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+-95- INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ACCUSTEM SCIENCES INC. Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021 F-2 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021 F-3 Unaudited Condensed Statements of Changes in Stockholders Equity for the Three and Nine Months Ended September 30, 2022 and 2021 F-4 Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 F-6 Notes to Unaudited Condensed Consolidated Financial Statements as of September 30, 2022 F-7 Report of Independent Registered Public Accounting Firm (Mazars USA LLP, New York, New York, PCAOB ID 339) F-16 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-17 Consolidated Statement of Operations and Comprehensive Income (Loss) for the year ended December 31, 2021 and for the period from June 5, 2020 (date of inception) to December 31, 2020 F-18 Consolidated Statements of Shareholders Equity for the year ended December 31, 2021 and for the period from June 5, 2020 (date of inception) to December 31, 2020 F-19 Consolidated Statements of Cash Flows for the year ended December 31, 2021 and for the period from June 5, 2020 (date of inception) to December 31, 2020 F-20 Notes to Consolidated Financial Statements F-21 F-1 ACCUSTEM SCIENCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, 2022 December 31, 2021 ASSETS Current Assets Cash $1,331,960 $- Related party receivable - 1,353,373 Prepaid expenses 282,113 - Total Current Assets $1,614,073 $1,353,373 Equipment, net 8,585 - TOTAL ASSETS $1,622,658 $1,353,373 LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities Accounts payable $154,889 $388,681 Related party payable 108,806 190,838 Accrued expenses 349,183 123,181 Note Payable 212,056 - Total Current Liabilities 824,934 702,700 TOTAL LIABILITIES 824,934 702,700 Stockholders Equity Preferred stock $.001 par value; 10,000,000 shares authorized; none issued and outstanding $- $- Common stock $.001 par value; 150,000,000 shares authorized; 11,346,535 and 9,999,132 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 11,346 9,999 Additional paid-in capital 4,279,125 1,503,434 Related party subscription receivable - (204,879) Accumulated other comprehensive loss - 66,981 Accumulated deficit (3,492,747) (724,862) TOTAL STOCKHOLDERS EQUITY 797,724 650,673 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $1,622,658 $1,353,373 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F-2 ACCUSTEM SCIENCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 OPERATING EXPENSES Research and development expenses $58,270 $14,125 $133,809 $46,869 General and administrative expenses 840,855 48,597 2,634,076 80,263 Total operating expenses 899,125 62,722 2,767,885 127,132 LOSS FROM OPERATIONS (899,125) (62,722) (2,767,885) (127,132) LOSS, BEFORE TAX (899,125) (62,722) (2,767,885) (127,132) Income tax benefit (expense) - - - - NET LOSS $(899,125) $(62,722) $(2,767,885) $(127,132) Net loss per share attributable to common stockholders, basic and diluted $(0.08) $(0.01) $(0.25) $(0.01) Weighted average common shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted 11,337,668 9,999,132 10,904,423 9,999,132 NET LOSS $(899,125) $(62,722) $(2,767,885) $(127,132) Translation adjustments - (33,433) - (16,347) COMPREHENSIVE LOSS $(899,125) $(96,155) $(2,767,885) $(143,479) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F-3 ACCUSTEM SCIENCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (UNAUDITED) For Three Months Ended September 30, 2022 Common Stock Additional Related Party Accumulated Other Number of Shares Amount Paid-in Capital Subscription Receivable Comprehensive Loss Accumulated Deficit Stockholders Equity Balance at June 30, 2022 11,337,571 $11,337 $4,232,851 - - $(2,593,622) $1,650,566 Share-based compensation - - 38,001 - - - 38,001 Exercise of common stock options 8,964 9 8,273 - - - 8,282 Net loss - - - - - (899,125) (899,125) Balance at September 30, 2022 11,346,535 $11,346 $4,279,125 - - $(3,492,747) $797,724 For Three Months Ended September 30, 2021 Common Stock Additional Related Party Accumulated Other Number of Shares Amount Paid-in Capital Subscription Receivable Comprehensive Income Accumulated Deficit Stockholders Equity Balance at June 30, 2021 9,999,132 $9,999 $1,482,174 $(208,928) $95,260 $(118,658) $1,260,207 Share-based compensation 21,260 21,260 Foreign currency translation adjustment - - (1,004) 5,078 (33,433) - (29,359) Net loss - - - - - (62,722) (62,722) Balance at September 30, 2021 9,999,132 $9,999 $1,502,430 $(203,850) $62,187 $(181,380) $1,189,386 F-4 For Nine Months Ended September 30, 2022 Common Stock Additional Related Party Accumulated Other Number of Shares Amount Paid-in Capital Subscription Receivable Comprehensive Income Accumulated Deficit Stockholders Equity Balance at December 31, 2021 9,999,132 $9,999 $1,503,434 $(204,879) $66,981 $(724,862) $650,673 Share-based compensation - - 92,629 - - - 92,629 Issuance of common stock 1,337,970 1,338 2,674,602 - - - 2,675,940 Receipt of subscription receivable - - - 204,879 - - 204,879 Exercise of common stock options 9,433 9 8,460 - - - 8,469 Foreign currency translation adjustment - - - - (66,981) - (66,981) Net loss - - - - - (2,767,885) (2,767,885) Balance at September 30, 2022 11,346,535 $11,346 $4,279,125 - - $(3,492,747) $797,724 For Nine Months Ended September 30, 2021 Common Stock Additional Related Party Accumulated Other Number of Shares Amount Paid-in Capital Subscription Receivable Comprehensive Income Accumulated Deficit Stockholders Equity Balance at December 31, 2020 9,999,132 $9,999 $1,482,174 $(206,663) $78,534 $(54,248) $1,309,796 Share-based compensation 21,260 21,260 Foreign currency translation adjustment - - (1,004) 2,813 (16,347) - (14,538) Net loss - - - - - (127,132) (127,132) Balance at September 30, 2021 9,999,132 $9,999 $1,502,430 $(203,850) $62,187 $(181,380) $1,189,386 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F-5 ACCUSTEM SCIENCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended September 30 2022 2021 Operating Activities Net loss (2,767,885) (127,132) Adjustments to reconcile net income to net cash provided by operating activities Foreign currency translation (66,981) (14,538) Depreciation 2,414 - Share-based compensation 92,629 21,260 Change in operating assets and liabilities: Related party receivable 1,353,373 18,586 Prepaid expenses 157,009 - Accounts payable (233,791) 41,414 Related party payable (82,033) 60,983 Accrued expenses 229,940 (573) Net cash used in operating activities (1,315,325) - Investing Activities Purchases of equipment (10,999) - Net cash used in investing activities (10,999) - Financing Activities Proceeds from receipt of subscription receivable 204,879 - Proceeds from issuance of common stock 2,675,940 - Proceeds from exercise of options 8,469 Payments on note payable (231,004) - Net cash provided by financing activities 2,658,284 - Increase in cash 1,331,960 - Cash, beginning of year - - Cash, end of year 1,331,960 - Supplemental disclosure of noncash investing and financing activities Issuance of Note Payable for payment of prepaid expense 439,122 - Shares issued for the demerger agreement of StemprintER/ Related party receivable Shares issued for the associated supplemental demerger agreement of StemprintER/ Related party subscription receivable Supplemental cash flow information Cash paid for interest 5,726 - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F-6 ACCUSTEM SCIENCES INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. NATURE OF
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diff --git a/parsed_sections/prospectus_summary/2023/AFJKU_aimei_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/AFJKU_aimei_prospectus_summary.txt
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+summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under "Risk Factors" and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus, or the context otherwise requires: references to "amended and restated memorandum and articles of association" are to the amended and restated memorandum and articles of association that we will adopt prior to the consummation of this offering; references to "we," "us" or "our company" are to Aimei Health Technology Co., Ltd, a Cayman Islands exempted company; references to the "Companies Act" are to the Companies Act (Revised) of the Cayman Islands as the same may be amended from time to time; references to "founder shares" are to the 1,725,000 ordinary shares currently held by the initial shareholders (as defined below), which include up to an aggregate of 225,000 ordinary shares subject to forfeiture by our sponsor to the extent that the underwriters over-allotment option is not exercised in full or in part; references to our "initial shareholders" are to our sponsor and any other holder of founder shares, including our officers and directors; references to "ordinary shares" are to our ordinary shares, par value of $0.0001 per share; references to our "management" or our "management team" are to our officers and directors; references to our "private shares" are to the ordinary shares included in the private units; references to our "private units" are to the units, each consisting of one ordinary share and one right, that our sponsor is purchasing privately from us in a private placement concurrent with this offering, as well as any units issued upon conversion of working capital loans; references to our "public shares" are to ordinary shares which are being sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and references to "public shareholders" refer to the holders of our public shares, including our initial shareholders to the extent our initial shareholders purchase public shares, provided that their status as "public shareholders" shall exist only with respect to such public shares; references to the "representative" are to Spartan Capital Securities, LLC, the representative of the underwriters; references to our "representative shares" are to 60,000 ordinary shares issued as compensation to the representative and its designees, upon the closing of this offering; references to our "rights" or "public rights" refer to the rights which are being sold as part of the units in this offering; references to our "sponsor" are to Aimei Investment Ltd, a Cayman Islands exempted company whose ultimate beneficial owner is Ms. Huang Han, a resident of the PRC; and All references in this prospectus to our shares being forfeited shall take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. All references in this prospectus to share dividends shall take effect as share capitalizations as a matter of Cayman Islands law. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. 1 You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not permitted. General We are a blank check company newly incorporated as a Cayman Islands exempted company on April 27, 2023. Exempted companies are Cayman Islands companies wishing to conduct business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with section 6 of the Tax Concessions Act (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. We were incorporated for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to as a "target business." Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location. As such, although we are not targeting target companies in China, we may consider an initial business combination with a target business with its principal business operations in China (including Hong Kong and Macau). We do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction with our company. Competitive Advantage We have an experienced and highly professional management team, almost all of whom have entrepreneurial experience or experience working for public companies, and we believe that this valuable experience can help us to better identify outstanding companies that are considering becoming public companies. Our Chief Executive Officer, Juan Fernandez Pascual, has a deep understanding of the industry, the current challenges and opportunities, and the best strategies for success. He is also familiar with the regulatory environment, and has a strong track record of navigating complex legal and financial matters. His background in financial management and corporate governance will be especially helpful in guiding the company s strategic decisions. We believe Juan s unique experience and contacts will help us identify great target companies. Our Chief Financial Officer, Hueng Ming Wong, has solid background of accounting and financing as he has worked in an international accounting firm and advanced in the audit field by leading both internal and external audits, including as a senior manager and a manager in PricewaterhouseCoopers, Beijing office and Deloitte Touche Tohmatsu, Hong Kong, respectively. He has also advised a number of companies that are listed on overseas stock exchanges, including those in the United States, China and Hong Kong. We believe that his experience will help us to better identify the financial risks of potential investment targets and to find outstanding companies to acquire. Additionally, we believe that our independent director nominees will provide public company governance, executive leadership, operational oversight, private equity investment management and capital markets experience. Our directors have experience with acquisitions, divestitures and corporate strategy and implementation, which we believe will significantly benefit us as we evaluate potential acquisition or merger candidates as well as following the completion of our initial business combination. 2 We believe our management team is well positioned to take advantage of the growing set of acquisition opportunities focused on the intelligent transportation sector and that our contacts and relationships, ranging from owners and management teams of private and public companies, private equity funds, investment bankers, attorneys, to accountants and business brokers will allow us to generate an attractive transaction for our shareholders. In addition, our sponsor has engaged the services of ARC Group Limited to provide financial advisory services to our sponsor in connection with this offering, which services include an analysis of markets, positioning, financial models, organizational structure and capital requirements as well as assistance with the public offering process including assisting in the preparation of financial information and statements. The past performance of the members of our management team, our sponsor s financial advisor or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate. You should not rely on the historical record of the performance of our management team or any of its affiliates performance as indicative of our future performance. Our Chief Financial Officer is a citizen of Hong Kong. Additionally, one of three independent director nominees, resides in China. Although we are not targeting target companies in China, we may consider a business combination with an entity or business with a physical presence or other significant ties to China, including Hong Kong and Macau, which may subject the post-business combination business to the laws, regulations and policies of China. Any target for a business combination may conduct operations through subsidiaries in China. The legal and regulatory risks associated with doing business in China discussed in this prospectus may make us a less attractive partner in an initial business combination than other special purpose acquisition companies that do not have any ties to China. As such, our ties to China may make it harder for us to complete an initial business combination with a target company without any such ties. In addition, we will not conduct a business combination with any target company that conducts operations through variable interest entities ("VIEs"), which are a series of contractual arrangements used to provide the economic benefits of foreign investment in Chinese-based companies where Chinese law prohibits direct foreign investment in the operating companies. As a result, this may limit the pool of acquisition candidates we may acquire in the PRC, in particular, relative to other special purpose acquisition companies that are not subject to such restrictions, which could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC relative to such other companies. If we were to complete a business combination with a Chinese entity, we could be subject to certain legal and operational risks associated with or having the majority of post-business combination operations in China. PRC laws and regulations governing PRC based business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of any post-business combination subsidiaries, significant depreciation of the value of our ordinary shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors, including investors in the United States. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. These recently enacted measures, and new measures which may be implemented, could materially and adversely affect the operations of any post-business combination company which we may acquire as our initial business combination. 3 Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on a China-based target company s daily business operation, the ability to accept foreign investments and list on a U.S. or other foreign exchange. Additionally, if we effect our initial business combination with a business located in the PRC, the laws applicable to such business will likely govern all of our material agreements and we may not be able to enforce our legal rights. There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations which may have a material adverse impact on the value of our securities. If we enter into a business combination with a target business operating in China, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to any future PRC subsidiaries via capital contribution or shareholder loans, as the case may be. All these risks could result in a material change in our or the target company s post-combination operations and/or the value of our ordinary shares or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. Furthermore, the PRC government has significant authority to exert influence on the ability of a China-based company to conduct its business, make or accept foreign investments or list on a U.S. stock exchange. For example, if we enter into a business combination with a target business operating in China, the combined company may face risks associated with regulatory approvals of the proposed business combination between us and the target, offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy. The PRC government may also intervene with or influence the combined company s operations at any time as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect our potential business combination with a PRC operating business and the business, financial condition and results of operations of the combined company. Any such action, once taken by the PRC government, could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC, result in material changes in the combined company s post-combination operations and cause the value of the combined company s securities to significantly decline, or in extreme cases, become worthless or completely hinder the combined company s ability to offer or continue to offer securities to investors. See "Risk Factors" beginning at page 23 "Risks Related to Acquiring or Operating Businesses in the PRC." On February 17, 2023, the China Securities Regulatory Commission (the "CSRC") promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures"), which took effect on March 31, 2023. The Trial Measures supersede the prior rules and clarified and emphasized several aspects, which include but are not limited to: (1) comprehensive determination of the "indirect overseas offering and listing by PRC domestic companies" in compliance with the principle of "substance over form" and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: (a) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year comes from PRC domestic companies, and (b) the main parts of the issuer s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements for issuers that (a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures, (b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and (c) whose such overseas securities offering or listing shall be completed before September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing or offering overseas, such as (a) issuers whose listing or offering overseas has been recognized by the State Council of the PRC as a possible threat to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers under ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers compliance with web security, data security, and other national security laws and regulations; (5) issuers filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and the obligation after offering or listing overseas to report to the CSRC material events including a change of control or voluntary or forced delisting of the issuer; and (6) the CSRC s authority to fine both issuers and their shareholders between 1 and 10 million RMB for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. 4 We believe we are not required to obtain approvals from any PRC government authorities, including the CSRC or the Cyberspace Administration of China ("CAC"), or any other government entity, to issue our securities to foreign investors and to list on a U.S. exchange or to search for a target company. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or any other PRC governmental authorities. However, applicable laws, regulations, or interpretations of the PRC may change or we could be mistaken about these rules applicability, and the relevant PRC government agencies could reach a different conclusion and may subject us to a stringent approval process from the relevant government entities in connection with this offering, continued listing on a U.S. exchange, the potential business combination, the issuance of shares or the maintenance of our status as a publicly listed company outside China, and the post business combination entity s PRC operations if our business combination target is a PRC Target Company. If the CSRC or the CAC, or any other governmental or regulatory body subsequently determines that its approval is needed for this offering, a business combination, the issuance of our ordinary shares upon exercise of the rights, or maintaining our status as a publicly listed company outside China, we may face approval delays, adverse actions or sanctions by the CSRC, CAC and/or other PRC regulatory agencies. It is uncertain whether we will be required to obtain permission from the PRC government to continue to list on a U.S. exchange in the future and offer our securities to foreign investors. If approval is required in the future, including pursuant to the Trial Measures, and we are denied permission from Chinese authorities to list on U.S. exchanges or offer our securities to foreign investors, we may not be able to continue listing on a U.S. exchange or be subject to other severe consequences, which would materially affect our ability to complete a business combination in which case we may have to liquidate which would be adverse to the interests of the investors. In addition, any changes in PRC law, regulations, or interpretations may severely affect our operations after this offering. The use of the term "operate" and "operations" includes the process of searching for a target business and conducting related activities. To that extent, we may not be able to conduct the process of searching for a potential target company in China. There are numerous risks and uncertainties related to doing business in China including: Adverse changes in political and economic policies or political or social conditions of the PRC government could have a material adverse effect on the overall economic growth of China; Uncertainties with respect to the PRC legal system could limit legal protections available to you and us; It may be difficult for overseas regulators to conduct investigations or collect evidence within China PRC companies in certain business sectors are required to undergo national security review or obtain clearance from relevant authorities if necessary before making any filings with the CSRC. PRC companies must comply with national secrecy and data security laws with respect to any data disclosure. CSRC has the authority to and may block offshore listings that: (1) are explicitly prohibited by law; (2) may endanger national security; (3) involve criminal offenses such as corruption, bribery, embezzlement, misappropriation of property by the issuer, its controlling persons (with a three-year lookback); (4) involve the issuer under investigations for suspicion of criminal offenses or major violations of laws and regulations; or (5) involve material ownership disputes. For a detailed description of risks associated with our significant ties to or a potential acquisition of a target business in China, see "Risk Factors — Risks Related to Acquiring or Operating Businesses in the PRC" commencing on page 36. Each of our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination. For more information, see the section of this prospectus entitled "Management — Conflicts of Interest" and see "Risk Factors." Investment Direction Although there is no restriction or limitation on what industry our target operates in, it is our intention to pursue prospective targets that are focused on healthcare innovation. We anticipate targeting what are traditionally known as "small cap" companies domiciled in North America, Europe and/or the Asia Pacific ("APAC") regions that are developing assets in the biopharmaceutical, medical technology/medical device and diagnostics space which aligns with our management team s experience in operating health care companies and in drug and device technology development as well as diagnostic and other services. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. As such, although we are not targeting target companies in China, we may consider an initial business combination with a target business with its principal business operations in China (including Hong Kong and Macau). At the time of preparing this prospectus, we have not identified any specific business combination, nor has anyone on our behalf initiated or engaged in any substantive discussions, formal or otherwise, related to such a transaction. Our efforts to date are limited to organizational activities related to this offering. 5 Transfers of Cash to and from our Post Business Combination Subsidiaries To date, we have not pursued an initial business combination and there have not been any capital contributions or shareholder loans by us to any PRC entities, we do not yet have any subsidiaries, and we have not received, declared or made any dividends or distributions. Although we do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction, our initial business combination target company may include a company based in the PRC. If we decide to consummate our initial business combination with a target business based in and primarily operating in the PRC, the combined company, whose securities will be listed on a U.S. stock exchange, may make capital contributions or extend loans to its PRC subsidiaries through intermediate holding companies subject to compliance with relevant PRC foreign exchange control regulations. After an initial business combination with a China-based company, the combined company s ability to pay dividends, if any, to the shareholders and to service any debt it may incur will depend upon dividends paid by its PRC subsidiaries. Under PRC laws and regulations, PRC companies are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to offshore entities. In particular, under the current PRC laws and regulations, dividends may be paid only out of distributable profits. Distributable profits are the net profit as determined under Chinese accounting standards and regulations, less any recovery of accumulated losses and appropriations to statutory and other reserves required to be made. Current PRC regulations permit a potential PRC target company s indirect PRC subsidiaries to pay dividends to an overseas subsidiary, for example, a subsidiary located in Hong Kong, only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of the target s subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. As a result, the combined company s PRC subsidiaries may not have sufficient distributable profits to pay dividends to the combined company. Furthermore, each such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. The PRC government also imposes controls on the conversion of the Renminbi ("RMB"), the legal currency of the PRC, into foreign currencies and the remittance of currencies out of the PRC. Our initial business combination target may be a PRC company with substantially all of its revenues in RMB. Shortages in the availability of foreign currency may restrict the ability of the PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands post business combination, we may not be able to pay dividends in foreign currencies to our security-holders. Furthermore, if our target s subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. Cash dividends, if any, on our ordinary shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and, as a result, may be subject to PRC withholding tax at a rate of up to 10.0%. The PRC government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions. If the foreign exchange control regulations prevent the PRC subsidiaries of the combined company from obtaining sufficient foreign currencies to satisfy their foreign currency demands, the PRC subsidiaries of the combined company may not be able to pay dividends or repay loans in foreign currencies to their offshore intermediary holding companies and ultimately to the combined company. We cannot assure you that new regulations or policies will not be promulgated in the future, which may further restrict the remittance of RMB into or out of the PRC. We cannot assure you, in light of the restrictions in place, or any amendment to be made from time to time, that the PRC subsidiaries of the combined company will be able to satisfy their respective payment obligations that are denominated in foreign currencies, including the remittance of dividends outside of the PRC. See "Risk Factors — Risks Related to Acquiring or Operating Businesses in the PRC" under the subheadings "Cash-Flow Structure of a Post-Acquisition Company Based in China" and "Exchange controls that exist in the PRC may restrict or prevent us from using the proceeds of this offering to acquire a target company in the PRC and limit our ability to utilize our cash flow effectively following our initial business combination." However, the funds held in our trust account are not held in China, they are held in U.S. dollars in the United States with Continental Stock Transfer & Trust Company and therefore shareholder redemption rights would not be impacted. 6 Opportunity & Acquisition Target Criteria We will seek to acquire small cap businesses in the biopharmaceutical, medical technology/device industries or diagnostic and other services sector. We believe these industries are attractive for a number of reasons, including: they represent attractive markets, which are characterized by a high level of innovation and they include a large number of emerging high growth companies that have the right size as potential targets. Our operating experience and industry contacts place us in a position to optimize our chances of identifying high value targets in these areas. Our target of small cap healthcare-based companies will be based on the concept of value investing and therefore focused on quality businesses with specific and time-based catalysts. We will remain opportunistic at considering opportunities throughout the healthcare space however, our primary focus will be on small cap healthcare companies with one or more of the following characteristics: Late-stage development or revenue generating High growth prospects with sustainable proprietary position Experienced management teams with previous successes, especially where we can add critical public company expertise Addressable conditions that are clinically important and under-diagnosed or treated Independent companies or corporate spin offs Domestic or International base of business We will be focused on companies in disruptive and other value added subsegments of healthcare that have the potential for significant gains in the next five years. Our ideal company will be institutionally backed, with a high-quality management team and a demonstrated ability to raise money from the private capital markets. Our plan is to focus on the esoteric/specialty diagnostic market that is quickly emerging as a critical component of the medical health system as the concept of therapeutics, diagnostics, medical devices and artificial intelligence merge into a single focus of optimizing patient care. The focus of our management team will be to create shareholder value by leveraging its experience to efficiently guide an emerging healthcare company towards commercialization. Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we see fit to do so: We believe that there are a substantial number of potential target businesses domestically and internationally with appropriate valuations that can benefit from a public listing and new capital for growth to support significant revenue and earnings growth or to advance clinical programs. We intend to seek target companies that have significant and underexploited expansion opportunities in a niche sector. This can be accomplished through a combination of accelerating organic growth and finding attractive add-on acquisition targets. Our management team has significant experience in identifying such targets. Similarly, our management has the expertise to assess the likely synergies and a process to help a target integrate acquisitions. Additionally, our management team has extensive experience assisting healthcare companies raise money as they navigate the regulatory approval process. We intend to seek target companies that should offer attractive risk-adjusted equity returns for our shareholders. We intend to seek to acquire a target on terms and in a manner that leverage our experience. We expect to evaluate a target based on its potential to successfully achieve regulatory approval and commercialize its product(s). We also expect to evaluate financial returns based on (i) risk-adjusted peak sales potential (ii) the potential of pipeline products and the scientific platform (iii) the ability to achieve the system cost savings, (iv) the ability to accelerate growth via other options, including through the opportunity for follow-on acquisitions and (v) the prospects for creating value through other value creation initiatives. Potential upside, for example, from the growth in the target business earnings or an improved capital structure will be weighed against any identified downside risks. We intend to invest in businesses that have a track record of success. We look for companies with shareholder-friendly governance and low leverage, which are valued at what we think are low prices relative to their earnings potential and where we see attractive return potential over the long run. We believe this investment approach constitutes our competitive advantage and can potentially offer both meaningful upside potential and a degree of downside protection in periods of financial market turbulence. 7 These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business, nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to select or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to select or locate any such acquisition candidate. Initial Business Combination We will have until 12 months (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus) from the closing of this offering to consummate our initial business combination. If we are unable to consummate our initial business combination within the time period described above, we will, as promptly as reasonably possible but not more than five business days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the rights will be worthless. Nasdaq rules provide that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction of such criteria. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. If the business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses. We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the "Investment Company Act". Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity securities of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions that our initial business combination is fair to our company (or shareholders) from a financial point of view. 8 Members of our management team and our independent directors and their affiliates will directly or indirectly own ordinary shares and private units following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Additionally, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity, including other blank check companies similar to our company, pursuant to which such officer or director may be required to present a business combination opportunity to such entity. Specifically, our executive officers are affiliated with our sponsor and other entities that make, or are looking to make, investments in companies. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination. For additional information regarding our executive officers and directors business affiliations and potential conflicts of interest, see "Management — Directors and Executive Officers" and "Management — Conflicts of Interest." Our amended and restated memorandum and articles of association will provide that, subject to fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. PRC Approvals Below is a summary of potential PRC laws and regulations that could be interpreted by the in-charge PRC government authorities, namely, the CSRC, the CAC and their enforcement agencies, to require the company to obtain permission or approval in order to issue securities to foreign investors in connection with a business combination or offer securities to foreign investors. The company does not believe that any permission or approval is required under the PRC laws or regulations to offer securities to non-PRC investors. However, there is no assurance that such approval or permission will not be required under the PRC laws, regulations or policies if the relevant governmental authorities take a contrary position, nor can the company predict whether or how long it will take to obtain such approval if so required. CSRC Approval The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors adopted by six PRC regulatory agencies, including the MOFCOM, the State-Owned Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce (the "SAMR"), the CSRC, and the SAFE in 2006 and amended in 2009, as well as some other regulations and rules concerning mergers and acquisitions (collectively, the "M&A Rules") include provisions that purport to require that an offshore special purpose vehicle that is controlled by PRC domestic companies or individuals and that has been formed for the purpose of an overseas listing of securities through acquisitions of PRC domestic companies or assets to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle s securities on an overseas stock exchange. On September 21, 2006, the CSRC published its approval procedures for overseas listings by special purpose vehicles. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. While the application of the M&A Rules remains unclear, the company believes that the CSRC approval would not be required in the context of a business combination because (1) the M&A Rules provide that the acquisition of the equity held by the shareholders of a "domestic company" (i.e., a non-foreign investment company) or the subscription for the new shares issued by a "domestic company" by the shareholders of an offshore special purpose vehicle with the equity of such offshore special purpose vehicle, or by the offshore special purpose vehicle with its new shares for the purpose of the overseas listing of such offshore special purpose vehicle, shall be subject to the approval of the CSRC; while the company currently is a foreign-invested enterprise rather than a "domestic company" as defined under the M&A Rules, and (2) the CSRC currently has not issued any definitive rule or interpretation concerning whether a transaction of the kind contemplated herein is subject to the M&A Rules. However, uncertainties still exist as to how the M&A Rules will be interpreted and implemented. 9 On February 17, 2023, the China Securities Regulatory Commission (the "CSRC") promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures"), which took effect on March 31, 2023. The Trial Measures supersede the prior rules and clarified and emphasized several aspects, which include but are not limited to: (1) comprehensive determination of the "indirect overseas offering and listing by PRC domestic companies" in compliance with the principle of "substance over form" and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: (a) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year comes from PRC domestic companies, and (b) the main parts of the issuer s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements for issuers that (a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures, (b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and (c) whose such overseas securities offering or listing shall be completed before September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing or offering overseas, such as (a) issuers whose listing or offering overseas has been recognized by the State Council of the PRC as a possible threat to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers under ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers compliance with web security, data security, and other national security laws and regulations; (5) issuers filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and the obligation after offering or listing overseas to report to the CSRC material events including a change of control or voluntary or forced delisting of the issuer; and (6) the CSRC s authority to fine both issuers and their shareholders between 1 and 10 million RMB for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. We believe we are not required to obtain approvals from any PRC government authorities, including the CSRC or the Cyberspace Administration of China ("CAC"), or any other government entity, to issue our securities to foreign investors and to list on a U.S. exchange or to search for a target company. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or any other PRC governmental authorities. However, applicable laws, regulations, or interpretations of the PRC may change or we could be mistaken about these rules applicability, and the relevant PRC government agencies could reach a different conclusion and may subject us to a stringent approval process from the relevant government entities in connection with this offering, continued listing on a U.S. exchange, the potential business combination, the issuance of shares or the maintenance of our status as a publicly listed company outside China, and the post business combination entity s PRC operations if our business combination target is a PRC Target Company. If the CSRC or the CAC, or any other governmental or regulatory body subsequently determines that its approval is needed for this offering, a business combination, the issuance of our ordinary shares upon exercise of the rights, or maintaining our status as a publicly listed company outside China, we may face approval delays, adverse actions or sanctions by the CSRC, CAC and/or other PRC regulatory agencies. It is uncertain whether we will be required to obtain permission from the PRC government to continue to list on a U.S. exchange in the future and offer our securities to foreign investors. If approval is required in the future, including pursuant to the Trial Measures, and we are denied permission from Chinese authorities to list on U.S. exchanges or offer our securities to foreign investors, we may not be able to continue listing on a U.S. exchange or be subject to other severe consequences, which would materially affect our ability to complete a business combination in which case we may have to liquidate which would be adverse to the interests of the investors. In addition, any changes in PRC law, regulations, or interpretations may severely affect our operations after this offering. The use of the term "operate" and "operations" includes the process of searching for a target business and conducting related activities. To that extent, we may not be able to conduct the process of searching for a potential target company in China. 10 Our Sponsor Our sponsor is Aimei Investment Ltd., a Cayman Islands exempted company whose ultimate beneficial owner is Ms. Huang Han. Ms. Han is a resident of the PRC. Mr. Juan Fernandez Pascual is the Secretary of our sponsor. On May 1, 2023, we entered into a subscription agreement for founder shares with our sponsor which is recorded as subscription receivable and which was amended and restated on May 24, 2023. On May 25, 2023, 1,437,500 founder shares were issued to the sponsor (up to 187,500 of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised) pursuant to a securities subscription agreement dated May 24, 2023 and the 1,437,500 ordinary shares previously held by the sponsor were repurchased by the company. Subsequently, on May 25, 2023, an aggregate of 152,000 founder shares were transferred to directors of the company. These 152,000 founder shares will not be subject to forfeiture in the event the underwriters over-allotment option is not exercised. On October 20, 2023, the Company capitalized an amount equal to $28.75 standing to the credit of the share premium account and appropriated such sum and applied it on behalf of the Sponsor towards paying up in full (as to the full par value of $0.0001 per founder share) 287,500 unissued ordinary shares of $0.0001 par value and allotted such shares credited as fully paid to the Sponsor, resulting in 1,725,000 shares being issued and outstanding. Such ordinary shares includes an aggregate of up to 225,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters over-allotment is not exercised in full or in part. Thus, such parties may have more of an economic incentive for us to enter into an initial business combination with a riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their founder shares. On October 20, 2023, the May 24, 2023 subscription agreement was amended to reflect this change. Each of our directors, director nominees and officers presently has and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. Notwithstanding our founder s and management team s past experiences, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) that we will provide an attractive return to our shareholders from any business combination we may consummate. You should not rely on the historical record of the members of our management team or our sponsor or their respective affiliates or any related investment s performance as indicative of our future performance of an investment in the company or the returns the company will, or is likely to, generate going forward. Each of our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination. For more information, see the section of this prospectus entitled "Management — Conflicts of Interest" and see "Risk Factors." Private Placements On May 1, 2023, we entered into a subscription agreement for founder shares with our sponsor which is recorded as subscription receivable and which was amended and restated on May 24, 2023. Prior to this offering, we issued an aggregate of 50,000 ordinary shares of $1.00 par value each to Han Huang. On May 11, 2023, Han Huang transferred those ordinary shares to our sponsor and on May 15, 2023 our sponsor resolved to sub-divide the ordinary shares of $1.00 par value each into ordinary shares of $0.0001 par value each and as such the sponsor held 500,000,000 ordinary shares of $0.0001 each. On May 15, 2023 the directors resolved to repurchase 498,562,500 ordinary shares from the sponsor, the repurchase resulting in the sponsor holding 1,437,500 ordinary shares. On May 25, 2023, 1,437,500 founder shares were issued to the sponsor (up to 187,500 of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised) pursuant to a securities subscription agreement dated May 24, 2023 and the 1,437,500 ordinary shares previously held by the sponsor were repurchased by the company. Subsequently, on May 25, 2023, an aggregate of 152,000 founder shares were transferred to directors of the company. These 152,000 founder shares will not be subject to forfeiture in the event the underwriters over-allotment option is not exercised. On October 20, 2023, the Company capitalized an amount equal to $28.75 standing to the credit of the share premium account and appropriated such sum and applied it on behalf of the Sponsor towards paying up in full (as to the full par value of $0.0001 per founder share) 287,500 unissued ordinary shares of $0.0001 par value and allotted such shares credited as fully paid to the Sponsor, resulting in 1,725,000 shares being issued and outstanding. Such ordinary shares includes an aggregate of up to 225,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters over-allotment is not exercised in full or in part. On October 20, 2023, the May 24, 2023 subscription agreement was amended to reflect this change. Subject to certain limited exceptions, our initial shareholders have agreed not to transfer, assign or sell their founder shares until six months after the date of the consummation of our initial business combination or earlier if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. Our sponsor has agreed to purchase an aggregate of 305,000 units (or 332,000 units if the over-allotment option is exercised in full) at a price of $10.00 per unit for an aggregate purchase price of $3,050,000 (or $3,320,000 if the over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Subject to certain limited exceptions, our initial shareholders have agreed not to transfer, assign or sell any of the private units and underlying ordinary shares until after the completion of our initial business combination. Subject to certain limited exceptions, our initial shareholders have agreed not to transfer, assign or sell their founder shares until six months after the date of the consummation of our initial business combination or earlier if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. Notwithstanding the foregoing if the last reported sale price of our ordinary shares equal or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganization, recapitalizations and other similar transactions) for any twenty (20) trading days within any thirty (30) trading day period commencing at least 150 days after our initial business combination the founder shares will not be subject to such transfer restrictions. Corporate Information We are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an "emerging growth company" for up to five years. However, if our non-convertible debt issued within a three year period or revenues exceeds $1.07 billion, or the market value of our shares that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. Our executive offices are located at 10 East 53rd Street, Suite 3001, New York, NY 10022, and our telephone number is +34 678 035200. 11 The Offering In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act of 1933, as amended, or the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled "Risk Factors" beginning on page 23 of this prospectus. Securities offered 6,000,000 units, at $10.00 per unit, each unit consisting of one ordinary share and one right. Each right entitles the holder thereof to receive one-fifth (1/5) of one ordinary share upon the consummation of an initial business combination, as described in more detail in this prospectus. Listing of our securities and proposed symbols We anticipate the units, and the ordinary shares and rights once they begin separate trading, will be listed on Nasdaq under the symbols "AFJKU," "AFJK" and "AFJKR," respectively. Each of the ordinary shares and rights may trade separately on the 52nd day after the date of this prospectus unless Spartan Capital Securities, LLC determines that an earlier date is acceptable; provided that no fractional rights will be issued. In no event will Spartan Capital Securities, LLC allow separate trading of the ordinary shares and rights until we file an audited balance sheet reflecting our receipt of the gross proceeds of this offering and the sale of the public units. Once the ordinary shares and rights commence separate trading, holders will have the option to continue to hold units or separate their units into the component pieces. Holders will need to have their brokers contact our transfer agent in order to separate the units into ordinary shares and rights. We will file a Current Report on Form 8-K with the SEC, including an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take place two business days from the date the units commence trading. If the underwriters over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters over-allotment option. We will also include in the Current Report, or amendment thereto, or in a subsequent Current Report on Form 8-K, information indicating if Spartan Capital Securities, LLC has allowed separate trading of the ordinary shares and rights prior to the 52nd day after the date of this prospectus. Ordinary shares: Number of issued and outstanding before this offering 1,725,000 ordinary shares (includes up to an aggregate of 225,000 founder shares that are subject to forfeiture by our initial shareholders if the over-allotment option is not fully exercised by the underwriters) Representative Shares As part of the underwriting compensation payable to the underwriters in connection with this offering, 60,000 representative shares will be issued to the underwriters. The underwriters have agreed not to transfer, assign or sell any such shares without our prior consent until the completion of our initial business combination. In addition, the underwriters agreed (A) to vote their representative shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, prior to and unrelated to an initial business combination, an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our redemption obligation to redeem all public shares if we cannot complete an initial business combination within 24 months of the closing of this offering, unless we provide public shareholders an opportunity to redeem their public shares in conjunction with any such amendment, (C) not to redeem the Representative Shares, into the right to receive cash from the trust account in connection with a shareholder vote to approve our proposed initial business combination or sell any shares to us in any tender offer in connection with our proposed initial business combination, and (D) that the representative shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. The representative shares are deemed to be underwriters compensation by FINRA pursuant to FINRA Rule 5110. 12 Number to be issued and outstanding after this offering and sale of private units 7,865,000 ordinary shares (assumes the over-allotment option has not been exercised and an aggregate of 225,000 founder shares have been forfeited by our sponsor as a result thereof). This amount includes 6,000,000 ordinary shares issued in this offering as part of the Units, 1,500,000 founder shares, 305,000 ordinary shares which are part of the private units and 60,000 Representative Shares. Rights: Number to be outstanding before this offering 0 Number to be outstanding after this offering and the sale of private units 6,305,000 (Includes 6,000,000 public rights and 305,000 private rights. If the over-allotment option is exercised in full, there will be a total of 7,232,000 rights outstanding, including an aggregate of 332,000 rights underlying the private units.) Terms of the Rights: Except in cases where we are not the surviving company in a business combination, each holder of a public right will automatically receive one-fifth (1/5) of one ordinary share upon consummation of our initial business combination. In the event we will not be the surviving company upon completion of our initial business combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-fifth (1/5) of a share underlying each right upon consummation of the business combination. We will not issue fractional shares in connection with an exchange of rights. Fractional shares will be rounded down to the nearest whole share. As a result, you must hold rights in multiples of five in order to receive shares for all of your rights upon closing of a business combination. If we are unable to complete an initial business combination within the required time period and we redeem the public shares for the funds held in the trust account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless. Offering proceeds to be held in the trust account $60,600,000 of the net proceeds of this offering and the sale of the private units (or $69,690,000 if the over-allotment option is exercised in full), or $10.10 per unit sold to the public in this offering in either case, will be placed in a trust account in the United States maintained by Continental Stock Transfer & Trust Company, acting as trustee pursuant to an agreement to be signed on the date of this prospectus. The proceeds to be placed in the trust account include $600,000 (or up to $690,000 if the underwriters over-allotment option is exercised in full) in deferred underwriting commissions and $3,050,000 (or up to $3,320,000 if the underwriters over-allotment option is exercised in full) we will receive from the sale of the private units. The remaining estimated $700,000 of net proceeds of this offering (after deducting offering expenses and underwriting discounts and commissions) will not be held in the trust account. Except as set forth below, the proceeds held in the trust account will not be released until the earlier of: (1) the completion of our initial business combination within the required time period; (2) our redemption of 100% of the outstanding public shares if we have not completed an initial business combination in the required time period; and (3) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption of public shares as described in this prospectus or redeem 100% of our public shares if we do not complete our initial business combination within the required time period or (B) with respect to any other provision relating to shareholders rights or pre-business combination activity. Therefore, unless and until our initial business combination is consummated, the proceeds held in the trust account will not be available for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the negotiation of an agreement to acquire a target business. 13 Notwithstanding the foregoing, there can be released to us from the trust account any interest earned on the funds in the trust account that we need to pay our income or other tax obligations. With this exception, expenses incurred by us may be paid prior to an initial business combination only from the net proceeds of this offering not held in the trust account of approximately $700,000; provided, however, that in order to meet our working capital needs following the consummation of this offering if the funds not held in the trust account are insufficient, our initial shareholders, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender s discretion, up to $1,500,000 of the notes may be converted upon consummation of our initial business combination into additional private units at a price of $10.00 per unit upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we do not complete an initial business combination, the loans will only be repaid with funds not held in the trust account, and only to the extent available. Ability to extend time to complete business combination We will have until 12 months from the closing of this offering to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 12 months, we may extend the period of time to consummate a business combination up to 12 times, each by an additional one month (for a total of up to 24 months to complete a business combination). Pursuant to the terms of our amended and restated memorandum and articles of association and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to extend the time available for us to consummate our initial business combination, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $198,000 or up to $227,700 if the underwriter s over-allotment option is exercised in full ($0.033 per share in either case) on or prior to the date of the applicable deadline, for each one month extension (or up to an aggregate of $2,376,000 (or $2,732,400 if the underwriter s over-allotment option is exercised in full), or approximately $0.40 per share if we extend for the full 12 months). Any such payments would be made in the form of a loan. Any such loans will be non-interest bearing and payable upon the consummation of our initial business combination. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. If we do not complete a business combination, we will not repay such loans. Furthermore, the letter agreement with our initial shareholders contains a provision pursuant to which our sponsor has agreed to waive its right to be repaid for such loans out of the funds held in the trust account in the event that we do not complete a business combination. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. You will not be able to vote on or redeem your shares in connection with any such extension. 14 Limited payments to insiders There will be no fees, reimbursements or other cash payments paid to our sponsor, officers, directors or their affiliates prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is) other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private units held in the trust account prior to the consummation of our initial business combination: repayment of a loan of up to an aggregate of $750,000 if drawn from the sponsor to cover offering related and organizational expenses, unless sooner paid in accordance with the terms of the promissory note dated May 1, 2023; reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations; and repayment upon consummation of our initial business combination of any loans which may be made by our initial shareholders or their affiliates or our officers and directors to finance transaction costs in connection with an intended initial business combination. There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business combination. Our audit committee will review and approve all reimbursements and payments made to our sponsor or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our board of directors, with any interested director abstaining from such review and approval. Shareholder approval of, or tender offer in connection with, initial business combination In connection with any proposed initial business combination, we will either (1) seek shareholder approval of such initial business combination at a general meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination or do not vote at all, for their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our shareholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. If we determine to engage in a tender offer, such tender offer will be structured so that each shareholder may tender all of his, her or its shares rather than some pro rata portion of his, her or its shares. The decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. If we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, we may be forced to seek third party financing which may not be available on terms acceptable to us or at all. As a result, we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. 15 Our initial shareholders and officers and directors have agreed (i) to vote any shares owned by them in favor of any proposed business combination, (ii) not to redeem any shares in connection with a shareholder vote to approve a proposed initial business combination or any amendment to our charter prior to the consummation of our initial business combination and (iii) not to sell any shares to us in a tender offer in connection with any proposed business combination. None of our initial shareholders, officers, directors or their affiliates has indicated any intention to purchase units in this offering or any units or ordinary shares from persons in the open market or in private transactions. However, if we hold a general meeting to approve a proposed business combination and a significant number of shareholders vote, or indicate an intention to vote, against a proposed business combination, or choose to redeem their shares, our initial shareholders, officers, directors or their affiliates could make such purchases in the open market or in private transactions in order to increase the likelihood of satisfying any closing conditions. Notwithstanding the foregoing, our officers, directors, initial shareholders and their affiliates will not make purchases of ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act which are rules designed to stop potential manipulation of a company s stock, shares or other equity securities. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. To the extent that any public shares are purchased, such public shares will be voted as required by Tender Offers and Schedules Compliance and Disclosure Interpretations Question 166.01 promulgated by the SEC. Further, any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares in such transactions prior to completion of our initial business combination. Redemption rights At any general meeting called to approve an initial business combination, any public shareholder (whether they are voting for or against such proposed business combination or not voting at all) will be entitled to demand that his, her or its ordinary shares be redeemed for a pro rata portion of the amount then in the trust account (initially $10.10 per share, plus any pro rata interest earned on the funds held in the trust account less amounts necessary to pay our taxes). The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Notwithstanding the foregoing, a public shareholder, together with any affiliate of his or any other person with whom he is acting in concert or as a "group" (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption rights with respect to 20% or more of the ordinary shares sold in this offering without our prior written consent. However, we would not be restricting our shareholders ability to vote all of their shares (including all shares held by those shareholders that hold more than 20% of the shares sold in this offering) for or against our initial business combination. Whether we elect to effectuate our initial business combination via shareholder vote or tender offer, we will require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in "street name," to either tender their certificates to our transfer agent or to deliver their shares to the transfer agent electronically using Depository Trust Company s DWAC (Deposit/Withdrawal At Custodian) System, at the holder s option prior to the expiration of the tender offer, or in the event we distribute proxy materials, up to two business days prior to the vote on the proposal to approve the business combination. The requirement for physical or electronic delivery at or prior to the general meeting ensures that a holder s election to redeem his shares is irrevocable once the business combination is approved. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker a nominal fee and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders to deliver their shares prior to the vote on the business combination in order to exercise redemption rights. This is because a holder would need to deliver shares to exercise redemption rights regardless of the timing of when such delivery must be effectuated. However, in the event the proposed business combination is not consummated, this may result in an increased cost to shareholders. The holders of representative shares will not participate in any distribution from our trust account with respect to such shares 16 Liquidation if no business combination If we are unable to complete our initial business combination within 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining holders of ordinary shares and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the company, subject (in the case of (ii) and (iii) above) to our obligations to provide for claims of creditors and the requirements of applicable law. In connection with our redemption of 100% of our issued and outstanding public shares for a portion of the funds held in the trust account, each public shareholder will receive a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not previously released to us and less up to $50,000 for liquidation expenses. Holders of rights will receive no proceeds in connection with the liquidation with respect to such, which will expire worthless. The holders of the founder shares and private units will not participate in any redemption distribution with respect to their founder shares or private units, until all of the claims of any redeeming shareholders and creditors are fully satisfied (and then only from funds held outside the trust account). If we are unable to conclude our initial business combination and we expend all of the net proceeds of this offering not deposited in the trust account, without taking into account any interest earned on the trust account, we expect that the initial per-share redemption price will be approximately $10.10. The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of our shareholders. In addition, if we are forced to file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. Therefore, the actual per-share redemption price may be less than approximately $10.10. We will pay the costs of liquidating the trust account from the up to $50,000 of interest earned on the funds held in the trust account that is available to us for liquidation expenses. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time) and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares. 17 Indemnity Our sponsor has agreed that it will be liable to us, if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below $10.10 per share (whether or not the underwriters over-allotment option is exercised in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor s only assets are securities of our company. We have not asked our sponsor to reserve for such obligations and therefore believe our sponsor will be unlikely to satisfy its indemnification obligations if it is required to do so. However, we believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Summary of Risk Factors An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled "Risk Factors," alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to: We may not be able to complete our initial business combination within 12 months after the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus), in which case we would cease all operations except for the purpose of winding up, we would redeem our public shares for a pro rata portion of the funds in the trust account, and we would liquidate. In such event, our rights would expire worthless. If we seek shareholder approval of our initial business combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote. Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. If we seek shareholder approval of our initial business combination, and if you or a "group" of shareholders are deemed to hold in excess of 20% of our ordinary shares, you will lose the ability to convert all such shares in excess of 20% of our ordinary shares. The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination, may not allow us to complete the most desirable business combination or optimize our capital structure, or may increase the probability that our initial business combination would be unsuccessful. 18 We may require shareholders who wish to redeem their shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights. If we seek shareholder approval of our business combination, our sponsor, directors, officers and their affiliates may elect to purchase shares from public shareholders which may reduce the public "float" of our ordinary shares. We are not required to obtain an opinion from an independent investment banking firm, and consequently, an independent source may not confirm that the price we are paying for the business is fair to the company or our shareholders from a financial point of view. We may issue additional ordinary shares to complete a business combination, which would dilute the interests of our shareholders. Similarly, we may issue notes or other debt securities, or otherwise incur substantial indebtedness, to complete a business combination, which may affect our leverage and financial condition and thus negatively impact the value of our shareholders investment in us. Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the status of debt and equity markets. As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination. Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination. We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company. If we effect our initial business combination with a company located outside of the United States, we would be subject to additional risks relating to the impact of foreign laws, currency risk, tariffs and trade barriers, tax risks, less developed corporate governance standards, and investors may have difficulty in enforcing judgments against us. Past performance by our management team may not be indicative of future performance of an investment in us. Our officers and directors presently have fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Our officers and directors may have interests in a potential business combination that are different than yours, which may create conflicts of interest. You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss. If third parties bring claims against us, and if our directors decide not to enforce the indemnification obligations of our sponsor or if our sponsor does not have the funds to indemnify us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share. Further, our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares. You will experience immediate and substantial dilution from the purchase of our ordinary shares. 19 The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities. Nasdaq may delist our securities from trading on its exchange, which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. Holders of rights will not participate in liquidating distributions if we are unable to complete an initial business combination. We may amend the terms of the rights in a manner that may be adverse to holders of rights, with the approval by the holders of a majority of the then outstanding rights. Provisions of our amended and restated memorandum and articles of association relating to the rights and obligations attaching to our ordinary shares may be amended prior to the consummation of our initial business combination with the approval of a special resolution approved by holders of at least two thirds of our shareholders represented in person or by proxy and, being entitled to vote thereon and who vote at a general meeting of the company for which notice specifying the intention to propose the resolution as a special resolution has been given; or by a unanimous written resolution of all of the company s shareholders We may not call an annual general meeting until after the consummation of our initial business combination, and accordingly, shareholders will not be afforded an opportunity to appoint directors and discuss company affairs with management until such time. We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination. Because we are incorporated under the laws of the Cayman Islands you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited. We are an emerging growth company and smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations. If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues. After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in such country. Accordingly, our results of operations and prospects may be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate. Exchange rate fluctuations and currency policies may cause a target business ability to succeed in the international markets to be diminished. We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights. 20 We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance. We may undertake our initial business combination with an entity or business which is based in a foreign country, including China, and the laws and regulations of such foreign countries may not afford U.S. investors or regulatory agencies access to information normally available to them with respect to U.S. based entities. Trading in our securities may be prohibited under the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditor. In that case, Nasdaq would delist our securities. The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections may deprive our investors with the benefits of such inspections. U.S. laws and regulations, including the HFCA Act, may restrict or eliminate our ability to complete a business combination with certain companies, particularly those acquisition candidates with substantial operations in China. Recent regulatory actions by the government of the People s Republic of China with respect to foreign capital efforts and activities, including Business Combinations with offshore shell companies such as SPACS, may adversely impact our ability to consummate a business combination with a China based entity or business, or materially impact the value of our securities following any such business combination. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The Chinese government may intervene in and influence the manner in which our post-combination entity must conduct its business activities in ways that we cannot expect when we enter into a definitive agreement with a target company with major operation in China, which could result in a material change in our operations of the combined company and/or the value of our securities, and could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or become worthless. If the Chinese government establishes some new policies, regulations, rules, or laws affecting the industries that our post-combination entity is in, it may materially and adversely affect our operations and the value of our ordinary shares. Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us. We will not conduct an initial business combination with any target company that conducts operations through VIEs, which may limit the pool of acquisition candidates we may acquire in the PRC and make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC. M&A Rules and other PRC regulations may make it more difficult for us to complete an acquisition of a target business. If the approval of the China Securities Regulatory Commission is required in connection with this offering, we cannot predict whether we will be able to obtain such approval. We may not be able to complete an initial business combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), or ultimately prohibited. 21 You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management and directors named in the prospectus based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. Given that some of our directors and officers have significant ties to China and Hong Kong, the Chinese government may exercise oversight and discretion over their conduct including their search for a target company, the Chinese government may intervene or influence our operations at any time, which could result in a material change in our search for a target business and/or the value of the securities we are registering. Any actions by the Chinese government, including any decision to intervene or influence the operations of any future PRC subsidiary or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of any future PRC subsidiary, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless. Exchange controls that exist in the PRC may restrict or prevent us from using the proceeds of this offering to acquire a target company in the PRC and limit our ability to utilize our cash flow effectively following our initial business combination. Recent greater oversight by the PRC government and Cyberspace Administration of China over cybersecurity and data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our initial business combination, future business and any future offering of securities. If we select a business combination target that operates in the PRC, the approval of the Cybersecurity Review Office ("CRO"), the Central Cyberspace Affairs Commission and/or other PRC authority may be required for our initial business combination under PRC law. China Securities Regulatory Commission and other Chinese government agencies may exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers. If the CSRC or another PRC regulatory body subsequently determines that its approval is needed for this offering, we cannot predict whether we will be able to obtain such approval. As a result, both you and us face uncertainty about future actions by the PRC government that could significantly affect our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may occur quickly quick with little advance notice and could have a significant impact upon our ability to operate profitably in the PRC. Summary Financial Data The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented. May 8, 2023 September 30, 2023 (Audited) (Unaudited) Balance Sheet Data: Working capital deficiency $(69,063) $ (203,567 ) Total assets $65,445 $ 234,949 Total liabilities $69,063 $ 213,567 Stockholders equity (deficit) $(3,618) $ 21,382 22 RISK FACTORS An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Risks Relating to Searching for and Consummating a Business Combination Our independent registered public accounting firm s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a "going concern." As of May 8, 2023, we had $0 in cash and a working capital deficit of $69,063. As of September 30, 2023, we had $10,000 in cash and a working capital deficit of $203,567. Further, we have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. Management s plans to address this need for capital through this offering are discussed in the section of this prospectus titled "Management s Discussion and Analysis of Financial Condition and Results of Operations." Our plans to raise capital and to consummate our initial business combination may not be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern. The requirement that we complete our initial business combination within 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus) may give potential target businesses leverage over us in negotiating our initial business combination and may limit the amount of time we have to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to consummate our initial business combination on terms that would produce value for our shareholders. Any potential target business with which we enter into negotiations concerning our initial business combination will be aware that we must consummate our initial business combination within 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus). Consequently, such target businesses may obtain leverage over us in negotiating our initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation. We may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. We must complete our initial business combination within 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus). We may not be able to find a suitable target business and consummate our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we are unable to consummate our initial business combination within the required time period, we will, as promptly as reasonably possible but not more than five business days thereafter, distribute the aggregate amount then on deposit in the trust account (net of taxes payable, and less up to $50,000 of interest to pay liquidation expenses), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. This redemption of public shareholders from the trust account shall be effected as required by function of our amended and restated memorandum and articles of association and prior to any voluntary winding up. 23 If we are unable to consummate our initial business combination within 12 months of the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus), our public shareholders may be forced to wait beyond such period of time before redemption from our trust account. If we are unable to consummate our initial business combination within 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus), we will, as promptly as reasonably possible but not more than five business days thereafter, distribute the aggregate amount then on deposit in the trust account (net of taxes payable, and less up to $50,000 of interest to pay liquidation expenses), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs by way of a voluntary liquidation, as further described herein. Any redemption of public shareholders from the trust account shall be effected as required by our amended and restated memorandum and articles of association prior to our commencing any voluntary liquidation. If we are required to liquidate prior to distributing the aggregate amount then on deposit in the trust account (net of taxes payable, and less up to $50,000 of interest to pay liquidation expenses) pro rata to our public shareholders, then such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 12 months (or 24 months) before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. Except as otherwise described herein, we have no obligation to return funds to investors prior to the date of any redemption required as a result of our failure to consummate our initial business combination within the period described above or our liquidation, unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their ordinary shares. Only upon any such redemption of public shares as we are required to effect or any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination. Our public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public shareholders do not support such a combination. If we do not decide to hold a shareholder vote in conjunction with our initial business combination for business or other legal reasons, we will conduct redemptions pursuant to the tender offer rules of the SEC and our amended and restated memorandum and articles of association. Nasdaq rules currently allow us to engage in a tender offer in lieu of a general meeting, provided that we were not seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration in any business combination. Furthermore, shareholder approval would not be required pursuant to the Companies Act if our initial business combination were structured as a purchase of assets, a purchase of stock, shares or other equity securities of the target not involving a merger with us, or a merger of the target into a subsidiary of our company, or if we otherwise entered into contractual arrangements with a target to obtain control of such company. Accordingly, we may consummate our initial business combination even if holders of a majority of our public shares do not approve of the business combination. Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Because our board of directors may consummate our initial business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination. If we seek shareholder approval of our business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a "group" of shareholders are deemed to hold in excess of 20% of our ordinary shares, you will lose the ability to redeem all such shares in excess of 20% of our ordinary shares. If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, individually or together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a "group" (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in this offering. Your inability to redeem more than an aggregate of 20% of the shares sold in this offering will reduce your influence over our ability to consummate our initial business combination and you could suffer a material loss on your investment in us if you sell such excess shares in open market transactions. As a result, you will continue to hold that number of shares exceeding 20% and, in order to dispose of such shares, you would be required to sell your shares in open market transaction, potentially at a loss. 24 Our initial shareholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support. Upon closing of this offering and the private placement, our initial shareholders will own 20% of our issued and outstanding ordinary shares (assuming our initial shareholders do not purchase any units in this offering and assuming no exercise of the underwriters over-allotment option and the forfeiture of 225,000 founder shares by our sponsor as a result thereof). Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our initial shareholders purchase any units in this offering or if they purchase any additional ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our sponsor nor, to our knowledge, any of our officers or directors, has any current intention to purchase additional securities. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our ordinary shares. In addition, our board of directors, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. It is unlikely that there will be an annual general meeting to appoint new directors prior to the consummation of our initial business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. If there is an annual general meeting, as a consequence of our "staggered" board of directors, only one-third of the board of directors will be considered for appointment and our initial shareholders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial shareholders will continue to exert control at least until the consummation of our initial business combination. The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to consummate the most desirable business combination or optimize our capital structure. We may enter into a business combination agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. The ability of our public shareholders to exercise redemption rights could prevent us from having such cash available to satisfy the closing condition. Accordingly, we may need to arrange third party financing to help fund our business combination in case a larger percentage of shareholders exercise their redemption rights than we expect. If the acquisition involves the issuance of our shares as consideration, we may be required to issue a higher percentage of our shares to the target or its shareholders to make up for the failure to satisfy a minimum cash requirement. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us. The ability of our public shareholders to exercise their redemption rights may not allow us to effectuate the most desirable business combination or optimize our capital structure. If our initial business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know how many public shareholders may exercise redemption rights, we may either need to reserve part of the trust account for possible payment upon such redemption, or we may need to arrange third party financing to help fund our initial business combination. In the event that the acquisition involves the issuance of our shares as consideration, we may be required to issue a higher percentage of our shares to make up for a shortfall in funds. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us. The requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies that we may complete such a business combination with. Pursuant to the Nasdaq listing rules, the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the execution of a definitive agreement for our initial business combination. This restriction may limit the type and number of companies that we may complete an initial business combination with. If we are unable to locate a target business or businesses that satisfy this fair market value test, we may be forced to liquidate and you will only be entitled to receive your pro rata portion of the funds in the trust account. 25 We may be unable to consummate an initial business combination if a target business requires that we have a certain amount of cash at closing, in which case public shareholders may have to remain shareholders of our company and wait until our redemption of the public shares to receive a pro rata share of the trust account or attempt to sell their shares in the open market. A potential target may make it a closing condition to our initial business combination that we have a certain amount of cash available at the time of closing. If the number of our public shareholders electing to exercise their redemption rights has the effect of reducing the amount of money available to us to consummate an initial business combination below such minimum amount required by the target business and we are not able to locate an alternative source of funding, we will not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. In that case, public shareholders may have to remain shareholders of our company and wait the full 12 months (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus) in order to be able to receive a portion of the trust account, or attempt to sell their shares in the open market prior to such time, in which case they may receive less than they would have in a liquidation of the trust account. The requirement that we maintain a minimum net worth or retain a certain amount of cash could increase the probability that our business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares. If, pursuant to the terms of our proposed business combination, we are required to maintain a minimum net worth or retain a certain amount of cash in trust in order to consummate the business combination and regardless of whether we proceed with redemptions under the tender or proxy rules, the probability that our business combination would be unsuccessful is increased. If our business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in our trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with the exercise of your redemption rights until we liquidate or you are able to sell your shares in the open market. We intend to offer each public shareholder the option to vote in favor of the proposed business combination and still seek redemption of such shareholders shares. In connection with any general meeting held to approve an initial business combination, we will offer each public shareholder (but not our initial shareholders, officers or directors) the right to have his, her or its ordinary shares redeemed for cash (subject to the limitations described elsewhere in this prospectus) regardless of whether such shareholder votes for or against such proposed business combination or does not vote at all. We will consummate our initial business combination only if a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination. This threshold and the ability to seek redemption while voting in favor of a proposed business combination may make it more likely that we will consummate our initial business combination. We will require public shareholders who wish to redeem their ordinary shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights. We will require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in "street name," to either tender their certificates to our transfer agent or to deliver their shares to the transfer agent electronically using The Depository Trust Company s DWAC (Deposit/Withdrawal At Custodian) System, at the holder s option, prior to the expiration date set forth in the tender offer documents mailed to such holders, or in the event we distribute proxy materials, up to two business days prior to the vote on the proposal to approve the business combination. In order to obtain a physical share certificate, a shareholder s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical share certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under our amended and restated memorandum and articles of association, we are required to provide at least 10 days advance notice of any general meeting, which would be the minimum amount of time a shareholder would have to determine whether to exercise redemption rights. Accordingly, if it takes longer than we anticipate for shareholders to deliver their shares, shareholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares. In the event that a shareholder fails to comply with the various procedures that must be complied with in order to validly tender or redeem public shares, its shares may not be redeemed. Additionally, despite our compliance with the proxy rules or tender offer rules, as applicable, shareholders may not become aware of the opportunity to redeem their shares. 26 Redeeming shareholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved. We will require public shareholders who wish to redeem their ordinary shares in connection with any proposed business combination to comply with the delivery requirements discussed above for redemption. If such proposed business combination is not consummated, we will promptly return such certificates to the tendering public shareholders. Accordingly, investors who attempted to redeem their shares in such a circumstance will be unable to sell their securities after the failed acquisition until we have returned their securities to them. The market price for our ordinary shares may decline during this time and you may not be able to sell your securities when you wish to, even while other shareholders that did not seek redemption may be able to sell their securities. Because of our structure, other companies may have a competitive advantage and we may not be able to consummate an attractive business combination. We expect to encounter intense competition from entities other than blank check companies having a business objective similar to ours, including private equity groups, venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. Therefore, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, seeking shareholder approval of our initial business combination may delay the consummation of a transaction. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating our initial business combination. If we seek shareholder approval of our business combination, our sponsor, directors, officers and their affiliates may elect to purchase shares from public shareholders which may reduce the public "float" of our ordinary shares. If we seek shareholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the consummation of our initial business combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. Please see "Proposed Business — Permitted purchases of our securities" for a description of how such persons will determine which shareholders to seek to acquire shares from. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transactions may be different than the amount per share a public shareholder would receive if such public shareholder elected to redeem its shares in connection with our initial business combination. The purpose of such purchases would be to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of the business combination, where it appears that such requirement would otherwise not be met. This may result in the consummation of an initial business combination that may not otherwise have been possible. Further, any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. In addition, if such purchases are made, the public "float" of our ordinary shares and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers (a) would purchase the public shares at a price no higher than the price offered through our redemption process; (b) would represent in writing that such public shares will not be voted in favor of approving the business combination; and (c) would waive in writing any redemption rights with respect to the public shares so purchased. To the extent any such purchases by our initial shareholders or any of their respective affiliates are made in situations in which the tender offer rules restrictions on purchases apply, we will disclose such sales, in a Current Report on Form 8-K prior to the security holder meeting to approve the business combination transaction. Purchases of ordinary shares in the open market or in privately negotiated transactions by our sponsor, directors, officers or their affiliates may make it difficult for us to maintain the listing of our ordinary shares on a national securities exchange following the consummation of an initial business combination. If our sponsor, directors, officers or their affiliates purchase ordinary shares in the open market or in privately negotiated transactions, the public "float" of our ordinary shares and the number of beneficial holders of our securities would both be reduced, possibly making it difficult to maintain the listing or trading of our securities on a national securities exchange following consummation of the business combination. Because we are not limited to any particular business or specific geographic location or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business operations. We may pursue acquisition opportunities in any geographic region and in any business industry or sector. Except for the limitations that a target business have a fair market value of at least 80% of the value of the trust account (less any deferred underwriting commissions and taxes payable on interest earned) and that we are not permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Because we have not yet identified or approached any specific target business with respect to our initial business combination, there is no basis to evaluate the possible merits or risks of any particular target business s operations, results of operations, cash flows, liquidity, financial condition or prospects. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. As such, although we are not targeting target companies in China, we may consider an initial business combination with a target business with its principal business operations in China (including Hong Kong and Macau). 27 To the extent we consummate our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. An investment in our units may not ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in an acquisition target. We are not required to obtain an opinion from an independent investment banking firm or another independent entity, and consequently, an independent source may not confirm that the price we are paying for the business is fair to our company (or shareholders) from a financial point of view. Unless we consummate our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our company (or shareholders) from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Our board of directors will have significant discretion in choosing the standard used to establish the fair market value of the target acquisition. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination. Our rights may have an adverse effect on the market price of our ordinary shares and make it more difficult to effectuate our initial business combination. Our units include 6,000,000 rights (6,900,000 rights if the underwriters exercise their over-allotment option) which convert on a 5 to 1 basis upon the consummation of our initial business combination. As such, upon the consummation of our initial business combination the rights will convert into 1,200,000 ordinary shares (or 1,380,000 ordinary shares if the underwriters exercise their over-allotment option in this offering). In addition, our initial shareholders, officers and directors or their affiliates may, but are not obligated to, make certain loans to us, up to $1,500,000 of which may be converted upon consummation of our initial business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued private rights entitling the holder to an aggregate of 30,000 ordinary shares upon the consummation of our initial business combination). To the extent we issue ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number of additional ordinary shares upon conversion of our rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding ordinary shares and reduce the value of the ordinary shares issued to complete the business transaction. Therefore, our rights may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business. 28 We may issue additional ordinary shares to complete our initial business combination or under an employee incentive plan upon or after consummation of our initial business combination, which would dilute the interest of our shareholders and likely present other risks. Our amended and restated memorandum and articles of association will authorize the issuance of 500,000,000 ordinary shares. We may issue a substantial number of additional ordinary shares to complete our initial business combination or under an employee incentive plan upon or after consummation of our initial business combination. Although no such issuance of ordinary shares will affect the per share amount available for redemption from the trust account, the issuance of additional ordinary shares: may significantly dilute the equity interest of investors in this offering, who will not have pre-emption rights in respect of such an issuance; could cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and may adversely affect prevailing market prices for our units, ordinary shares and/or rights. We may issue notes or other debt securities, or otherwise incur substantial debt, to complete our initial business combination, which may adversely affect our financial condition and thus negatively impact the value of our shareholders investment in us. Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete initial business combination. Furthermore, we may issue a substantial number of additional ordinary shares to complete our initial business combination or under an employee incentive plan upon or after consummation of our initial business combination. We and our officers and directors have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to any monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including: default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations; acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; our inability to pay dividends on our ordinary shares; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. 29 We may only be able to complete one business combination with the proceeds of this offering, and the sale of the private units, which will cause us to be solely dependent on a single business, which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability. The net proceeds from this offering and the sale of the private units will provide us with approximately $61,300,000 (or approximately $70,390,000 if the underwriters over-allotment option is exercised in full) that we may use to complete our initial business combination (which includes up to approximately $600,000 (or up to $690,000 if the over-allotment option is exercised in full, for the payment of deferred underwriting commissions). We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By consummating our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities, which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be: solely dependent upon the performance of a single business, property or asset, or dependent upon the development or market acceptance of a single or limited number of products, processes or services. This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination. We may attempt to simultaneously consummate business combinations with multiple prospective targets, which may hinder our ability to consummate our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability. If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete the initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations. Resources could be wasted in researching acquisitions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. We anticipate that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may only receive $10.10 per share (whether or not the underwriters over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and our rights will expire worthless. 30 We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we are unable to complete our initial business combination, our public shareholders may only receive $10.10 per share (whether or not the underwriters over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and the rights will expire worthless. Although we believe that the net proceeds of this offering and the sale of the private units, together with interest earned on the trust account, will be sufficient to allow us to consummate our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private units, together with available interest from the trust account, prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. Financing may not be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate our initial business combination, we would be compelled to either restructure the transaction or abandon that particular initial business combination and seek an alternative target business candidate. If we are unable to complete our initial business combination, our public shareholders may only receive $10.10 per share (whether or not the underwriters over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and the rights will expire worthless. In addition, even if we do not need additional financing to consummate our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination. Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses. The United States federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements must be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or International Financial Reporting Standard as issued by the International Accounting Standards Board, or IFRS, and the historical financial statements must be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and consummate our initial business combination within our 12 month (or up to 24 month) time frame. Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus (COVID-19) pandemic. The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination may have been materially and adversely affected or may be so affected in the future. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extended period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination. In recent years and especially in the last several months, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate an initial business combination. 31 In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether. Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination. In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed. The premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. There can be no assurance that these trends will not continue. The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination s ability to attract and retain qualified officers and directors. In addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity will likely need to purchase additional insurance with respect to any such claims ("run-off insurance"). The need for run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors. The SEC has issued proposed rules relating to certain activities of special purpose acquisition companies ("SPACs"). Certain of the procedures that we, a potential business combination target, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete our initial business combination and may constrain the circumstances under which we could complete an initial business combination. The need for compliance with the SPAC Rule Proposals may cause us to liquidate the funds in the Trust Account or liquidate our company at an earlier time than we might otherwise choose. On March 30, 2022, the SEC issued proposed rules (the "SPAC Rule Proposals") relating, among other items, to disclosures in business combination transactions between SPACS such as us and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC s duration, asset composition, business purpose and activities. The SPAC Rule Proposals have not yet been adopted, and may be adopted in the proposed form or in a different form that could impose additional regulatory requirements on SPACs. Certain of the procedures that we, a potential business combination target, or others may determine to undertake in connection with the SPAC Rule Proposals, or pursuant to the SEC s views expressed in the SPAC Rule Proposals, may increase the costs and time of negotiating and completing an initial business combination, and may constrain the circumstances under which we could complete an initial business combination. The need for compliance with the SPAC Rule Proposals may cause us to liquidate the funds in the Trust Account or liquidate our company at an earlier time than we might otherwise choose. We face risks related to the ongoing Russian invasion of Ukraine and any other conflicts that may arise on a global or regional scale which may adversely affect the business and results of operations of the post-combination entity. On February 24, 2022, the Russian Federation launched an invasion of Ukraine that has had an immediate impact on the global economy resulting in higher energy prices and higher prices for certain raw materials and goods and services which in turn is contributing to higher inflation in the United States and other countries across the globe with significant disruption to financial markets and supply and distribution chains for certain raw materials and goods and services on an unprecedented scale. The impact of the sanctions has also included disruptions to financial markets, an inability to complete financial or banking transactions, restrictions on travel and an inability to service existing or new customers in a timely manner in the affected areas of Europe. The Russian invasion of Ukraine has continued to escalate without any resolution of the invasion foreseeable in the near future with the short and long-term impact on financial and business conditions in Europe remaining highly uncertain. 32 The U.S. and the European Union responded to Russia s invasion of Ukraine by imposing various economic sanctions on the Russian Federation to which the Russian Federation has responded in kind. The United Kingdom, Japan, South Korea, Australia and other countries across the globe have imposed their own sanctions on the Russian Federation. The United States, the European Union and such other countries acting together or separately could impose wider sanctions or take further actions against the Russian Federation if the conflict continues to escalate. Multinational corporations and other corporations and businesses with business and financial ties to the Russian Federation have either reduced or eliminated their ties to the Russian Federation in a manner that often exceeds what is required pursuant to sanctions by these countries. Further, the Russian Federation s cyberattacks and other action may impact businesses across the United States, the European Union and other nations across the globe including those without any direct business ties to the Russian Federation. It is uncertain if the post-combination entity s business, operation, or financial conditions could be materially impacted in the event of a downturn in the worldwide economy resulting from the Russian invasion of Ukraine and other conflicts with a global impact. If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination. If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including: restrictions on the nature of our investments; and restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including: registration as an investment company; adoption of a specific form of corporate structure; and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading "investment securities" constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor. We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an "investment company" within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (a) the completion of our initial business combination; (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination within the period to consummate the initial business combination or (ii) with respect to any other provisions relating to the rights of holders of our ordinary shares; or (c) absent our completing an initial business combination within the period to consummate the initial business combination, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we do not complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders. 33 Risks Associated with Acquiring and Operating a Business in Foreign Countries If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations. If we pursue a target a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates. If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following: costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets; rules and regulations regarding currency redemption; complex corporate withholding taxes on individuals; laws governing the manner in which future business combinations may be effected; exchange listing and/or delisting requirements; tariffs and trade barriers; regulations related to customs and import/export matters; local or regional economic policies and market conditions; export limits of raw materials and related in-country value-added processing requirements unexpected changes in regulatory requirements; longer payment cycles; tax issues, such as tax law changes and variations in tax laws as compared to the United States; currency fluctuations and exchange controls, including devaluations and other exchange rate movements; rates of inflation; liquidity of domestic capital and lending markets and challenges in collecting accounts receivable; compliance with the U.S. Foreign Corrupt Practices Act of 1977, as amended (the "FCPA") and similar laws in other countries, which prohibit U.S. companies and their intermediaries from engaging in bribery or other prohibited payments to foreign officials and require companies to keep books and records that accurately and fairly reflect the transactions of the company and to maintain an adequate system of internal accounting controls; cultural and language differences; employment regulations; underdeveloped or unpredictable legal or regulatory systems; 34 corruption; protection of intellectual property; social unrest, crime, strikes, riots and civil disturbances; regime changes and political upheaval; terrorist attacks, natural disasters and wars; deterioration of political relations with the United States; and government appropriation of assets. We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations. If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues. Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations. After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in such country. Accordingly, our results of operations and prospects may be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate. The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable. Exchange rate fluctuations and currency policies may cause a target business ability to succeed in the international markets to be diminished. In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction. 35 We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights. In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital. We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance. We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. Risks Related to Acquiring or Operating Businesses in the PRC We do not currently operate in the PRC. However, our sponsor and certain members of our board of directors and management have significant business ties to or are based in the PRC and Hong Kong. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. As such, although we are not targeting target companies in China, we may consider a business combination with an entity or business with a physical presence or other significant ties to the PRC which may subject the post-business combination business to the laws, regulations and policies of the PRC. As a result, we may be subject to risks related to the PRC as discussed below. We may undertake our initial business combination with an entity or business which is based in a foreign country, including China, and the laws and regulations of such foreign countries may not afford U.S. investors or regulatory agencies access to information normally available to them with respect to U.S. based entities. In November 2020, the SEC Staff issued guidance regarding certain risks and considerations that should be considered by investors regarding foreign entities, specifically the limited ability of U.S. investors and regulatory agencies to rely upon or obtain information from foreign based entities, specifically China based entities, under the laws and regulations of such foreign countries. As stated by the SEC Staff, "[A]lthough China-based Issuers that access the U.S. public capital markets generally have the same disclosure obligations and legal responsibilities as other non-U.S. issuers, the Commission s ability to promote and enforce high-quality disclosure standards for China-based Issuers may be materially limited. As a result, there is substantially greater risk that their disclosures may be incomplete or misleading. In addition, in the event of investor harm, investors generally will have substantially less access to recourse, in comparison to U.S. domestic companies and foreign issuers in other jurisdictions." Among other potential issues and risks cited by the SEC Staff, the SEC Staff identified restrictions in China which restricted the PCAOB s ability to inspect audit work and practices of PCAOB-registered public accounting firms in China and on the PCAOB s ability to inspect audit work with respect to China-based issuer audits by PCAOB-registered public accounting firms in Hong Kong. However, we will not conduct an initial business combination with a target company that has an auditor that PCAOB is unable to inspect for two consecutive years at the time of our business combination, and will not engage an auditor following an initial business combination that PCAOB is unable to inspect for two consecutive years. 36 Further, current laws and regulations in China as well as other potential target countries, can limit or restrict investigations and similar activities by U.S. regulatory agencies such as the SEC to gather information regarding the securities and other activities of issuers based in the foreign countries where such laws or regulations exist. According to Article 177 of the newly amended PRC Securities Law which became effective in March 2020 (the "Article 177"), the securities regulatory authority of the PRC State Council may collaborate with securities regulatory authorities of other countries or regions in order to monitor and oversee cross border securities activities. Article 177 further provides that overseas securities regulatory authorities are not allowed to carry out investigation and evidence collection directly within the territory of the PRC, and that any Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to overseas agencies without prior consent of the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council. Although we have not identified a potential target business nor any particular country in which a business combination may occur, we intend to consider potential target business in foreign jurisdictions, including China based entities and businesses, and therefore investors should be aware of risks related to the ability to obtain information and conduct investigations and be afforded protections by U.S. based agencies such as the SEC related to any such business combination with a target business in a foreign country and consider such risks prior to investing in our securities. Trading in our securities may be prohibited under the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditor. In that case, Nasdaq would delist our securities. The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections may deprive our investors with the benefits of such inspections. The HFCA Act, or the HFCA Act, was enacted on December 18, 2020. The HFCA Act states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years, the SEC shall prohibit our shares or other securities from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. Our current auditor, MaloneBailey, LLP is an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, and is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. However, if it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, Nasdaq would delist our securities, and the SEC shall prohibit them from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. For example, if we effect our initial business combination with a business located in the PRC and if our new auditor is located in China, with operations in and which performs audit operations of registrants in China, a jurisdiction where the PCAOB has been unable to conduct inspections without the approval of the Chinese authorities, the work of our new auditor as it relates to those operations may not be inspected by the PCAOB. Although we will not conduct an initial business combination with a target company that has an auditor that PCAOB is unable to inspect for two consecutive years at the time of our business combination, and will not engage an auditor following an initial business combination that PCAOB is unable to inspect for two consecutive years, which requirements will be included as a condition to closing our initial business combination, if applicable laws, regulations or interpretations change that prevent any such auditor from being inspected by the PCAOB in the future, we may suffer adverse consequences including the delisting of our securities. If our securities are delisted and prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. due to the PCAOB not being able to conduct inspections or full investigations of our auditor, it would substantially impair your ability to sell or purchase our securities when you wish to do so, and the risk and uncertainty associated with potential delisting and prohibition would have a negative impact on the price of our securities. Also, such delisting and prohibition could significantly affect the company s ability to raise capital on acceptable terms, or at all, which would have a material adverse effect on the company s business, financial condition and prospects. 37 On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements under the HFCA Act. We will be required to comply with these rules if the SEC identifies us as having a "non-inspection" year under a process to be subsequently established by the SEC. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which would amend the HFCA Act and require the SEC to prohibit an issuer s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. On November 5, 2021, the SEC approved the PCAOB s Rule 6100, Board Determinations Under the HFCA Act. Rule 6100 provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements of the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction. On December 16, 2021, the PCAOB issued a report in which it determined that it is unable to inspect or investigate completely registered public accounting firms headquartered in China, because of positions taken by Chinese authorities in those jurisdictions. The PCAOB made its determination pursuant to its Rule 6100, which provides the framework for how the PCAOB fulfills its responsibilities under the HFCA Act. In addition, the PCAOB s report also identified the specific registered public accounting firms which are subject to the PCAOB s determination that it is unable to inspect or investigate completely registered public accounting firms headquartered in China. Our auditor, MaloneBailey, LLP, is headquartered in Houston, Texas, and was not identified in the report as a firm subject to the PCAOB s determination. In December 2021, the SEC adopted amendments to finalize its rules under the HFCA Act that set forth submission and disclosure requirements for commission-identified issuers identified under the Act, specify the processes by which the SEC will identify and notify Commission-Identified Issuers, and implement trading prohibitions after three consecutive years of identification. On December 2022, Congress passed the omnibus spending bill and the President signed it into law. This spending bill included the enactment of provisions to accelerate the timeline for implementation of trading prohibitions from three years to two years. Separately, on December 15, 2022 the PCAOB published its determination that in 2022 the PCAOB was able to inspect and investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. This determination reset the now two-year clock for compliance with the trading prohibitions for identified issuers audited by these firms. The amendment had originally been passed by the U.S. Senate in June 2021, as the Accelerating Holding Foreign Companies Accountable Act. The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on August 6, 2020, the President s Working Group ("PWG") on Financial Markets, or the PWG, issued the Report on Protecting United States Investors from Significant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCA Act. However, some of the recommendations were more stringent than the HFCA Act. For example, if a company was not subject to PCAOB inspection, the report recommended that the transition period before a company would be delisted would end on January 1, 2022. The SEC has announced that the SEC staff is preparing a consolidated proposal for the rules regarding the implementation of the HFCA Act and to address the recommendations in the PWG report. It is unclear when the SEC will complete its rulemaking and when such rules will become effective and what, if any, of the PWG recommendations will be adopted. The SEC has also announced amendments to various annual report forms to accommodate the certification and disclosure requirements of the HFCA Act. There could be additional regulatory or legislative requirements or guidance that could impact us if our auditor is not subject to PCAOB inspection. The implications of these possible regulations in addition to the requirements of the HFCA Act are uncertain, and such uncertainty could cause the market price of our securities to be materially and adversely affected. If, for whatever reason, the PCAOB is unable to conduct inspections or full investigations of our auditor, the company could be delisted or prohibited from being traded over the counter earlier than would be required by the HFCA Act. If our securities are unable to be listed on another securities exchange by then, such delisting and prohibition would substantially impair your ability to sell or purchase our securities when you wish to do so, and the risk and uncertainty associated with potential delisting and prohibition would have a negative impact on the price of our securities. Also, such delisting and prohibition could significantly affect the company s ability to raise capital on acceptable terms, or at all, which would have a material adverse effect on the company s business, financial condition and prospects. 38 Inspections of audit firms that the PCAOB has conducted have identified deficiencies in those firms audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. If the PCAOB were unable to conduct inspections or full investigations of the company s auditor, investors in our securities would be deprived of the benefits of such PCAOB inspections. In addition, the inability of the PCAOB to conduct inspections or full investigations of auditors would may make it more difficult to evaluate the effectiveness of the company s independent registered public accounting firm s audit procedures or quality control procedures as compared to auditors that are subject to the PCAOB inspections, which could cause investors and potential investors in our stock to lose confidence in the audit procedures of our auditor and reported financial information and the quality of our financial statements. U.S. laws and regulations, including the HFCA Act, may restrict or eliminate our ability to complete a business combination with certain companies, particularly those acquisition candidates with substantial operations in China. The PCAOB is currently unable to conduct inspections on accounting firms in the PRC without the approval of the Chinese government authorities. Future developments in U.S. laws may restrict our ability or willingness to complete certain business combinations with companies that are affected. For instance, the enacted HFCA Act would restrict our ability to consummate a business combination with a target company unless that business met certain standards of the PCAOB and would require delisting of a company from U.S. national securities exchanges if the PCAOB is unable to inspect its public accounting firm for three consecutive years. The HFCA Act also requires public companies to disclose, among other things, whether they are owned or controlled by a foreign government, specifically, those based in China. While we will not conduct a business combination with a target company that has an auditor that PCAOB is unable to inspect for two consecutive years beginning at the time of our business combination, and will not engage an auditor following a business combination that PCAOB is unable to inspect for two consecutive years, we may not be able to consummate a business combination with a favored target company due to these laws. In the event that we complete a business combination with a company with substantial operations in China and any of the legislative actions or regulatory changes discussed above were to proceed in ways that are detrimental to China-based issuers, it could cause us to fail to be in compliance with U.S. securities laws and regulations, we could cease to be listed on a U.S. securities exchange, and U.S. trading of our shares could be prohibited. Any of these actions, or uncertainties in the market about the possibility of such actions, could adversely affect our prospects to successfully complete a business combination with a China-based company. Other developments in U.S. laws and regulatory environment, including but not limited to executive orders such as Executive Order (E.O.) 13959, "Addressing the Threat from Securities Investments That Finance Communist Chinese Military Companies," may further restrict our ability to complete a business combination with certain China-based businesses. Recent regulatory actions by the government of the People s Republic of China with respect to foreign capital efforts and activities, including Business Combinations with offshore shell companies such as SPACS, may adversely impact our ability to consummate a business combination with a China based entity or business, or materially impact the value of our securities following any such business combination. Although we have not identified any potential business combination target or any country in which we may source any target business, we may eventually identify and submit for shareholder approval a business combination with a target business located or based in China. On July 30, 2021, the Chairman of the SEC issued a statement highlighting potential issues resulting from recent China regulatory changes and guidance that may impact investors investments in China based entities. According to the SEC s Chairman, the PRC provided new guidance to and placed restrictions on China-based companies raising capital offshore, including through associated offshore shell companies. These developments include China government-led cybersecurity reviews of certain companies raising capital through offshore entities. This is relevant to U.S. investors. In a number of sectors in China, companies are not allowed to have foreign ownership and cannot directly list on exchanges outside of China. To raise money on such exchanges, many China-based operating companies are structured as Variable Interest Entities (VIEs). In such an arrangement, a China-based operating company typically establishes an offshore shell company in another jurisdiction to issue stock to public shareholders. For U.S. investors, this arrangement creates "exposure" to the China-based operating company, though only through a series of service contracts and other contracts. To be clear, though, neither the investors in the shell company s stock, nor the offshore shell company itself, has stock ownership in the China-based operating company. 39 On March 15, 2019, the National People s Congress approved the Foreign Investment Law, which took effect on January 1, 2020 and replaced three existing laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic invested enterprises in China. The Foreign Investment Law establishes the basic framework for access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition. According to the China Foreign Investment Law, "foreign investment" refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as "foreign investor") within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council. The "variable interest entity" structure, or VIE structure, has been adopted by many PRC-based companies to obtain necessary licenses and permits in the industries that are currently subject to foreign investment restrictions in China. However, we will not conduct a business combination with any target company that conducts operations through VIEs. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. If we were to undertake a business combination with a China based business, our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, cyber security, environmental regulations, land use rights, property and other matters. The central or local governments of jurisdictions such as China may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations. The laws and regulations are sometimes vague and new laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business. In connection with any business combination with a China based entity, we will be required to provide additional risk disclosure related to any such possible transaction and would be expected to incur additional costs related to compliance with such laws and regulations, if such compliance can be obtained. 40 The Chinese government may intervene in and influence the manner in which our post-combination entity must conduct its business activities in ways that we cannot expect when we enter into a definitive agreement with a target company with major operation in China, which could result in a material change in our operations of the combined company and/or the value of our securities, and could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or become worthless. If the Chinese government establishes some new policies, regulations, rules, or laws affecting the industries that our post-combination entity is in, it may materially and adversely affect our operations and the value of our ordinary shares. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. If we acquire a company based in China, our post-combination entity s ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property, and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties. Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us. The PRC legal system is based on written statutes. Unlike common law systems, it is a system in which legal cases have limited value as precedents. In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The legislation over the past three decades has significantly increased the protection afforded to various forms of foreign or private-sector investment in China. Any future PRC subsidiary would be subject to various PRC laws and regulations generally applicable to companies in China. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, however, the interpretations of many laws, regulations, and rules are not always uniform and enforcement of these laws, regulations, and rules involve uncertainties. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, however, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies, internal rules, and regulations that may have retroactive effect and may change quickly with little advance notice. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property), and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations. In addition, the legal and regulatory risks associated with doing business in China may make us a less attractive partner in an initial business combination than other special purpose acquisition companies that do not have ties to China. As such, our ties to China — including through our sponsor, officers and directors – may make it harder for us to complete an initial business combination with a target company without any such ties. We will not conduct an initial business combination with any target company that conducts operations through VIEs, which may limit the pool of acquisition candidates we may acquire in the PRC and make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC. Our sponsor and members of our board of directors and management have significant business ties to or are based in the PRC or Hong Kong and we may consider a business combination with an entity or business with a physical presence or other significant ties to the PRC. Where Chinese law prohibits direct foreign investment in companies located in the PRC, such companies may conduct operations through VIEs as a means of providing the economic benefits of foreign investment in such companies without investing directly. However, we will not conduct an initial business combination with any target company that conducts operations through VIEs. As a result, this may limit the pool of acquisition candidates we may acquire in the PRC, in particular, due to the relevant PRC laws and regulations against foreign ownership of and investment in certain assets and industries, known as restricted industries, including but not limited to value-added telecommunications services such as internet content providers. Furthermore, this may limit the pool of acquisition candidates we may acquire in the PRC relative to other special purpose acquisition companies that are not subject to such restrictions and may make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC relative to such other companies. As a result, we may not be able to consummate a business combination with a favored target company. 41 M&A Rules and other PRC regulations may make it more difficult for us to complete an acquisition of a target business. The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, and other regulations and rules concerning mergers and acquisitions established a comprehensive set of regulations governing the approval process by which a Chinese company may participate in an acquisition of its assets or its equity interests and by which a Chinese company may obtain public trading of its securities on a securities exchange outside the PRC. The M&A Rules have largely centralized and expanded the approval process to the Ministry of Commerce, the State Administration of Industry and Commerce (SAIC), the State Administration of Foreign Exchange (SAFE) or its branch offices, the State Asset Supervision and Administration Commission (SASAC), and the China Securities Regulatory Commission (CSRC) Depending on the structure of the transaction, the M&A Rules may require the Chinese parties to make a series of applications and supplemental applications to one or more of the aforementioned agencies, some of which must be made within strict time limits and depend on approvals from one or the other of the aforementioned agencies. The application process has been supplemented to require the presentation of economic data concerning a transaction, including appraisals of the business to be acquired and evaluations of the acquirer which will permit the government to assess the economics of a transaction in addition to compliance with legal requirements. If obtained, approvals will have expiration dates by which a transaction must be completed. Completed transactions must also be reported to MOFCOM the Ministry of Commerce and some of the other agencies within a short period after closing or be subject to an unwinding of the transaction. Therefore, acquisitions in China may not be able to be completed because the terms of the transaction may not satisfy aspects of the approval process and may not be completed, even if approved, if they are not consummated within the time permitted by the approvals granted. Moreover, according to the Anti-Monopoly Law and other relevant PRC regulations, transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the State Administration for Market Regulation before they can be completed. On July 1, 2015, the National Security Law of China took effect, which provides that China would establish rules and mechanisms to conduct national security review of foreign investments in China that may impact national security. The Foreign Investment Law of China, or the Foreign Investment Law, came into effect on January 1, 2020 and reiterates that China will establish a security review system for foreign investments. On December 19, 2020, the National Development and Reform Commission, or the NDRC, and MOFCOM jointly issued the Measures for the Security Review of Foreign Investments, or the FISR Measures, which were made according to the National Security Law and the Foreign Investment Law and became effective on January 18, 2021. Under the FISR Measures, foreign investments in military-related industries and certain other industries that affect or may affect national security are subject to the security review conducted through the NDRC and MOFCOM. The FISR Measures further expand the scope of national security review on foreign investment compared to the existing rules, while leaving substantial room for interpretation and speculation. Pursuant to the Foreign Investment Law, the PRC State Council shall promulgate or approve a list of special administrative measures for foreign investments. The Special Administrative Measures (Negative List) for the Access of Foreign Investment (Edition 2020) that was promulgated by the NDRC and MOFCOM and took effect in July 2020 is the currently effective negative list and may be amended from time to time. The Foreign Investment Law provides that foreign investors shall not invest in the "prohibited" industries on the negative list, and shall meet such requirements as stipulated under the negative list for making investment in the "restricted" industries. Depending on the specific industry in which the target for our initial business combination operates, our initial business combination may be subject to requirements of the negative list. If we pursue an initial business combination with a target based in China, or if the combined company after our initial business combination pursues additional strategic acquisitions in China, complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from MOFCOM, any other relevant PRC governmental authorities or their respective local counterparts may hinder our ability to complete such transaction on a timely basis or at all. As a result, we may not be able to complete our initial business combination within the prescribed timeframe described in this prospectus, and the combined company s ability to expand its business or maintain its market share by strategic acquisitions may be limited. 42 In addition, the Circular of the General Office of the State Council on the Establishment of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors that became effective in March 2011, and the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by MOFCOM. The rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the event we acquire a target in China, we may be subject to such regulatory reviews, which may impact our ability to complete a business combination within the prescribed time period. The scope of the review we may be subject to includes, but is not limited to, whether the acquisition will impact national security or economic and social stability, and research and development capabilities on key national security related technologies. Foreign investors must submit a security review application to MOFCOM for its review of a contemplated acquisition. If the acquisition is considered within the scope of the security review regulations, MOFCOM will transfer the application to a joint security review committee consisting of members from various PRC government agencies, for further review. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete acquisitions could be time consuming. Any required approval processes may delay or inhibit our ability to complete such transactions, including but not limited to our ability to complete an initial business combination within the prescribed timeframe described in this prospectus. We may also be prevented from pursuing certain investment opportunities if the PRC government considers the potential investments a national security concern. If the approval of the China Securities Regulatory Commission is required in connection with this offering, we cannot predict whether we will be able to obtain such approval. The M&A Rules, adopted by six PRC regulatory agencies requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the China Securities Regulatory Commission ("CSRC") prior to the listing and trading of such special purpose vehicle s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by any such special purpose vehicle seeking CSRC s approval of overseas listings. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules and the CSRC approval requirement to offshore special purpose vehicles. In addition, the Opinions jointly issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council (the "Opinions"), which were made available to the public on July 6, 2021, call for strengthened regulation over illegal securities activities and supervision of overseas listings by China-based companies and propose to take effective measures, such as promoting the development of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. The Opinions also provide that the State Council will revise provisions regarding the overseas issuance and listing of shares by companies limited by shares and will clarify the duties of domestic regulatory authorities. As of the date of this prospectus, no official guidance and related implementation rules have been issued in relation to the recently issued Opinions and the interpretation and implementation of the Opinions remain unclear at this stage. 43 On February 17, 2023, the CSRC promulgated the Trial Measures, which took effect on March 31, 2023. The Trial Measures supersede the prior M&A Rules and clarified and emphasized several aspects, which include but are not limited to: (1) comprehensive determination of the "indirect overseas offering and listing by PRC domestic companies" in compliance with the principle of "substance over form" and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: (a) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year comes from PRC domestic companies, and (b) the main parts of the issuer s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements for issuers that (a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures, (b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and (c) whose such overseas securities offering or listing shall be completed before September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing or offering overseas, such as (a) issuers whose listing or offering overseas has been recognized by the State Council of the PRC as a possible threat to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers under ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers compliance with web security, data security, and other national security laws and regulations; (5) issuers filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and the obligation after offering or listing overseas to report to the CSRC material events including a change of control or voluntary or forced delisting of the issuer; and (6) the CSRC s authority to fine both issuers and their shareholders between 1 and 10 million RMB for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. Based on our understanding of the current PRC laws and regulations, we believe that our company is not required to obtain any prior permission from any PRC governmental authorities (including the CSRC) for consummating this offering, given that our company is a blank check company newly incorporated in the Cayman Islands rather than in China and currently we do not own or control any equity interest in any PRC company or operate any business in China. Likewise, while our sponsor is controlled by persons residing in the PRC, it is a Cayman company and has no operations in the PRC. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or any other PRC governmental authorities. However, there remains some uncertainty and no assurance as to how our interpretations to the M&A Rules, the Opinions and the Trial Measures will be interpreted or implemented by the relevant PRC governmental authorities, including the CSRC, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or adopt new interpretation of existing rules that would require us to obtain CSRC or other PRC governmental approvals for this offering or, in the context of an overseas offering or if we decide to consummate the business combination with a target business based in and primarily operating in China. If the CSRC or another PRC governmental authority subsequently determines that its approval is needed for this offering, or for our business combination with a target business based in and primarily operating in China, or approval obtained for the business combination is subsequently rescinded, we may face adverse actions or sanctions by the CSRC or other PRC governmental authorities. For example, we may be required to register with the CSRC following the Offering as a result of the Trial Measures. These governmental authorities may delay this offering or a potential business combination, impose fines and penalties, limit our operations in China, or take other actions that could result in our inability to consummate an initial business combination with a China-based business, or materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our securities or the continued listing on a U.S. exchange. Any changes in PRC law, regulations, or interpretations may severely affect our operations after this offering. The use of the term "operate" and "operations" includes the process of searching for a target business and conducting related activities. To that extent, we may not be able to conduct the process of searching of a potential target company in China. If we decide to consummate our business combination with a target business based in and primarily operating in China, the combined company s business operations in China through its subsidiaries, are subject to relevant requirements to obtain applicable licenses from PRC governmental authorities under relevant PRC laws and regulations. 44 We may not be able to complete an initial business combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), or ultimately prohibited. Our sponsor, Aimei Investment Ltd., a Cayman Islands exempted company s ultimate beneficial owner is a Huang Han a resident of the PRC. Our Chief Financial Officer, is a resident and citizen of Hong Kong. One of our independent directors, Lin Bao, is a resident of China. Further, all of our management and board of directors are not U.S. citizens. Therefore, we may be considered a "foreign person" under the regulations administered by CFIUS and could continue to be considered as such in the future for so long as our sponsor has the ability to exercise control over us for purposes of CFIUS s regulations. As such, an initial business combination with a U.S. business may be subject to CFIUS review, the scope of which was expanded by the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"), to include certain non-passive, non-controlling investments in sensitive U.S. businesses and certain acquisitions of real estate even with no underlying U.S. business, this could delay us in consummating our business combination. FIRRMA, and subsequent implementing regulations that are now in force, also subjects certain categories of investments to mandatory filings. If our potential initial business combination with a U.S. business falls within CFIUS s jurisdiction, we may determine that we are required to make a mandatory filing or that we will submit a voluntary notice to CFIUS, or to proceed with the initial business combination without notifying CFIUS and risk CFIUS intervention, before or after closing the initial business combination. CFIUS may decide to block or delay our initial business combination, impose conditions to mitigate national security concerns with respect to such initial business combination or order us to divest all or a portion of a U.S. business of the combined company without first obtaining CFIUS clearance, which may limit the attractiveness of or prevent us from pursuing certain initial business combination opportunities that we believe would otherwise be beneficial to us and our stockholders. As a result, the pool of potential targets with which we could complete an initial business combination may be limited and we may be adversely affected in terms of competing with other special purpose acquisition companies which do not have similar foreign ownership issues. Moreover, the process of government review, whether by the CFIUS or otherwise, could be lengthy and we have limited time to complete our initial business combination. If we cannot complete our initial business combination because the review process drags on beyond 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus) or because our initial business combination is ultimately prohibited by CFIUS or another U.S. government entity, we may be required to liquidate. If we liquidate, our public shareholders may only receive $10.10 per share, and our rights will expire worthless. This will also cause you to lose the investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation in the combined company. You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management and directors named in the prospectus based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. Some of our directors and officers are citizens or reside in the PRC and Hong Kong. In addition, following completion of a business combination, we may remain a company incorporated under the laws of the Cayman Islands, and some of the post-combined company s officers and directors may reside in China. As a result, it may be difficult for you to effect service of process upon us or those persons residing in China. Even with service of process, it may also be difficult to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against these officers and directors in China. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of U.S. securities laws or those of any U.S. state. The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the U.S. 45 It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the U.S. may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or "Article 177," which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council. While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests. Given that some of our directors and officers have significant ties to China and Hong Kong, the Chinese government may exercise oversight and discretion over their conduct including their search for a target company, the Chinese government may intervene or influence our operations at any time, which could result in a material change in our search for a target business and/or the value of the securities we are registering. Since some of our directors and officers have significant ties to China Hong Kong, the Chinese government may have potential oversight and discretion over the conduct of our directors and officers including over our directors and officers search for a target company. The Chinese government may intervene or influence our operations at any time through the directors and officers who have significant ties in China, which could result in a material change in our search for a target business and/or the value of the securities we are offering. Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be adopted quickly with little advance notice and could have a significant impact upon our ability to operate. The realization of any these risks could adversely impact our initial business combination, future business and any future offering of securities. Any actions by the Chinese government, including any decision to intervene or influence the operations of any future PRC subsidiary or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of any future PRC subsidiary, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The ability of our subsidiary to operate in China may be impaired by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, foreign investment limitations, and other matters. The central or local governments of China may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our PRC subsidiary compliance with such regulations or interpretations. As such, any future PRC subsidiary may be subject to various government and regulatory interference in the provinces in which they operate. They could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Furthermore, it is uncertain when and whether we will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Our operations following a business combination with a PRC entity could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry, particularly in the event permission to list on U.S. exchanges may be later required, or withheld or rescinded once given. Accordingly, government actions in the future, including any decision to intervene or influence the operations of any future PRC subsidiary at any time or to exert control over an offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of any future PRC subsidiary, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless. 46 Cash-Flow Structure of a Post-Acquisition Company Based in China. The PRC government also has significant authority to exert restrictions on foreign exchange and our ability to transfer cash between entities, across borders, and to U.S. investors that may apply if we acquire a company that is based in China in an initial business combination. If we consummate an initial business combination with a company based in China, we may rely on dividends and other distributions from our future operating company in China to provide us with cash flow and to meet our other obligations. Such payments would be subject to restrictions on dividends as current regulations in China would permit our PRC operating company to pay dividends to us only out of its accumulated distributable profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, our operating company in China will be required to set aside at least 10% (up to an aggregate amount equal to half of its registered capital) of its accumulated profits each year. Such cash reserve may not be distributed as cash dividends. Each such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. In addition, if our operating company in China incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. In addition, we may be subject to restrictions on currency exchange as the PRC government may limit or eliminate our ability to utilize cash generated in Renminbi, or RMB to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, including holders of our securities, and may limit our ability to obtain foreign currency through debt or equity financing. Should we choose to acquire a company in China, exchange controls that exist in the PRC may restrict or prevent us from using the proceeds of this offering to acquire a target company in PRC and limit our ability to utilize our cash flow effectively following our initial business combination. If we were to acquire a PRC company, the PRC regulation on loans to, and direct investment in, our PRC subsidiary by offshore holding companies and governmental control in currency conversion may restrict our ability to make loans to or capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business. These restrictions will restrict our ability to distribute earnings from our businesses, including subsidiaries, to the parent company and U.S. investors as well as the ability to settle amounts owed under contractual agreements. In addition, fluctuations in exchange rates could result in foreign currency exchange losses to us and may reduce the value of, and amount in U.S. Dollars of dividends payable on, our shares in foreign currency terms. To date, we have not pursued an initial business combination and there have not been any capital contributions or shareholder loans by us to any PRC entities, we do not yet have any subsidiaries, and we have not received, declared or made any dividends or distributions. Exchange controls that exist in the PRC may restrict or prevent us from using the proceeds of this offering to acquire a target company in the PRC and limit our ability to utilize our cash flow effectively following our initial business combination. China s State Administration of Foreign Exchange, or SAFE, promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or Circular 19, effective on June 1, 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 142, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, or Circular 59, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses, or Circular 45. According to Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of banks loans that have been transferred to a third party. Although Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such capital to be used for equity investments in the PRC in actual practice. SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-associated enterprises. Violations of SAFE Circular 19 and Circular 16 could result in administrative penalties. 47 As such, Circular 19 and Circular 16 may significantly limit our ability to transfer the proceeds of this offering to a PRC target company and the use of such proceeds by the PRC target company. In addition, following our initial business combination with a PRC target company, we will be subject to the PRC s rules and regulations on currency conversion. In the PRC, the SAFE regulates the conversion of the Renminbi into foreign currencies. Currently, foreign invested enterprises ("FIE") are required to apply to the SAFE for "Foreign Exchange Registration Certificates for FIEs." Following our initial business combination, we will likely be an FIE as a result of our ownership structure. With such registration certificates, which need to be renewed annually, FIEs are allowed to open foreign currency accounts including a "basic account" and "capital account." Currency conversion within the scope of the "basic account," such as remittance of foreign currencies for payment of dividends, can be effected without requiring the approval of the SAFE. However, conversion of currency in the "capital account," including capital items such as direct investment, loans and securities, still require approval of the SAFE. We cannot assure you the PRC regulatory authorities will not impose further restrictions on the convertibility of the Renminbi. Any future restrictions on currency exchanges may limit our ability to use the proceeds of this offering in an initial business combination with a PRC target company and the use our cash flow for the distribution of dividends to our shareholders or to fund operations we may have outside of the PRC. Nonetheless, the funds held in our trust account are not held in China, they are held in U.S. dollars in the United States with Continental Stock Transfer & Trust Company and therefore shareholder redemption rights would not be impacted. Recent greater oversight by the PRC government and Cyberspace Administration of China over cybersecurity and data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our initial business combination, future business and any future offering of securities. On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities and made them available to the public. These Opinions emphasized the need to strengthen the administration over illegal securities activities and supervision of overseas listings by China-based companies. These Opinions proposed to take measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies including greater cybersecurity and data privacy protection. On July 10, 2021, the Cyberspace Administration of China or CAC published the Circular on Seeking Comments on Cybersecurity Review Measures (Revised Draft for Comments) (the "Review Measures Draft"), which provides that, in addition to critical information infrastructure operators ("CIIOs") that intend to purchase Internet products and services, data processing operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Review Measures Draft, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Review Measures Draft further requires that CIIOs and data processing operators that possess personal data of at least one million users must apply for a review by the Cybersecurity Review Office of the PRC before conducting listings in foreign countries. On December 28, 2021, CAC published the Measures for Cybersecurity Review ("CRM"), which further restates and expands the applicable scope of the cybersecurity review. The revised CRM became effective on February 15, 2022. Pursuant to the revised CRM, if a network platform operator holding personal information of over one million users seeks for foreign listing, it must apply for the cybersecurity review, and operators of critical information infrastructure purchasing network products and services are also obligated to apply for the cybersecurity review for such purchasing activities. In addition, the revised CRM empowers the cybersecurity review office to initiate cybersecurity review when they believe any particular data processing activities affect or may affect national security. Compliance or failure to comply with such laws could increase the costs of our products and services, could limit their use or adoption, and could otherwise negatively affect our operating results and business. 48 As these regulations were newly issued and the governmental authorities may further enact detailed rules or guidance with respect to the interpretation and implementation of such regulations, it remains unclear whether we will be identified as a CIIO. Our business is subject to complex and evolving Chinese and international laws and regulations, including those regarding data privacy and cybersecurity. Many of these laws and regulations are subject to change and uncertain interpretation. Failure to comply with existing or future laws and regulations related to cybersecurity, information security, privacy and data protection could lead to government enforcement actions, which could include civil or criminal fines or penalties, investigation or sanction by regulatory authorities, private litigation, other liabilities, and/or adverse publicity. Compliance or failure to comply with such laws could increase the costs of our products and services, could limit their use or adoption, and could otherwise negatively affect our operating results and business. There remains uncertainty as to how the above-mentioned initiatives will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or further detailed implementation and interpretation related thereto. As we do not have any assets or operations at this time in PRC, we may become subject to such processes, procedures and reviews following a business combination with a PRC entity. We will take all reasonable measures and actions to comply with any such laws, regulations or rules that are or come into effect, and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that we will not be subject to cybersecurity review in the future. During such review, we may be required to suspend our operation or experience other disruptions to our operations. Cybersecurity review could also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business, financial conditions, and results of operations. Furthermore, if any such new laws, regulations, rules, or implementation and interpretation require cybersecurity review and clearance or other specific actions to be completed by a potential acquisition target based in the PRC, we may face delays and uncertainties as to whether such clearance can be obtained within the timeframe described in this prospectus for our initial business combination, and we may be prevented from pursuing certain investment opportunities as a result thereof. In anticipation of the strengthened implementation of cybersecurity laws and regulations and the continued expansion of our business, we face potential risks if we provide or are deemed to provide network products and services to CIIOs, or we are deemed as a CIIO under the PRC cybersecurity laws and regulations. In such case, we would be required to follow the relevant cybersecurity review procedures and could be subject to cybersecurity review by the CAC and other relevant PRC regulatory authorities. As of the date of this offering memorandum, we have not been involved in any investigations on cybersecurity review made by the CAC on such basis, and we have not received any inquiry, notice, warning, or sanctions in such respect. For the further purposes of regulating data processing activities, safeguarding data security, promoting data development and utilization, protecting the lawful rights and interests of individuals and organizations, and maintaining national sovereignty, security, and development interests, the Standing Committee of the National People s Congress of China, or the SCNPC, published the Data Security Law, which took effect on September 1, 2021. The Data Security Law introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it may cause to national security, public interests, or legitimate rights and interests of individuals or organizations if such data are tampered with, destroyed, leaked, illegally acquired or illegally used. The appropriate level of protection measures is required to be taken for each respective category of data. Moreover, the Data Security Law provides a national security review procedure for those data activities which affect or may affect national security and imposes export restrictions on certain data and information. In addition, the Data Security Law also provides that any organization or individual within the territory of the PRC shall not provide any foreign judicial body and law enforcement body with any data without the approval of the competent PRC governmental authorities. 49 If we select a business combination target that operates in the PRC, the approval of the Cybersecurity Review Office ("CRO"), the Central Cyberspace Affairs Commission and/or other PRC authority may be required for our initial business combination under PRC law. In April 2020, the CAC and certain other PRC regulatory authorities promulgated the Measures for Cybersecurity Review, which requires that operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On January 4, 2022, the CAC, in conjunction with 12 other government departments issued the New Measures for Cybersecurity Review (the "New Measures"). The New Measures, which became effective on February 15, 2022, amends the Measures for Cybersecurity Review (Draft Revision for Comments) released on July 10, 2021. The New Measures require that certain operators of data processing activities that affect or may affect national security or that handle personal information of more than one million users must apply for cybersecurity review to the Cybersecurity Review Office when they go public abroad. The PRC Data Security Law, which took effect on September 1, 2021, imposes data security and privacy obligations on entities and individuals that carry out data activities, provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data and information. On August 20, 2021, the Standing Committee of the People s Congress promulgated the PRC Personal Information Protection Law (the "PIPL"), which took effect on November 1, 2021. The PIPL sets out the regulatory framework for the handling and protection of personal information and the transmission of personal information overseas. If our potential future target business in China involves collecting and retaining internal or customer data, such target might be subject to the relevant cybersecurity laws and regulations, including the PRC Cybersecurity Law and the PIPL, and the cybersecurity review before effecting a business combination. The cybersecurity review might impact the timetable of our initial business combination and the certainty of our initial business combination, if the target company we have identified is subject to the aforementioned cybersecurity related laws and regulations. China Securities Regulatory Commission and other Chinese government agencies may exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers. If the CSRC or another PRC regulatory body subsequently determines that its approval is needed for this offering, we cannot predict whether we will be able to obtain such approval. As a result, both you and us face uncertainty about future actions by the PRC government that could significantly affect our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document (Opinions on Strictly Cracking Down Illegal Securities Activities) to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. Since this document is relatively new, uncertainties still exist in relation to how soon legislative or administrative regulation making bodies will respond and what existing or new laws, regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our future business combination with a PRC Target Company. Therefore, CSRC and other Chinese government agencies may exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers. If the CSRC or another PRC regulatory body subsequently determines that its approval is needed for this offering, a business combination, the issuance of our ordinary shares upon exercise of the rights or maintaining our status as a publicly listed company outside China, we may face approval delays, adverse actions or sanctions by the CSRC or other PRC regulatory agencies. In any such event, these regulatory agencies may delay a potential business combination, impose fines and penalties, limit our acquisitions and operations of a target business in China, or take other actions that could materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our units, ordinary shares and rights. As a result, both you and we face uncertainty about future actions by the PRC government that could significantly affect our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. The Opinions on Strictly Cracking Down Illegal Securities Activities call for strengthened regulation over illegal securities activities and the supervision on overseas offerings and listings by China-based companies and propose to take effective measures, such as promoting the development of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. As these Opinions are recently issued, official guidance and related implementation rules have not been issued yet and the interpretation of these opinions remains unclear at this stage. We cannot assure you we will not be imposed additional requirements relating to approval from the China Securities Regulatory Commission, or the CSRC, or other regulatory authorities or other procedures, including the cybersecurity review under the enacted version of the revised Measures for Cybersecurity Review. Nor can we be certain whether we can or how long it will take us to obtain such approval or complete such procedures and any such approval or completion could be rescinded. See "Risk Factors – Risks Related to Doing Business in China – The approval of the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval." As of the date of this offering memorandum, we have not received any inquiry, notice, warning, or sanctions regarding offshore offering from the CSRC or any other PRC government authorities. 50 Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may occur quickly with little advance notice and could have a significant impact upon our ability to operate profitably in the PRC. Our post-combination entity may conduct most of our operations and most of our revenue is generated in the PRC. Accordingly, economic, political, and legal developments in the PRC will significantly affect our post-combination entity s business, financial condition, results of operations and prospects. Policies, regulations, rules, and the enforcement of laws of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our post-combination entity s ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation. Risks Relating to the Post-Business Combination Company We may seek investment opportunities outside of our management s area of expertise and our management may not be able to adequately ascertain or assess all significant risks associated with the target company. There is no limitation on the industry or business sector we may consider when contemplating our initial business combination. We may therefore be presented with a business combination candidate in an industry unfamiliar to our management team, but determine that such candidate offers an attractive investment opportunity for our company. In the event we elect to pursue an investment outside of our management s expertise, our management s experience may not be directly applicable to the target business or their evaluation of its operations. We may seek investment opportunities with a financially unstable business or in its early stages of development. To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. Although we identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines. Although we have identified specific criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we consummate our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce our initial business combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by law or the rules of Nasdaq, or we decide to obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may only receive $10.10 per share (whether or not the underwriters over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and our rights will expire worthless. Subsequent to our consummation of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment. Even if we conduct thorough due diligence on a target business with which we combine, this diligence may not surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. 51 Our ability to successfully effect our initial business combination and to be successful thereafter will be largely dependent upon the efforts of our officers, directors and key personnel, some of whom may join us following our initial business combination. The loss of our officers, directors, or key personnel could negatively impact the operations and profitability of our business. Our operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have consummated our initial business combination. In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us. Additionally, we do not intend to have any full time employees prior to the consummation of our initial business combination. The role of such persons in the target business, however, cannot presently be ascertained. Although some of such persons may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, our assessment of these individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements. We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company. When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value. The officers and directors of an acquisition candidate may resign upon consummation of our initial business combination. The loss of an acquisition target s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate s key personnel upon the consummation of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that some members of the management team of an acquisition candidate will not wish to remain in place. Our management team and our shareholders may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business. We may structure our initial business combination to acquire less than 100% of the equity interests or assets of a target business, but we will only consummate such business combination if we will become the majority shareholder of the target (or control the target through contractual arrangements in limited circumstances for regulatory compliance purposes) or are otherwise not required to register as an investment company under the Investment Company Act. Even though we may own a majority interest in the target, our shareholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity securities of a target. In this case, we acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company s stock, shares or other equity securities than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business. 52 An investment in this offering may result in uncertain or adverse U.S. federal income tax consequences. An investment in this offering may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to the units we are issuing in this offering, the allocation an investor makes with respect to the purchase price of a unit between the ordinary share and the right included in each unit could be challenged by the IRS or courts. Finally, it is unclear whether the redemption rights with respect to our ordinary shares suspend the running of a U.S. Holder s holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of ordinary shares is long-term capital gain or loss and for determining whether any dividend we pay would be considered "qualified dividend income" for U.S. federal income tax purposes. See the section titled "Taxation — United States Federal Income Tax Considerations" for a summary of certain U.S. federal income tax considerations generally applicable to an investment in our securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax considerations applicable to their specific circumstances when purchasing, owning or disposing of our securities. Investors may suffer adverse tax consequences in connection with acquiring, owning and disposing of our ordinary shares and/or our rights. The tax consequences in connection with acquiring, owning and disposing of our ordinary shares and/or our rights may differ from the tax consequences in connection with acquiring, owning and disposing of securities in other entities and may differ depending on an investor s particular circumstances including, without limitation, where investors are tax resident. Such tax consequences could be materially adverse to investors. Prospective investors are urged to consult their own tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our securities. We may qualify as a passive foreign investment company, or "PFIC," which could result in adverse U.S. federal income tax consequences to U.S. investors. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned "Taxation — United States Federal Income Tax Considerations") of our ordinary shares or rights, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our actual PFIC status for our current taxable year may depend on whether we qualify for the PFIC start-up exception (see the section of this prospectus captioned "Taxation — United States Income Tax Considerations — U.S. Holders — Passive Foreign Investment Company Rules"). Depending on particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any future taxable year. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service ("IRS") may require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a "qualified electing fund" election, but there can be no assurance that we will timely provide such required information, and such election would likely be unavailable with respect to our rights. We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules. For a more detailed explanation of the tax consequences of PFIC classification to U.S. Holders, see the section of this prospectus captioned "Taxation — United States Federal Income Tax Considerations — U.S. Holders — Passive Foreign Investment Company Rules." Our initial business combination and our structure thereafter may not be tax-efficient to our shareholders. As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain. Although we will attempt to structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial business combination and subject to any requisite shareholder approval, we may structure our business combination in a manner that requires shareholders to recognize gain or income for tax purposes, effect a business combination with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business is located). We do not intend to make any cash distributions to shareholders to pay taxes in connection with our business combination or thereafter. Accordingly, a shareholder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares received. In addition, shareholders may also be subject to additional income, withholding or other taxes with respect to their ownership of us after our initial business combination. 53 In addition, we may effect a business combination with a target company that has business operations in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S. federal, state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial condition. We may re-domicile or continue out of the Cayman Islands into another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction will likely govern all of our material agreements and we may not be able to enforce our legal rights. In connection with our initial business combination, we may relocate the home jurisdiction of our business or re-domicile or continue out of the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction would likely govern all of our material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital. Any such reincorporation and the international nature of our business will likely subject us to foreign regulation. Investors may have difficulty enforcing judgments against our management or our target business. After the consummation of a business combination, it is possible that substantially all or a significant portion of our assets may be located outside of the United States and some of our officers and directors may reside outside of the United States. As a result, it may not be possible for investors in the United States to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors and officers under federal securities laws. Risks Associated with Acquiring and Operating a Business Outside of the United States If we effect our initial business combination with a company located outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations. If we effect our initial business combination with a company located outside of the United States, we would be subject to any special considerations or risks associated with companies operating in the target business home jurisdiction, including any of the following: rules and regulations or currency redemption or corporate withholding taxes on individuals; laws governing the manner in which future business combinations may be effected; exchange listing and/or delisting requirements; tariffs and trade barriers; regulations related to customs and import/export matters; longer payment cycles; 54 tax issues, such as tax law changes and variations in tax laws as compared to the United States; currency fluctuations and exchange controls; rates of inflation; challenges in collecting accounts receivable; cultural and language differences; employment regulations; crime, strikes, riots, civil disturbances, terrorist attacks and wars; and deterioration of political relations with the United States. We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer. Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited. We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States on our company or our directors or officers, or enforce judgments obtained in the United States courts against our company or our directors or officers. Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States. We have been advised by Ogier (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, so far as the liabilities imposed by those provisions are penal in nature. Although there is currently no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive, given by a court of competent jurisdiction (the courts of the Cayman Islands will apply the rules of Cayman Islands private international law to determine whether the foreign court is a court of competent jurisdiction), and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands. Furthermore it is uncertain that Cayman Islands courts would enforce: (1) judgments of U.S. courts obtained in actions against us or other persons that are predicated upon the civil liability provisions of the U.S. federal securities laws; or (2) original actions brought against us or other persons predicated upon the Securities Act. Ogier (Cayman) LLP has informed us that there is uncertainty with regard to Cayman Islands law relating to whether a judgment obtained from the U.S. courts under civil liability provisions of the securities laws will be determined by the courts of the Cayman Islands as penal, punitive in nature. A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. 55 As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company. Because of the costs and difficulties inherent in managing cross-border business operations, our results of operations may be negatively impacted. Managing a business, operations, personnel or assets in another country is challenging and costly. Any management that we may have (whether based abroad or in the U.S.) may be inexperienced in cross-border business practices and unaware of significant differences in accounting rules, legal regimes and labor practices. Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border business operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively impact our financial and operational performance. Many countries have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience, which may adversely impact our results of operations and financial condition. Our ability to seek and enforce legal protections, including with respect to intellectual property and other property rights, or to defend ourselves with regard to legal actions taken against us in a given country, may be difficult or impossible, which could adversely impact our operations, assets or financial condition. Rules and regulations in many countries are often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional and federal levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent. Delay with respect to the enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious disruption to operations abroad and negatively impact our results. If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues. Following our initial business combination, certain members of our management team will likely resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with our laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which may adversely affect our operations. After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate. The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. If in the future such country s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable. Exchange rate fluctuations and currency policies may cause a target business ability to succeed in the international markets to be diminished. In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction. 56 Because foreign law could govern almost all of our material agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere, which could result in a significant loss of business, business opportunities or capital. Foreign law could govern almost all of our material agreements. The target business may not be able to enforce any of its material agreements or that remedies will be available outside of such foreign jurisdiction s legal system. The system of laws and the enforcement of existing laws and contracts in such jurisdiction may not be as certain in implementation and interpretation as in the United States. As a result, the inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business and business opportunities. Corporate governance standards in foreign countries may not be as strict or developed as in the United States and such weakness may hide issues and operational practices that are detrimental to a target business. General corporate governance standards in some countries are weak in that they do not prevent business practices that cause unfavorable related party transactions, over-leveraging, improper accounting, family company interconnectivity and poor management. Local laws often do not go far to prevent improper business practices. Therefore, shareholders may not be treated impartially and equally as a result of poor management practices, asset shifting, conglomerate structures that result in preferential treatment to some parts of the overall company, and cronyism. The lack of transparency and ambiguity in the regulatory process also may result in inadequate credit evaluation and weakness that may precipitate or encourage financial crisis. In our evaluation of a business combination we will have to evaluate the corporate governance of a target and the business environment, and in accordance with United States laws for reporting companies take steps to implement practices that will cause compliance with all applicable rules and accounting practices. Notwithstanding these intended efforts, there may be endemic practices and local laws that could add risk to an investment we ultimately make and that result in an adverse effect on our operations and financial results. Companies in foreign countries may be subject to accounting, auditing, regulatory and financial standards and requirements that differ, in some cases significantly, from those applicable to public companies in the United States, which may make it more difficult or complex to consummate a business combination. In particular, the assets and profits appearing on the financial statements of a foreign company may not reflect its financial position or results of operations in the way they would be reflected had such financial statements been prepared in accordance with U.S. GAAP and there may be substantially less publicly available information about companies in certain jurisdictions than there is about comparable United States companies. Moreover, foreign companies may not be subject to the same degree of regulation as are United States companies with respect to such matters as insider trading rules, tender offer regulation, shareholder proxy requirements and the timely disclosure of information. Legal principles relating to corporate affairs and the validity of corporate procedures, directors fiduciary duties and liabilities and shareholders rights for foreign corporations may differ from those that may apply in the U.S., which may make the consummation of a business combination with a foreign company more difficult. We therefore may have more difficulty in achieving our business objective. Because a foreign judiciary may determine the scope and enforcement of almost all of our target business material agreements under the law of such foreign jurisdiction, we may be unable to enforce our rights inside and outside of such jurisdiction. The law of a foreign jurisdiction may govern almost all of our target business material agreements, some of which may be with governmental agencies in such jurisdiction. We cannot assure you that the target business or businesses will be able to enforce any of their material agreements or that remedies will be available outside of such jurisdiction. The inability to enforce or obtain a remedy under any of our future agreements may have a material adverse impact on our future operations. Mail addressed to us may not reach us in a timely manner. Mail addressed to us and received at our registered office will be forwarded unopened to the forwarding address supplied by us to be dealt with. Neither we nor our directors, officers, advisors or service providers (including the organization which provides registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused in mail reaching the forwarding address. We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance. We are subject to rules and regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities. 57 Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. Risks Relating to our Management, Directors, and Initial Shareholders Past performance by our management team may not be indicative of future performance of an investment in the Company. Information regarding performance by, or businesses associated with, our management team and their affiliates is presented for informational purposes only. Past performance by our management team is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical record of our management team s performance as indicative of our future performance of an investment in the company or the returns the company will, or is likely to, generate going forward. Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous. Our key personnel may be able to remain with the company after the consummation of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the consummation of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under the Companies Act. However, we believe the ability of such individuals to remain with us after the consummation of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the consummation of our initial business combination. Our key personnel may not remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination. Management s flexibility in identifying and selecting a prospective acquisition candidate, along with our management s financial interest in consummating our initial business combination, may lead management to enter into an acquisition agreement that is not in the best interest of our shareholders. Subject to the requirement that our initial business combination must be with one or more target businesses or assets having an aggregate fair market value of at least 80% of the value of the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the agreement to enter into such initial business combination, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Investors will be relying on management s ability to identify business combinations, evaluate their merits, conduct or monitor diligence and conduct negotiations. Management s flexibility in identifying and selecting a prospective acquisition candidate, along with management s financial interest in consummating our initial business combination, may lead management to enter into an acquisition agreement that is not in the best interest of our shareholders. Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented. Following the completion of this offering and until we consummate our business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our officers and directors are, or may in the future become, affiliated with entities that are engaged in a similar business. Our officers also may become aware of business opportunities, which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary duties or contractual obligations. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor or that a potential target business would not be presented to another entity prior to its presentation to us. 58 The shares beneficially owned by our officers and directors may not participate in liquidation distributions and, therefore, our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for our initial business combination. Our officers and directors have waived their right to redeem their founder shares or any other ordinary shares acquired in this offering or thereafter, or to receive distributions with respect to their founder shares upon our liquidation if we are unable to consummate our initial business combination, until all of the claims of any redeeming shareholders and creditors are fully satisfied (and then only from funds held outside the trust account). Accordingly, these securities will be worthless if we do not consummate our initial business combination. Any rights they hold, like those held by the public, will also be worthless if we do not consummate an initial business combination. The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors and officers discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders best interest. We may engage in our initial business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers or directors, which may raise potential conflicts of interest. We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers and directors. Our directors also serve as officers and board members for other entities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to consummate our initial business combination with any entities with which they are affiliated, and there have been no discussions concerning a business combination with any such entity or entities. Despite our agreement to obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions regarding the fairness to our company (or shareholders) from a financial point of view of a target business affiliated with our officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest. Our directors have a fiduciary duty to act in the best interests of our company, whether or not a conflict of interest may exist. Since our sponsor will lose their entire investment in us if our initial business combination is not consummated and our officers and directors have significant financial interests in us, a conflict of interest may arise in determining whether a particular acquisition target is appropriate for our initial business combination. Our sponsor agreed to purchase an aggregate of 1,725,000 founder shares for an aggregate purchase price of $25,028.75, or approximately $0.015 per share, 152,000 of which were transferred to directors of the company on May 25, 2023. The founder shares will be worthless if we do not consummate an initial business combination. In addition, our initial shareholders have committed to purchase an aggregate of 305,000 private units (or up to 332,000 private units if the underwriters over-allotment option is exercised in full) for an aggregate purchase price of $3,050,000 (or up to $3,320,000 if the underwriters over-allotment option is exercised in full) that will also be worthless if we do not consummate our initial business combination. Risks Relating to our Securities You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares, potentially at a loss. Our public shareholders shall be entitled to receive funds from the trust account only (i) in the event of a redemption to public shareholders prior to any winding up in the event we do not consummate our initial business combination or our liquidation (ii) if they redeem their shares in connection with an initial business combination that we consummate or (iii) if they redeem their shares in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption rights or to redeem 100% of our public shares if we do not complete our initial business combination within 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus) or (B) with respect to any other provision relating to shareholders rights or pre-business combination activity. In no other circumstances will a shareholder have any right or interest of any kind to the funds in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your securities, potentially at a loss. 59 If third parties bring claims against us, the proceeds held in trust could be reduced and the per-share liquidation price received by shareholders may be less than $10.10. Our placing of funds in trust may not protect those funds from third party claims against us. Although we will seek to have all vendors and service providers we engage and prospective target businesses we negotiate with execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, they may not execute such agreements. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party s engagement would be significantly more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue. Our independent registered public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account, nor will the underwriters of this offering. Even if such entities execute such agreements with us, they may seek recourse against the monies held in the trust account. A court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of our public shareholders. If we liquidate the trust account before the completion of a business combination, our sponsor has agreed that it will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us and which have not executed a waiver agreement. However, our sponsor may not be able to meet such obligation. Therefore, the per-share distribution from the trust account in such a situation may be less than $10.10 due to such claims. Additionally, if we are forced to file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us which is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, we may not be able to return to our public shareholders at least $10.10 per share. Our directors may decide not to enforce indemnification obligations against our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders. In the event that the proceeds in the trust account are reduced below $10.10 per share (whether or not the underwriters over-allotment option is exercised in full) and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine on our behalf whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf to enforce such indemnification obligations, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations on our behalf, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.10 per share. The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.10 per share. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable. Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.10 per share. 60 Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares. If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors or as having acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business immediately following the date on which the distribution was proposed to be paid would be guilty of an offence and may be liable on a summary conviction to a fine and to imprisonment for five years in the Cayman Islands. Our sponsor has paid an aggregate of $25,028.75, or approximately $0.015 per founder share (assuming over-allotment option will be exercised) and, accordingly, you will experience immediate and substantial dilution from the purchase of our ordinary shares. The difference between the public offering price per share (allocating all of the unit purchase price to the ordinary shares and none to the rights included in the unit) and the pro forma net tangible book value per ordinary share after this offering constitutes the dilution to you and the other investors in this offering. Our initial shareholders acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon closing of this offering, you and the other public shareholders will incur an immediate and substantial dilution of approximately 99.52% or $8.29 per share (the difference between the pro forma net tangible book value per share of $0.04 and the initial offering price of $8.33 per ordinary share). We may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time. In connection with our initial business combination, we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price of $10.00 per share or which approximates the per-share amounts in our trust account at such time, which is generally approximately $10.00. The purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may therefore be less, and potentially significantly less, than the market price for our shares at such time. The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the rights were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the ordinary shares and rights underlying the units, include: the history and prospects of companies whose principal business is the acquisition of other companies; prior offerings of those companies; our prospects for acquiring an operating business at attractive values; a review of debt to equity ratios in leveraged transactions; our capital structure; an assessment of our management and their experience in identifying operating companies; general conditions of the securities markets at the time of this offering; and 61 other factors as were deemed relevant. Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results. There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities. Although we will apply to list our securities on Nasdaq, as of the date of this prospectus there is currently no market for our securities. Prospective shareholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Once listed on Nasdaq, an active trading market for our securities may never develop or, if developed, it may not be sustained. Additionally, if our securities become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we were listed on Nasdaq or another national exchange. You may be unable to sell your securities unless a market can be established and sustained. Once initially listed on Nasdaq, our securities may not continue to be listed on Nasdaq in the future, which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. We anticipate that our securities will be initially listed on Nasdaq upon consummation of this offering. However, we cannot assure you of this or that our securities will continue to be listed on Nasdaq in the future. Additionally, in connection with our business combination, Nasdaq will require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time. If Nasdaq delists our securities from trading on its exchange, and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; a reduced liquidity with respect to our securities; a determination that our ordinary shares are a "penny stock" which will require brokers trading in our ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our ordinary shares; a limited amount of news and analyst coverage for our company; and a decreased ability to issue additional securities or obtain additional financing in the future. The grant of registration rights to our initial shareholders (including the holders of the Representative Shares) may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our ordinary shares. Pursuant to an agreement to be entered into on the date of this prospectus, our initial shareholders and their permitted transferees and holders of the Representative Shares can demand that we register for resale an aggregate of 1,500,000 (or 1,725,000 if the over-allotment is exercised in full) founder shares, 305,000 private units (or up to 332,000 private units if the underwriters over-allotment option is exercised in full), the underlying private shares, rights, the Representative Shares and up to 150,000 units issuable upon conversion of working capital loans and the underlying shares. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our ordinary shares that is expected when the securities owned by our initial shareholders or their respective permitted transferees are registered. 62 Holders of rights will not participate in liquidating distributions if we are unable to complete an initial business combination within the required time period. If we are unable to complete an initial business combination within the required time period and we liquidate the funds held in the trust account, the rights will expire and holders will not receive any of such proceeds with respect to the rights. In this case, holders of rights are treated in the same manner as holders of rights of blank check companies whose units are comprised of shares and rights, as the rights in those companies do not participate in liquidating distributions. Nevertheless, the foregoing may provide a financial incentive to public shareholders to vote in favor of any proposed initial business combination as their rights would entitle the holder to receive one-fifth of one ordinary share, resulting in an increase in their overall economic stake in our company. If a business combination is not approved, the rights will expire and will be worthless. We may amend the terms of the rights in a way that may be adverse to holders with the approval by the holders of a majority of the then outstanding rights. Our rights will be issued in registered form under a rights agreement between Continental Stock Transfer & Trust Company, as rights agent, and us. The rights agreement provides that the terms of the rights may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. The rights agreement requires the approval by the holders of a majority of the then outstanding rights in order to make any change that adversely affects the interests of the registered holders of the rights. 63 The provisions of our amended and restated memorandum and articles of association relating to the rights and obligations attaching to our ordinary shares may be amended prior to the consummation of our initial business combination with the approval of a special resolution approved by at least two thirds of our shareholders represented in person or by proxy and, being entitled to vote thereon and who vote at a general meeting of the company for which notice specifying the intention to propose the resolution as a special resolution has been given; or by a unanimous written resolution of all of the company s shareholders. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the consummation of an initial business combination that a significant number of our shareholders may not support. Many blank check companies have a provision in their charter, which prohibits the amendment of certain of its provisions, including those, which relate to a company s pre-business combination activity, without approval by a certain percentage of the company s shareholders. Typically, amendment of these provisions requires approval by between 90% and 100% of the company s public shareholders. Our amended and restated memorandum and articles of association provides that, prior to the consummation of our initial business combination, its provisions related to pre-business combination activity and the rights and obligations attaching to the ordinary shares, may be amended if approved by a special resolution approved by at least two thirds of our shareholders represented in person or by proxy and, being entitled to vote thereon and who vote at a general meeting of the company for which notice specifying the intention to propose the resolution as a special resolution has been given; or by a unanimous written resolution of all of the company s shareholders. Prior to our initial business combination, if we seek to amend any provisions of our amended and restated memorandum and articles of association relating to shareholders rights or pre-business combination activity, we will provide public shareholders with the opportunity to redeem their public shares in connection with any such vote on any proposed amendments to our amended and restated memorandum and articles of association. Following the consummation of our initial business combination, the rights and obligations attaching to our ordinary shares and other provisions of our amended and restated memorandum and articles of association may be amended if approved by a special resolution approved by at least two thirds of our shareholders represented in person or by proxy and, being entitled to vote thereon and who vote at a general meeting of the company for which notice specifying the intention to propose the resolution as a special resolution has been given; or by a unanimous written resolution of all of the company s shareholders. Our initial shareholders, which will beneficially own approximately 20% of our ordinary shares upon the closing of this offering (assuming our initial shareholders do not purchase any units in this offering, no exercise of the underwriters over-allotment option and the forfeiture of 225,000 founder shares by our sponsor as a result thereof), will participate in any vote to amend our amended and restated memorandum and articles of association and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination and the rights and obligations attaching to the ordinary shares behavior more easily that many blank check companies, and this may increase our ability to consummate our initial business combination with which you do not agree. However, we and our directors and officers have agreed not to propose any amendment to our amended and restated memorandum and articles of association that would affect the substance and timing of our obligation to redeem the public shares of any public shareholder without the consent of that holder. If we do not hold an annual general meeting until after the consummation of our initial business combination, shareholders will not be afforded an opportunity to appoint directors and to discuss company affairs with management until such time. We may not call an annual general meeting until after we consummate our initial business combination. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. Accordingly, shareholders would not have the right to attend such a meeting or appoint directors, unless the holders of not less than 10% in par value capital of our company request such a meeting. As a result, it is unlikely that there will be an annual general meeting to appoint new directors prior to the consummation of a business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors and to discuss company affairs with management. Unlike other blank check companies, we may extend the time to complete a business combination by up to 12 months without a shareholder vote or your ability to redeem your shares. We will have until 12 months from the closing of this offering to consummate an initial business combination. However, unlike other similarly structured blank check companies, if we anticipate that we may not be able to consummate our initial business combination within 12 months, we may extend the period of time to consummate a business combination up to 12 times, each by an additional one month (for a total of up to 24 months to complete a business combination). Pursuant to the terms of our amended and restated memorandum and articles of association and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to extend the time available for us to consummate our initial business combination, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $198,000 or up to $227,700 if the underwriter s over-allotment option is exercised in full ($0.033 per share in either case) on or prior to the date of the applicable deadline, for each one month extension (or up to an aggregate of $2,376,000 (or $2,732,400 if the underwriter s over-allotment option is exercised in full), or approximately $0.40 per share if we extend for the full 12 months). You will not be able to vote on or redeem your shares in connection with any such extension. 64 Our rights agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our rights, which could limit the ability of rights holders to obtain a favorable judicial forum for disputes with our company. Our rights agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the rights agreement , including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, these provisions of the rights agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our rights shall be deemed to have notice of and to have consented to the forum provisions in our rights agreement. If any action, the subject matter of which is within the scope the forum provisions of the rights agreement is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (for purposes of this subsection, a "foreign action") in the name of any holder of our rights such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York or the United States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (for purposes of this subsection, an "enforcement action"), and (y) having service of process made upon such rights holder in any such enforcement action by service upon such rights holder s counsel in the foreign action as agent for such rights holder. These choice-of-forum provisions may limit the ability of rights holders to bring a claim in a judicial forum that such holders find favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our rights agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors. We note, however, that there is uncertainty as to whether a court would enforce these provisions and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. General Risk Factors We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. We are a blank check company with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning our initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues. 65 You will not be entitled to protections normally afforded to investors of many other blank check companies. Since the net proceeds of this offering are intended to be used to complete our initial business combination with a target business that has not been identified, we may be deemed to be a "blank check" company under the United States securities laws. Accordingly, investors will not be afforded the benefits or protections of rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Among other things, this means our units will be immediately tradable. Moreover, offerings subject to Rule 419 would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our consummation of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see "Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419." If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination. If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including restrictions on the nature of our investments and restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including registration as an investment company, adoption of a specific form of corporate structure and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination. Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations. We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application also may change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations. Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing a business combination. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2024. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination. We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our securities less attractive to investors. We are an "emerging growth" within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used. Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss. We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early state company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against or to investigate and remediate any vulnerability to cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss. 66 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this prospectus, which reflect our current views with respect to future events and financial performance, and any other statements of a future or forward-looking nature, constitute "forward-looking statements" for the purpose of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about: our ability to complete our initial business combination; our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements; our potential ability to obtain additional financing to complete our initial business combination; our pool of prospective target businesses, including their industry and geographic location; the ability of our officers and directors to generate a number of potential investment opportunities; failure to list or delisting of our securities from Nasdaq or an inability to have our securities listed on Nasdaq following a business combination; our public securities potential liquidity and trading; the lack of a market for our securities; or our financial performance following this offering or an initial business combination. The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Factors". Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. 67 USE OF PROCEEDS We are offering 6,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private units (all of which will be deposited into the trust account) will be used as set forth in the following table. Without Over- Allotment Option Over-Allotment Option Exercised Gross proceeds From public offering $ 60,000,000 $ 69,000,000 From private offering 3,050,000 3,320,000 Total gross proceeds $ 63,050,000 $ 72,320,000 Offering expenses(1) Underwriting discount (5) 1,200,000 (2) 1,380,000 (2) Legal fees and expenses 255,000 255,000 Nasdaq listing fee 5,000 5,000 Printing and engraving expenses 10,000 10,000 Accounting fees and expenses 60,000 60,000 FINRA filing fee 11,000 11,000 SEC registration fee 10,000 10,000 Reimbursement to underwriters for expenses 140,000 140,000 Miscellaneous expenses 59,000 59,000 Total offering expenses $ 1,750,000 $ 1,930,000 Net proceeds Held in the trust account 60,600,000 69,690,000 Not held in the trust account 700,000 700,000 Total net proceeds $ 61,300,000 $ 70,390,000 Use of net proceeds not held in the trust account(3)(4(5) Legal, accounting and other third party expenses related to business combination $250,000 35.7% SEC filing and other legal and accounting fees related to regulatory reporting obligations 130,000 18.6% Office space and other administrative expenses 120,000 17.1% D&O insurance premiums 150,000 21.4% Working capital to cover miscellaneous expense and general corporate purposes 50,000 7.2% Total $700,000 100.0% (1) A portion of the offering expenses, including the SEC registration fee, the FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees, have been paid from the funds advanced to us by our sponsor. These funds will be repaid out of the proceeds of this offering available to us. (2) No discounts or commissions will be paid with respect to the purchase of the private units. (3) The amount of proceeds not held in trust will remain constant at approximately $700,000 even if the over-allotment is exercised. The amount in the table above does not include interest available to us from the trust account to pay our tax obligations. The proceeds held in the trust account may be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. 68 (4) We estimate the pre-tax interest earned on the trust account will be approximately $775,680, per year, assuming an interest rate of 1.28% per year, which is the average of 2021-2022 U.S. Treasury Securities at 6-Month Constant Maturity; however, we can provide no assurances regarding this amount. (5) These are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of that business combination. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would be deducted from our excess working capital. (6) The underwriters will receive $1,200,000 in the aggregate (or $1,380,000 if the underwriters over-allotment option is exercised in full) in cash upon the closing of this offering. The underwriters have agreed to defer underwriting commissions equal to 1.0% of the gross proceeds of this offering. Upon completion of our initial business combination, $600,000 ($690,000 if the over-allotment option is exercised in full), which constitutes the underwriters deferred commissions will be paid to the underwriters from the funds held in the trust account, and the remaining funds, less amounts released by the trustee to pay redeeming shareholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions. A total of $60,600,000 (or $69,690,000 if the underwriters over-allotment option is exercised in full) of the net proceeds from this offering and the sale of the private units described in this prospectus (which includes up to approximately $600,000 (or up to $690,000 if the over-allotment option is exercised in full, for the payment of deferred underwriting commissions) will be placed in a trust account in the United States maintained by Continental Stock Transfer & Trust Company acting as trustee and will be held as cash or invested only in U.S. government treasury bills, notes and bonds with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act and which invest solely in U.S. Treasuries. Except for all interest income that may be released to us to pay taxes, and up to $50,000 to pay dissolution expenses, none of the funds held in the trust account will be released from the trust account until the earlier of: (1) the completion of our initial business combination within the required time period; (2) our redemption of 100% of the outstanding public shares if we have not completed an initial business combination in the required time period; and (3) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within the required time period or (B) with respect to any other provision relating to shareholders rights or pre-business combination activity. The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using shares or debt securities, or not all of the funds released from the trust account are used for payment of the purchase price in connection with our business combination, we may apply the cash released from the trust account that is not applied to the purchase price for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating the initial business combination, to fund the purchase of other companies, the payment of a fee to the representatives upon consummation of our initial business combination for assisting us in connection with our initial business combination, as described under the section titled "Underwriting (Conflicts of Interest," or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of our initial business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. In this event, we could seek such additional capital through loans or additional investments from our initial shareholders or our officers and directors or their affiliates, but such members of our management team are not under any obligation to advance funds to, or invest in, us. 69 As of May 8, 2023, our sponsor advanced us, pursuant to a promissory note, a total of $69,063 to be used for a portion of the expenses of this offering. As of September 30, 2023, our sponsor advanced us, pursuant to a promissory note, a total of $210,151 to be used for a portion of the expenses of this offering. The loan is, at the discretion of the sponsor, due on the earlier of (i) December 31, 2023, (ii) the consummation of this offering or (iii) the abandonment of this offering. The promissory note will be payable without interest. The promissory note will be repaid out of the proceeds of this offering available to us for payment of offering expenses. In addition, in order to finance transaction costs in connection with an intended initial business combination, our initial shareholders, officers, directors or their affiliates may, but are not obligated to, loan us funds on a non-interest bearing basis as may be required. If we consummate our initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the offering proceeds held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. The terms and conditions of our initial business combination may have a minimum net worth or minimum cash requirement. If too many public shareholders exercise their redemption rights so that we cannot any such net worth or cash requirements, we would not proceed with the redemption of our public shares or the business combination, and instead may search for an alternate business combination. A public shareholder will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our consummation of our initial business combination, and then only in connection with those ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of our public shares if we are unable to consummate our initial business combination within the required time period or (iii) the redemption of our public shares in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption of the public shares or to redeem 100% of our public shares if we do not complete our initial business combination within the required time period or (B) with respect to any other provision relating to shareholders rights or pre-business combination activity, subject to applicable law. In no other circumstances will a public shareholder have any right or interest of any kind to or in the trust account. Our initial shareholders have agreed to waive their redemption rights with respect to their founder shares and private units in connection with the consummation of our initial business combination. Our initial shareholders have also agreed to waive their redemption rights with respect to any public shares purchased during or after the offering in connection with the consummation of our initial business combination. In addition, our initial shareholders have agreed to waive their rights to liquidating distributions with respect to its founder shares if we fail to consummate our initial business combination within the required time period. However, if our initial shareholders acquire public shares in or after this offering, they will be entitled to receive liquidating distributions with respect to such public shares if we fail to consummate our initial business combination within the required time period. 70 DIVIDEND POLICY We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of an initial business combination. Under the laws of the Cayman Islands a Cayman Islands company may pay a dividend on its shares out of either profit or the share premium account, provided that in no circumstances may a dividend be paid if following such payment the company would be unable to pay its debts as they fall due in the ordinary course of business. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. The payment of any dividends subsequent to a business combination will be within the discretion of our board of directors at such time. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future, except if we increase the size of the offering pursuant to Rule 462(b) under the Securities Act, in which case we will effect a share dividend immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial shareholders at 20.0% of our issued and outstanding our ordinary shares upon the consummation of this offering (assuming the initial shareholders do not purchase units in this offering). Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. Subject to the provisions of the Companies Act and any rights attaching to any class or classes of shares under and in accordance with the Articles: (a)the directors may declare dividends or distributions out of our funds which are lawfully available for that purpose; and (b)our shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors. Subject to the requirements of the Companies Act regarding the application of a company s share premium account and with the sanction of an ordinary resolution, dividends may also be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment either in cash or in specie. Unless provided by the rights attached to a share, no dividend shall bear interest. Under the laws of the Cayman Islands a Cayman Islands company may pay a dividend on its shares out of either profit or the share premium account, provided that in no circumstances may a dividend be paid if following such payment the company would be unable to pay its debts as they fall due in the ordinary course of business. 71 DILUTION The difference between the public offering price per share, assuming no value is attributed to the rights included in the units we are offering by this prospectus and the private units, and the pro forma net tangible book value per share after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the conversion of the rights, including the private units. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of ordinary shares which may be redeemed for cash), by the number of issued and outstanding ordinary shares. At September 30, 2023, our net tangible book value was $(203,567), or approximately $(0.12) per share. For the purposes of the dilution calculation, in order to present the maximum estimated dilution as a result of this offering, we have assumed (i) the issuance of 0.2 ordinary shares for each right included in the public units and Private Units, as such issuance will occur upon a business combination without the payment of additional consideration and (ii) the number of ordinary shares included in the units offered hereby will be deemed to be 7,200,000 (consisting of 6,000,000 ordinary shares included in the units we are offering by this prospectus and 1,200,000 ordinary shares for the outstanding rights), and the price per ordinary share in this offering will be deemed to be $8.33. After giving effect to the sale of 6,000,000 ordinary shares included in the units we are offering by this prospectus, and the deduction of underwriting discounts and estimated expenses of this offering, and the sale of the private units, our pro forma net tangible book value at September 30, 2023 would have been $121,382 or $0.04 per share, representing an immediate increase in net tangible book value of $0.16 per share to the initial shareholders and an immediate dilution of 99.52% per share or $8.29 to new investors not exercising their redemption rights. For purposes of presentation, our pro forma net tangible book value after this offering is $60,600,000 less than it otherwise would have been because if we effect our initial business combination, the redemption rights of the public shareholders (but not our initial shareholders) may result in the redemption of up to 6,000,000 shares sold in this offering. The following table illustrates the dilution to our public shareholders on a per-share basis, assuming no value is attributed to the rights included in the units. No exercise of over-allotment option Exercise of over-allotment option in full Public offering price $ 8.33 $ 8.33 Pro forma net tangible book value before this offering $ (0.12 ) $ (0.12 ) Increase attributable to new investors and private sales 0.16 0.13 Pro forma net tangible book value after this offering 0.04 0.01 Dilution to public shareholders $ 8.29 $ 8.32 The following table sets forth information with respect to our initial shareholders and the new investors: Number Percentage Amount Percentage Initial Shareholders(1) 1,500,000 16.44 % $ 25,029 0.04 % $ 0.02 Private placement(2) 366,000 4.01 % 3,050,000 4.84 % $ 8.33 Public Shareholders(3) 7,200,000 78.90 % 60,000,000 95.12 % $ 8.33 Representative Shares(4) 60,000 0.65 % - - - 9,126,000 100.0 % $ 63,075,029 100.0 % (1) Assumes no exercise of the underwriters over-allotment option and the corresponding forfeiture of an aggregate of 225,000 founder shares held by our sponsor. (2) Assumes issuance of additional 61,000 shares underlying the rights contained in the private unit holders and no exercise of the underwriters over-allotment option. (3) Assumes the issuance of an additional 1,200,000 shares underlying the rights issued to public shareholders upon the closing of this offering. (4) Assumes no exercise of the underwriters over-allotment option. 72 The pro forma net tangible book value per unit after the offering (assuming that the underwriters over-allotment option is not exercised) is calculated as follows: Without Over- allotment With Over- allotment Numerator: Net tangible book deficit before this offering $ (203,567 ) $ (203,567 ) Net Proceeds from this offering and sale of the private Units(1) 61,300,000 $ 70,390,000 Plus: Offering costs paid in advance, excluded from tangible book value 224,949 224,949 Less: deferred underwriter commissions (600,000 ) (690,000 ) Less: Proceeds held in trust subject to redemption(2) (60,600,000 ) (69,690,000 ) $ 121,382 $ 31,382 Denominator: Ordinary shares outstanding prior to this offering 1,725,000 1,725,000 Ordinary shares forfeited if over-allotment is not exercised (225,000 ) - Ordinary shares included in the units offered 6,000,000 6,900,000 Ordinary shares underlying the rights 1,200,000 1,380,000 Ordinary shares included in the Private Units issued 305,000 332,000 Ordinary shares underlying placement rights 61,000 66,400 Representative shares 60,000 69,000 Less: shares subject to redemption (6,000,000 ) (6,900,000 ) 3,126,000 3,572,400 (1) Expenses applied against gross proceeds include offering expenses of $550,000 and underwriting commissions of $1,200,000 or $1,380,000 if the underwriters exercise their over-allotment option (excluding deferred underwriting fees). See "Use of proceeds." (2) If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial shareholders, directors, executive officers, advisors or their respective affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of ordinary shares subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per unit. See "Proposed Business — Permitted Purchases of Our Securities." 73 CAPITALIZATION The following table sets forth our capitalization at September 30, 2023 and as adjusted to give effect to the sale of 6,000,000 units offered by this prospectus and the sale of 305,000 private units, and the application of the estimated net proceeds derived from the sale of such securities, assuming no exercise by the underwriters of their over-allotment option: September 30, 20232 Actual As Adjusted Promissory Note related party(1) $210,151 $— Deferred underwriting commissions — 600,000 Ordinary shares, $0.0001 par value, and 6,000,000 shares which are subject to possible redemption — 60,600,000 Shareholder equity: Ordinary shares, $0.0001 par value, 500,000,000 shares authorized; 1,437,500 and 1,865,000 shares issued and outstanding (excluding -0- and 6,000,000 shares subject to possible redemption), actual and as adjusted, respectively(2)(3)(4) 144 187 Additional paid-in capital 24,856 124,814 Accumulated deficit (3,618) (3,618) Total shareholders equity (deficit) 21,382 121,382 Total capitalization $ 231,533 $ 61,321,382 (1) Our sponsor has agreed to loan us up to $750,000 under an unsecured promissory note issued on May 1, 2023 to be used for a portion of the expenses of this offering. As of May 8, 2023, we have borrowed $69,063 under the promissory note with our sponsor. As of September 30, 2023, we have borrowed $210,151 under the promissory note with our sponsor. (2) Upon the completion of our initial business combination, we will provide our shareholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in the trust account and not previously released to us to pay our taxes. (3) Actual share amount is prior to any forfeiture of founder shares by our sponsor and as adjusted amount assumes no exercise of the underwriters over-allotment option. As of September 30, 2023, 1,437,500 founder shares were issued to the sponsor (up to 187,500 of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised). On October 20, 2023, the Sponsor further subscribed for 287,500 ordinary shares of $0.0001 each in the Company for a purchase price of $28.75, resulting in 1,725,000 shares being issued and outstanding (up to 225,000 of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised). (4) All of the 6,000,000 ordinary shares sold as part of the units in the offering contain a redemption feature which allows for the redemption of such public shares in connection with our liquidation if there is a shareholder vote or tender offer in connection with our initial business combination and in connection with certain amendments to our amended and restated certificate of incorporation. In accordance with SEC and its guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require shares subject to redemption to be classified outside of permanent equity. Given that the 6,000,000 ordinary shares sold as part of the units in the offering will be issued with other freestanding instruments (i.e., public rights), the initial carrying value of the ordinary shares classified as temporary equity will be the allocated proceeds determined in accordance with ASC 470-20. Our ordinary shares are subject to ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, we have the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. We have elected to recognize the changes immediately. The accretion or remeasurement will be treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital). All ordinary shares sold in this offering are redeemable and classified as such on the balance sheet until such date that a redemption event takes place. 74 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a blank check company newly incorporated as a Cayman Islands exempted company on April 27, 2023 for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more target businesses. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. As such, although we are not targeting target companies in China, we may consider an initial business combination with a target business with its principal business operations in China (including Hong Kong and Macau). We intend to utilize cash derived from the proceeds of this offering, our securities, debt or a combination of cash, securities and debt, in effecting a business combination. The issuance of additional shares in our initial business combination: may significantly dilute the equity interest of investors in this offering who would not have pre-emption rights in respect of any such issue; could cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and may adversely affect prevailing market prices for our ordinary shares. Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in: default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations; acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; our inability to obtain necessary additional financing if any document governing such debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding; our inability to pay dividends on our ordinary shares; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. As indicated in the accompanying financial statements, at May 8, 2023, we had $0 in cash and a working capital deficit of $69,063. At September 30, 2023, we had $10,000 in cash and a working capital deficit of $203,567. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. Our plans to raise capital or to consummate our initial business combination may not be successful. These factors among others raise substantial doubt about our ability to continue as a going concern. 75 Results of Operations and Known Trends or Future Events We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering. Liquidity and Capital Resources Our liquidity needs will be satisfied through receipt of $25,028.75 from the sale of the founder shares and an aggregate of up to $750,000 in loans available from our sponsor under an unsecured promissory note executed on May 1, 2023, and due at the earlier of (i) December 31, 2023, (ii) the closing of this offering or (iii) the date on which we determine to not proceed with this offering. As of May 8, 2023, we have borrowed $69,063 under the promissory note with our sponsor. As of September 30, 2023, we have borrowed $210,151 under the promissory note with our sponsor. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management s plans to address this uncertainty through this offering are discussed above. We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. We estimate that the net proceeds from (1) the sale of the units in this offering, after deducting offering expenses of approximately $550,000 and underwriting discounts and commissions of $1,200,000 and (2) the sale of the private units for a purchase price of $3,050,000 (or up to $3,320,000 if the underwriters over-allotment option is exercised in full), will be $61,300,000 (or $70,390,000 if the over-allotment option is exercised in full), of which amount $60,600,000 (or $69,690,000 if the over-allotment is exercised in full) will be held in the trust account (which includes up to approximately $600,000 (or up to $690,000 if the over-allotment option is exercised in full, for the payment of deferred underwriting commissions). The remaining estimated $700,000 will not be held in the trust account. We intend to use substantially all of the net proceeds of this offering and the sale of the private units, including the funds held in the trust account (excluding deferred underwriting commissions) to acquire a target business or businesses and to pay our expenses relating thereto. To the extent that our shares used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business or businesses. Such working capital funds could be used in a variety of ways including continuing or expanding the target business operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the trust account were insufficient to cover such expenses. We believe that, upon consummation of this offering, the estimated $700,000 of net proceeds not held in the trust account, along with interest on the funds held in the trust account that is available to us, will be sufficient to allow us to operate for at least the next 12 months, assuming that a business combination is not consummated during that time. Over this time period, we will be using these funds for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination. We anticipate that we will incur approximately: $250,000 of expenses for the legal, accounting and other third-party expenses in connection with initial business combination; $130,000 of expenses relating to our SEC filing obligations and other legal and accounting fees related to regulatory reporting obligations; $120,000 for office space and other administrative expenses. $150,000 for D&O insurance premiums. $50,000 for general working capital that will be used for miscellaneous expenses. 76 If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. Controls and Procedures We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2024. As of the date of this prospectus, we have not completed an assessment, nor have our auditors tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as: staffing for financial, accounting and external reporting areas, including segregation of duties; reconciliation of accounts; proper recording of expenses and liabilities in the period to which they relate; evidence of internal review and approval of accounting transactions; documentation of processes, assumptions and conclusions underlying significant estimates; and documentation of accounting policies and procedures. Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively also may take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting. Related Party Transactions On May 1, 2023, we entered into a subscription agreement for founder shares with our sponsor which is recorded as subscription receivable and which was amended and restated on May 24, 2023. Prior to this offering, we issued an aggregate of 50,000 ordinary shares of $1.00 par value each to Han Huang. On May 11, 2023, Han Huang transferred those ordinary shares to our sponsor and on May 15, 2023 our sponsor resolved to sub-divide the ordinary shares of $1.00 par value each into ordinary shares of $0.0001 par value each and as such the sponsor held 500,000,000 ordinary shares of $0.0001 each. On May 15, 2023 the directors resolved to repurchase 498,562,500 ordinary shares from the sponsor, the repurchase resulting in the sponsor holding 1,437,500 ordinary shares. On May 25, 2023, 1,437,500 founder shares were issued to the sponsor (up to 187,500 of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised) pursuant to a securities subscription agreement and the 1,437,500 ordinary shares previously held by the sponsor were repurchased by the company, the shares have been retroactively adjusted. On October 20, 2023, the Company capitalized an amount equal to $28.75 standing to the credit of the share premium account and appropriated such sum and applied it on behalf of the Sponsor towards paying up in full (as to the full par value of $0.0001 per founder share) 287,500 unissued ordinary shares of $0.0001 par value and allotted such shares credited as fully paid to the Sponsor, resulting in 1,725,000 shares being issued and outstanding. Such ordinary shares includes an aggregate of up to 225,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters over-allotment is not exercised in full or in part. On October 20, 2023, the May 24, 2023 subscription agreement was amended to reflect this change. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20.0% of the issued and outstanding shares upon completion of this offering. Prior to the initial investment in the company of $25,028.75 by our sponsor, we had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a share dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial shareholders prior to this offering at 20.0% of our issued and outstanding ordinary shares upon the consummation of this offering (without giving effect to any purchases by our initial shareholders in the offering). Subsequently, on May 25, 2023, an aggregate of 152,000 founder shares were transferred to directors of the company. These 152,000 founder shares will not be subject to forfeiture in the event the underwriters over-allotment option is not exercised. 77 As of May 8, 2023, Aimei Investment Ltd, our sponsor, advanced an aggregate of $69,063 to us on a non-interest bearing basis for the payment of offering expenses on our behalf. As of September 30, 2023, Aimei Investment Ltd, our sponsor, advanced an aggregate of $210,151 to us on a non-interest bearing basis for the payment of offering expenses on our behalf. The loan is, at the discretion of the sponsor, due on the earlier of (i) December 31, 2023, (ii) the consummation of this offering or (iii) the abandonment of this offering. The promissory note will be payable without interest. The promissory note will be repaid out of the proceeds of this offering available to us for payment of offering expenses. Our initial shareholders have committed to purchase from us an aggregate of 305,000 private units (or up to 332,000 private units if the underwriters over-allotment option is exercised in full) at $10.00 per unit. Such purchases will take place on a private placement basis simultaneously with the consummation of this offering. All of the proceeds we receive from the purchase of the private units will be placed in the trust account described below. We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, in order to finance transaction costs in connection with an intended initial business combination, our initial shareholders, officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. Such loans would be evidenced by promissory notes. In the event that we are unable to consummate an initial business combination, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. If we consummate an initial business combination, the notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender s discretion, up to $1,500,000 of the notes may be converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued 150,000 units if the full amount of notes were issued and converted). In connection with this transaction, we have agreed to issue 60,000 ordinary shares as Representative Shares (or 69,000 Representative Shares if the underwriters exercise their over-allotment option in full) to the underwriters. The holders of the representative shares have agreed (A) to vote the representative shares in favor of any proposed business combination, (B) not to convert representative shares in connection with a shareholder vote to approve a proposed initial business combination or sell the representative shares to us in a tender offer in connection with a proposed initial business combination and (C) that the representative shares will not participate in any liquidating distributions from our trust account upon winding up if a business combination is not consummated. The holders of the Representative Shares will have registration rights as described elsewhere in this prospectus. Our audit committee will review and approve all reimbursements and payments made to our sponsor or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our board of directors, with any interested director abstaining from such review and approval. Quantitative and Qualitative Disclosures about Market Risk The amounts in the trust account will be invested in United States government treasury bills, bonds or notes having a maturity of 185 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act and that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk. Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results As of the date of this prospectus, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have conducted no operations to date. JOBS Act On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company", we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an "emerging growth company," whichever is earlier. 78 PROPOSED BUSINESS General We are a blank check company newly incorporated as a Cayman Islands exempted company on April 27, 2023. Exempted companies are Cayman Islands companies wishing to conduct business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with section 6 of the Tax Concessions Act (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. We were incorporated for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to as a "target business." Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location. As such, although we are not targeting target companies in China, we may consider an initial business combination with a target business with its principal business operations in China (including Hong Kong and Macau). We do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction. Competitive Advantage We have an experienced and highly professional management team, almost all of whom have entrepreneurial experience or experience working for public companies, and we believe that this valuable experience can help us to better identify outstanding companies that are considering becoming public companies. Our Chief Executive Officer, Juan Fernandez Pascual, has a deep understanding of the industry, the current challenges and opportunities, and the best strategies for success. He is also familiar with the regulatory environment, and has a strong track record of navigating complex legal and financial matters. His background in financial management and corporate governance will be especially helpful in guiding the company s strategic decisions. We believe Juan s unique experience and contacts will help us identify great target companies. Our Chief Financial Officer, Hueng Ming Wong, has solid background of accounting and financing as he has worked in an international accounting firm and advanced in the audit field by leading both internal and external audits, including as a senior manager and a manager in PricewaterhouseCoopers, Beijing office and Deloitte Touche Tohmatsu, Hong Kong, respectively. He has also advised a number of companies that are listed on overseas stock exchanges, including those in the United States, China and Hong Kong. We believe that his experience will help us to better identify the financial risks of potential investment targets and to find outstanding companies to acquire. Additionally, we believe that our independent director nominees will provide public company governance, executive leadership, operational oversight, private equity investment management and capital markets experience. Our directors have experience with acquisitions, divestitures and corporate strategy and implementation, which we believe will significantly benefit us as we evaluate potential acquisition or merger candidates as well as following the completion of our initial business combination. We believe our management team is well positioned to take advantage of the growing set of acquisition opportunities focused on the intelligent transportation sector and that our contacts and relationships, ranging from owners and management teams of private and public companies, private equity funds, investment bankers, attorneys, to accountants and business brokers will allow us to generate an attractive transaction for our shareholders. 79 In addition, our sponsor has engaged the services of ARC Group Limited to provide financial advisory services to our sponsor in connection with this offering, which services include an analysis of markets, positioning, financial models, organizational structure and capital requirements as well as assistance with the public offering process including assisting in the preparation of financial information and statements. The past performance of the members of our management team, our sponsor s financial advisor or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate. You should not rely on the historical record of the performance of our management team or any of its affiliates performance as indicative of our future performance. Our Chief Financial Officer is a citizen of Hong Kong. Additionally, one of our three independent director nominees, resides in China. Although we are not targeting target companies in China, we may consider a business combination with an entity or business with a physical presence or other significant ties to China, including Hong Kong and Macau, which may subject the post-business combination business to the laws, regulations and policies of China. Any target for a business combination may conduct operations through subsidiaries in China. The legal and regulatory risks associated with doing business in China discussed in this prospectus may make us a less attractive partner in an initial business combination than other special purpose acquisition companies that do not have any ties to China. As such, our ties to China may make it harder for us to complete an initial business combination with a target company without any such ties. In addition, we will not conduct a business combination with any target company that conducts operations through variable interest entities ("VIEs"), which are a series of contractual arrangements used to provide the economic benefits of foreign investment in Chinese-based companies where Chinese law prohibits direct foreign investment in the operating companies. As a result, this may limit the pool of acquisition candidates we may acquire in the PRC, in particular, relative to other special purpose acquisition companies that are not subject to such restrictions, which could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC relative to such other companies. If we were to complete a business combination with a Chinese entity, we could be subject to certain legal and operational risks associated with or having the majority of post-business combination operations in China. PRC laws and regulations governing PRC based business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of any post-business combination subsidiaries, significant depreciation of the value of our ordinary shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors, including investors in the United States. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. These recently enacted measures, and new measures which may be implemented, could materially and adversely affect the operations of any post-business combination company which we may acquire as our initial business combination. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on a China-based target company s daily business operation, the ability to accept foreign investments and list on a U.S. or other foreign exchange. Additionally, if we effect our initial business combination with a business located in the PRC, the laws applicable to such business will likely govern all of our material agreements and we may not be able to enforce our legal rights. There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations which may have a material adverse impact on the value of our securities. If we enter into a business combination with a target business operating in China, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to any future PRC subsidiaries via capital contribution or shareholder loans, as the case may be. All these risks could result in a material change in our or the target company s post-combination operations and/or the value of our ordinary shares or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. 80 Furthermore, the PRC government has significant authority to exert influence on the ability of a China-based company to conduct its business, make or accept foreign investments or list on a U.S. stock exchange. For example, if we enter into a business combination with a target business operating in China, the combined company may face risks associated with regulatory approvals of the proposed business combination between us and the target, offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy. The PRC government may also intervene with or influence the combined company s operations at any time as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect our potential business combination with a PRC operating business and the business, financial condition and results of operations of the combined company. Any such action, once taken by the PRC government, could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC, result in material changes in the combined company s post-combination operations and cause the value of the combined company s securities to significantly decline, or in extreme cases, become worthless or completely hinder the combined company s ability to offer or continue to offer securities to investors. See "Risk Factors" beginning at page 23 "Risks Related to Acquiring or Operating Businesses in the PRC." On February 17, 2023, the China Securities Regulatory Commission (the "CSRC") promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures"), which took effect on March 31, 2023. The Trial Measures supersede the prior rules and clarified and emphasized several aspects, which include but are not limited to: (1) comprehensive determination of the "indirect overseas offering and listing by PRC domestic companies" in compliance with the principle of "substance over form" and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: (a) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year comes from PRC domestic companies, and (b) the main parts of the issuer s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements for issuers that (a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures, (b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and (c) whose such overseas securities offering or listing shall be completed before September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing or offering overseas, such as (a) issuers whose listing or offering overseas has been recognized by the State Council of the PRC as a possible threat to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers under ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers compliance with web security, data security, and other national security laws and regulations; (5) issuers filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and the obligation after offering or listing overseas to report to the CSRC material events including a change of control or voluntary or forced delisting of the issuer; and (6) the CSRC s authority to fine both issuers and their shareholders between 1 and 10 million RMB for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. We believe we are not required to obtain approvals from any PRC government authorities, including the CSRC or the Cyberspace Administration of China ("CAC"), or any other government entity, to issue our securities to foreign investors and to list on a U.S. exchange or to search for a target company. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or any other PRC governmental authorities. However, applicable laws, regulations, or interpretations of the PRC may change or we could be mistaken about these rules applicability, and the relevant PRC government agencies could reach a different conclusion and may subject us to a stringent approval process from the relevant government entities in connection with this offering, continued listing on a U.S. exchange, the potential business combination, the issuance of shares or the maintenance of our status as a publicly listed company outside China, and the post business combination entity s PRC operations if our business combination target is a PRC Target Company. If the CSRC or the CAC, or any other governmental or regulatory body subsequently determines that its approval is needed for this offering, a business combination, the issuance of our ordinary shares upon exercise of the rights, or maintaining our status as a publicly listed company outside China, we may face approval delays, adverse actions or sanctions by the CSRC, CAC and/or other PRC regulatory agencies. It is uncertain whether we will be required to obtain permission from the PRC government to continue to list on a U.S. exchange in the future and offer our securities to foreign investors. If approval is required in the future, including pursuant to the Trial Measures, and we are denied permission from Chinese authorities to list on U.S. exchanges or offer our securities to foreign investors, we may not be able to continue listing on a U.S. exchange or be subject to other severe consequences, which would materially affect our ability to complete a business combination in which case we may have to liquidate which would be adverse to the interests of the investors. In addition, any changes in PRC law, regulations, or interpretations may severely affect our operations after this offering. The use of the term "operate" and "operations" includes the process of searching for a target business and conducting related activities. To that extent, we may not be able to conduct the process of searching for a potential target company in China. 81 There are numerous risks and uncertainties related to doing business in China including: Adverse changes in political and economic policies or political or social conditions of the PRC government could have a material adverse effect on the overall economic growth of China; Uncertainties with respect to the PRC legal system could limit legal protections available to you and us; It may be difficult for overseas regulators to conduct investigations or collect evidence within China PRC companies in certain business sectors are required to undergo national security review or obtain clearance from relevant authorities if necessary before making any filings with the CSRC. PRC companies must comply with national secrecy and data security laws with respect to any data disclosure. CSRC has the authority to and may block offshore listings that: (1) are explicitly prohibited by law; (2) may endanger national security; (3) involve criminal offenses such as corruption, bribery, embezzlement, misappropriation of property by the issuer, its controlling persons (with a three-year lookback); (4) involve the issuer under investigations for suspicion of criminal offenses or major violations of laws and regulations; or (5) involve material ownership disputes. For a detailed description of risks associated with our significant ties to or a potential acquisition of a target business in China, see "Risk Factors — Risks Related to Acquiring or Operating Businesses in the PRC" commencing on page 36. Each of our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination. For more information, see the section of this prospectus entitled "Management — Conflicts of Interest" and see "Risk Factors." Investment Direction Although there is no restriction or limitation on what industry our target operates in, it is our intention to pursue prospective targets that are focused on healthcare innovation. We anticipate targeting what are traditionally known as "small cap" companies domiciled in North America, Europe and/or the Asia Pacific ("APAC") regions that are developing assets in the biopharmaceutical, medical technology/medical device and diagnostics space which aligns with our management team s experience in operating health care companies and in drug and device technology development as well as diagnostic and other services. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. As such, although we are not targeting target companies in China, we may consider an initial business combination with a target business with its principal business operations in China (including Hong Kong and Macau). At the time of preparing this prospectus, we have not identified any specific business combination, nor has anyone on our behalf initiated or engaged in any substantive discussions, formal or otherwise, related to such a transaction. Our efforts to date are limited to organizational activities related to this offering. 82 Transfers of Cash to and from our Post Business Combination Subsidiaries To date, we have not pursued an initial business combination and there have not been any capital contributions or shareholder loans by us to any PRC entities, we do not yet have any subsidiaries, and we have not received, declared or made any dividends or distributions. Although we do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction, our initial business combination target company may include a company based in the PRC. If we decide to consummate our initial business combination with a target business based in and primarily operating in the PRC, the combined company, whose securities will be listed on a U.S. stock exchange, may make capital contributions or extend loans to its PRC subsidiaries through intermediate holding companies subject to compliance with relevant PRC foreign exchange control regulations. After the initial business combination, the combined company s ability to pay dividends, if any, to the shareholders and to service any debt it may incur will depend upon dividends paid by its PRC subsidiaries. Under PRC laws and regulations, PRC companies are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to offshore entities. In particular, under the current PRC laws and regulations, dividends may be paid only out of distributable profits. Distributable profits are the net profit as determined under Chinese accounting standards and regulations, less any recovery of accumulated losses and appropriations to statutory and other reserves required to be made. Current PRC regulations permit a potential PRC target company s indirect PRC subsidiaries to pay dividends to an overseas subsidiary, for example, a subsidiary located in Hong Kong, only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of the target s subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. As a result, the combined company s PRC subsidiaries may not have sufficient distributable profits to pay dividends to the combined company. Furthermore, each such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. The PRC government also imposes controls on the conversion of the Renminbi ("RMB"), the legal currency of the PRC, into foreign currencies and the remittance of currencies out of the PRC. Our initial business combination target may be a PRC company with substantially all of its revenues in RMB. Shortages in the availability of foreign currency may restrict the ability of the PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands post business combination, we may not be able to pay dividends in foreign currencies to our security-holders. Furthermore, if our target s subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. Cash dividends, if any, on our ordinary shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and, as a result, may be subject to PRC withholding tax at a rate of up to 10.0%. The PRC government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions. If the foreign exchange control regulations prevent the PRC subsidiaries of the combined company from obtaining sufficient foreign currencies to satisfy their foreign currency demands, the PRC subsidiaries of the combined company may not be able to pay dividends or repay loans in foreign currencies to their offshore intermediary holding companies and ultimately to the combined company. We cannot assure you that new regulations or policies will not be promulgated in the future, which may further restrict the remittance of RMB into or out of the PRC. We cannot assure you, in light of the restrictions in place, or any amendment to be made from time to time, that the PRC subsidiaries of the combined company will be able to satisfy their respective payment obligations that are denominated in foreign currencies, including the remittance of dividends outside of the PRC. See "Risk Factors — Risks Related to Acquiring or Operating Businesses in the PRC" under the subheadings "Cash-Flow Structure of a Post-Acquisition Company Based in China" and "Exchange controls that exist in the PRC may restrict or prevent us from using the proceeds of this offering to acquire a target company in the PRC and limit our ability to utilize our cash flow effectively following our initial business combination." 83 Market and Industry According to the HIMSS Future of Healthcare Report, 80% of healthcare providers plan to increase investment in technology and digital solutions over the next five years. In addition, 47% cited digital as a top organizational priority and 58% plan to invest more than $10 million in digital health programs by 2026. A report released by MedTech Europe disclosed that the European medical technology market was estimated at approximately 150 billion in 2021. In terms of growth, the in vitro diagnostics (IVD) market has been boosted in recent years by the COVID-19 pandemic, reaching a growth rate of 25% in 2020. The top five biggest medtech markets are Germany, France, the United Kingdom, Italy, and Spain. Medical technology offers solutions for many disease areas. From a worldwide perspective, IVD is the largest sector, followed by cardiology and diagnostic imaging. Based upon manufacturer prices, the European medical device market is estimated to make up approximately 27.3% of the world market. It is the second-largest medical device market after the United States (43.5%). The pharmaceutical industry has experienced significant growth during the past two decades, and pharma revenues worldwide totaled 1.42 trillion U.S. dollars in 2021. 3 In 2022, the United States was still the largest single pharmaceutical market, generating more than 600 billion U.S. dollars of revenue. Europe was responsible for generating around 213 billion U.S. dollars. These two markets, together with Japan, Canada and Australia, form the so-called established (or developed) markets. Over the past decade, Asia has grown exponentially, driving growth, innovation, and future development. While the United States still accounts for approximately half of novel pipeline assets, Asia is closing ranks. Asia s pharma industry typically entails not only innovative portfolios and pipelines, but also creative market access approaches, effective stakeholder engagements, and innovative business models and go-to-market strategies. Opportunity & Acquisition Target Criteria We will seek to acquire small cap businesses in the biopharmaceutical, medical technology/device industries or diagnostic and other services sector. We believe these industries are attractive for a number of reasons, including: they represent attractive markets, which are characterized by a high level of innovation and they include a large number of emerging high growth companies that have the right size as potential targets. Our operating experience and industry contacts place us in a position to optimize our chances of identifying high value targets in these areas. Our target of small cap healthcare-based companies will be based on the concept of value investing and therefore focused on quality businesses with specific and time-based catalysts. We will remain opportunistic at considering opportunities throughout the healthcare space however, our primary focus will be on small cap healthcare companies with one or more of the following characteristics: Late-stage development or revenue generating High growth prospects with sustainable proprietary position Experienced management teams with previous successes, especially where we can add critical public company expertise Addressable conditions that are clinically important and under-diagnosed or treated Independent companies or corporate spin offs Domestic or International base of business We will be focused on companies in disruptive and other value added subsegments of healthcare that have the potential for significant gains in the next five years. Our ideal company will be institutionally backed, with a high-quality management team and a demonstrated ability to raise money from the private capital markets. Our plan is to focus on the esoteric/specialty diagnostic market that is quickly emerging as a critical component of the medical health system as the concept of therapeutics, diagnostics, medical devices and artificial intelligence merge into a single focus of optimizing patient care. 84 The focus of our management team will be to create shareholder value by leveraging its experience to efficiently guide an emerging healthcare company towards commercialization. Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we see fit to do so: We believe that there are a substantial number of potential target businesses domestically and internationally with appropriate valuations that can benefit from a public listing and new capital for growth to support significant revenue and earnings growth or to advance clinical programs. We intend to seek target companies that have significant and underexploited expansion opportunities in a niche sector. This can be accomplished through a combination of accelerating organic growth and finding attractive add-on acquisition targets. Our management team has significant experience in identifying such targets. Similarly, our management has the expertise to assess the likely synergies and a process to help a target integrate acquisitions. Additionally, our management team has extensive experience assisting healthcare companies raise money as they navigate the regulatory approval process. We intend to seek target companies that should offer attractive risk-adjusted equity returns for our shareholders. We intend to seek to acquire a target on terms and in a manner that leverage our experience. We expect to evaluate a target based on its potential to successfully achieve regulatory approval and commercialize its product(s). We also expect to evaluate financial returns based on (i) risk-adjusted peak sales potential (ii) the potential of pipeline products and the scientific platform (iii) the ability to achieve the system cost savings, (iv) the ability to accelerate growth via other options, including through the opportunity for follow-on acquisitions and (v) the prospects for creating value through other value creation initiatives. Potential upside, for example, from the growth in the target business earnings or an improved capital structure will be weighed against any identified downside risks. We intend to invest in businesses that have a track record of success. We look for companies with shareholder-friendly governance and low leverage, which are valued at what we think are low prices relative to their earnings potential and where we see attractive return potential over the long run. We believe this investment approach constitutes our competitive advantage and can potentially offer both meaningful upside potential and a degree of downside protection in periods of financial market turbulence. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business, nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to select or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to select or locate any such acquisition candidate. Initial Business Combination We will have until 12 months from the closing of this offering (or up to 24 months from the closing of this offering if we extend the period of time to consummate a business combination by the full amount of time, as described in more detail in this prospectus) to consummate our initial business combination. If we are unable to consummate our initial business combination within the applicable time period, we will, as promptly as reasonably possible but not more than five business days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the rights will be worthless. Nasdaq rules provide that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction of such criteria. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. If the business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses. If our securities are not listed on Nasdaq after this offering, we would not be required to satisfy the 80% requirement. However, we intend to satisfy the 80% requirement even if our securities are not listed on Nasdaq at the time of our initial business combination. 85 We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity securities of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our initial shareholders, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our initial shareholders, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions that our initial business combination is fair to our company (or shareholders) from a financial point of view. Members of our management team and our independent directors and their affiliates will directly or indirectly own ordinary shares and private rights following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Additionally, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity, including other blank check companies similar to our company, pursuant to which such officer or director may be required to present a business combination opportunity to such entity. Specifically, our executive officers are affiliated with our sponsor and other entities that make, or are looking to make, investments in companies. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination. For additional information regarding our executive officers and directors business affiliations and potential conflicts of interest, see "Management — Directors and Executive Officers" and "Management — Conflicts of Interest." Our amended and restated memorandum and articles of association provides that, subject to fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. PRC Approvals Below is a summary of potential PRC laws and regulations that could be interpreted by the in-charge PRC government authorities, namely, the CSRC, the CAC and their enforcement agencies, to require the company to obtain permission or approval in order to issue securities to foreign investors in connection with a business combination or offer securities to foreign investors. The company does not believe that any permission or approval is required under the PRC laws or regulations to offer securities to non-PRC investors. However, there is no assurance that such approval or permission will not be required under the PRC laws, regulations or policies if the relevant governmental authorities take a contrary position, nor can the company predict whether or how long it will take to obtain such approval if so required. 86 CSRC Approval The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors adopted by six PRC regulatory agencies, including the MOFCOM, the State-Owned Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce (the "SAMR"), the CSRC, and the SAFE in 2006 and amended in 2009, as well as some other regulations and rules concerning mergers and acquisitions (collectively, the "M&A Rules") include provisions that purport to require that an offshore special purpose vehicle that is controlled by PRC domestic companies or individuals and that has been formed for the purpose of an overseas listing of securities through acquisitions of PRC domestic companies or assets to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle s securities on an overseas stock exchange. On September 21, 2006, the CSRC published its approval procedures for overseas listings by special purpose vehicles. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. While the application of the M&A Rules remains unclear, the company believes that the CSRC approval would not be required in the context of a business combination because (1) the M&A Rules provide that the acquisition of the equity held by the shareholders of a "domestic company" (i.e., a non-foreign investment company) or the subscription for the new shares issued by a "domestic company" by the shareholders of an offshore special purpose vehicle with the equity of such offshore special purpose vehicle, or by the offshore special purpose vehicle with its new shares for the purpose of the overseas listing of such offshore special purpose vehicle, shall be subject to the approval of the CSRC; while the company currently is a foreign-invested enterprise rather than a "domestic company" as defined under the M&A Rules, and (2) the CSRC currently has not issued any definitive rule or interpretation concerning whether a transaction of the kind contemplated herein is subject to the M&A Rules. However, uncertainties still exist as to how the M&A Rules will be interpreted and implemented. On February 17, 2023, the China Securities Regulatory Commission (the "CSRC") promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures"), which took effect on March 31, 2023. The Trial Measures supersede the prior rules and clarified and emphasized several aspects, which include but are not limited to: (1) comprehensive determination of the "indirect overseas offering and listing by PRC domestic companies" in compliance with the principle of "substance over form" and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: (a) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year comes from PRC domestic companies, and (b) the main parts of the issuer s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements for issuers that (a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures, (b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and (c) whose such overseas securities offering or listing shall be completed before September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing or offering overseas, such as (a) issuers whose listing or offering overseas has been recognized by the State Council of the PRC as a possible threat to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers under ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers compliance with web security, data security, and other national security laws and regulations; (5) issuers filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and the obligation after offering or listing overseas to report to the CSRC material events including a change of control or voluntary or forced delisting of the issuer; and (6) the CSRC s authority to fine both issuers and their shareholders between 1 and 10 million RMB for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. We believe we are not required to obtain approvals from any PRC government authorities, including the CSRC or the Cyberspace Administration of China ("CAC"), or any other government entity, to issue our securities to foreign investors and to list on a U.S. exchange or to search for a target company. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or any other PRC governmental authorities. However, applicable laws, regulations, or interpretations of the PRC may change or we could be mistaken about these rules applicability, and the relevant PRC government agencies could reach a different conclusion and may subject us to a stringent approval process from the relevant government entities in connection with this offering, continued listing on a U.S. exchange, the potential business combination, the issuance of shares or the maintenance of our status as a publicly listed company outside China, and the post business combination entity s PRC operations if our business combination target is a PRC Target Company. If the CSRC or the CAC, or any other governmental or regulatory body subsequently determines that its approval is needed for this offering, a business combination, the issuance of our ordinary shares upon exercise of the rights, or maintaining our status as a publicly listed company outside China, we may face approval delays, adverse actions or sanctions by the CSRC, CAC and/or other PRC regulatory agencies. It is uncertain whether we will be required to obtain permission from the PRC government to continue to list on a U.S. exchange in the future and offer our securities to foreign investors. If approval is required in the future, including pursuant to the Trial Measures, and we are denied permission from Chinese authorities to list on U.S. exchanges or offer our securities to foreign investors, we may not be able to continue listing on a U.S. exchange or be subject to other severe consequences, which would materially affect our ability to complete a business combination in which case we may have to liquidate which would be adverse to the interests of the investors. In addition, any changes in PRC law, regulations, or interpretations may severely affect our operations after this offering. The use of the term "operate" and "operations" includes the process of searching for a target business and conducting related activities. To that extent, we may not be able to conduct the process of searching for a potential target company in China. 87 Our Sponsor Our sponsor is Aimei Investment Ltd.., a Cayman Islands exempted company whose ultimate beneficial owner is Ms. Huang Han. Ms. Han is a resident of the PRC. Mr. Juan Fernandez Pascual is the Secretary of our sponsor. On May 1, 2023, we entered into a subscription agreement for founder shares with our sponsor which is recorded as subscription receivable and which was amended and restated on May 24, 2023. On May 25, 2023, 1,437,500 founder shares were issued to the sponsor (up to 187,500 of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised) pursuant to a securities subscription agreement and the 1,437,500 ordinary shares previously held by the sponsor were repurchased by the company. Subsequently, on May 25, 2023, an aggregate of 152,000 founder shares were transferred to directors of the company. These 152,000 founder shares will not be subject to forfeiture in the event the underwriters over-allotment option is not exercised. On October 20, 2023, the Company capitalized an amount equal to $28.75 standing to the credit of the share premium account and appropriated such sum and applied it on behalf of the Sponsor towards paying up in full (as to the full par value of $0.0001 per founder share) 287,500 unissued ordinary shares of $0.0001 par value and allotted such shares credited as fully paid to Sponsor, resulting in 1,725,000 shares being issued and outstanding. Such ordinary shares includes an aggregate of up to 225,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters over-allotment is not exercised in full or in part. On October 20, 2023, the May 24, 2023 subscription agreement was amended to reflect this change. Thus, such parties may have more of an economic incentive for us to enter into an initial business combination with a riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their founder shares. Each of our directors, director nominees and officers presently has and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. Notwithstanding our founder s and management team s past experiences, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) that we will provide an attractive return to our shareholders from any business combination we may consummate. You should not rely on the historical record of the members of our management team or our sponsor or their respective affiliates or any related investment s performance as indicative of our future performance of an investment in the company or the returns the company will, or is likely to, generate going forward. Each of our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination. For more information, see the section of this prospectus entitled "Management — Conflicts of Interest" and see "Risk Factors." Our Competitive Advantages Status as a Publicly Listed Company We believe our structure will make us an attractive business combination partner to prospective target businesses. As a publicly listed company, we will offer a target business an alternative to the traditional initial public offering. We believe that target businesses will favor this alternative, which we believe is less expensive, while offering greater certainty of execution than the traditional initial public offering. During an initial public offering, there are typically expenses incurred in marketing, which would be costlier than a business combination with us. Furthermore, once a proposed business combination is approved by our shareholders (if applicable) and the transaction is consummated, the target business will have effectively become public, whereas an initial public offering is always
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+TAX CONSEQUENCES The tax consequences of the Exchange Offer are complex and will vary depending on your particular facts and circumstances. The U.S. federal income tax consequences to you of participating in the Exchange Offer are complex and will vary depending on certain facts and circumstances. We intend to treat the exchange of the Shares for the Trust Preferred Securities as a recapitalization pursuant to Section 368(a)(1)(E) of the Code. Assuming the exchange is so treated, you generally will recognize gain for U.S. federal income tax purposes equal to the excess, if any, of the fair market value of the Trust Preferred Securities received in the exchange (including any fractional share) over your tax basis in the Shares. You will not be able to recognize any loss realized in the recapitalization (except with respect to cash received in lieu of a fractional share). Cash received in lieu of a fractional share will generally be treated as received in exchange for the fractional share, and you will generally recognize the gain or loss thereon. Please see Exchange Offer Section 13. Because the U.S. federal income tax consequences of the Exchange Offer are complex, you are urged to consult with your own tax advisor. MARKET AND INDUSTRY DATA In this prospectus, we rely on and refer to information and statistics regarding our industry. Where possible, we obtained this information and these statistics from third party sources, such as independent industry publications, government publications or reports by market research firms, including company research, trade interviews, and public filings with the SEC. Additionally, we have supplemented third party information where necessary with management estimates based on our review of internal surveys, information from our customers and vendors, trade and business organizations and other contacts in markets in which we operate, and our management s knowledge and experience. However, these estimates are subject to change and are uncertain due to limits on the availability and reliability of primary sources of information and the voluntary nature of the data gathering process. As a result, you should be aware that industry data included in this prospectus, and estimates and beliefs based on that data, may not be reliable. NOTICE TO INVESTORS We have no contract, arrangement or understanding relating to, and will not, directly or indirectly, pay any commission or other remuneration to any broker, dealer, salesperson, agent or any other person for soliciting tenders in the Exchange Offer. No dealer, salesman or other person has been authorized to give any information or to make any representations with respect to the matters described in the Exchange Offer, other than those contained in, or incorporated by reference into, the Exchange Offer. If given or made, such information or representations may not be relied upon as having been authorized by us. In making an investment decision, holders must rely on their own examination of us and the terms of the Exchange Offer, including the merits and risks involved. The information contained in the Exchange Offer is correct in all material respects as of the date hereof. Neither the delivery of this prospectus with respect to the Trust Preferred Securities nor the consummation of the Exchange Offer will create the implication that the information contained herein is correct at any time after the date hereof however, if a material change occurs in the information contained in this prospectus, we will disseminate promptly disclosure of the change to you. Our business, financial condition, results of operations and prospects may change after that date. No representation is made to any holder regarding the legality of an investment in the Trust Preferred Securities under any applicable legal investment or similar laws or regulations. The contents of this prospectus are not to be construed as legal, financial or tax advice. Holders should consult their own attorneys, financial advisors or tax advisors as to legal, financial or tax advice with respect to the Exchange Offer. Questions regarding the Exchange Offer, requests for assistance in tendering your shares of Common Stock or requests for additional copies of this prospectus or the Letter of Transmittal should be directed to the Company s Information Agent, D.F. King Co., Inc., toll-Free (800) 848-340. Holders of shares of Common Stock may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Exchange Offer. PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before deciding to invest in our securities, you should read this entire prospectus carefully, including the section of this prospectus entitled Risk Factors. Air T, Inc. and Air T Funding Overview Air T, Inc. (the Company, Air T, we or us or our ) is a holding company with a portfolio of operating businesses and financial assets. Our goal is to prudently and strategically diversify Air T s earnings power and compound the growth in its free cash flow per share over time. We currently operate in four industry segments Overnight air cargo, which operates in the air express delivery services industry Ground equipment sales, which manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers Commercial jet engines and parts, which manages and leases aviation assets supplies surplus and aftermarket commercial jet engine components provides commercial aircraft disassembly part-out services commercial aircraft parts sales procurement services and overhaul and repair services to airlines and Corporate and other, which acts as the capital allocator and resource for other consolidated businesses. Further, Corporate and other is also comprised of insignificant businesses that do not pertain to other reportable segments. Each business segment has separate management teams and infrastructures that offer different products and services. The following table provides segment operating income for each of the last two fiscal years. (Dollars in thousands) Fiscal Year Ended March 31, 2023 2022 Overnight Air Cargo $90,543 $74,409 Ground Equipment Sales 48,485 42,239 Commercial Jet Engines and Parts 101,737 57,689 Corporate and other 6,558 2,740 $247,323 $177,077 Air T Funding Air T Funding (the Trust ) is a statutory business trust formed under Delaware law pursuant to (i) the Trust Agreement and (ii) the filing of a certificate of trust with the Delaware Secretary of State on September 28, 2018. Air T Funding s business and affairs are conducted by the Property Trustee, Delaware Trustee and two individual Administrative Trustees who are officers of the Company. Air T Funding exists for the exclusive purposes of (i) issuing and selling the Trust Preferred Securities, (ii) using the proceeds from the sale of the Trust Preferred Securities to acquire the Junior Subordinated Debentures issued by the Company, and (iii) engaging in only those other activities necessary, advisable or incidental thereto (such as registering the transfer of the Trust Preferred Securities). Accordingly, the Junior Subordinated Debentures are the sole assets of Air T Funding, and payments by the Company under the Junior Subordinated Debentures and the Expense Agreement are the sole revenues of Air T Funding. All of the Common Securities of the Trust are owned by the Company. The Common Securities rank pari passu, and payments will be made thereon pro rata, with the Trust Preferred Securities, except that upon the occurrence and during the continuance of an event of default under the Trust Agreement, as amended resulting from an event of default under the Indenture, the rights of the Company as holder of the common securities to payment in respect of distributions and payments upon liquidation, redemption or otherwise will be subordinated to the rights of the holders of the Trust Preferred Securities. See Description of Trust Preferred Securities, Junior Subordinated Debentures and Guarantee -- Subordination of Common Securities of Air T Funding Held by the Company. Air T Funding has a term of 30 years, but may terminate earlier as provided in the Trust Agreement, as amended. The Trust Agreement was most recently amended on March 3, 2021 and on January 28, 2022 and currently allows the issuance of up to $100,000,000 of Trust Preferred Securities. As of the date of this prospectus, there are $31,002,125 in Trust Preferred Securities outstanding. Additional Information Air T, Inc. was incorporated under the laws of the State of Delaware in 1980. The principal place of business of Air T and of Air T Funding is 11020 David Taylor Drive, Suite 305, Charlotte NC, 28262. We maintain an internet website at http www.airt.net and our SEC filings may be accessed through links on our website. The information on our website is available for information purposes only and is not incorporated by reference into, and does not constitute a part of, this prospectus. Exchange Offer We are making the Exchange Offer because the Company believes it is in the best interest of the Company to repurchase shares of its common stock and that at this time the Exchange Offer described in this Exchange Offer is a prudent and effective way to do so and to provide value and offer our stockholders the opportunity to exchange their Shares for a security that is traded on a national securities exchange that currently pays an 8.0% annual distribution. We believe an Exchange Offer at the exchange ratio offered will provide value to our stockholders. Conversely, the Exchange Offer also affords stockholders the option not to participate and, thereby, to increase their relative percentage interest in the Company and its future results. In addition, our Board believes the Exchange Offer provides stockholders with an opportunity to exchange their shares for securities that currently pays a distribution that is traded on a national securities exchange, without potential disruption to the share price and the usual transaction costs inherent in open market purchases and sales. The Board may consider undertaking additional offer(s) based upon a variety of factors, including the performance of the market price of the Shares. See Exchange Offer - Section 2. Current holders of Shares will be able to tender their Shares and receive 1.40 Trust Preferred Securities for each Share validly tendered in Exchange Offer. You should read the discussions under the headings Purpose of the Exchange Offer Certain Effects of the Exchange Offer and Procedures for Tendering Shares included in the Exchange Offer, respectively, for more information about the Exchange Offer. Exchange Offer Until the Expiration Date, holders can tender Shares in exchange for 1.40 Trust Preferred Securities for each Share validly tendered. A holder may tender as few or as many Shares as the holder elects. Shares may only be exchanged for whole Trust Preferred Securities. In lieu of issuing fractional Trust Preferred Securities, any holder of Shares who would otherwise have been entitled to receive fractional Trust Preferred Securities will, after aggregating all such fractional Trust Preferred Securities of such holder, be paid cash (without interest) in an amount equal to such fractional part of a Trust Preferred Securities Share multiplied by the last sale price of the Trust Preferred Securities on The NASDAQ Global Market on the last trading day prior to the Expiration Date. Expiration Date The Exchange Offer will expire on the Expiration Date, which is at 5 00 p.m., eastern time, on _______ ___, 2023 unless extended by us at our sole discretion. Procedure for Participating in the Exchange Offer In all cases, the issuance of Trust Preferred Securities pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of the Shares, the Letter of Transmittal (or a facsimile thereof) properly completed and duly executed and any required signature guarantees and other documents required by the Letter of Transmittal. In lieu of physically completing and signing the Letter of Transmittal and delivering it to the Exchange Agent, DTC participants may electronically transmit their acceptance of the Exchange Offer through DTC s automated tender offer program, for which the transaction will be eligible. By signing or agreeing to be bound by the Letter of Transmittal and other required documents, you will represent to us that, among other things any Trust Preferred Securities that you receive will be acquired in the ordinary course of your business you have no arrangement or understanding with any person to participate in the distribution of the Trust Preferred Securities you are not our affiliate, as defined in Rule 405 under the Securities Act if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the Trust Preferred Securities and if you are a broker-dealer, that you will receive Trust Preferred Securities for your own account in exchange for Shares that were acquired as a result of market-making activities or other trading activities and that you will deliver a prospectus in connection with any resale of such Trust Preferred Securities. Procedures for Tendering Units Through a Custodian If you are a beneficial owner of Shares, but the holder of such Shares is a custodial entity such as a bank, broker, dealer, trust company or other nominee, and you seek to tender your Shares pursuant to the Exchange Offer, you must provide appropriate instructions to such holder of the Shares in order to participate through DTC s automated tender offer program with respect to such Shares. Withdrawal of Participation in the Exchange Your right to tender any Shares pursuant to the Exchange Offer will expire at the Expiration Date. Return of Shares If we do not accept any Shares tendered in the Exchange Offer for any reason described in the terms and conditions of the Exchange Offer or if any Shares tendered are withdrawn pursuant to the terms of the Exchange Offer, we will return such Shares without expense to the exercising holder. Conditions to the Exchange Offer The Exchange Offer is subject to certain customary conditions, which we may amend or waive. We have the right, in our sole discretion, to terminate or withdraw the Exchange Offer if any of the conditions described in this prospectus are not satisfied or waived. See Exchange Offer Section 7. Exchange Agent Information Agent D.F. King Co., Inc. is serving as the Exchange Agent and Information Agent in connection with the Exchange Offer. Questions or requests for assistance, or for additional copies of the Exchange Offer documents, Letter of Transmittal or other materials should be directed to D.F. King Co., Inc., 48 Wall Street, 22nd Floor, New York, NY 10005. Depositary Equiniti Trust Company, LLC is serving as the Depositary in connection with the Exchange Offer. Deliveries should be addressed to Equiniti Trust Company, LLC c o Reorganization Department, 6201 15th Avenue, Brooklyn, NY 11219. United States Federal Income Tax Considerations We recommend that you consult with your own tax advisor with regard to the possibility of any federal, state, local or other tax consequences of the Exchange Offer. See Exchange Offer Section 13 for a discussion of the material U.S. Federal Income Tax Consequences of participating in the Exchange Offer. Registration The Trust Preferred Securities issued at the closing will be registered pursuant to this registration statement. Risk Factors See Risk Factors and other information included in this prospectus for a discussion of factors you should consider carefully before investing pursuant to the terms of this prospectus. Trust Preferred Securities Issued in the Exchange In exchange for Shares tendered pursuant to the terms of the Exchange Offer, the Air T Funding will issue Trust Preferred Securities in book-entry form. The material provisions of the Trust Preferred Securities are set forth herein but are only a summary and are qualified in their entirety by the provisions of the Trust Agreement, as amended and the other governing documents of the Trust, which have been filed as exhibits to this registration statement, of which this prospectus forms a part. Copies of these documents are also available to security holders of the Company and prospective investors upon request. Issuer Air T Funding, a Delaware statutory trust. Securities offered Up to 193,200 shares of the Air T Funding s Alpha Income Trust Preferred Securities (also referred to as the 8.0% Cumulative Securities), par value $25.00 per share (the Trust Preferred Securities ). Risk factors See Risk Factors and other information included in this prospectus for a discussion of factors you should consider carefully before investing pursuant to the terms of this prospectus. The Trust Preferred Securities will be registered pursuant to this registration statement at the time the Trust Preferred Securities are issued. The Trust Preferred Securities will be listed on The NASDAQ Global Market under the symbol AIRTP. Who is offering to purchase my shares We, Air T, Inc. are offering to exchange your shares of Air T, Inc. common stock, par value $0.25 per share (the Shares ) for shares of Air T Funding s Alpha Income Trust Preferred Securities (also referred to as the 8.0% Cumulative Securities) par value $25.00 per share (the Trust Preferred Securities ). Air T Funding is a wholly-owned subsidiary of Air T. See Exchange Offer - Section 1. What will be the Exchange Ratio for the shares We are offering to exchange up to 138,000 Shares, upon the terms and subject to the conditions of the Exchange Offer, at an exchange ratio of one Share for 1.40 Trust Preferred Securities, less any applicable withholding taxes and without interest. A minimum of at least 25,000 Shares must be tendered in the Exchange Offer. A maximum of 193,200 Trust Preferred Securities may be issued in the Exchange Offer. What will be the form of exchange If your Shares are exchanged in the Exchange Offer, you will receive that 1.40 Trust Preferred Securities for each Share validly tendered pursuant to the Exchange Offer plus cash for any fractional Trust Preferred Securities, less any applicable withholding taxes and without interest. The applicable number of Trust Preferred Securities will be issued promptly after the expiration of the Exchange Offer period. See Exchange Offer - Section 5. How many Shares will the Company acquire in the Exchange Offer We will acquire up to 138,000 Shares, or a lower amount depending on the number of Shares properly tendered and not properly withdrawn pursuant to the Exchange Offer. Assuming that the conditions to the Exchange Offer are satisfied or waived and the Exchange Offer is fully subscribed, we would acquire 138,000 Shares, representing approximately 4.9% of our outstanding Shares as of the date of this Exchange Offer and Air T Funding would issue 193,200 Trust Preferred Securities. The Exchange Offer is conditioned on a minimum number of 25,000 Shares being tendered. See Exchange Offer - Section 7. How will the Company exchange the shares We will cause Air T Funding to issue Trust Preferred Securities in the Exchange Offer and use our available cash on hand to pay for fractional Trust Preferred Securities in order to exchange shares in the Exchange Offer and to pay related expenses. See Exchange Offer - Section 9. The Trust Preferred Securities to be delivered in the Exchange Offer will be registered with the Commission and currently trade on Nasdaq under the trading symbol AIRTP. How long do I have to tender my Shares You may tender your Shares until the Exchange Offer expires. The Exchange Offer will expire on _______ ___, 2023, at 5 00 P.M., Eastern Time, unless we extend or withdraw the Exchange Offer (such date and time, as the same may be extended, the Expiration Date ). We may choose to extend the Exchange Offer for any reason. We cannot assure you that the Exchange Offer will be extended or, if extended, for how long. See Exchange Offer - Sections 1 and 14. If a broker, dealer, commercial bank, trust company or other nominee holds your Shares, it is likely that such nominee has an earlier deadline for accepting the Exchange Offer. Accordingly, beneficial owners wishing to participate in the Exchange Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Exchange Offer. Can the Exchange Offer be extended, amended or terminated, and under what circumstances We can extend or amend the Exchange Offer in our sole discretion. If we extend the Exchange Offer, we will delay the acceptance of any Shares that have been tendered. We can terminate the Exchange Offer under certain circumstances. See Exchange Offer - Sections 7 and 14. How will I be notified if the Company extends the Exchange Offer or amends the terms of the Exchange Offer We will issue a press release no later than 9 00 a.m., Eastern Time, on the business day after the previously scheduled expiration date if we decide to extend the Exchange Offer. We will announce any amendment to the Exchange Offer by making a public announcement of the amendment. In the event that the terms of the Exchange Offer are amended, we will file a Form 8-K with the Commission and include the amendment to our Exchange Offer. See Exchange Offer - Section 14. What is the purpose of the Exchange Offer The Board determined that it is in the best interest of the Company to repurchase shares of its common stock and that at this time the Exchange Offer described in this Exchange Offer is a prudent and effective way to do so and to provide value and offer our stockholders the opportunity to exchange their shares for a security that is traded on a national securities exchange that currently pays an 8.0% annual distribution. We believe an Exchange Offer at the Exchange Ratio offered will provide value to our stockholders. Conversely, the Exchange Offer also affords stockholders the option not to participate and, thereby, to increase their relative percentage interest in the Company and its future results. In addition, our Board believes the Exchange Offer provides stockholders with an opportunity to exchange their shares for securities that currently pay a distribution that are traded on a national securities exchange, without potential disruption to the share price and the usual transaction costs inherent in open market purchases and sales. The Board may consider undertaking additional offer(s) based upon a variety of factors, including the performance of the market price of the Shares. See Exchange Offer - Section 2. Are there any conditions to the Exchange Offer Yes. Our obligation to accept and exchange Trust Preferred Securities for your tendered Shares depends on a number of conditions, including, but not limited to A minimum of 25,000 Shares are tendered in the Exchange Offer. No legal action shall have been threatened, instituted or pending that challenges or relates to the Exchange Offer or that, in our reasonable judgment, could materially and adversely affect our business, condition (financial or otherwise), assets, income, operations or prospects or otherwise materially impair the contemplated future conduct of our business or our ability to exchange Shares in the Exchange Offer. No general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter markets in the United States or the declaration of a banking moratorium or any suspension of payment in respect of banks in the United States shall have occurred. No commencement or escalation of war, armed hostilities, or other international or national calamity, including, but not limited to, an act of terrorism, shall have occurred. No changes in the general political, market, economic or financial conditions in the United States or abroad that, in our reasonable judgment, could materially and adversely affect our business, condition (financial or otherwise), assets, income, operations or prospects. No decline shall have occurred in the market price for our Shares or the Trust Preferred Securities or in the Dow Jones Industrial Average, New York Stock Exchange Index, Nasdaq Composite Index or the Standard and Poor s 500 Composite Index by more than 10% from the close of business on _________ ___, 2023, the business day prior to the announcement by the Company of the commencement of the Exchange Offer. No tender or exchange offer for any or all of our Shares (other than this Exchange Offer) shall have been proposed, announced or made by any person or shall have been publicly disclosed other than in the ordinary course of business. No change in law or in the official interpretation or administration of law, or relevant position or policy of a governmental authority with respect to any laws, applicable to the Exchange Offer, shall have occurred. In addition, the Exchange Offer is condition on the registration of the Trust Preferred Securities to be delivered in the Exchange Offer with the Commission. The Exchange Offer is subject to a number of other conditions described in greater detail in Exchange Offer - Section 7. How do I tender my shares To tender your shares, prior to 5 00 P.M. Eastern Time, on _______ ___, 2023, unless the Exchange Offer is extended if your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact such nominee and have such nominee tender your Shares for you if you hold certificates in your own name, complete and sign a Letter of Transmittal according to its instructions and deliver it, together with any required signature guarantees, the certificates for your Shares and any other documents required by the Letter of Transmittal, to the Depositary at its address shown on the Letter of Transmittal or if you are an institution participating in The Depository Trust Company ( DTC ), which we refer to as the Book-Entry Transfer Facility, tender your Shares according to the procedure for book-entry transfer described in Exchange Offer - Section 3. Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadline for participation in the Exchange Offer. Accordingly, beneficial owners wishing to participate in the Exchange Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Exchange Offer. If you want to tender your Shares, but your certificates for the Shares are not immediately available or cannot be delivered to the Depositary, you cannot comply with the procedure for book-entry transfer or you cannot deliver the other required documents to the Depositary by the Expiration Date of the Exchange Offer, you will not be able to tender your Shares. This can occur, for example, if you purchased shares of our common stock at, or within one or two days of, the Expiration Date, not allowing sufficient time for such purchase transaction to settle. There are no guaranteed delivery procedures available under the terms of this offer as an alternative delivery mechanism. How will the Exchange Offer affect the number of our Shares and the number of Trust Preferred Securities outstanding As of June 30, 2023, we had 2,817,754 outstanding Shares. If the conditions to the Exchange Offer are satisfied or waived and the Exchange Offer is fully subscribed at the maximum amount, we will have 2,679,754 Shares outstanding immediately following the exchange of Shares tendered in the Exchange Offer, representing an approximate 4.9% reduction in the number of outstanding Shares. The actual number of Shares outstanding immediately following completion of the Exchange Offer will depend on the number of Shares tendered and exchanged in the Exchange Offer. See Exchange Offer - Section 2. As of June 30, 2023, there were 1,240,085 Trust Preferred Securities outstanding (includes 200,000 shares held by affiliated entities). If the conditions to the Exchange Offer are satisfied or waived and the Exchange Offer is fully subscribed, Air T Funding will have 1,433,285 Trust Preferred Securities outstanding immediately following the exchange of shares tendered in the Exchange Offer, representing an approximate 15% increase in the number of outstanding Trust Preferred Securities. The actual number of Trust Preferred Securities outstanding immediately following completion of the Exchange Offer will depend on the number of Shares tendered and exchanged in the Exchange Offer. Stockholders who do not have their Shares exchanged in the Exchange Offer will realize a proportionate increase in their relative ownership interest in the Company following the exchange of Shares pursuant to the Exchange Offer. See Exchange Offer - Section 2. Can I change my mind after I have tendered Shares in the Exchange Offer Yes. You may withdraw any Shares you have tendered at any time before the expiration of the Exchange Offer, which will occur at 5 00 p.m. Eastern Time, on _______ ___, 2023, unless we extend or withdraw it. See Exchange Offer - Section 4. How do I withdraw Shares I previously tendered You must deliver on a timely basis a written or facsimile notice of your withdrawal to the Depositary at the address appearing on the back cover of this Exchange Offer. Your notice of withdrawal must specify your name, the number of Shares to be withdrawn and the name of the registered holder of such Shares. Some additional requirements apply if the certificates for Shares to be withdrawn have been delivered to the Depositary or if your Shares have been tendered under the procedure for book-entry transfer set forth in Exchange Offer - Section 3. In what order will the Company exchange tendered Shares If the terms and conditions of the Exchange Offer have been satisfied or waived and 138,000 Shares are properly tendered and not properly withdrawn prior to the Expiration Date, we will acquire up to 138,000 Shares properly tendered and not properly withdrawn. If less than 138,000 Shares (and more than 25,000 Shares) are tendered, we will exchange all of the Shares at the exchange ratio of 1.40 Trust Preferred Securities per Share. If the conditions to the Exchange Offer have been satisfied or waived and more than 138,000 Shares have been properly tendered and not properly withdrawn prior to the Expiration Date, we will exchange Shares first, subject to the conditional tender provisions described in Exchange Offer - Section 6, on a pro rata basis from all other stockholders who properly tender Shares and do not properly withdraw them before the expiration of the Exchange Offer and second, if necessary to permit us to exchange up to 138,000 Shares, from holders who have tendered Shares conditionally (for which the condition was not initially satisfied) by random lot, to the extent feasible. To be eligible for exchange by random lot, stockholders whose Shares are conditionally tendered must have properly tendered all of their Shares and not properly withdrawn them before the expiration of the Exchange Offer. Therefore, we may not exchange all of the Shares that you tender. See Exchange Offer - Section 1. Has the Company or its Board adopted a position on the Exchange Offer While our Board has authorized the Exchange Offer, it has not, nor has the Company, the Information Agent or the Depositary made, any recommendation to you as to whether you should tender or refrain from tendering your Shares. We cannot predict how our stock or the Trust Preferred Securities will trade after expiration of the Exchange Offer, and it is possible that our stock price will trade above the exchange ratio or that the Trust Preferred Securities will trade below the exchange price after expiration of the Exchange Offer. You must make your own decision as to whether to tender your Shares and, if so, how many Shares to tender. In doing so, you should read carefully all of the information in this Exchange Offer, in the related Letter of Transmittal and in the other exchange offer materials. Will the Company s directors and executive officers tender Shares in the Exchange Offer The Company s directors and executive officers are entitled to participate in the Exchange Offer on the same basis as other stockholders. See Exchange Offer - Section 11. If I decide not to tender, how will the Exchange Offer affect my Shares Stockholders who choose not to tender will own a greater percentage interest in our outstanding shares of common stock following the completion of the Exchange Offer. When and how will the Company complete the Share exchange We will cause Air T Funding to issue Trust Preferred Securities to stockholders that tender Shares and we will pay in cash any amounts necessary to pay for fractional Trust Preferred Securities, less any applicable withholding taxes and without interest. The exchange of shares will occur promptly after the expiration of the Exchange Offer and the acceptance of the Shares for exchange, by depositing the Trust Preferred Securities and the aggregate purchase price with the Depositary. The Depositary will act as your agent and will transmit to you the Trust Preferred Securities and any payment for fractional shares. See Exchange Offer - Section 5. What is a recent market price for the Shares and the Trust Preferred Securities On July 21, 2023, the last reported sale price of the Shares on the Nasdaq was $23.98 per share. On July 21, 2023, the last reported sale price of the Trust Preferred Securities on the Nasdaq was $21.72 per share. You are urged to obtain current market quotations for the shares. See Exchange Offer - Section 8. Will I have to pay brokerage fees and commissions if I tender my Shares If you are a holder of record of your Shares and you tender your Shares directly to the Depositary, you will not incur any brokerage fees or commissions. If you hold your Shares through a broker, dealer, commercial bank, trust company or other nominee and such nominee tenders Shares on your behalf, such nominee may charge you a fee for doing so. We urge you to consult your broker or other nominee to determine whether any charges will apply. See Exchange Offer - Sections 5 and 16. Does the Company intend to repurchase any Shares other than pursuant to the Exchange Offer during or after the Exchange Offer The Company s Board approved an open-market share repurchase program, which allows the Company to opportunistically buy back Shares in the market from time to time at prevailing market prices. However, we and our affiliates are prohibited from purchasing any Shares or Trust Preferred Securities, other than exchanging Shares for Trust Preferred Securities pursuant to the Exchange Offer, until at least ten business days after the expiration of the Exchange Offer. Beginning ten business days after the Expiration Date of the Exchange Offer, we may make stock repurchases from time to time on the open market and or in private transactions. Whether we make additional repurchases will depend on many factors, including, without limitation, the number of Shares, if any, that we acquire in this Exchange Offer, our business and financial performance and situation, the business and market conditions at the time, including the price of the Shares, and such other factors as we may consider relevant. Upon commencement of the Exchange Offer, the Company suspended a 10b5-1 trading plan that provides for the repurchase of shares of common stock. The plan terminates December 31, 2023 and provides for the repurchase of up to $50,000 a week of common stock following July 1, 2023. The program and prior repurchase authorization does not obligate the Company to acquire any specific number of Shares and may be suspended, terminated or modified at any time. Any of these repurchases may be on the same terms or on terms that are more or less favorable to the stockholders in those transactions than the terms of the Exchange Offer. What are the U.S. federal income tax consequences if I tender my Shares Generally, the U.S. federal income tax consequences to you of participating in the Exchange Offer are complex and will vary depending on certain facts and circumstances. We intend to treat the exchange of the shares for the Trust Preferred Securities as a recapitalization pursuant to Section 368(a)(1)(E) of the Code. Assuming the exchange is so treated, you generally will recognize gain for U.S. federal income tax purposes equal to the excess, if any, of the fair market value of the Trust Preferred Securities received in the exchange (including any fractional share) over your tax basis in the Shares. You will not be able to recognize any loss realized in the recapitalization (except with respect to cash received in lieu of a fractional share). Cash received in lieu of a fractional share will generally be treated as received in exchange for the fractional share, and you will generally recognize the gain or loss thereon. Please see Exchange Offer Section 13. Because the U.S. federal income tax consequences of the Exchange Offer are complex, you are urged to consult with your own tax advisor. Will I have to pay stock transfer tax if I tender my Shares If you hold your Shares in street name through a broker or other nominee, or instruct the Depositary in the Letter of Transmittal to issue shares and make any payment necessary for the Shares to the registered holder, you will not incur any stock transfer tax. See Exchange Offer - Section 5. Have there been any recent developments of which I should be aware For a description of recent developments of the Company and Air T Funding, please refer to our Forms 10-K and 10-K A filed for such fiscal year ended March 31, 2023 and our Definitive Proxy Statement for our Annual Meeting of Stockholders scheduled for August 16, 2023. We have also filed Current Reports on Form 8-K on July 27, 2023 and August 21, 2023. See Where You Can Find More information and Incorporation of Certain Documents by Reference.
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+PROSPECTUS SUMMARY
+
+ This summary highlights information contained elsewhere in this prospectus. This summary does not contain all the information you should consider before deciding whether to buy Xiao-I s ADSs. You should read this entire prospectus carefully, including Risk Factors, Business, Management s Discussion and Analysis of Financial Condition and Results of Operations and Xiao-I s consolidated financial statements, including the notes thereto, before making an investment decision. This prospectus contains information from an industry report commissioned by Xiao-I and prepared by Frost & Sullivan, an independent research firm, to provide information regarding the PRC operating entities industry and their market position in China.
+
+ Investors should note that Xiao-I, the ultimate Cayman Islands holding company, does not own any substantive operations in the PRC and the businesses in the PRC described in this prospectus are operated through the PRC operating entities in China.
+
+ Xiao-I s Mission
+
+ Xiao-I s mission is to leverage Shanghai Xiao-i s advanced core artificial intelligence technology to make the world a better place.
+
+ Overview
+
+ Xiao-I is a holding company incorporated in the Cayman Islands. As a holding company with no material operations of its own, Xiao-I conducts a substantial majority of its operations through Shanghai Xiao-i, the VIE, in the PRC. Investors in Xiao-I s ADSs or Ordinary Shares should be aware that they may never hold equity interests in the VIE, but rather purchasing equity interests solely in Xiao-I, the Cayman Islands holding company, which does not own any of the businesses in China conducted by the PRC operating entities. The ADSs offered in this offering represent shares of the Cayman Islands holding company instead of shares of the VIE in China.
+
+ Shanghai Yingsi Software Technology Co., Ltd. ( Incesoft ) was founded in 2001. Incesoft established the Xiaoi robot brand (Chinese: i ) and developed AI technology used to support its consumer-to-consumer business model. In 2009, Incesoft transformed its business model from consumer-to-consumer to business-to-business. At the same time, founders of Incesoft founded Shanghai Xiao-i, the VIE, which acquired the Xiaoi robot brand and Incesoft s core AI technology. Following the acquisition, Incesoft was dissolved by de-registering with local company registrar in accordance with PRC law in 2012. Since 2009, Shanghai Xiao-i has become a leading artificial intelligence ( AI ) company by building on its wide technology commercialization, brand recognition and culture of innovation in China.
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+ Milestone Accomplishments over 20 Years History
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+ 4
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+ Table of Contents
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+ Since its founding in 2001, Shanghai Xiao-i has developed a portfolio of cognitive intelligence technologies for businesses based on its natural language processing and AI implementation. Leveraging its cutting-edge technologies, dedicated services, and long-standing customer base, it has become a leading customer service solution company in China according to Frost & Sullivan. It focuses on the development and promotion of cognitive intelligence technology and products with natural language processing as the core, and it uses cognitive intelligence products and services to enable and promote industrial digitization and intelligent upgrading and transformation.
+
+ Shanghai Xiao-i is a leading cognitive intelligence enterprise in China, integrating parts of perceptive intelligence like natural language processing and computer vision. It offers a wide range of business services in AI, covering natural language processing, computer vision, machine learning and cloud computing. It has multi-field data resources and multiple industry standards, a cutting-edge talent team training system and strong experience in resource integration. It primarily provides smart city, software business and architectural design AI services to its customers.
+
+ 
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+ Shanghai Xiao-i has comprehensive business lines covering fundamental tech platform, conversation bot, cloud services, industry solutions and robotics solutions.
+
+ 
+
+ Shanghai Xiao-i s cognitive intelligence artificial intelligence ( CIAI ) platform products and services are marketed and sold primarily to customers in the following industries: (1) Contact Center, (2) Finance, (3) Urban Public Service, (4) Construction, (5) Metaverse, (6) Manufacturing and (7) Smart Healthcare.
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+ 
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+ 5
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+ Table of Contents
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+ Xiao-I s History and Corporate Structure
+
+ Xiao-I was incorporated in the Cayman Islands on August 13, 2018, with limited liability under the Companies Act. Upon incorporation, the authorized share capital of the Company was US$50,000 divided into 1,000,000,000 shares, par value of US$0.00005 each, comprising of 1,000,000,000 Ordinary Shares of a par value of US$0.00005 each. The Company is a holding company.
+
+ On August 30, 2018, Xiao-I established its wholly-owned subsidiary AI Plus, under the law of British Virgin Islands, as its intermediate holding company, which then established its wholly-owned subsidiary, Xiao-i Technology under the law of Hong Kong, which in turn established a wholly-owned PRC subsidiary, Zhizhen Technology or WFOE, on March 29, 2019. Subsequently, Xiao-I, through WFOE, entered into a series of contractual arrangements with Shanghai Xiao-i and its shareholders whereby Xiao-I was established as the primary beneficiary of Shanghai Xiao-i for accounting purposes. Xiao-I has recognized the net assets of Shanghai Xiao-i at historical cost with no change in basis in the consolidated financial statements upon the completion of this reorganization.
+
+ As of the date of this prospectus, Al Plus, Xiao-i Technology and Zhizhen Technology do not have any substantive business operations. As a result of Xiao-I s indirect ownership in Zhizhen Technology and the variable interest entity contractual arrangements, Xiao-I is regarded as the primary beneficiary of the VIE for accounting purposes. Xiao-I treats the PRC entities as its consolidated affiliated entities under U.S. GAAP, and have consolidated the financial results of these entities in Xiao-I s consolidated financial statements in accordance with U.S. GAAP. For more details and risks related to the variable interest entity structure, please see Risk Factors Risks Relating to Our Corporate Structure on page 52 of this prospectus.
+
+ The following diagram illustrates the corporate legal structure of Xiao-I as of the date of this prospectus.
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+ 
+
+ 
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+ 6
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+ Table of Contents
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+ The following diagram illustrates the ownership of the VIE, Shanghai Xiao-i, as of the date of this prospectus.
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+ 
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+ 
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+ 7
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+ Table of Contents
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+ The VIE Agreements
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+ The PRC government regulates the telecommunications and internet industry, including software industry, through strict business licensing requirements and other government regulations. These laws and regulations also include limitations on foreign ownership of PRC companies that engage in software business. Xiao-I, AI Plus and Zhizhen Technology, are considered as foreign invested enterprises. To comply with these regulations, the Company conducts the majority of its activities in PRC through the PRC operating entities. Uncertainties exist as to the Company s ability to enforce the VIE Agreements, and the VIE Agreements have not been tested in a court of law.
+
+ Zhizhen Technology has entered into the following contractual arrangements with Shanghai Xiao-i and 61 of its shareholders, whom together hold 100% equity interest in Shanghai Xiao-i, that enable the Company to (i) have power to direct the activities that most significantly affect the performance of Shanghai Xiao-i and its subsidiaries, and (ii) receive the benefits of Shanghai Xiao-i and its subsidiaries that could be significant to Shanghai Xiao-i and its subsidiaries. The Company, through its indirect wholly owned subsidiary, Zhizhen Technology, is fully and exclusively responsible for the management of Shanghai Xiao-i, absorbs all risk of losses of Shanghai Xiao-i (excluding non-controlling interests) and has the exclusive right to exercise all voting rights of Shanghai Xiao-i s shareholders. In exchange, Shanghai Xiao-i pays service fees to Zhizhen Technology. The service fees shall consist of 100% of the profit before tax of Shanghai Xiao-i, after the deduction of all costs, expenses, taxes and other fee required under PRC laws and regulations. Shanghai Xiao-i agrees not to accept the same or any similar services provided by any third party and shall not establish cooperation relationships similar to that formed by the Exclusive Business Cooperation Agreement with any third party, except with the prior written consent of Zhizhen Technology. Therefore, the Company, through its wholly owned subsidiaries AI Plus and Zhizhen Technology, has been determined to be the primary beneficiary of Shanghai Xiao-i and the VIE s subsidiaries for accounting purposes and has consolidated Shanghai Xiao-i s and its subsidiaries assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements.
+
+ Exclusive Call Option Agreement
+
+ Pursuant to the Exclusive Call Option Agreement signed on March 29, 2019 by and among Zhizhen Technology, Shanghai Xiao-i and its shareholders, the shareholders irrevocably granted Zhizhen Technology or any third party designated by Zhizhen Technology an option to purchase all or part of their equity interests in Shanghai Xiao-i at any time at a price determined at Zhizhen Technology s discretion. According to the Exclusive Call Option Agreement, the purchase price to be paid by the Company to each shareholder of Shanghai Xiao-i will be the minimum price permitted by applicable PRC Law at the time when such share transfer occurs. Without Zhizhen Technology s prior written consent, the shareholders and Shanghai Xiao-i agreed not to, among other things: set encumbrance on, transfer all or part of, or dispose of the equity interests; amend the articles of association of Shanghai Xiao-i; change the registered capital of Shanghai Xiao-i or holding structure; change Shanghai Xiao-i s business activities; sell, assign, mortgage or dispose of any legal or beneficial rights to or in any of Shanghai Xiao-i s assets, business, or revenue; incur, assume or guarantee any debts; enter into any material contract; extend any loan or credit to any party, or provide any guarantee or assume any obligation of any party; merge or consolidate with any third party or acquire or invest in any third party; or distribute dividends. The shareholders and Shanghai Xiao-i agreed to manage business and handle financial and commercial affairs prudently and in accordance with relevant laws and codes of practice. This agreement will continue with full force and effect until the earlier of the date on which Zhizhen Technology has acquired all of the Equity Interests in Shanghai Xiao-i, or this Agreement is terminated by the mutual written consent.
+
+ Exclusive Business Cooperation Agreement
+
+ On March 29, 2019, Zhizhen Technology entered into an Exclusive Business Cooperation Agreement with Shanghai Xiao-i to enable Zhizhen Technology to engage in the development and operation of the Internet technology development in accordance with applicable laws. Under this agreement, Shanghai Xiao-i appointed Zhizhen Technology to provide exclusive comprehensive business support, technical services, consulting services and other services to Shanghai Xiao-i, and Shanghai Xiao-i agreed to accept such services. The term of the Services provided by Zhizhen Technology shall be 10 years from the effective date of March 29, 2019, and will be automatically extended after the expiration until when terminated in writing by Zhizhen Technology. Additionally, Zhizhen Technology has the full and exclusive right to manage and direct all cash flow and assets of Shanghai Xiao-i and to direct and administrate the financial affairs and daily operation of Shanghai Xiao-i. In exchange, Shanghai Xiao-i pays service fees to Zhizhen Technology. The service fees shall consist of 100% of the profit before tax of Shanghai Xiao-i, after the deduction of all costs, 
+
+ 
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+ 8
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+ Table of Contents
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+ expenses, taxes and other fee required under PRC laws and regulations. If Shanghai Xiao-i is unable to pay the service fees due to the actual managing situation, with the written consent of Zhizhen Technology, the unpaid part of the service fees in the previous fiscal year can be deferred to the end of the next year and settled together. Shanghai Xiao-i agrees not to accept the same or any similar services provided by any third party and shall not establish cooperation relationships similar to that formed by the Exclusive Business Cooperation Agreement with any third party, except with the prior written consent of Zhizhen Technology. During the validity term of this agreement, Zhizhen Technology will bear all the economic benefits and risks arising from the business of Shanghai Xiao-i and its subsidiaries. Zhizhen Technology will provide financial support to Shanghai Xiao-i or its subsidiaries in the event of a loss or serious operational difficulties.
+
+ Power of Attorney Agreement
+
+ On March 29, 2019, each shareholder of Shanghai Xiao-i, signed the Power of Attorney Agreement to irrevocably entrust Zhizhen Technology or any person(s) designated by Zhizhen Technology to act as its attorney-in-fact to exercise any and all of its rights as a shareholder of Shanghai Xiao-i, including, but not limited to, the right to convene, attend and present the shareholders meetings, vote, sign and perform as a shareholder; transfer, pledge or dispose of all the equity interest of Shanghai Xiao-i held by the shareholder; collect the dividend, and participate in litigation procedures. This agreement is effective and irrevocable until all of each shareholder s equity interest in Shanghai Xiao-i has been transferred to Shanghai Xiao-i or the person(s) designated by Zhizhen Technology.
+
+ Share Interest Pledge Agreement
+
+ Under the Share Interest Pledge Agreement signed on March 29, 2019 by and among Zhizhen Technology and each shareholder of Shanghai Xiao-i, the shareholders of Shanghai Xiao-i have agreed to pledge 100% equity interest in Shanghai Xiao-i to Zhizhen Technology to guarantee the performance obligations of Shanghai Xiao-i under the Exclusive Business Cooperation Agreement, and the performance obligations of each shareholder under the Exclusive Call Option Agreement. If Shanghai Xiao-i or its shareholders breach their contractual obligations under these agreements, Zhizhen Technology, as pledgee, will have the right to exercise the pledge.
+
+ The shareholders also agreed that, without prior written consent of Zhizhen Technology, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests. The pledge of equity interests in Shanghai Xiao-i has been registered with the relevant office of the State Administration for Market Regulation in accordance with the Civil Code of the People s Republic of China.
+
+ Spousal Commitment Letter
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+ The spouses of each individual shareholder of Shanghai Xiao-i have each signed a Commitment Letter. Under the Commitment Letter, the signing spouse unconditionally and irrevocably has agreed to the execution by his or her spouse of the above-mentioned Exclusive Business Cooperation Agreement, Exclusive Call Option Agreement, Power of Attorney Agreement and Share Interest Pledge Agreement, and that his or her spouse may perform, amend or terminate such agreements without his or her consent. In addition, in the event that the spouse obtains any equity interest in Shanghai Xiao-i held by his or her spouse for any reason, he or she agrees to be bound by and sign any legal documents substantially similar to the contractual arrangements entered into by his or her spouse, as may be amended from time to time.
+
+ The VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies. Xiao-I has evaluated the guidance in FASB ASC 810 and determined that Xiao-I is the primary beneficiary of the VIE, for accounting purposes, based upon such contractual arrangements. ASC 810 requires a VIE to be consolidated if the company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE s residual returns. A VIE is an entity in which a company, through contractual arrangements, is fully and exclusively responsible for the management of the entity, absorbs all risk of losses of the entity (excluding non-controlling interests), receives the benefits of the entity that could be significant to the entity (excluding non-controlling interests), and has the exclusive right to exercise all voting rights of the entity, and therefore the company is the primary beneficiary of the entity for accounting purposes. Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. Through the VIE agreements, the Company is deemed the 
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+ 9
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+ primary beneficiary of the VIE for accounting purposes. The VIE has no assets that are collateral for or restricted solely to settle its obligations. The creditors of VIE do not have recourse to the Company s general credit. Accordingly, under U.S. GAAP, the results of the PRC operating entities are consolidated in Xiao-I s financial statements.
+
+ However, investors will not and may never hold equity interests in the PRC operating entities. The VIE Agreements may not be effective in providing control over Shanghai Xiao-i. Uncertainties exist as to Xiao-I s ability to enforce the VIE Agreements, and the VIE Agreements have not been tested in a court of law. If the VIE or its shareholders fail to perform their respective obligations under the contractual arrangements, Xiao-I may have to incur substantial costs and expend additional resources to enforce such arrangements. The Chinese regulatory authorities could disallow this VIE structure, which would likely result in a material change in the PRC operating entities operations and the value of Xiao-I s ADSs, including that it could cause the value of such securities to significantly decline or become worthless. See Risk Factors Risks Relating to Our Corporate Structure beginning on page 52 of this prospectus for certain risks relating to the contractual arrangements.
+
+ As of the date of this prospectus, no cash transfer or transfer of other assets by way of dividends or distributions have occurred among the Company, its subsidiaries, or the PRC operating entities. Xiao-I intends to keep any future earnings to finance the expansion of its business, and it does not anticipate that any cash dividends will be paid, or any funds will be transferred from one entity to another, in the foreseeable future. As such, Xiao-I has not installed any cash management policies that dictate how funds are transferred among the Company, its subsidiaries, or investors, or the PRC operating entities. For further details, please refer to Prospectus Summary Consolidation , as well as the condensed consolidating schedule and the consolidated financial statements included elsewhere in this registration statement.
+
+ Xiao-I is a holding company with no operations of its own. It conducts its operations in China primarily through the PRC operating entities in China. As a result, although other means are available for Xiao-I to obtain financing at the holding company level, Xiao-I s ability to pay dividends and other distributions to its shareholders and to service any debt it may incur may depend upon dividends and other distributions paid by Xiao-I s PRC subsidiaries, which relies on dividends and other distributions paid by the PRC operating entities pursuant to the VIE Agreements. If any of these entities incurs debt on its own in the future, the instruments governing such debt may restrict its ability to pay dividends and other distributions to Xiao-I.
+
+ In addition, dividends and distributions from Xiao-I s PRC subsidiaries and the VIE are subject to regulations and restrictions on dividends and payment to parties outside of China. Applicable PRC law permits payment of dividends to Xiao-I by WFOE only out of net income, if any, determined in accordance with PRC accounting standards and regulations. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset by general reserve fund and profits (if general reserve fund is not enough). Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. In addition, registered share capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each operating subsidiary. In contrast, there is presently no foreign exchange control or restrictions on capital flows into and out of Hong Kong. Hence, Xiao-I s Hong Kong subsidiary is able to transfer cash without any limitation to the Cayman Islands under normal circumstances. As a result of these PRC laws and regulations, the PRC operating entities are restricted in their ability to transfer a portion of their net assets to the Company.
+
+ Moreover, the transfer of funds among the PRC operating entities are subject to the Provisions on Private Lending Cases, which was implemented on January 1, 2021 to regulate the financing activities between natural persons, legal persons and unincorporated organizations. As advised by Xiao-I s PRC counsel, Jingtian & Gongcheng, the Provisions on Private Lending Cases does not prohibit using cash generated from one PRC operating entity to fund another affiliated PRC operating entity s operations. Xiao-I, its subsidiaries or the PRC operating entities have not been notified of any other restriction which could limit the PRC operating entities ability to transfer cash among each other. In the future, cash proceeds from overseas financing activities, including this offering, may be transferred by Xiao-I to AI Plus, and then transferred to Xiao-i Technology, and then transferred to WFOE via capital contribution or shareholder loans, as the case may be. Cash proceeds may flow to Shanghai Xiao-i from WFOE pursuant to certain contractual arrangements between WFOE and Shanghai Xiao-i as permitted by the applicable PRC regulations.
+
+ Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid out of share premium if this would result in the company being unable to pay its debts due in the ordinary course of business. Xiao-I does not expect to pay 
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+ dividends in the foreseeable future. If, however, it declares dividends on its Ordinary Shares, the depositary will pay you the cash dividends and other distributions it receives on Xiao-I s Ordinary Shares after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement. If it determines to pay dividends on any of its Ordinary Shares in the future, as a holding company, it will rely on payments made from Shanghai Xiao-i to WFOE, pursuant to the VIE Agreements between them, and the distribution of such payments to Xiao-i Technology from WFOE, and then to AI Plus from Xiao-i Technology, and then to Xiao-I from AI Plus as dividends, unless it receives proceeds from future offerings. See Prospectus Summary Transfers of Cash to and from the VIE on page 26 and Risk Factors Risks Relating to Doing Business in China There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits on page 65 of this prospectus.
+
+ Product and Technology Overview
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+ Overall Architecture of Shanghai Xiao-i s Products and Technologies
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+ 
+
+ The overall architecture of Shanghai Xiao-i s products and technologies are divided into three layers: (1) infrastructure, (2) aggregation empowerment platform and (3) domain application.
+
+ Infrastructure Layer
+
+ Shanghai Xiao-i s infrastructure layer provides the informational support for its products and technologies. Typically built with third-party products and technologies, it integrates the information into the infrastructure layer. Additional properties include:
+
+ Compatibility with cloud native and private or third-party cloud platforms;
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+ Ubiquitous perception layer connection enabling integration with the Internet of Things, the Internet, 5G, and dedicated networks; and
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+ Multidimensional data collection and integration, including spatiotemporal, channels, and community.
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+ Aggregation Empowerment Platform Layer
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+ AI Core Technology Platform Cognitive Intelligence Artificial Intelligence (CIAI)
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+ Using proprietary intellectual property technologies, Shanghai Xiao-i has independently developed CIAI, its core technology platform. To date, it has developed and commercialized six core technologies based on CIAI: (1) natural language processing, (2) speech processing, (3) computer vision, (4) machine learning, (5) affective computing and (6) data intelligence and hyperautomation.
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+ Natural Language Processing
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+ CIAI s multilingual, natural language processing capability extracts and analyzes information, mines text, constructs knowledge, and performs knowledge representation and reasoning based on words, phrases, sentences, and text, providing solutions to the human-computer interaction needs of diverse enterprises and professional users.
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+ Speech Processing
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+ The hybrid architecture of Time-Delay Neural Network + Deep Feedforward Sequential Memory Network + attention, in combination with Shanghai Xiao-i s vast corpus accumulation of more than ten years, has enabled it to train its intelligent voice technology for end-to-end application across various scenarios in numerous fields. Based on these technologies, it has built a variety of intelligent voice solutions under the Aviation Industry Computer-Based Training Committee framework, including intelligent Interactive Voice Response navigation, intelligent outbound call, intelligent agent assistance, intelligent voice quality inspection, and intelligent coaching.
+
+ Computer Vision
+
+ Shanghai Xiao-i offers various computer vision capabilities, including face recognition and analysis, multi-target tracking, human posture and action recognition, and scene analysis capabilities such as semantic and instance segmentation. In terms of Optical Character Recognition ( OCR ), it has general OCR and customized OCR for all types of cards, invoice, receipts, tickets, and more. In terms of construction drawing analysis, it applies various capabilities including pattern recognition and computer vision to comprehensively analyze and process Computer Aided Design ( CAD ) drawings, bringing to life standard review capability for construction drawings. Relating to engineering, it provides rapid 
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+ engineering customization through its internally-developed deep learning framework, which is a machine learning algorithm that uses multiple layers to progressively extract higher-level features from the raw input. It also offers model distillation and pruning solutions to meet clients model compression requirements. This high performance framework is adaptable to various environments.
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+ Machine Learning
+
+ Machine learning methods offered by Shanghai Xiao-i include everything from traditional machine learning to the latest deep learning, reinforcement learning (a machine learning training method based on rewarding desired behaviors and/or punishing undesired ones), active learning (a learning algorithm that interactively queries a user or some other information source to label new data points with the desired outputs), transfer learning (reusing elements of a pre-trained model in a new machine learning model), and generative adversarial networks ( GAN ) (a machine learning model in which two neural networks compete with each other to become more accurate in their predictions). These methods are applied across multiple fields such as natural language processing, speech recognition, vision recognition and analysis, and in business scenarios such as precision marketing, personalized recommendation, and risk assessment in combination with massive data and distribution processing algorithms to form an efficient human-computer collaborative learning system.
+
+ Affective Computing
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+ Deep learning technology is used to recognize, understand, process, and simulate human emotions, so as to realize multi-dimensional and multimodal affective computing capabilities such as text, voice and vision. Shanghai Xiao-i has built affective computing, analysis, and interactive processing capabilities that process real-time perception, intelligent planning, automatic simulation, and this technology has been widely used in various practical business scenarios.
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+ Data Intelligence and Hyperautomation
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+ Large-scale machine learning technology mines, analyzes, and processes massive amounts of data, the assets of which are comprehensively integrated to extract information contained therein. Business processes are automatically and quickly identified, reviewed, and executed in combination with innovative technologies such as process automation and low code (which provides a development environment used to create application software through a graphical user interface). The results enable enterprises to delegate simple tasks with high repeatability, as well as complex tasks, to AI and data enhancement, thereby improving the quality and efficiency of business operations. Applications include data monitoring, data analysis, user profiling, business process automation, financing business automation, financial business automation, supply chain business automation, IT operation, and maintenance and integration automation.
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+ Shanghai Xiao-i s Product Platforms
+
+ Shanghai Xiao-i has commercialized its six core technologies to create the following product platforms: (1) Conversational AI, (2) Knowledge Fusion, (3) Intelligence Voice, (4) Hyperautomation, (5) Data Intelligence, (6) Intelligent Construction Support, (7) Vision Analysis, (8) Intelligent Hardware Support, and (9) Metaverse.
+
+ Conversational AI Platform
+
+ Its conversational AI platform makes full use of deep learning, data enhancement, and active learning technologies, employing flexible and diverse dialog management and context processing mechanisms, and driven by a powerful learning system, the results of which achieve in-depth scenario dialog processing, intent recognition, and complex logic reasoning in combination with structured knowledge and semantic analysis capabilities. Additionally, the platform realizes the business value of conversational AI in a variety of application scenarios, including intelligent customer service, smart marketing, intelligent hardware, intelligent assistant, agent assistance, and intelligent human-computer training.
+
+ 
+
+ 13
+
+ Table of Contents
+
+ 
+ Knowledge Fusion Platform
+
+ The knowledge fusion platform integrates various types of knowledge such as Question & Answer ( Q&A ), documents, multimedia, information forms, business processes, knowledge graphs, and multimodal to assist enterprises in improving knowledge management capabilities, building intelligent service cores, supporting intelligent knowledge management, retrieval, recommendation, application assistance, cognitive reasoning, and other capabilities. It helps enterprise-level intelligent applications, improves work efficiency, optimizes user experience, and reduces enterprise operating costs.
+
+ Intelligent Voice Platform
+
+ Shanghai Xiao-i s intelligent voice platform ( IVP ) uses natural language processing ( NLP ), automatic speech recognition, voiceprint recognition, and text-to-speech technologies with human-computer interaction as its core, in combination with various business scenarios, to comprehensively create or enhance business capabilities such as intelligent speech solutions, thereby realizing the macro processes of intelligent IVP, intelligent outbound calls, speech analysis, agent assistance, and human-computer interaction.
+
+ Hyperautomation Platform
+
+ The hyperautomation platform innovatively uses low code technology in combination with agents to realize and expand vast capabilities of the traditional low code platform and Robotic Process Automation. It integrates technologies such as OCR, NLP, and visualized data mining and analysis, enables users to realize business and process automation, combines capabilities of knowledge base and imitation learning, and enables realization of business and process intelligence with intelligent planning capabilities.
+
+ Data Intelligence Platform
+
+ The data intelligence platform comprehensively integrates data assets, manages the entire life cycle of data, and realizes the entire cycles of data integration, processing, transformation, analysis, and mining through What You See Is What You Get (a system in which editing software allows content to be edited in a form that resembles its appearance when printed or displayed as a finished product) with the support of component-based data visualization technology. It also helps clients extract valuable information contained in data, and provides assistance in business and process automation, business prediction, decision support, among others, and improves the efficiency of data-driven business intelligence and business intelligence services.
+
+ Intelligent Construction Support Platform
+
+ Shanghai Xiao-i s intelligent construction support platform offers many capabilities such as parsing, reconstruction, visualization, and multi-dimensional analysis of construction drawings. Combined with a variety of construction application scenarios, the platform can realize intelligent construction drawings review, design assistance, online collaborative design, among other applications. It enables the construction industry to reduce the cost of drawing review, improve per-capita energy efficiency, empowers the construction industry value chain, and facilitates the transformation and upgrading of intelligence and automation.
+
+ Vision Analysis Platform
+
+ The vision analysis platform uses a variety of computer vision-related technologies to apply OCR, detection, video, and image analysis, helps clients extract and mine valuable information contained in images, and realizes business automation, industrial defect detection, monitoring analysis, and other innovative applications encountered in specific business scenarios.
+
+ Intelligent Hardware Support Platform
+
+ The intelligent hardware support platform provides the framework of signal collection, processing, analysis, prediction, and more. This framework can be combined with various sensors to quickly process signal, select and adapt appropriate machine learning algorithms for business modeling according to the intelligent requirements of various types of hardware, make full use of various machine learning capabilities to make the equipment be more intelligent.
+
+ 
+
+ 14
+
+ Table of Contents
+
+ 
+ Metaverse Platform
+
+ Shanghai Xiao-i developed the first virtual digital human in 2016 and released it for the first time at the Guiyang Digital Expo in 2017. It continues to innovate and develop more advanced and smarter digital human products. Digital human with multimodal emotional interaction capabilities can be widely used in various business scenarios including film and television production, media, games, financial services, culture, tourism, education, healthcare, and retail.
+
+ Domain Application Layer
+
+ For more than 20 years, Shanghai Xiao-i has applied its aggregation platform to form a number of mature application fields designed to address the business needs of various fields, including (1) AI + Contact Center, (2) AI + Finance, (3) AI + Urban Public Service, (4) AI + Construction, (5) AI + Metaverse, (6) AI + Manufacturing and (7) AI + Smart Healthcare.
+
+ Its technologies are based, in significant part, upon its proprietary intellectual property portfolio. As of December 1, 2022, Shanghai Xiao-i has applied for 554 patents, 281 of which have been granted and it has obtained 225 registered trademarks and 130 computer software copyrights. In June 2020, it passed the national intellectual property management system certification and obtained the certificate. This certificate represents that the company s intellectual property management system conforms to the GB/T 29490-2013 standard, which is the first national standard for enterprise intellectual property management jointly drafted and formulated by China National Intellectual Property Administration and the China National Institute of Standardization, and jointly approved by the General Administration of Quality Supervision, Inspection and Quarantine of the PRC and Standardization Administration of the PRC. It continues to develop and improve its intellectual property portfolio through its in-depth Research and Development ( R&D ) department. As of December 1, 2022, it has 277 R&D personnel, accounting for about 62.5% of its personnel, including 189 with Bachelor s degrees, 23 with Master s degrees and 5 with Doctorates. Its primary services are software services. Software services refer to the sales of software products corresponding to the Company s obtained patents or software copyrights to customers for meeting the needs of different customers in different industries for artificial intelligence: 
+
+ (1) Contact Center: Shanghai Xiao-i leverages contact center AI solutions to improve customer experience and operational efficiency. It offers AI-based platforms, software tools and services that leverage voice-based assistants to facilitate strong interactions and engagement in different industries, including both small and medium enterprises and large enterprises. 
+
+ (2) Architectural Design AI services Shanghai Xiao-i provides professional architectural drawing review solutions. By using computer vision, natural language processing technology and its unique map, image morphology processing, pattern recognition, image segmentation, image target detection, path planning, OCR and many other independent research and development technologies, combined with the rich professional experience in architectural design, it has launched AI products for blueprint review to achieve automation and intelligence, enabling the architecture industry to reduce the cost of reviewing blueprints, improving the efficiency, and cross-institution collaborative drawing review.
+
+ (3) Smart City Shanghai Xiao-i uses natural language processing, data intelligence and other technologies to build a cognitive brain for smart city public services, and continuously improves the level of urban intelligence from social service efficiency and public experience. It provides solutions such as smart city service hotline, smart public service and smart legal services.
+
+ The PRC operating entities generate revenue primarily from the (i) sale of software products and service, (ii) maintenance and support ( M&S ) service, and (iii) sale of cloud platform products. For the years ended December 31, 2020 and 2021, and for the six months ended June 30, 2021 and 2022, their total revenue was US$13.86 million, US$32.52 million, US$8.9 million, and US$12.9 million, respectively.
+
+ 1. Their software products sold to customers comprising customized software products for specific needs. The revenue from sales of software products increased by 109.9% from US$11.50 million for the year ended December 31, 2020 to US$24.14 million for the year ended December 31, 2021, primarily due to two major contracts signed in 2021, providing smart graphic review software products amounted to US$11.88 million and technical services amounted to US$1.51 million, respectively. The revenue from sales of software products increased by 57.8% from US$4.88 million for the six months ended June 30, 
+
+ 
+
+ 15
+
+ Table of Contents
+
+ 
+ 2021 to US$7.69 million for the six months ended June 30, 2022, primarily due to two major contracts providing technical services amounted to US$3.37 million and software products sales amounted to US$1.19 million, respectively.
+
+ 2. They provide M&S services for software products contracts which consist of future software updates, upgrades, and enhancements as well as technical product support services, and the provision of updates and upgrades on a when-and-if-available basis. The revenue from sales of M&S service increased by 43.1% from US$1.94 million for the year ended December 31, 2020 to US$2.78 million for the year ended December 31, 2021, primarily due to more residence service provided to customers in 2021. The revenue from sales of M&S service increased by 4.6% from US$1.43 million for the six months ended June 30, 2021 to US$1.50 million for the six months ended June 30, 2022, primarily due to a slight increase of price per service provided to customers in 2022.
+
+ 3. Their cloud platform products, which is a newly established revenue stream in 2021, consist of standardized software products uploaded to their cloud platform. The revenue from sales of cloud platform products increased from nil for the year ended December 31, 2020 to US$5.53 million for the year ended December 31, 2021. The revenue from sales of cloud platform products increased by 44.5% from US$2.53 million for the six months ended June 30, 2021 to US$3.65 million for the six months ended June 30, 2022, primarily due to increased number of customers attracted by the flexibility and mobility of cloud platform products.
+
+ They sell their products and services to end customers through their sales ecosystem. Sales to customers in Mainland China accounted for approximately 88.3% and 97.7% of their total revenue in the fiscal years 2020 and 2021, and 96.1% and 99.3% for the six months ended June 30, 2021 and 2022, respectively. 
+
+ Sales to customers in Hong Kong, Macao, Taiwan and other countries accounted for approximately 11.7% and 2.3% of their total revenue in the fiscal years 2020 and 2021, and 3.9% and 0.7% for the six months ended June 30, 2021 and 2022, respectively.
+
+ Shanghai Xiao-i s Competitive Advantages
+
+ Shanghai Xiao-i believes it has the following competitive advantages and they distinguish Shanghai Xiao-i from its competitors:
+
+ Its Pioneer Position in AI Technology and Focus on Research and Development ( R&D )
+
+ It believes that it pioneered the industry s first cognitive intelligence and narrow artificial intelligence technology and have built on its culture of innovation.
+
+ Since its establishment in 2001, Shanghai Xiao-i has focused on developing cognitive intelligence technologies based on its natural language processing and AI implementation in businesses, enjoying a privileged reputation in the AI industry. As a leading AI technology and industrialization service platform in China, through years of operation, it has established cooperation with many leading companies amongst various industry verticals according to Frost & Sullivan. Its industry leadership is built on its pioneering research to commercialize AI technology.
+
+ Its first-mover advantage in natural language processing has made it a pioneer in formulating AI industry standards and creating more than 500 patents granted or pending. To protect its technology, in June 2012, Shanghai Xiao-i sued Apple Computer Trading (Shanghai) Co., Ltd., a subsidiary of Apple, Inc., for patent infringement and received the Supreme People s Court Supreme Court Administrative Judgment, a final judgement, confirming the validity of Shanghai Xiao-i s patent in June 2020, but did not make a ruling on whether Apple infringed its patent. Specifically, according to the Patent Administration (Patent) Retrial Administrative Judgment issued by the Supreme People s Court of China ((2017) ZGFXZ No. 34), in the retrial case of Shanghai Xiao-i and Apple Computer Trading (Shanghai) Co., Ltd. and the China National Intellectual Property Administration, the Supreme People s Court determined that the invention patent named A Chatbot System (Patent No.: 200410053749.9) held by Shanghai Xiao-i is a valid patent. On August 3, 2020, after obtaining the final judgment confirming the validity of its patent, Shanghai Xiao-i filed another infringement lawsuit against Apple Computer Trading (Shanghai) Co., Ltd., Apple, Inc., and Apple Computer Trading (Shanghai) Co., Ltd. (together, Apple ), demanding Apple to stop the infringement and compensate for the losses. As of the date of this prospectus, the case is still pending. See Legal Proceedings on page 131 for details. 
+
+ 
+
+ 16
+
+ Table of Contents
+
+ 
+ Shanghai Xiao-i is a pioneer in AI + with over 20 years of development and innovation with 4 R&D centers, 280+ engineers, 50+ external experts, and 10+ university partners.
+
+ Advantages of Shanghai Xiao-i s Products and Services
+
+ It develops and commercializes Metaverse-related offerings, including Virtual Humans, Artificial Reality ( AR ) and Virtual Reality ( VR ).
+
+ It helps its clients with their digital transformation using its cognitive intelligence and AI technologies.
+
+ It enables its customers to reap economies of scale by providing one-stop shop service from its extensive network of service hubs in their vicinity. 
+
+ Its deep-rooted attention to quality assurance in its product and service offerings puts it ahead of its competitors.
+
+ It has a proven monetization model based on product differentiation, revenue source diversification, and customer loyalty.
+
+ Its products and services meet the needs of different customers and it maintains frequent client engagement for continuous business development and customer loyalty cultivation.
+
+ While its customer contracts vary, they generally represent multi-year engagements, giving it visibility into future revenue. It has master similar commercial arrangements in place with many of its customers, retaining customers over the long term.
+
+ Shanghai Xiao-i s Robust Ecosystem of Partnerships
+
+ It has various regional sales teams, including Shanghai, Beijing and Hong Kong.
+
+ It maintains good relationships with suppliers that have a good record of performance.
+
+ Its products cover large and medium-sized contact centers, financial institutions, communication operators, government services, industrial manufacturing, healthcare, and other customer groups.
+
+ It builds strong and long-standing customer relationships with large enterprises in China. Its client list includes nearly all the industry giants in the banking and telecom industries in China.
+
+ Shanghai Xiao-i s Visionary and Seasoned Management
+
+ Its CEO Mr. Hui Yuan is a recognized AI industry Key Opinion Leader and domain expert.
+
+ Shanghai Xiao-i s team has deep technical expertise and proven track record of constant innovation.
+
+ Shanghai Xiao-i has proven ability to attract and retain highly qualified talent.
+
+ Shanghai Xiao-i s Growth Strategy
+
+ It intends to further grow its business by pursuing the following strategies:
+
+ Continue to improve cognitive technology capability. It has set up a technology research institute to conduct in-depth communication on technological innovation with experts and scholars from top universities, such as Duke University, Hong Kong University of science and technology and Columbia University. It has also carried out in-depth cooperation with well-known domestic universities to jointly develop the latest and cutting-edge technologies.
+
+ Further develop and create long-term sustainable commercialization opportunities through technology innovation, application combination innovation, and AI product diversification. For example, its commercialization in the field of intelligent drawing review has met the needs of the construction industry for drawing review through its artificial intelligence technology.
+
+ 
+
+ 17
+
+ Table of Contents
+
+ 
+ Further strengthen the leading position in the metaverse related products. It began to design and produce a virtual human in 2016. Its first mover advantage in the metaverse will help it continue to succeed in this field.
+
+ Expand its customer base and make full use of existing customers through market segmentation and personalization. It will gradually expand its target customers from the previous major customers to small and medium-sized customers, to provide services for a wider range of customer groups.
+
+ Increase hardware products. As a company mainly engaged in software sales and services, it will increase integrated software and hardware products in the future.
+
+ Further expand its global footprint strategically. The goal of the company is to become a global artificial intelligence enterprise. After the completion of this offering, it is committed to internationalizing its products and services and providing high-quality products and services to customers around the world.
+
+ Consolidation
+
+ Xiao-I conducts substantially all of its business in China through Shanghai Xiao-i, the VIE, due to PRC legal restrictions of foreign ownership in certain sectors. Substantially all of Xiao-I s revenues, costs and net income in China are directly or indirectly generated through the VIE. Xiao-I, through its indirect wholly owned subsidiary, Zhizhen Technology, has signed various agreements with the VIE and shareholders of the VIE to allow the transfer of economic benefits from the VIE to Zhizhen Technology and to direct the activities of the VIE. Total assets and liabilities presented on Xiao-I s consolidated balance sheets and revenue, expense, net income presented on consolidated statement of operations and comprehensive income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows are the financial position, operation and cash flow of the PRC operating entities (excluding non-controlling interests). The Company has not provided any financial support to the PRC operating entities for the fiscal years ended at December 31, 2020, 2021 and for the six months ended June 30, 2022, and the variable interest entities accounted for an aggregate of 100%, 100%, and 95% of the Company s total assets and total liabilities, respectively. As of December 31, 2020, 2021 and June 30, 2022, $697,798 and $1,254,528 and $1,472,555 of cash, cash equivalents and restricted cash were denominated in RMB, respectively.
+
+ Xiao-I and its directly and indirectly wholly owned subsidiaries, AI Plus, Xiao-i Technology and Zhizhen Technology do not have any substantial assets or liabilities or result of operations. The following table sets forth the assets, liabilities, results of operations and changes in cash, cash equivalents of the PRC operating entities, which were included in the Company s consolidated balance sheets and statements of comprehensive income and statements of cash flows with intercompany transactions eliminated:
+
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ As of December 31, 2020
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule 
+of Financial Position
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Assets
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Current assets:
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Cash and cash equivalents
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 365,756
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 366,865
+
+ 
+ 
+
+ 
+ 
+ Restricted cash
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 460,164
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 460,164
+
+ 
+ 
+
+ 
+ 
+ Accounts receivable, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,052,564
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,052,564
+
+ 
+ 
+
+ 
+ 
+ Amounts due from related parties
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 23,072
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 23,072
+
+ 
+ 
+
+ 
+ 
+ Inventories, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 273,364
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 273,364
+
+ 
+ 
+
+ 
+ 
+ Contract costs
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,067,289
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,067,289
+
+ 
+ 
+
+ 
+ 
+ Prepaid expenses and other current assets, net
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 1,848,404
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,848,408
+
+ 
+ 
+
+ 
+ 
+ Total current assets
+
+ 
+ 
+ 
+ 1,109
+
+ 
+ 
+ 
+ 12,090,613
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 12,091,726
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 18
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ As of December 31, 2020
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule 
+of Financial Position
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Non-current assets:
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Property and equipment, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 236,499
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 236,499
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Intangible assets, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 886,479
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 886,479
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Long-term investment
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 482,463
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 482,463
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Right of use assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,250,351
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,250,351
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Deferred tax assets, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,320,284
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,320,284
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Prepaid expenses and other, non-current assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,909,726
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,909,726
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total non-current assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,085,802
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,085,802
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ TOTAL ASSETS
+
+ 
+ 
+ 
+ 1,109
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 25,176,415
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 25,177,528
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Liabilities
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Current liabilities:
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Short-term borrowings
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,923,372
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,923,372
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accounts payable
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,187,810
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,187,810
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Amount due to related 
+parties-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 540,778
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 540,778
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Deferred revenue
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,926,373
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,926,373
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accrued liabilities and other current liabilities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,872,347
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,872,351
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Lease liabilities, current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,310,634
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,310,634
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Deficit of VIE and VIE s subsidiaries absorbed by WFOE
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,808,481
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,808,481
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Investment deficit in subsidiaries
+
+ 
+ 
+ 
+ 3,808,481
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,808,481
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total current liabilities
+
+ 
+ 
+ 
+ 3,808,481
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 25,761,314
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,808,481
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ (7,616,962
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 25,761,318
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Non-current liabilities:
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accrued liabilities, 
+non-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,038,643
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,038,643
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Lease liabilities, non-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,007,939
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,007,939
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total non-current liabilities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 6,046,582
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 6,046,582
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ TOTAL LIABILITIES
+
+ 
+ 
+ 
+ 3,808,481
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 31,807,896
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,808,481
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ (7,616,962
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 31,807,900
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Shareholders deficit
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Ordinary shares
+
+ 
+ 
+ 
+ 1,106
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,106
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Additional paid-in capital
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (75,621,294
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Statutory reserve
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (237,486
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accumulated deficit
+
+ 
+ 
+ 
+ (76,262,434
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (76,262,434
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,808,481
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 80,070,915
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (76,262,434
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Accumulated other comprehensive loss
+
+ 
+ 
+ 
+ (3,404,824
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,404,827
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,404,827
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,404,824
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ XIAO-I CORPORATION shareholders deficit
+
+ 
+ 
+ 
+ (3,807,372
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,808,481
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,808,481
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 7,616,962
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,807,372
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Non-controlling interests
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,823,000
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,823,000
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Total shareholders deficit
+
+ 
+ 
+ 
+ (3,807,372
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (6,631,481
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,808,481
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 7,616,962
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (6,630,372
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ TOTAL LIABILITIES AND SHAREHOLDERS DEFICIT
+
+ 
+ 
+ 
+ 1,109
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 25,176,415
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 25,177,528
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 19
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the year ended December 31, 2020
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule 
+of Results of Operations
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,856,734
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,856,734
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cost of revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,228,046
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,228,046
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Gross profit
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 6,628,688
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 6,628,688
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Operating expenses
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (14,498,268
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (14,498,268
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Loss of VIE and VIE s subsidiaries absorbed by WFOE
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 6,808,365
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Share of loss in subsidiaries
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 6,808,365
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total operating expenses
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (14,498,268
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,616,730
+
+ 
+ 
+ 
+ (14,498,268
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Loss from operations
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (7,869,580
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,616,730
+
+ 
+ 
+ 
+ (7,869,580
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Other income
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 577,684
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 577,684
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Income tax benefits
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 235,854
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 235,854
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net loss
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (7,056,042
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,616,730
+
+ 
+ 
+ 
+ (7,056,042
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net loss attributable to 
+non-controlling interests
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (247,677
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (247,677
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net loss attributable to XIAO-I CORPORATION shareholders
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,616,730
+
+ 
+ 
+ 
+ (6,808,365
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the year ended December 31, 2020
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule of Cash Flows
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIEs and 
+their 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net cash used in operating activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,463,094
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,463,094
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net cash used in investing activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (25,825
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (25,825
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net cash provided by financing activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,792,682
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,792,682
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Effect of exchange rate changes
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (797,954
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (797,954
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net change in cash, cash equivalents and restricted 
+cash
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,494,191
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,494,191
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at beginning of year
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 3,320,111
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,321,220
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at end of year
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 825,920
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 827,029
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 20
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ As of December 31, 2021
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule 
+of Financial Position
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Assets
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Current assets:
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Cash and cash equivalents
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 1,310,737
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,311,846
+
+ 
+ 
+
+ 
+ 
+ Accounts receivable, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 31,184,779
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 31,184,779
+
+ 
+ 
+
+ 
+ 
+ Amounts due from related parties
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 391,919
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 391,919
+
+ 
+ 
+
+ 
+ 
+ Inventories, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 768,762
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 768,762
+
+ 
+ 
+
+ 
+ 
+ Contract costs
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,669,519
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,669,519
+
+ 
+ 
+
+ 
+ 
+ Prepaid expenses and other current assets, net
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 479,194
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 479,198
+
+ 
+ 
+
+ 
+ 
+ Total current assets
+
+ 
+ 
+ 
+ 1,109
+
+ 
+ 
+ 
+ 35,804,910
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 35,806,023
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Non-current assets:
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Property and equipment, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 207,989
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 207,989
+
+ 
+ 
+
+ 
+ 
+ Intangible assets, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 798,459
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 798,459
+
+ 
+ 
+
+ 
+ 
+ Long-term investment
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 335,448
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 335,448
+
+ 
+ 
+
+ 
+ 
+ Right of use assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,194,859
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,194,859
+
+ 
+ 
+
+ 
+ 
+ Deferred tax assets, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4,906,287
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4,906,287
+
+ 
+ 
+
+ 
+ 
+ Prepaid expenses and other, non-current assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,941,346
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,941,346
+
+ 
+ 
+
+ 
+ 
+ Total non-current assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 11,384,388
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 11,384,388
+
+ 
+ 
+
+ 
+ 
+ TOTAL ASSETS
+
+ 
+ 
+ 
+ 1,109
+
+ 
+ 
+ 
+ 47,189,298
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 47,190,411
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Liabilities
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Current liabilities:
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Short-term borrowings
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 9,117,158
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 9,117,158
+
+ 
+ 
+
+ 
+ 
+ Accounts payable
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,581,879
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,581,879
+
+ 
+ 
+
+ 
+ 
+ Amount due to related parties-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,558,642
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,558,642
+
+ 
+ 
+
+ 
+ 
+ Deferred revenue
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,953,238
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,953,238
+
+ 
+ 
+
+ 
+ 
+ Convertible loans
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,717,737
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,717,737
+
+ 
+ 
+
+ 
+ 
+ Accrued liabilities and other current liabilities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 10,316,428
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 10,316,432
+
+ 
+ 
+
+ 
+ 
+ Lease liabilities, current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 800,658
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 800,658
+
+ 
+ 
+
+ 
+ 
+ Income tax payable
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 17,904
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 17,904
+
+ 
+ 
+
+ 
+ 
+ Deficit of VIE and VIE s subsidiaries absorbed by WFOE
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 190,267
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (190,267
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Investment deficit in subsidiaries
+
+ 
+ 
+ 
+ 190,267
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (190,267
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total current liabilities
+
+ 
+ 
+ 
+ 190,267
+
+ 
+ 
+ 
+ 36,063,644
+
+ 
+ 
+ 
+ 190,267
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ (380,534
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 36,063,648
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Non-current liabilities:
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Amount due to related 
+parties-non current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,905,313
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,905,313
+
+ 
+ 
+
+ 
+ 
+ Accrued liabilities, 
+non-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,157,971
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,157,971
+
+ 
+ 
+
+ 
+ 
+ Lease liabilities, non-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 446,140
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 446,140
+
+ 
+ 
+
+ 
+ 
+ Total non-current liabilities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 14,509,424
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 14,509,424
+
+ 
+ 
+
+ 
+ 
+ TOTAL LIABILITIES
+
+ 
+ 
+ 
+ 190,267
+
+ 
+ 
+ 
+ 50,573,068
+
+ 
+ 
+ 
+ 190,267
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ (380,534
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 50,573,072
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 21
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ As of December 31, 2021
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule 
+of Financial Position
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Shareholders deficit
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Ordinary shares
+
+ 
+ 
+ 
+ 1,106
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,106
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Additional paid-in capital
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (75,621,294
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Statutory reserve
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (237,486
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accumulated deficit
+
+ 
+ 
+ 
+ (72,584,621
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (72,584,621
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (190,267
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 72,774,888
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (72,584,621
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Accumulated other comprehensive loss
+
+ 
+ 
+ 
+ (3,464,423
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,464,426
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,464,426
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,464,423
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ XIAO-I CORPORATION shareholders deficit
+
+ 
+ 
+ 
+ (189,158
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (190,267
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (190,267
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 380,534
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (189,158
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Non-controlling interests
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,193,503
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,193,503
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Total shareholders deficit
+
+ 
+ 
+ 
+ (189,158
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,383,770
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (190,267
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 380,534
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,382,661
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ TOTAL LIABILITIES AND SHAREHOLDERS DEFICIT
+
+ 
+ 
+ 
+ 1,109
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 47,189,298
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 47,190,411
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the year ended December 31, 2021
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule 
+of Results of Operations
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 32,524,013
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 32,524,013
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cost of revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (10,885,731
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (10,885,731
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Gross profit
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 21,638,282
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 21,638,282
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Operating expenses
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (16,641,273
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (16,641,273
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Income of VIE and VIE s subsidiaries absorbed by WFOE
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,677,813
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Share of income in subsidiaries
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,677,813
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total operating expenses
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ (16,641,273
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,355,626
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (16,641,273
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Income from operations
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 4,997,009
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,355,626
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 4,997,009
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Other loss
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,079,652
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,079,652
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Income tax expenses
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (552,355
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (552,355
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net income
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 3,365,002
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,355,626
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 3,365,002
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net loss attributable to non-controlling interests
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (312,811
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (312,811
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net income attributable to XIAO-I CORPORATION shareholders
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,355,626
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 3,677,813
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 22
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the year ended December 31, 2021
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule 
+of Cash Flows
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIEs and 
+their 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net cash used in operating 
+activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (11,887,122
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (11,887,122
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net cash provided by investing activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 77,259
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 77,259
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net cash provided by financing activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 12,192,952
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 12,192,952
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Effect of exchange rate changes
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 101,728
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 101,728
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net change in cash, cash equivalents and restricted cash
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 484,817
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 484,817
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at beginning of year
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 825,920
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 827,029
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at end of year
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 1,310,737
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,311,846
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the six months ended June 30, 2021
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule
+of Results of Operations
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its
+consolidated
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination
+Adjustments
+
+ 
+ 
+ 
+ Consolidated
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,874,070
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,874,070
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cost of revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,598,319
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,598,319
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Gross profit
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,275,751
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,275,751
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Operating expenses
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (8,496,553
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (8,496,553
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Loss of VIE and VIE s subsidiaries absorbed by WFOE
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,826,857
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Share of loss in subsidiaries
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,826,857
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total operating expenses
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (8,496,553
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,653,714
+
+ 
+ 
+ 
+ (8,496,553
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Loss from operations
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,220,802
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,653,714
+
+ 
+ 
+ 
+ (3,220,802
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Other loss
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (333,455
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (333,455
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Income tax benefits
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 568,713
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 568,713
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net loss
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (2,985,544
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,653,714
+
+ 
+ 
+ 
+ (2,985,544
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net loss attributable to non-controlling interests
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (158,687
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (158,687
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net loss attributable to XIAO-I CORPORATION 
+shareholders
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,653,714
+
+ 
+ 
+ 
+ (2,826,857
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+
+ 23
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the six months ended June 30, 2021
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule
+of Cash Flows
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIEs and 
+their 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net cash used in operating activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,649,508
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,649,508
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net cash used in investing 
+activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 92,988
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 92,988
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net cash provided by financing activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,020,758
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,020,758
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Effect of exchange rate changes
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (97,414
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (97,414
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net change in cash, cash equivalents and restricted cash
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 366,824
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 366,824
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at beginning of period
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 825,920
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 827,029
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at end of 
+period
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 1,192,744
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,193,853
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ As of June 30, 2022
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule
+of Financial Position
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its
+consolidated
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination
+Adjustments
+
+ 
+ 
+ 
+ Consolidated
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Assets
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Current assets:
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Cash and cash equivalents
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 1,522,921
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,524,030
+
+ 
+ 
+
+ 
+ 
+ Accounts receivable, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 35,498,955
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 35,498,955
+
+ 
+ 
+
+ 
+ 
+ Amounts due from related parties
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 374,367
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 374,367
+
+ 
+ 
+
+ 
+ 
+ Inventories, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 270,065
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 270,065
+
+ 
+ 
+
+ 
+ 
+ Contract costs
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,589,487
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,589,487
+
+ 
+ 
+
+ 
+ 
+ Advance to suppliers
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,108,139
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,108,139
+
+ 
+ 
+
+ 
+ 
+ Deferred offering costs
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 514,182
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 514,182
+
+ 
+ 
+
+ 
+ 
+ Prepaid expenses and other current assets, net
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 303,292
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 303,296
+
+ 
+ 
+
+ 
+ 
+ Income of VIE and VIE s subsidiaries absorbed by WFOE
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 420,512
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (420,512
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Investment income in subsidiaries
+
+ 
+ 
+ 
+ 420,512
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (420,512
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total current assets
+
+ 
+ 
+ 
+ 421,621
+
+ 
+ 
+ 
+ 44,181,408
+
+ 
+ 
+ 
+ 420,512
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ (841,024
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 44,182,521
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Non-current assets:
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ Property and equipment, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 170,994
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 170,994
+
+ 
+ 
+
+ 
+ 
+ Intangible assets, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 707,701
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 707,701
+
+ 
+ 
+
+ 
+ 
+ Long-term investment
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 254,346
+
+ 
+ 
+ 
+ 2,709,137
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,963,483
+
+ 
+ 
+
+ 
+ 
+ Right of use assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 988,803
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 988,803
+
+ 
+ 
+
+ 
+ 
+ Deferred tax assets, net
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4,881,462
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4,881,462
+
+ 
+ 
+
+ 
+ 
+ Prepaid expenses and other, non-current assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,740,001
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,740,001
+
+ 
+ 
+
+ 
+ 
+ Total non-current assets
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 10,743,307
+
+ 
+ 
+ 
+ 2,709,137
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 13,452,444
+
+ 
+ 
+
+ 
+ 
+ TOTAL ASSETS
+
+ 
+ 
+ 
+ 421,621
+
+ 
+ 
+ 
+ 54,924,715
+
+ 
+ 
+ 
+ 3,129,649
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ (841,024
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 57,634,965
+
+ 
+ 
+
+ 
+ 
+
+ 24
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ As of June 30, 2022
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule
+of Financial Position
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its
+consolidated
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination
+Adjustments
+
+ 
+ 
+ 
+ Consolidated
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Liabilities
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Current liabilities:
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Short-term borrowings
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 15,709,376
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 15,709,376
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accounts payable
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,039,985
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,039,985
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Amount due to related parties-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 732,957
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 732,957
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Deferred revenue
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,010,410
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,010,410
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Convertible loans
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,473,774
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 5,473,774
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accrued expenses and other current liabilities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 12,729,285
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 33
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 12,729,322
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Lease liabilities, current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 689,837
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 689,837
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total current liabilities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 43,385,624
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 33
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 43,385,661
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Non-current liabilities:
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Amount due to related parties-non current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,836,834
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 8,836,834
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accrued liabilities, 
+non-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4,909,821
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,761,977
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 7,671,798
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Lease liabilities, non-current
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 387,705
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 387,705
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total non-current liabilities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 14,134,360
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,761,977
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 16,896,337
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ TOTAL LIABILITIES
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 57,519,984
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,762,010
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 60,281,998
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Shareholders deficit
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Ordinary shares
+
+ 
+ 
+ 
+ 1,106
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,106
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Additional paid-in capital
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (75,621,294
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 75,621,294
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Statutory reserve
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (237,486
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 237,486
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Accumulated (deficit)/income
+
+ 
+ 
+ 
+ (71,991,448
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (71,936,791
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 365,855
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 71,570,936
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (71,991,448
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Accumulated other comprehensive 
+(loss)/income
+
+ 
+ 
+ 
+ (3,446,817
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (3,448,604
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 1,784
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,446,820
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,446,817
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ XIAO-I CORPORATION shareholders equity
+
+ 
+ 
+ 
+ 421,621
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 473,385
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 367,639
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (841,024
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 421,621
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Non-controlling interests
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,068,654
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,068,654
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Total shareholders equity/(deficit)
+
+ 
+ 
+ 
+ 421,621
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,595,269
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 367,639
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (841,024
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (2,647,033
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
+
+ 
+ 
+ 
+ 421,621
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 54,924,715
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 3,129,649
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ (841,024
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 57,634,965
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 25
+
+ Table of Contents
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the six months ended June 30, 2022
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule of Results of Operations
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIE and its 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 12,859,481
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 12,859,481
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cost of revenues
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,720,705
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (3,720,705
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Gross profit
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 9,138,776
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 9,138,776
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Operating expenses
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,489,248
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (7,489,248
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Income of VIE and VIE s subsidiaries absorbed by WFOE
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (593,173
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Share of income in subsidiaries
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (593,173
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total operating income (expenses)
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+ (7,489,248
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,186,346
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (7,489,248
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Income from operations
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+ 1,649,528
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,186,346
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 1,649,528
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Other loss
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,225,192
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ (54,657
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,279,849
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Income tax benefits
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 220,820
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 220,820
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net income
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+ 645,156
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 538,516
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,186,346
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 590,499
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Net loss attributable to non-controlling interests
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,674
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,674
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net income attributable to XIAO-I CORPORATION shareholders
+
+ 
+ 
+ 
+ 647,830
+
+ 
+ 
+ 
+ 647,830
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 538,516
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (1,241,003
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 593,173
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ 
+ For the six months ended June 30, 2022
+
+ 
+ 
+
+ 
+ 
+ Condensed Consolidating Schedule of Cash Flows
+
+ 
+ 
+ 
+ Parent
+
+ 
+ 
+ 
+ VIEs and 
+their 
+consolidated 
+subsidiaries
+
+ 
+ 
+ 
+ WFOE
+
+ 
+ 
+ 
+ Other 
+Subsidiaries
+
+ 
+ 
+ 
+ Elimination 
+Adjustments
+
+ 
+ 
+ 
+ Consolidated 
+Total
+
+ 
+ 
+
+ 
+ 
+ 
+ 
+ (in U.S. dollars)
+
+ 
+ 
+
+ 
+ 
+ Net cash used in operating activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (6,826,343
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (6,826,343
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net cash provided by/(used in) investing activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,238
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,855,335
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (2,853,097
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net cash provided by financing activities
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 7,085,478
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 2,855,335
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 9,940,813
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Effect of exchange rate 
+changes
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (49,189
+
+ 
+ 
+ )
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ (49,189
+
+ 
+ 
+ )
+
+ 
+ 
+
+ 
+ 
+ Net change in cash, cash equivalents and restricted cash
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 212,184
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 212,184
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at beginning of period
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 1,310,737
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,311,846
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Cash, cash equivalents and restricted cash, at end of period
+
+ 
+ 
+ 
+ 1,105
+
+ 
+ 
+ 
+ 1,522,921
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 4
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 1,524,030
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ Transfers of Cash to and from the VIE
+
+ Xiao-I is a holding company with no operations of its own. It conducts its operations in China primarily through the PRC operating entities in China. As a result, although other means are available for it to obtain financing at the holding company level, Xiao-I s ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends paid by Xiao-I s PRC subsidiaries, which relies on dividends and other distributions paid by the PRC operating entities pursuant to the VIE Agreements. If any of Xiao-I s subsidiaries incurs debt on its own in the future, the instruments governing such debt may restrict its ability to pay dividends to Xiao-I. In addition, dividends and distributions from Xiao-I s subsidiaries and the VIE are subject to regulations and restrictions on dividends and payment to parties outside of China. Applicable PRC law permits payment of dividends to Xiao-I by 
+
+ 
+
+ 26
+
+ Table of Contents
+
+ 
+ WFOE only out of net income, if any, determined in accordance with PRC accounting standards and regulations. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset by general reserve fund and profits (if general reserve fund is not enough). Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. In addition, registered share capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each operating subsidiary. In contrast, there is presently no foreign exchange control or restrictions on capital flows into and out of Hong Kong. Hence, Xiao-I s Hong Kong subsidiary is able to transfer cash without any limitation to the Cayman Islands under normal circumstances. As a result of these PRC laws and regulations, the PRC operating entities are restricted in their ability to transfer a portion of their net assets to the Company. As of December 31, 2021 and June 30, 2022, net assets restricted in the aggregate, which include paid-in capital and statutory reserve funds of the PRC operating entities, that are included in the Company s consolidated net assets were approximately $75,858,780 and $75,858,780, respectively.
+
+ Moreover, the transfer of funds among the PRC operating entities are subject to the Provisions of the Supreme People s Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (2020 Second Amendment Revision, the Provisions on Private Lending Cases ), which was implemented on January 1, 2021 to regulate the financing activities between natural persons, legal persons and unincorporated organizations. As advised by Xiao-I s PRC counsel, Jingtian & Gongcheng, the Provisions on Private Lending Cases does not prohibit using cash generated from one PRC operating entity to fund another affiliated PRC operating entity s operations. Xiao-I, its subsidiaries or the PRC operating entities have not been notified of any other restriction which could limit the PRC operating entities ability to transfer cash among each other. In the future, cash proceeds from overseas financing activities, including this offering, may be transferred by Xiao-I to AI Plus, and then transferred to Xiao-i Technology, and then transferred to WFOE via capital contribution or shareholder loans, as the case may be. Cash proceeds may flow to Shanghai Xiao-i from WFOE pursuant to certain contractual arrangements between WFOE and Shanghai Xiao-i as permitted by the applicable PRC regulations. 
+
+ As of the date of this prospectus, no cash transfer or transfer of other assets by way of dividends or distributions have occurred among the Company, its subsidiaries, or the PRC operating entities. Xiao-I intends to keep any future earnings to finance the expansion of its business, and it does not anticipate that any cash dividends will be paid, or any funds will be transferred from one entity to another, in the foreseeable future. As such, Xiao-I has not installed any cash management policies that dictate how funds are transferred among the Company, its subsidiaries, or investors, or the PRC operating entities. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid out of share premium if this would result in the company being unable to pay its debts due in the ordinary course of business. Xiao-I does not expect to pay dividends in the foreseeable future. If, however, it declares dividends on its Ordinary Shares, the depositary will pay you the cash dividends and other distributions it receives on Xiao-I s Ordinary Shares after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement. If Xiao-I determines to pay dividends on any of its Ordinary Shares in the future, as a holding company, unless it receives proceeds from future offerings, it will rely on payments made from Shanghai Xiao-i to WFOE, pursuant to the VIE Agreements between them, and the distribution of such payments to Xiao-i Technology from WFOE, and then to AI Plus from Xiao-i Technology, and then to Xiao-I from AI Plus as dividends. Certain payments from the VIE and Xiao-i Technology, to WFOE are subject to PRC taxes, including business taxes and VAT.
+
+ During each of the fiscal years ended December 31, 2020, 2021 and the six months ended June 30, 2021 and 2022, Xiao-I did not make investment in cash to its subsidiaries or the VIE and no cash was transferred from any of its subsidiaries and the VIE to the Cayman Islands holding company. There has not been any dividends or distributions made to US investors.
+
+ Cash dividends, if any, on Xiao-I s Ordinary Shares will be paid in U.S. dollars. If Xiao-I is considered a PRC tax resident enterprise for tax purposes, any dividends it pays to its overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.
+
+ WFOE s ability to distribute dividends is based upon its distributable earnings. Current PRC regulations permit its indirect PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of its subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Each of such entity in China may 
+
+ 
+
+ 27
+
+ Table of Contents
+
+ 
+ also set aside a portion of its after-tax profits to fund an optional employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of shareholders. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.
+
+ The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, Xiao-I may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from its profits, if any. Furthermore, if Xiao-I s subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If Xiao-I or its subsidiaries are unable to receive all of the profits from the PRC operating entities operations through the current VIE Agreements, Xiao-I may be unable to pay dividends on its Ordinary Shares.
+
+ Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, Xiao-I cannot assure you that Xiao-I will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by its PRC subsidiaries to its immediate holding companies in Hong Kong. As of the date of this prospectus, Xiao-I has not applied for the tax resident certificate from the relevant Hong Kong tax authority. Xiao-I s Hong Kong subsidiary intends to apply for the tax resident certificate when WFOE plans to declare and pay dividends to Xiao-i Technology. See Risk Factors Risks Relating to Doing Business in China There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits on page 65 of this prospectus.
+
+ Further, the proceeds of this offering may be sent back from Xiao-I to the PRC operating entities, and the process for sending such proceeds back to the PRC operating entities may be time-consuming after the closing of this offering. Xiao-I may be unable to use these proceeds to grow the business of the PRC operating entities until the PRC operating entities receive such proceeds in the PRC. Any transfer of funds by Xiao-I to the PRC operating entities, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration or filing with relevant governmental authorities in China. Any foreign loans procured by the PRC operating entities is required to be registered with China s State Administration of Foreign Exchange ( SAFE ) or its local branches or satisfy relevant requirements, and the PRC operating entities may not procure loans which exceed the difference between their respective total project investment amount and registered capital or 2 times (which may be varied year by year due to the change of PRC s national macro-control policy) of the net worth of Xiao-I s PRC subsidiaries. According to the relevant PRC regulations on foreign-invested enterprises in China, capital contributions to the PRC operating entities are subject to the approval of or filing with State Administration for Market Regulation in its local branches, the Ministry of Commerce in its local branches and registration with a local bank authorized by SAFE.
+
+ See Risk Factors Risks Relating to Our Corporate Structure 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 ADSs on page 55 of this prospectus.
+
+ Permission Required from the PRC Authorities for the Company s Operation and the Company to Issue Xiao-I s Ordinary Shares or ADSs to Foreign Investors
+
+ Permission from Cyberspace Administration of China
+
+ Shanghai Xiao-i has applied for a cybersecurity review organized by the Center, which is authorized by the Cybersecurity Review Office of the CAC to accept public consultation and cybersecurity review submissions, pursuant to the Cybersecurity Review Measures, which became effective on February 15, 2022. On August 25, 2022, Shanghai Xiao-i received a written notice from the Cybersecurity Review Office, pursuant to which cybersecurity review is not required for
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/ALCYU_alchemy_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ALCYU_alchemy_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..691c76d6b996f52801f397bf383d01b6a5bdb0ca
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/ALCYU_alchemy_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under the section of this prospectus entitled Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus, or the context otherwise requires, references to: we, us, company or our company are to Alchemy Investments Acquisition Corp 1, a Cayman Islands exempted company; amended and restated memorandum and article of association are to the second amended and restated memorandum and articles of association that the company will adopt prior to the consummation of this offering; board of directors are to the board of directors of the company (including our director nominees who will become directors in connection with the consummation of this offering); Class A Ordinary Shares are to our Class A Ordinary Shares of par value $0.0001 per share in the share capital of the company; Class B Ordinary Shares are to our Class B Ordinary Shares of par value $0.0001 per share in the share capital of the company; Companies Act are to the Companies Act (As Revised) of the Cayman Islands, as the same may be amended from time to time; directors are to our current directors and director nominees; founder shares are to our Class B Ordinary Shares initially purchased by our sponsor in a private placement prior to this offering, and our Class A Ordinary Shares issuable upon the conversion thereof as provided herein; management or our management team are to our officers and directors; Non-Executive Chairman are to the director on a board of directors of a company organized under the laws of the Cayman Islands that assumes the roles and responsibilities typically associated with a chairman of a board of directors, but is neither an officer nor formally appointed as chairman of the board of directors of such company under Cayman Islands law; Ordinary Shares are to our Class A Ordinary Shares and our Class B Ordinary Shares, collectively; placement shares are to the shares being purchased by our sponsor and Cantor in the private placement; private placement are to the private placement to our sponsor and Cantor of an aggregate of 543,000 placement shares (up to 595,500 placement shares if the over-allotment option is exercised in full) at a price of $10.00 per placement share, for an aggregate purchase price of $5,430,000 (up to $5,955,000 if the over-allotment option is exercised in full), which will occur simultaneously with the completion of this offering; public shares are to our Class A Ordinary Shares sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); public shareholders are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor s and member of our management team s status as a public shareholder shall only exist with respect to such public shares; public warrants or warrants are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market, including warrants that may be acquired by our sponsor or its affiliates in this offering or thereafter in the open market); representative or Cantor are to Cantor Fitzgerald & Co., the representative of the underwriters in this offering; TABLE OF CONTENTS PRELIMINARY PROSPECTUSSUBJECT TO COMPLETION, DATED APRIL 28, 2023 Alchemy Investments Acquisition Corp 1 $100,000,000 10,000,000 Units Alchemy Investments Acquisition Corp 1 is a special purpose acquisition company incorporated under the laws of the Cayman Islands as an exempted company for the purpose of completing a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination throughout this prospectus. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination opportunity in any business, industry, sector or geographical location, we intend to look at deep technology with a focus on data analytics. We plan to focus on companies acquiring, processing, analyzing, and utilizing data acquired from a variety of systems and sources. This data may be used to enable and deliver applications such as: remote sensing, telecommunications, financial trading, environmental monitoring, greenhouse gas emissions monitoring, business intelligence, precision agriculture, infrastructure monitoring, space traffic monitoring and management, data science, and their adjacent industries. This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one Class A Ordinary Share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A Ordinary Share at a price of $11.50 per share, subject to adjustment as described herein. Each whole warrant will become exercisable on the later of: (i) thirty (30) days after the completion of an initial business combination and (ii) one (1) year from the date of this prospectus, and will expire five (5) years after the completion of an initial business combination, or earlier upon redemption. The underwriters have a 45-day option from the date of this prospectus to purchase up to an additional 1,500,000 units to cover over-allotments, if any. We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A Ordinary Shares upon the completion of our initial business combination, subject to the limitations described herein. We have 18 months from the closing of this offering to consummate our initial business combination. If we anticipate that we may not be able to consummate our initial business combination within such 18 month period, we may seek shareholder approval of the amendments to our second amended and restated memorandum and articles of association (which we refer to as our amended and restated memorandum and articles of association throughout this prospectus) for any extension beyond 18 months at a meeting called for such purpose. Public shareholders will be offered the opportunity to vote on and redeem their shares in connection with any such extension. If we are unable to complete our initial business combination within 18 months from the closing of this offering, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, subject to applicable law and certain conditions as further described herein. Our sponsor, Alchemy DeepTech Capital LLC, has agreed to purchase an aggregate of 493,000 placement shares (or 538,000 placement shares if the over-allotment option is exercised in full) at a price of $10.00 per placement share, for an aggregate purchase price of $4,930,000 (or $5,380,000 if the over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. Cantor Fitzgerald & Co. ( Cantor ) has also agreed to purchase an aggregate of 50,000 placement shares (or 57,500 placement shares if the over-allotment option is exercised in full) at a price of $10.00 per placement share, for an aggregate purchase price of $500,000 (or $575,000 if the over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. The placement shares purchased by our sponsor and Cantor are identical to the Class A Ordinary Shares included in the units sold in this offering, subject to certain limited exceptions as described in this prospectus. Our sponsor owns 2,875,000 of our Class B Ordinary Shares (up to 375,000 shares of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised), which will automatically convert into Class A Ordinary Shares at any time at the option of the holders thereof and at the time of the consummation of our initial business combination, on a one-for-one basis, subject to adjustment as described herein. On all matters submitted to a vote of our shareholders, holders of our Class A Ordinary Shares and holders of our Class B Ordinary Shares will vote together as a single class, except as required by the laws of the Cayman Islands. TABLE OF CONTENTS sponsor are to Alchemy DeepTech Capital LLC, a Delaware limited liability company; underwriters are to the underwriters of this offering, for which the representative is acting as representative; and Any forfeiture of shares described in this prospectus will take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. Any conversion of the Class B ordinary shares described in this prospectus will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take effect as share capitalizations as a matter of Cayman Islands law. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. General We are a newly-organized blank check company incorporated on October 27, 2021 as a Cayman Islands exempted company for the purpose of completing a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. While we may pursue an initial business combination opportunity in any business, industry, sector or geographical location, we intend to look at deep technology with a focus on data analytics. We plan to focus on companies acquiring, processing, analyzing, and utilizing data acquired from a variety of systems and sources. This data may be used to enable and deliver applications such as: remote sensing, telecommunications, financial trading, environmental monitoring, greenhouse gas emissions monitoring, business intelligence, precision agriculture, infrastructure monitoring, space traffic monitoring and management, data science, and their adjacent industries. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. Our Management Team We will seek to capitalize on the experience and networks of our management team. Our team consists of seasoned and experienced professionals who have experience in equity investments, finance, business operations and management, as well as deal negotiation. We believe our team has the ability to source attractive deals and find good investment opportunities from private and public sources in their networks. Other members of our management also have extensive experience in sourcing and evaluating potential investment targets, and have developed a proprietary network of business leaders, investors and intermediaries that we believe can generate deal flow for us. Our management team is led by Steven M. Wasserman, our Non-Executive Chairman, Mattia Tomba and Vittorio Savoia, our Co-Chief Executive Officers ( co-CEOs ), and Harshana Sidath Jayaweera, our Chief Financial Officer. Steven M. Wasserman is the co-founder and managing partner of Alchemy Investment Management, an affiliate of our sponsor, and has been our director since November 19, 2021 and our Non-Executive Chairman since November 2022. Mr. Wasserman has been a principal in MSP Sports Capital, LP., an investment fund specializing in professional sports businesses, since 2019. He served as Vice Chairman of The Roosevelt Investment Group, Inc. an investment advisory firm, from 2018 to 2021 and was previously Chief Executive Officer of Seaport Investment Management, LLC, an investment management firm, from 2015 to 2018 and helped Seaport develop new investment strategies during his tenure. Since 2017, Mr. Wasserman has been a senior advisor to a New York based hedge fund with respect to special situations/ credit opportunity investments and has also been an advisor to BlockWorks Group, LLC, a blockchain/ cryptocurrency communications company. From 2011 to 2014 he was Senior Managing Director of the Beige Group, LLC, a family office where he was responsible for identifying, analyzing and executing investment TABLE OF CONTENTS Currently, there is no public market for our units, Class A Ordinary Shares or warrants. We intend to apply to have our units listed on The Nasdaq Global Market, or Nasdaq, under the symbol ALCYU on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. We expect the Class A Ordinary Shares and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Cantor, the representative of the underwriters of this offering, informs us of its decision to allow earlier separate trading, subject to our satisfaction of certain conditions. Once the securities comprising the units begin separate trading, we expect that the Class A Ordinary Shares and warrants will be listed on Nasdaq under the symbols ALCY and ALCYW, respectively. We are an emerging growth company under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See Risk Factors beginning on page 33 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Unit Total ($) Public offering price 10.00 100,000,000 Underwriting discounts and commissions(1) 0.65 6,500,000 Proceeds, before expenses, to Alchemy Investments Acquisition Corp 1 9.35 93,500,000 Note: (1) Includes $0.20 per unit, or $2,000,000 (or $2,300,000 if the over-allotment option is exercised in full) in the aggregate, payable to Cantor Fitzgerald & Co. upon the closing of this offering. Also includes $0.45 per unit, or $4,500,000 in the aggregate, payable to Cantor Fitzgerald & Co. for its own account for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. If the underwriters over-allotment option is exercised, $0.45 per over-allotment unit (or up to $5,175,000 in the aggregate) will be deposited in the trust account as deferred underwriting commissions. The deferred commissions will be released to Cantor Fitzgerald & Co. for its own account only on completion of an initial business combination, as described in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See the section of this prospectus entitled Underwriting beginning on page 156 for a description of compensation and other items of value payable to the underwriters. Of the proceeds we receive from this offering and the sale of the placement shares described in this prospectus, $101,500,000, or $116,725,000 if the underwriters over-allotment option is exercised in full ($10.15 per share in either case) will be deposited into a trust account in the United States with Continental Stock Transfer & Trust Company acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay taxes payable and up to $100,000 of dissolution expenses, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity; or (iii) absent our completing an initial business combination within 18 months from the closing of this offering, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders. The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about , 2023. Sole Book-Running Manager CANTOR The date of this prospectus is , 2023 TABLE OF CONTENTS opportunities. Mr. Wasserman is also a director for byNordic, a SPAC currently listed on Nasdaq and previously was Chief Executive Officer of Alpha Security Group Corporation, a special purpose acquisition company, from 2005 to 2009. He has also served as an advisor to various other special purpose acquisition companies including, but not limited to, Energy Infrastructure Acquisition Corp. from March 2006 to March 2008, Seanergy Acquisition Corp. from November 2007 to September 2008, and Starbulk Acquisition Corp. from April 2008 to March 2009. From 2004 to 2008, Mr. Wasserman also served as the managing partner of AMT Ventures LLC, an entity primarily engaged in public and private equity and debt investments on a principal basis. During his tenure AMT portfolio investments included: Ktech Corporation, a provider of technical support services, scientific and engineering services and management expertise to a variety of government defense and industry clients; Nanodetex Corporation, a leader in lab-on-chip (LOC) platform technologies for gas phase chemical analysis and explosive detection; Agent Science Technologies Incorporated, a provider of neural information management software solutions to the defense industry; and Link One, LLC, a technology transfer advisory group to Los Alamos National Laboratory. Mr. Wasserman is also a licensed attorney. Mattia Tomba is the co-founder and managing partner of Alchemy Investment Management, an affiliate of our sponsor, and has been our director since October 27, 2021 and our co-CEO since November 2022. He has been a founding investor and the head of International Markets at Tradeteq since 2017. He has also been a Partner at M&M Investments Pte. Ltd., a holding company that invests in technology companies globally and provides debt and equity advice since 2016. He is a research affiliate at the Middle East Institute in Singapore (MEI), while from 2016 to 2018, Mr. Tomba was a senior fellow, and from 2015 to 2016, Mr. Tomba was a visiting senior fellow at MEI, where he focused on Asia Middle East relations. He has also been sitting on the Advisory Council of the Center for Sovereign Wealth and Global Capital at The Fletcher School, Tufts University, since 2013. Mr. Tomba has experience in evaluating, negotiating, and structuring direct investments globally across all parts of the capital structure, in public and private markets. Mr. Tomba served as an Investment Manager at Qatar s Sovereign Wealth Fund (Qatari Diar), where he managed an equity portfolio and worked on large private equity and real estate transactions worldwide from 2008 to 2016. Prior to that, in 2003, Mr. Tomba joined the Goldman Sachs group, where he was involved in the investment and portfolio management of the real estate funds managed by the bank until 2008. Mr. Tomba began his private equity and investment management career in 2002 with the Private Wealth Management team of Merrill Lynch. He studied business administration and international affairs at Bocconi University, Sciences Po, and Fletcher School. Vittorio Savoia is the co-founder and managing partner of Alchemy Investment Management, an affiliate of our sponsor, and has been our director since November 19, 2021 and our co-CEO since November 2022. Since 2017, he has been the founder, managing director and CEO of FIDES Holdings, a multi-asset alternative investment firm that is active in real estate, venture capital, private equity, middle-market direct lending, sustainable civil and structural engineering, and facilities & maintenance solutions. Mr. Savoia has over 15 years of experience in investment management, alternative asset management, and advising families and financial institutions on complex transactions across Europe and North America. Mr. Savoia served as the managing partner of VIS Partners, a Luxembourg-based independent GP, from 2016 to 2020. At VIS Partners, he led investment practices mainly focused on uncorrelated long-term value strategies across different asset classes and geographies. Mr. Savoia is an executive member of the Italian Family Offices Association. Mr. Savoia is a member of the Harvard Alumni Entrepreneurs and Investment Industry Association and an alumnus and faculty member of the Harvard Real Estate Alumni Organization. Mr. Savoia received a master s degree in Business Management, Finance and Control from Harvard University in 2010. He also received a bachelor s degree with Honours in Business Management from Westminster Business School, UK in 2008, and Rennes School of Business, France in 2007. Harshana Sidath Jayaweera has been our Chief Financial Officer since October 2022. He has been the Managing Director of Aartha Capital Advisory & Investments Limited, a boutique advisory and consultancy firm with an international clientele, since June 2017. He also functions as an Independent Director and Board Member at GRIP (DIFC) Limited, a regulated Investment Bank based in Dubai International Financial Centre, since October 2019. In the interim, from December 2020 to November 2021, he supported the Investment Banking landscape in Sri Lanka as the Chief Business Officer at Acuity Group (JV of DFCC PLC and Hatton National Bank PLC). Previously, Mr. Jayaweera was the Director and Head of Client Coverage of Investment Banking at ADSS Group, a leading International Brokerage established nexus TABLE OF CONTENTS to Abu Dhabi Government, from April 2018 to March 2019. Prior to ADSS, from September 2016 to March 2018, he served as a Vice President at Credit Suisse AG, working in the International Wealth Management Division. Prior to that, from May 2008 to July 2016, he served as the Country Head for United Arab Emirates, at Bank ABC, a Universal Bank based in Bahrain. Before joining Bank ABC, from June 2006 to May 2008, he worked with BNP Paribas S.A. based in Abu Dhabi, United Arab Emirates, where he managed and assisted the largest lending and investment portfolio of the branch. Previously, Mr. Jayaweera held a similar analytical and client facing role with Emirates NBD from November 2004 to June 2006. While working in Sri Lanka, prior to 2004, he worked with Nations Trust Bank PLC (from January 2003 to July 2004), and Sampath Bank PLC (from November 1998 to January 2003), attached to Corporate Banking, Bank Operations, Management Reporting as well as Branch Banking. Mr. Jayaweera has a Master of Business Administration (with Merit) from the University of Leicester, UK, obtained in 2015. He has also completed the Executive Management Program in International Management conducted by Stanford Graduate School of Business (USA) and National University of Singapore Business School (Singapore) in 2014. He is certified in Marketing of Financial Services as well as Banking & Finance from Institute of Bankers Sri Lanka and Chartered Institute of Bankers (UK) respectively. Furthermore, he has obtained certification from Harvard Business School in relation to FinTech and Blockchain. The other members of our board of directors are: Debbie S. Zoldan has been our independent director since November 19, 2021. Ms. Zoldan has been the Chief Compliance Officer of Seaport Securities Corporation since 2000. Prior to that she served as a Partner at Seaport Securities Corporation from 1987 to 2000. Ms. Zoldan holds Series 4, 7, 8, 14, 24, 55, and 63 FINRA Registrations. She is licensed as a registered representative with Seaport Securities Corporation, which is a registered securities broker/dealer and a member of the Financial Industry Regulatory Authority, or FINRA, New York Stock Exchange, or NYSE, and the Securities Investors Protection Corporation, or SIPC. Ms. Zoldan sits on the NYSE Acceptability Board and the NYSE Hearing Board. She is also a member of the FINRA roster, to serve as a Non-Public FINRA Arbitrator. Ms. Zoldan received a Bachelor of Business Administration degree from CUNY-Baruch College in New York in 1992. Pablo Terpolilli has been our independent director since November 19, 2021. Mr. Terpolilli is currently the founder and CEO of vabble Ltd., a startup that is building a neo-bank platform to help emerging market companies connect with institutional investors since 2021. Additionally, Mr. Terpolilli has been the founder and an executive of PACT-AM, an advisory and independent sponsor that is active in Europe and the Americas since 2019. Mr. Terpolilli has held various banking roles and has served in senior management roles at various industrial companies. In 2020, he co-headed the rollout of alternative investments for Santander Bank International, a major private bank based in Geneva, Switzerland. Between June 2017 and December 2018, Mr. Terpolilli led the private financing for the Western Hemisphere-Europe, the Middle East and Africa and the Americas at Standard Chartered Bank Plc. Mr. Terpolilli has also served on the board of directors of Valuable Insights since 2015. Since 2015, Mr. Terpolilli has held various advisory and consulting positions as well. From 2013 to 2014, he was the head of the corporate finance group at The Klesch Group, a large family-office-owned industrial conglomerate that operates in oil refining, shipping, commodities trading, petrochemicals and metals. In 2009, he joined UBS where he worked with the Special Situations Financing group until 2012. From 2004 to 2009, Mr. Terpolilli served in various banking roles in leveraged finance and distressed trading at Goldman, Sachs & Co. in both London and New York. In 1998, Mr. Terpolilli joined the high yield division of Donaldson, Lufkin & Jenrette, an investment bank, in New York. Mr. Terpolilli received an MBA from Babson College in 1998, where he graduated magna cum laude, a JD from University of Buenos Aires in Argentina in 1995 and an undergraduate research degree in International Trade and Economics from Argentine University of Enterprise in 1991. Carlo Tursi will be appointed to serve as an independent member of our board of directors in connection with this offering. Mr. Tursi is currently the Chief Executive Officer of UrbanV, a company based in Italy with a mission to bring air mobility in urban centers and beyond through designing, building and managing vertiports the ground infrastructure to enable electric vertical takeoff and landing. Prior to his role with UrbanV, Mr. Tursi served as the Chief Executive Officer of TIM Ventures, an Italian corporate venture capital firm owned by the Italian telecommunications company Telecom Italia, from 2020 to 2021. Mr. Tursi also served as a director on the board of Satispay Italy, a thriving European payment solutions provider from March until October 2021. Prior to that, from 2014 to 2018 he served as the General Manager for Italy of TABLE OF CONTENTS Uber. Mr. Tursi was an Associate at Quantum Pacific, a London-based family office from 2013 to 2014, where he worked primarily in the automotive and energy sectors, while also contributing to the company s venture capital activities. He also worked from 2006 to 2008 as an analyst at Kearney, where he began his career. Mr. Tursi received an MBA from MIT Sloan in 2010 and an MSc in Mechanical Engineering in 2005. With their support, we intend to conduct a disciplined process of deal origination and evaluation, due diligence, and investment. Our group of independent directors will provide public company governance, executive leadership, operational oversight, private equity investment management and capital markets experience. Our board members have extensive experience, having served as directors or officers for numerous publicly-listed and privately-owned companies. Our directors have experience with acquisitions, divestitures and corporate strategy and implementation, which we believe will significantly benefit us as we evaluate potential acquisition or merger candidates as well as following the completion of our initial business combination. We believe our management team is uniquely positioned to take advantage of the growing set of acquisition opportunities in the remote sensing, telecommunications, financial trading, environmental monitoring, greenhouse gas emissions monitoring, business intelligence, precision agriculture, infrastructure monitoring, space traffic monitoring and management, data science, including their adjacent industries and that our contacts and relationships, ranging from owners and management teams of private and public companies, private equity funds, investment bankers, attorneys, to accountants and business brokers will allow us to generate an attractive transaction for our shareholders. The past performance of the members of our management team or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate and certain members of our management team do not have previous experience with special purpose acquisition companies or blank check companies. However, we believe that the skills and professional network of our management team will enable us to identify, structure and consummate a business combination. You should not rely on the historical record of the performance of our management team or any of its affiliates performance as indicative of our future performance. Business Strategy While we may pursue an initial business combination opportunity in any business, industry, sector or geographical location, we intend to look at deep technology with a focus on data analytics. We plan to focus on companies acquiring, processing, analyzing, and utilizing data acquired from a variety of systems and sources. This data may be used to enable and deliver applications such as: remote sensing, telecommunications, financial trading, environmental monitoring, greenhouse gas emissions monitoring, business intelligence, precision agriculture, infrastructure monitoring, space traffic monitoring and management, data science, and their adjacent industries. We believe there is a diverse set of opportunities globally where value can be unlocked by accessing international capital markets. We believe our management team is uniquely qualified to use its extensive networks and experience to source and execute a business combination. Possible acquisitions may involve special situations in which significant value can be created by recapitalization, providing growth capital and allowing the company to use its listing to engage in additional consolidations in its industry. We intend to capitalize on the operating experience and contacts of Steven M. Wasserman, our Non-Executive Chairman, and Mattia Tomba and Vittorio Savoia, our co-CEOs, along with the other members of our management team in consummating an initial business combination. These individuals have extensive transactional experience and a broad network of contacts to assist in our search for a target business. Competitive Advantages We intend to capitalize on the following competitive advantages in our pursuit of a target company: Leadership of an Experienced Management Team. Our management team is led by Steven M. Wasserman, our Non-Executive Chairman, Mattia Tomba and Vittorio Savoia, our co-CEOs. See Our Management Team. TABLE OF CONTENTS We have the flexibility to explore upstream and downstream business combination opportunities. We believe we are well positioned to take advantage of both upstream and downstream business combination opportunities. If we pursue an upstream business combination, we will seek a business combination with a company that already has operational assets in space. However, we do not intend to pursue a business combination with traditional space companies which focus on the institutional space business. If we pursue a downstream business combination with a data-analytics company, we may then pursue further M&A transactions to merge with, or acquire, a company that has the ability to source data. Status as a Publicly Listed Acquisition Company. We believe our structure will make us an attractive business combination partner to prospective target businesses. As a publicly listed company, we will offer a target business an alternative to the traditional initial public offering process. We believe that target businesses will favor this alternative, which we believe is less expensive, while offering greater certainty of execution, than the traditional initial public offering process. During an initial public offering, there are typically underwriting fees and marketing expenses, which would be costlier than a business combination with us. Furthermore, once a proposed business combination is approved by our shareholders (if applicable) and the transaction is consummated, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriter s ability to complete the offering, as well as general market conditions that could prevent the offering from occurring. Once public, we believe our target business would have greater access to capital and additional means of creating management incentives that are better aligned with shareholders interests than it would as a private company. This can offer further benefits by augmenting a company s profile among potential new customers and vendors and aid in attracting talented management staffs. Established Deal Sourcing Network. We believe the strong track record of our management team will provide access to quality initial business combination partners. In addition, through our management team, we believe we have contacts and sources from which to generate acquisition opportunities and possibly seek complementary follow-on business arrangements. These contacts and sources include those in government, private and public companies, private equity and venture capital funds, investment bankers, attorneys and accountants. Strong Financial Position and Flexibility. With the funds held in our trust account, we can offer a target business a variety of options to facilitate a business combination and fund future expansion and growth of its business. Because we are able to consummate a business combination using the cash proceeds from this offering, our share capital, debt or a combination of the foregoing, we have the flexibility to use an efficient structure allowing us to tailor the consideration to be paid to the target business to address the needs of the parties. However, if a business combination requires us to use substantially all of our cash to pay for the purchase price, we may need to arrange third party financing to help fund our business combination. Since we have no specific business combination under consideration, we have not taken any steps to secure third party financing. Industry Opportunity The deep tech industry is emerging as one of the most promising industries globally, with significant economic potential in many different areas of application. The deep tech industry refers to economic activities related to the development and application of technology solutions that represent a substantial scientific or engineering challenge. Our focus will be in particular on data analytics, which is the process of sourcing, extracting and examining data sets to find trends and draw conclusions about the information they contain. This represents possible applications for a lot of industries, such as energy, agriculture, telecommunications, financial services, aerospace, logistics and pharmaceuticals. The market size related to data analytics market was already valued in 2021 at over $240 billion and is expected to have a significant growth that will lead to a market value of over $650 billion by 2029. Data analytics development relies on the development of artificial intelligence technologies such as machine learning, deep reinforcement learning, computer vision and natural language processing. According to the McKinsey Technology Trends Outlook 2022 , the applied TABLE OF CONTENTS AI sector has the highest innovation score of all the trends studied, and is one of the main areas of investments, having attracted an estimated $165 billion in 2021. Acquisition Criteria The focus of our management team is to create shareholder value by leveraging its experience to improve the efficiency of the business while implementing strategies to grow revenue and profits organically and/or through acquisitions. Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we see fit to do so: Strong Growth Potential. As a result of the space and data economy and related services strong growth over the past several decades, there are a large number of domestic and regional companies with principal business operations which are serving the ever-increasing emerging needs of the economy. In addition, we intend to target businesses that have historically demonstrated revenue growth and possess favorable future growth characteristics, combined with a durable business model that is resistant to macroeconomic volatility. We will seek target businesses for which we can provide strategic advice, access to sufficient capital and effective operational expertise, to grow the business. Unique Market Position. We intend to seek target businesses with an industry or businesses that have leading competitive technology, unique brand equity and/or product competences. In particular, we intend to seek businesses that may be at a point of achieving high growth and require additional expertise or capital to help drive their further expansion. Benefit from Capital Markets. We intend to seek to acquire a target with an experienced operating management team that may lack experience with the capital markets but that has the ambition to take advantage of the improved liquidity and additional capital that can come from a successful listing in the United States. The access to the capital markets could allow such a target business to accelerate its growth and build capital profile. Middle-Market Businesses. We intend to seek target businesses with a total enterprise value of at least $500 million. We believe there are a considerable number of potential target businesses within this valuation range that can benefit from new capital for scalable operations to generate substantial revenue and earnings growth. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. Initial Business Combination We are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following this offering. We intend to utilize cash derived from the proceeds of this offering and the placement shares, as well as our equity, debt or a combination of these, in effecting a business combination which has not yet been identified. Accordingly, investors in this offering are investing without first having an opportunity to evaluate the specific merits or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with various federal and state securities laws. In the alternative, we may seek to consummate a business combination with a company that may be financially unstable or in its early stages of development or growth. While we may seek to effect simultaneous business combinations with more than one target business, we will probably have the ability, as a result of our limited resources, to effect only a single business combination. We will either (1) seek shareholder approval of our initial business combination at a general meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they TABLE OF CONTENTS vote for or against the proposed business combination or do not vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (less taxes payable), or (2) provide our shareholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (less taxes payable), in each case subject to the limitations described herein. The decision as to whether we will seek shareholder approval of our proposed business combination or allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. If we decide to allow shareholders to sell their shares to us in a tender offer, we will file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination as is required under the SEC s proxy rules. If we seek shareholder approval of our initial business combination, we will consummate our initial business combination only if approved as an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shares held by shareholders who attend and vote at a general meeting of the company to approve the business combination or as a special resolution under Cayman Islands law, which requires the affirmative vote of at least a two-thirds (2/3) majority of the shares held by shareholders who attend and vote at a general meeting of the company to approve the business combination to the extent that such business combination is structured as a merger. We have 18 months from the closing of this offering to consummate our initial business combination. If we anticipate that we may not be able to consummate our initial business combination within such 18 month period, we may seek shareholder approval of amendments to our amended and restated memorandum and articles of association for any extension beyond 18 months at a meeting called for such purpose. Public shareholders will be offered the opportunity to vote on and redeem their shares in connection with any such extension. As described herein, our sponsor, officers and directors have agreed that they will not propose any such amendment unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable), divided by the number of then-outstanding public shares, subject to the limitations described herein. If we are unable to consummate an initial business combination within the applicable time period, we will redeem 100% of our issued and outstanding public shares for a pro rata portion of the funds held in the trust account, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and as further described herein, and then seek to liquidate and dissolve. We expect the pro rata redemption price to be approximately $10.15 per Class A Ordinary Share (regardless of whether or not the underwriter exercises its over-allotment option), without taking into account any interest earned on such funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public shareholders. Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors. We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the TABLE OF CONTENTS target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the Investment Company Act ). Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital share, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. If the business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as our initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/ALTB_alpine_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ALTB_alpine_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/ALTB_alpine_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/AONCW_american_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/AONCW_american_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..df2a0d57eeaa7fb90c0a8ed5a64457c4efa7c14b
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/AONCW_american_prospectus_summary.txt
@@ -0,0 +1 @@
+SUMMARY OF THE PROSPECTUS This summary highlights selected information from this prospectus and may not contain all of the information that is important to you in making an investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our financial statements and the related notes included in this prospectus and the information set forth under the headings Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations. See also the section titled Where You Can Find More Information. Unless the context otherwise requires, references in this prospectus to the Company, we, us or our are to American Oncology Network, Inc. Overview Since its inception in 2018, American Oncology Network, Inc. (f/k/a American Oncology Network, LLC) ( AON ) has offered a progressive model of physician-led, community-based oncology management. AON preserves and elevates community oncology by helping its physicians navigate the complex healthcare landscape, providing them an efficient platform to work autonomously and thrive, and most importantly, improving the quality of patient care that is being delivered. We are an alliance of physicians and veteran healthcare leaders partnering to ensure the long-term success and viability of oncology diagnosis and treatment in community-based settings. As of September 30, 2023, AON s platform includes 109 physicians and 31 practices across 85 locations in 19 states and the District of Columbia. Our robust platform provides oncology practices with comprehensive support, access to revenue-diversifying adjacent services and practice management expertise to empower physicians to make cancer care better for every patient. Our mission is to provide the best cancer care that is affordable and close to where patients live and work. We believe the key to accessible and equitable healthcare lies in the strength of community healthcare practices and we are committed to closing the gap in cancer care to ensure every patient has access to the optimal care needed to help in their fight against cancer. To accomplish this, we have practices in some of the most densely populated cities as well as rural areas where medical resources are scarce. We deliver cancer care innovation by bringing new treatments to the forum and also by ensuring the access to the necessary adjacent services to provide comprehensive quality cancer care and, preserving the delivery of personalized cancer care in the community oncology setting. Through access to care-enhancing patient services such as a centralized specialty pharmacy, wide ranging clinical lab and pathology, a fully integrated technology platform anchored by an oncology-specific electronic medical record system, as well as a care management team and a variety of financial assistance programs, our patients receive expert cancer care at each of our clinics. We provide patients a variety of services to enhance patient care throughout the healthcare journey: high-quality and timely laboratory services for routine and specialized testing; in-house professional and technical pathology providing complete, accurate and timely pathology reports; in-house specialty pharmacy with patient education, financial assistance, and 24/7 patient assistance; and care management support services including nutrition guidance. As the future of healthcare continues to transition from volume to value, we are at the forefront of this initiative by ensuring care quality over care quantity and adopting a patient-first mentality. Through an integrated system of seamless communication, coordination and patient care for better health outcomes, AON practices benefit from decreased expenditures through the implementation of centralized administrative services, processes, and technologies designed to support effective decision-making such as optimal pricing on drugs and medical supplies. Our patients benefit through our 24/7 clinical care support leading to a reduction in unnecessary emergency room visits and admissions and enhanced care quality. Ultimately, the payors benefit from more efficient delivery of high-quality, comprehensive services comparable to any hospital system at a lower cost point. Though our network spans the country, its clinicians are interconnected and focused on driving change not just at their local clinics, but throughout our network. Our Network Practices unite in collaboration through a physician advisory board, which acts as a liaison between AON management and our Network Practices so that we remain apprised of issues and opinions concerning our Network Practices. In addition, our Network Practices also remain at the forefront of new discoveries and findings by expanding and improving cancer treatment options for every patient through a pharmacy and therapeutics committee that continuously updates its formulary in real time as TABLE OF CONTENTS advanced therapeutics come to market and through participating in clinical research to ensure we remain on the cutting edge of cancer protocols. Patients benefit from convenient access to clinical trials that we participate in without the need to travel to large cities or tertiary cancer care facilities, and personalized care by matching a patient s cancer to a tailored therapy using molecular profiling. We have made significant investment in a resilient, integrated technology platform to support the practices which includes a fully-integrated electronic health record and a robust decision support tool and analytics engine. Our development of compliance materials ensures consistency and optimal patient experiences and meets or exceeds the Office of Inspector General ( OIG ) guidelines. We believe that our position in the market and focus on elevating the state of oncology care with our affiliated providers bodes well for future growth. Our proprietary technology platform supports this growth and enables the our oncology practices and affiliated care providers ( Network Practices ) to standardize and deliver consistent care at scale. We believe that our model will support growth into new markets and allow us to continue to service more patients across the United States. Corporate Information Our principal executive office is located at 14543 Global Pkwy STE 110, Fort Myers, FL 33913. Our telephone number is (833) 886-1725. Our website address is www.aoncology.com. Information contained on our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only. Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of AON s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the Closing of DTOC s Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the second fiscal quarter of our most recently completed fiscal year; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company have the meaning associated with it in the JOBS Act. TABLE OF CONTENTS THE OFFERING We are registering (i) the issuance by us of up to 8,337,500 shares of Class A Common Stock that may be issued upon exercise of 8,337,500 the public warrants, each of which entitles its holder to purchase shares of Class A Common Stock at an exercise price of $11.50 per share to purchase Class A Common Stock at an exercise price of $11.50 per share and (ii) the resale of (a) an aggregate of 51,161,832 shares of Class A Common Stock by certain of the selling securityholders named in this prospectus (each a Selling Securityholder and, collectively, the Selling Securityholders )and (b) 6,113,333 warrants to purchase shares of Class A Common Stock issued to certain of the Selling Securityholders in private placements prior to DTOC s IPO (the Private Placement Warrants ). Any investment in the securities offered hereby is speculative and involves a high degree of risk. You should carefully consider the information set forth under the Risk Factors section of this prospectus. Issuance of Common Stock The following information is as of October 1, 2023 and does not give effect to issuances of our Class A Common Stock or the exercise of warrants after such date. Shares of our Class A Common Stock to be issued upon exercise of the public warrants 8,337,500 shares of Class A Common Stock to be issued upon exercise of the 8,337,500 public warrants, which entitles its holder to purchase shares of Class A Common Stock at an exercise price of $11.50 per share. Use of proceeds We will receive up to an aggregate of approximately $95.9 million from the exercise of all public warrants assuming the exercise in full of all such warrants for cash. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the exercise of such warrants for general corporate purposes which may include acquisitions or other strategic investments. Our warrants are currently out-of-the money. We do not expect warrant holders to exercise their warrants and, therefore, we do not expect to receive cash proceeds from any such exercise, for so long as the warrants remain out-of-the money. See the section entitled Description of Securities Warrants for more information. Resale of Shares of Class A Common Stock and Warrants Shares of Class A Common Stock offered by the Selling Securityholders 51,161,832 shares Private Placement Warrants offered by the Selling Securityholders 6,113,333 Private Placement Warrants Exercise Price $11.50 per share with respect to the public warrants and $11.50 per share with respect to the private placement warrants, subject to adjustment as described herein, which exceeds the market price of our Class A Common Stock of $6.30 per share based on the closing price on the Nasdaq on November 14, 2023. If all of our public warrants were exercised in full for cash, we would receive an aggregate of approximately $95.9 million. If all of our public warrants and private warrants were exercised in full for cash, we would receive an aggregate of approximately $166.2 million. For so long as the warrants remain out-of-the money, we believe it is unlikely that the Selling TABLE OF CONTENTS Securityholders will exercise their warrants and therefore, we do not expect to receive cash proceeds from any such exercise. There can be no assurance that the warrants will ever be in-the money prior to their expiration and as such, the warrants may expire worthless. Redemption The private placement warrants are not redeemable by us. See Description of Our Securities Warrants for further discussion. Use of proceeds We will not receive any of the proceeds from the sale of the shares of Class A Common Stock by the Selling Securityholders. With respect to shares of Class A Common Stock underlying the warrants, we will not receive any proceeds from such shares except with respect to amounts received by us upon exercise of such warrants to the extent such warrants are exercised for cash. See Use of proceeds above for more information on the proceeds we expect to receive from the exercise of such warrants. Ticker Symbol Our shares of Class A Common Stock and warrants are listed on Nasdaq under the symbols AONC and AONCW, respectively. Lock-up restrictions All of the Selling Securityholders, except for holders of our Series A Preferred Stock, are subject to certain restrictions on transfer until the termination of applicable lock-up periods. See Securities Act Restrictions on Resale of Securities Lock-up Restrictions. TABLE OF CONTENTS INFORMATION RELATED TO OFFERED SECURITIES This prospectus relates to (i) the issuance by us of up to 8,337,500 shares of Class A Common Stock that may be issued upon exercise of 8,337,500 the public warrants, which entitles its holder to purchase shares of Class A Common Stock at an exercise price of $11.50 per share and (ii) the resale of (a) an aggregate of 51,161,832 shares of Class A Common Stock by certain of the selling securityholders named in this prospectus (each a Selling Securityholder and, collectively, the Selling Securityholders ) and (b) 6,113,333 private placement warrants to purchase shares of Class A Common Stock issued to the Selling Securityholders prior to DTOC s IPO (the Private Placement Warrants ). The securities registered for resale covered by this prospectus consist of: (a) 8,337,500 shares of Class A Common Stock held by the Sponsors of Digital Transformation Opportunities Corp. ( DTOC ) (such shares, the Founder Shares ) which were issued upon the conversion of the Founder Shares, which includes up to 2,918,125 shares of Class A Common Stock (that may be issued from time to time upon achievement of certain stock price thresholds) to affiliates of the Company in connection with the earnout provisions set forth in the Sponsor Support Agreement (the Earnout Shares ); (b) 28,109,796 shares of the Class A Common Stock issued in connection with the exchange or redemption of AON LLC Common Units ( Common Units ) and Class B Common Stock issued or Warrants to convert into Class B Common Stock pursuant to the terms of AON LLC s Amended and Restated LLC Agreement or Amended and Restated Company Certificate of Incorporation, as applicable (collectively, the Exchange Shares ); (c) up to 8,601,203 shares of Class A Common Stock that may be issued from time to time upon conversion of Series A Preferred Stock, including up to 1,949,593 shares of Class A Common Stock that may be issuable pursuant to non-cash dividends that may accrue on the shares of Series A Preferred Stock; (d) 6,113,333 private placement warrants each exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share, purchased by the Sponsors and their permitted transferees, at a price of $1.50 per private placement warrant in a private placement simultaneously with the consummation of DTOC s IPO; and (e) 6,113,333 shares of Class A Common Stock underlying the private placements warrants. TABLE OF CONTENTS The following table includes information relating to the securities held by the Selling Securityholders, including the price each Selling Securityholder paid for the securities, the potential profit relating to such securities and any applicable lock-up restrictions. The following table is in part based off AON s internal records and is for illustrative purposes only. The table should not be relied upon for any purpose outside of its illustrative nature. The public offering price in DTOC s IPO was $10.00 per share. Consequently, as seen in the table below, some of the Selling Securityholders may realize a positive rate of return on the sale of their Common Stock covered by this prospectus even if the market price per share of our Common Stock is below $10.00 per share, in which case the public shareholders may experience a negative rate of return on their investment. Selling Securityholder Number of Offered Securities Effective Purchase Price per Offered Security Potential Profit per Offered Security(1) Aggregate Potential Profit(1) Lock-Up Restrictions Entities or persons affiliated with Digital Transformation Sponsor LLC and permitted transferees Founder shares 8,337,500 $0.003 $6.30 $52,501,250 (2) Private placement warrants 6,113,333 $1.50 $ $ N/A Shares of Class A Common Stock underlying private placement warrants 6,113,333 $11.50(3) $ $ (2) AON LLC Equityholders Class A Common stock 28,109,796 $10.00(4) $ $ (5) Holders of Series A Preferred Stock Class A Common stock 8,601,203 $10.00(6) $ $ N/A (1) Based on the closing price of our Class A Common Stock on November 14, 2023 of $6.30 and the closing price of our public warrants on November 14, 2023 of $0.19. (2) The Sponsor, DTOC s former directors and officers, certain affiliates of the Sponsor and their permitted transferees agreed to subject any shares of Class A Common Stock (including founder shares) received by them to lock-up restrictions. Pursuant to the Sponsor Support Agreement, during the period beginning on the Closing Date until 12 months after the Closing Date, such persons may not transfer any of its, his or her shares of Class A Common Stock (including founder shares), except for certain limited permitted transfers. (3) Represents the exercise price of the private placement warrants and public warrants. (4) Represents the value of AON securities exchanged by AON LLC equityholders at the Business Combination, calculated pursuant to the exchange ratio set forth in the Business Combination Agreement, which valued AON securities at $10.00 per share. (5) Equityholders of AON LLC agreed to subject the shares of Class B Common Stock issued to them in the Business Combination to lock-up restrictions. During the period beginning on the Closing until 6 months after the Closing, such persons may not transfer any of its, his or her shares of Class B Common Stock issued to them in the Business Combination, except for certain limited permitted transfers, and until the expiration of this lock-up period, such equityholders of AON LLC may not exchange AON LLC common units together with an equal number of shares of AON Class B Common Stock for shares of AON Class A Common Stock. (6) Represents the initial conversion price of the Series A Preferred Stock into Class A Common Stock. TABLE OF CONTENTS
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diff --git a/parsed_sections/prospectus_summary/2023/ATAT_atour_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ATAT_atour_prospectus_summary.txt
new file mode 100644
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--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/ATLX_atlas_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ATLX_atlas_prospectus_summary.txt
new file mode 100644
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@@ -0,0 +1,503 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+The
+following summary highlights selected information contained elsewhere in this prospectus and is qualified in its entirety by the more
+detailed information and financial statements included elsewhere in this prospectus. It does not contain all the information that may
+be important to you and your investment decision. You should carefully read this entire prospectus, including the matters set forth under
+ Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, 
+and our financial statements and related notes included elsewhere in this prospectus.
+
+ 
+
+Unless
+otherwise expressly provided herein, all share and per share numbers set forth herein relating to our common stock reflects the
+Reverse Stock Split (defined below) and no exercise of (a) any warrants and/or options, (b) the representatives common stock purchase
+warrants and/or (c) the representatives over-allotment option.
+
+ 
+
+Company
+Overview
+
+ 
+
+Atlas Lithium Corporation ( Atlas Lithium, 
+ Brazil Minerals, the Company, we, us, or our ) is a U.S. mineral
+exploration and mining company with lithium projects and properties in other critical battery metals to power the Green Energy Revolution
+- nickel, rare earths, graphite, and titanium. Our current focus is on developing our hard-rock lithium project located in Minas
+Gerais state in Brazil at a well-known, premier pegmatitic district in Brazil. We intend to produce and sell lithium concentrate,
+a key ingredient for battery supply chain. Lithium is essential for batteries in electric vehicles and demand is expected to outstrip
+supply.
+
+ 
+
+As
+reported in our Form 10-Q for the period ended September 30, 2022, we have been approached, in an unsolicited manner, by two large
+companies seeking to secure lithium supply. Recently, one of such companies has provided us with a preliminary, written non-binding
+proposal for the right to acquire, at a reasonable discount to the then prevailing market prices, part of our planned production in
+exchange for providing capital towards the construction of our lithium concentration plant. There can be no assurance, however, that
+these discussions or proposals will result in any binding agreements.
+
+ 
+
+We are in the initial stages of planning to develop
+and own 100% of a lithium concentration facility capable of producing 150,000 tons of lithium concentrate annually. However, there can
+be no assurance that such a facility may ultimately come to fruition or, if developed, that the production capacity will equal our expectations.
+
+ 
+
+All
+of our mineral projects and properties are located in Brazil and, as of the date of this prospectus, our mineral rights portfolio for
+battery metals includes approximately 72,344 acres (293 km2) for lithium in 59 mineral rights, 54,950 acres
+for nickel (222 km2) in 15 mineral rights, 30,054 acres (122 km2) for rare earths in seven mineral rights,
+22,050 acres (89 km2) for titanium in seven mineral rights, and 13,766 acres (56 km2) for
+graphite in three mineral rights. We believe that we hold the largest portfolio of lithium mineral exploration properties in Brazil,
+a premier and well-established jurisdiction for hard-rock lithium. We also believe that we are among the largest holders by
+size and breadth in exploration projects for other critical and battery metals among publicly traded companies.
+
+ 
+
+We are
+primarily focused on advancing and developing our hard-rock lithium project located in the state of Minas Gerais, Brazil, where some
+of our high-potential mineral rights are adjacent to or near large lithium deposits that belong to a competitor, a Nasdaq listed company.
+Our Minas Gerais Lithium Project is our largest endeavor and consists of 52 mineral rights spread over 56,078 acres (227
+km2) and predominantly located within the Brazilian Eastern Pegmatitic Province
+which has been surveyed by the Brazilian Geological Survey and is known for the presence of hard rock formations known as pegmatites
+which contain lithium-bearing minerals such as spodumene and petalite. Generally, lithium derived from pegmatites is less costly to purify
+for uses in high technology applications than lithium obtained from brine. Such applications include the battery supply chain for electric
+vehicles ( EVs ), an area of expected high growth for the next several decades.
+
+ 
+
+We
+believe that we can materially increase our value by the acceleration of our exploratory work and quantification of our
+lithium mineralization. Our initial commercial goal is to be able to enter production of lithium-bearing concentrate, a product which is highly sought after in the battery supply chain for EVs.
+
+ 
+
+According
+to Benchmark Mineral Intelligence, demand for lithium-ion batteries is set to grow six-fold by 2032 as global automakers scale up production
+of EVs. And to meet the world s lithium requirements would require 74 new lithium mines with an average size of 45,000 tonnes by
+2035.
+
+ 
+
+We
+also have 100%-ownership of early-stage projects and properties in other minerals that are needed in the battery supply chain and high
+technology applications such as nickel, rare earths, graphite, and titanium. Our goal is to become the
+Mineral Resources Company for the Green Energy Revolution. We believe that the shift from fossil fuels to battery power will yield
+long-term opportunities for us not only in lithium but also in such other minerals.
+
+ 
+
+Additionally,
+we have 100%-ownership of several mining concessions for gold and diamonds. Historically, we have had revenues from mining and selling
+gold, diamonds, and industrial sand. Such endeavors have given us the critical management experience needed to take early-stage
+projects in Brazil from the exploration phase through successful licensing from regulators and to revenues. 
+
+ 
+
+As of the date of this
+prospectus, we also own 45.11% of the shares of common stock of Apollo Resources Corporation ( Apollo Resources ),
+a private company currently primarily focused on the development of its initial iron mine.
+
+ 
+
+As of the date of this
+prospectus, we also own approximately 28.72% of Jupiter Gold Corporation ( Jupiter Gold ), a company focused on the
+development of gold projects and of a quartzite mine, and whose common stock are quoted on the OTCQB under the symbol JUPGF. 
+The quartzite mine is fully permitted and is expected to start operations in early 2023.
+
+ 
+
+The results of operations
+from both Apollo Resources and Jupiter Gold are consolidated in our financial statements under accounting principles generally accepted
+in the United States ( U.S. GAAP ).
+
+ 
+
+Risk
+Factors
+
+ 
+
+Our
+business is subject to numerous risks and uncertainties, including those highlighted in the section titled Risk Factors, 
+that represent challenges that we face in connection with the successful implementation of our strategy. The occurrence of one or more
+of the events or circumstances described in the section titled Risk Factors, alone or in combination with other events
+or circumstances, may have an adverse effect on our business, cash flows, financial condition, and results of operations. Such risks
+include, but are not limited to:
+
+ 
+
+ 
+ 
+ 
+ Our
+ future performance is difficult to evaluate because we have a limited operating history.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ There
+ is substantial doubt about our ability to continue as a going concern.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ are an exploration stage company, and there is no guarantee that our properties will result in the commercial extraction of mineral
+ deposits.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Because
+ the probability of an individual prospect ever having reserves is not known, our properties may not contain any reserves, and any
+ funds spent on exploration and evaluation may be lost.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ face risks related to mining, exploration, and mine construction, if warranted, on our properties.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive cash flow from
+ our mining activities.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ depend on our ability to successfully access the capital and financial markets. Any inability to access the capital or financial
+ markets may limit our ability to fund our ongoing operations, execute our business plan or pursue investments that we may rely on
+ for future growth.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ quarterly and annual operating and financial results and our revenue are likely to fluctuate significantly in future periods.
+
+ 
+ 
+
+ 
+
+ 3
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ We
+ may be unable to find sources of funding if and when needed, resulting in the failure of our business.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ ability to manage growth will have an impact on our business, financial condition, and results of operations.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ depend upon Marc Fogassa, our Chief Executive Officer and Chairman.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ growth will require new personnel, which we will be required to recruit, hire, train and retain.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Certain
+ of our executive officers and directors may be in a position of conflict of interest.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ mineral projects will be subject to significant governmental regulations.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ will be required to obtain governmental permits in order to conduct development and mining operations, a process which is often costly
+ and time-consuming.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Compliance
+ with environmental regulations and litigation based on environmental regulations could require significant expenditures.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ operations are subject to extensive environmental laws and regulations.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Mineral
+ prices are subject to unpredictable fluctuations.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ ability to execute our business plan depends primarily on the continuation of a favorable mining environment in Brazil and our ability
+ to freely sell our minerals.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ The
+ perception of Brazil by the international community may affect us.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Exposure
+ to foreign exchange fluctuations and capital controls may adversely affect our costs, earnings and the value of some of our assets.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ common stock price may be volatile.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ do not intend to pay regular future dividends on our common stock and thus stockholders must look to appreciation of our common stock
+ to realize a gain on their investments.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ may seek to raise additional funds, finance acquisitions, or develop strategic relationships by issuing securities that would dilute
+ your ownership.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Our
+ Series A Convertible Preferred Stock has the effect of concentrating voting control over us in Marc Fogassa, our Chief Executive
+ Officer and Chairman.
+
+ 
+ 
+
+Corporate
+Information
+
+ 
+
+We
+were originally incorporated in the State of Nevada on December 15, 2011 under the name Flux Technologies, Corp. On January
+24, 2013, an amendment to our articles of incorporation was filed with the Nevada Secretary of State changing our name to Brazil
+Minerals, Inc. On September 26, 2022, an amendment to our articles of incorporation was filed with the Nevada Secretary of State
+changing our name to Atlas Lithium Corporation Our principal place of business is located at Rua Bahia, 2463, Suite 205,
+Belo Horizonte, Minas Gerais 30.160-012, Brazil. We also maintain an office at 433 North Camden Drive, Suite 810, Beverly Hills, CA 90210.
+Our telephone numbers are +55-31-3956-1109 (Brazil) and (833) 661-7900 (U.S.). Our website address is www.atlas-lithium.com. The
+information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information
+contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
+
+ 
+
+ Listing on a National Stock Exchange
+
+ 
+
+We
+have applied to list our common stock under the symbol ATLX on the Nasdaq Capital Market. No assurance can be given
+that our application will be approved, and we will not consummate this offering unless our common stock is approved for listing
+on the Nasdaq Capital Market.
+
+ 
+
+Controlled
+Company
+
+ 
+
+Marc
+Fogassa, our Chief Executive Officer and Chairman, by way of his ownership of our common stock and 100% of our Series A Stock currently
+controls 54.16% of the voting power of our capital stock and will continue to control 53.80% of the voting power of our capital
+stock upon completion of this offering, and we believe that we may be a controlled company, as such term is defined under
+the Nasdaq Listing Rules.
+
+ 
+
+Reverse Stock Split
+
+ 
+
+On
+December 20, 2022, we filed a Certificate of Amendment to our Articles of Incorporation (the Amendment ) to effect a reverse
+stock split of our issued and outstanding shares of common stock at a ratio of 1-for-750 (the Reverse Stock Split ).
+
+ 
+
+Following
+the Reverse Stock Split, each 750 shares of our issued and outstanding shares of common stock were automatically converted into one issued
+and outstanding share of common stock, without any change in par value per share. No fractional shares were issued as a result of the
+Reverse Stock Split and no cash or other consideration was paid. Instead, we issued one whole share of the post-split common stock to
+any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split. The Reverse Stock Split
+did not affect the number of shares of authorized stock. Our common stock began trading on a Reverse Stock Split-adjusted basis on December
+23, 2022 and was assigned a new temporary ticker symbol ATLXD for the 20 business days following the reverse
+stock split and on the 21st day, it will change back to ATLX. 
+
+ 
+
+The
+purpose of the Reverse Stock Split was to allow us to meet the stock price threshold of the listing requirements of a national securities
+exchange.
+
+ 
+
+Except
+for our historical financial statements, all option, share, and per share information in this prospectus gives effect to the Reverse
+Stock Split.
+
+ 
+
+ 4
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/ATXG_addentax_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ATXG_addentax_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..09f30df002a8897bb955a2b5a2ead869c78bb439
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/ATXG_addentax_prospectus_summary.txt
@@ -0,0 +1 @@
+II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Luohu District, Shenzhen City, China, on March 2, 2023. ADDENTAX GROUP CORP. /s/ Hong Zhida Hong Zhida CEO, President, Secretary and Director (Principal Executive Officer) SIGNATURES Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Hong Zhida CEO, President, Secretary and Director March 2, 2023 Hong Zhida (Principal Executive Officer) /s/ Huang Chao CFO and Treasurer March 2, 2023 Huang Chao (Principal Financial and Accounting Officer) /s/ Hong Zhiwang March 2, 2023 Hong Zhiwang Director /s/ Yu Jiaxin March 2, 2023 Yu Jiaxin Independent Director /s/ Alex P. Hamilton March 2, 2023 Alex P. Hamilton Independent Director /s/ Jiangping (Gary) Xiao March 2, 2023 Jiangping (Gary) Xiao Independent Director */s/ Hong Zhida Hong Zhida Attorney-in-Fact II-5
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/ATXI_avenue_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ATXI_avenue_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..da4c37111ba676eab05b6089d995db2e99d4caf7
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/ATXI_avenue_prospectus_summary.txt
@@ -0,0 +1 @@
+II-5 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Amendment No. 2 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on October 23, 2023. Avenue Therapeutics, Inc. By: /s/ Alexandra MacLean, M.D. Name: Alexandra MacLean, M.D. Title: Chief Executive Officer Pursuant to the requirements of the Securities Act, this Amendment No. 2 to Registration Statement has been signed by the following persons in the capacities and on the dated indicated. Signature Title Date /s/ Alexandra MacLean, M.D. Chief Executive Officer (Principal Executive Officer) October 23, 2023 Alexandra MacLean, M.D. * Chief Operating Officer and Interim Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer) October 23, 2023 David Jin * Chairman of the Board October 23, 2023 Jay Kranzler, M.D., Ph.D. * Director October 23, 2023 Faith Charles * Director October 23, 2023 Neil Herskowitz * Director October 23, 2023 Curtis Oltmans * Director October 23, 2023 Lindsay A. Rosenwald, M.D. By: /s/ Alexandra MacLean, M.D. Alexandra MacLean, M.D. Attorney-in-Fact II-6
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/BAERW_bridger_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/BAERW_bridger_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/BAERW_bridger_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/BEATW_heartbeam_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/BEATW_heartbeam_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/BEATW_heartbeam_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/BETRW_better_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/BETRW_better_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..32b7cd2ddee15c318fbfff617416bfc01a445822
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/BETRW_better_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights selected information from this prospectus and does not contain all of the information that is important to you. You should read this entire document and the other documents to which we refer before you decide to invest in our securities. Unless otherwise indicated or the context otherwise requires, references to the Company, Better Home & Finance , we, us, or our and similar other terms refer to Better before the Business Combination and Better Home & Finance and its consolidated subsidiaries after the Business Combination. About Better Home & Finance Better Home & Finance principally operates a digital-first homeownership company with services including mortgage financing, real estate services, title, and homeowners insurance. We have combined technology innovation and fresh thinking with a deep customer focus with the goal to revolutionize a homeownership industry. We started by redesigning the mortgage manufacturing process, and, since then, have built toward a broader vision of revolutionizing homeownership. Background As previously announced, Aurora, a Cayman Islands exempted company incorporated with limited liability, entered into an Agreement and Plan of Merger, dated as of May 10, 2021, as amended as of October 27, 2021, November 9, 2021, November 30, 2021, August 26, 2022, February 24, 2023 and June 23, 2023 (as amended, the Merger Agreement ) by and among Aurora, Better Holdco, Inc., a Delaware corporation, and Merger Sub. On August 21, 2023, as contemplated by the Merger Agreement, and as described in the section titled Domestication Proposal beginning on page 248 of the final prospectus and definitive proxy statement, dated July 27, 2023 (the Proxy Statement/Prospectus ), filed with the U.S. Securities and Exchange Commission (the SEC ), Aurora filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Aurora was transferred by way of continuation from the Cayman Islands and domesticated as a Delaware corporation (the Domestication ). Following the Domestication, on August 22, 2023 (the Closing Date ), as previously announced and as contemplated by the Merger Agreement, and as described in the section titled BCA Proposal beginning on page 198 of the Proxy Statement/Prospectus, Merger Sub merged with and into Better, with Better surviving the merger (the First Merger ) and Better merged with and into Aurora, with Aurora surviving the merger and changing its name to Better Home & Finance Holding Company (hereinafter referred to as Better Home & Finance or the Company ) (such merger, the Second Merger, and together with the First Merger and the Domestication, the Business Combination and the completion thereof, the Closing ). In connection with the consummation of the Business Combination, the Company issued an aggregate of 40,601,825 shares of Better Home & Finance Class A common stock, 574,407,420 shares of Better Home & Finance Class B common stock and 6,877,283 shares of Better Home & Finance Class C common stock. Each share of Better Home & Finance Class B common stock and Better Home & Finance Class C common stock may be converted to a share of Better Home & Finance Class A common stock at any time by the holder thereof and upon certain other transfers that are not permitted transfers provided by the Amended and Restated Charter. In addition, in connection with other transactions contemplated by the Merger Agreement and related documentation, including the conversion or exchange of certain bridge notes, the Company issued an aggregate of 41,700,000 shares of Better Home & Finance Class A common stock and 65,000,000 shares of Better Home & Finance Class C common stock. Better Home & Finance Class A common stock and Warrants are listed on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols BETR and BETRW. The Business Combination has been accounted for as a reverse recapitalization in accordance with GAAP, with no goodwill or other intangible assets recorded. Under this method of accounting, Aurora was treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Business Table of Contents Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. The net assets of Aurora were stated at historical cost, with no goodwill or other intangible assets recorded. The rights of holders of Better Home & Finance Class A common stock, Better Home & Finance Class B common stock and Better Home & Finance Class C common stock are governed by our Amended and Restated Charter, our Bylaws, and the DGCL. Corporate Information Better Home & Finance Holding Company is a Delaware corporation. Our principal executive offices are located at 3 World Trade Center, 175 Greenwich Street, 57th Floor, New York, NY 10007 and our telephone number at that address is (415) 523-8837. Our website is located at www.better.com. We do not incorporate the information contained on, or accessible through, our corporate website into this prospectus, and you should not consider it part of this prospectus. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website. Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or that do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is not an emerging growth company or is an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of Aurora s initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700.0 million as of the end of the prior fiscal year s second fiscal quarter and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References to emerging growth company have the meaning ascribed to it in the JOBS Act. We are also a smaller reporting company, as defined in the Exchange Act. Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company, which would allow us to continue taking advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. In addition, for so long as we continue to qualify as a non-accelerated filer, we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. Table of Contents Warrants Each Warrant entitles the holder thereof to purchase one share of Better Home & Finance Class A common stock at a price of $11.50 per share. We believe the likelihood that the holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of Better Home & Finance Class A common stock. If the trading price of Better Home & Finance Class A common stock is less than the exercise price thereof, we believe the holders are unlikely to exercise their Warrants. Conversely, the holders are more likely to exercise their Warrants the higher the price of Better Home & Finance Class A common stock is above the exercise price thereof. As of December 1, 2023, the closing price of Better Home & Finance Class A common stock as reported on Nasdaq was $0.453 per share, which is below the $11.50 exercise price of the Warrants. For so long as the Warrants remain out-of-the-money, we do not expect warrant holders to exercise their Warrants. See Risk Factors There is no guarantee that the exercise price of the Warrants will ever be less than the trading price of Better Home & Finance Class A Common Stock on Nasdaq, and they may expire worthless; and the terms of the Warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Warrants approve of such amendment. Table of Contents The Offering Issuer Better Home & Finance Holding Company (f/k/a/ Aurora Acquisition Corp.). Issuance of Better Home & Finance Class A common stock Shares of Better Home & Finance Class A common stock offered by us Up to an aggregate of 9,808,405 shares of Better Home & Finance Class A common stock, par value $0.0001 per share, which consists of (i) 6,075,047 shares of Better Home & Finance Class A common stock issuable upon exercise of Public Warrants and (ii) 3,733,358 shares of Better Home & Finance Class A common stock issuable upon exercise of Private Warrants. Shares of Better Home & Finance Class A common stock outstanding prior to exercise of Public Warrants and Private Warrants 359,001,627 shares as of the close of business on December 1, 2023. Shares of Better Home & Finance Class A common stock outstanding assuming exercise of all Public Warrants and Private Warrants 368,810,032 shares (based on total shares outstanding as of the close of business on December 1, 2023). Exercise price of Public Warrants and Private Warrants $11.50 per share, subject to adjust as described herein. Use of proceeds We will receive up to an aggregate of approximately $112.8 million from the exercise of the Public Warrants and the Private Warrants, assuming the exercise in full of all of the such warrants for cash. We expect to use the net proceeds from the exercise of such warrants for general corporate purposes. As of December 1, 2023, the closing price of Better Home & Finance Class A common stock as reported on Nasdaq was $0.453 per share, which is below the $11.50 exercise price of the Warrants. For so long as the Warrants remain out-of-the-money, we do not expect warrant holders to exercise their Warrants. See Use of Proceeds for further discussion. Table of Contents Offering and Resale of Better Home & Finance Class A common stock and Private Warrants Shares of Better Home & Finance Class A common stock offered by the Selling SecurityholdersUp to an aggregate of 418,173,409 shares of Better Home & Finance Class A common stock, par value $0.0001 per share, which consists of (i) 53,665,365 shares of Better Home & Finance Class A common stock, acquired by the Selling Securityholders at prices ranging from $0.00003 per share to $10.00 per share, (ii) 288,897,403 shares of Better Home & Finance Class A common stock issuable upon conversion of Better Home & Finance Class B common stock, par value $0.0001 per share, acquired by the Selling Securityholders at prices ranging from $0.00003 per share to $8.01 per share, (iii) 71,877,283 shares of Better Home & Finance Class A common stock issuable upon conversion of Better Home & Finance Class C common stock, par value $0.0001 per share, acquired by the Selling Securityholders at prices ranging from $8.01 per share to $10.00, and (iv) 3,733,358 shares of Better Home & Finance Class A common stock issuable upon exercise of Private Warrants, acquired by the Selling Securityholders at prices ranging from $0.86 per warrant to $1.50 per warrant. The effective purchase price is calculated, if securities were acquired from Aurora or by its affiliates in connection with the Aurora IPO or before the Closing, based on the transaction acquisition cost or, if securities were acquired by holders of Better capital stock prior to the Business Combination, based on the weighted-average purchase price of such Better capital stock on an as-exchanged basis. Private Warrants offered by the Selling Securityholders Up to 3,733,358 Private Warrants Shares of Better Home & Finance Class A common stock outstanding359,001,627 shares as of the close of business on December 1, 2023. Use of proceedsWe will not receive any proceeds from the sale of shares of Better Home & Finance Class A Common Stock or Private Warrants by the Selling Securityholders. Lock-up restrictions Certain of our stockholders are subject to certain restrictions on transfer until the termination of applicable lock-up periods. See Plan of Distribution Lock-up Restrictions for further discussion. Nasdaq ticker symbols BETR and BETRW for Better Home & Finance Class A common stock and Warrants, respectively. The following table includes information relating to the Better Home & Finance Class A common stock and Warrants offered hereby, including the price each selling securityholder paid for its securities and the potential profit relating to such securities. The following table is derived in part from our internal records and is for illustrative purposes only. The table should not be relied upon for any purpose outside of its illustrative nature. Name of Selling SecurityholderNumber of Offered SharesEffective Purchase Price per Offered Share or Warrant Potential Aggregate Profit of Offered Shares (1) Novator Capital Sponsor Ltd. Novator Exchange Agreement40,000,000$2.50* Sponsor Purchase Subscription Agreement1,700,000$10.00* Table of Contents Merger Agreement 3,471,946$0.004$1,558,904 Merger Agreement 636,240$9.785* Merger Agreement (PublicWarrants) 575,000$0.86* Merger Agreement (Private Warrants) 1,715,015$1.50* Unbound Holdco Ltd. Merger Agreement 1,159,375$0.004$520,559 Merger Agreement 1,000,000$9.785* Merger Agreement (Private Warrants) 1,143,343$1.50* Merger Agreement (Public Warrants) 250,000$0.86* Entities Affiliated with Activant Capital Group LLC 61,306,253$1.73* SVF Beaver II (DE) LLC Merger Agreement 55,188,435$8.01* Merger Agreement 6,877,283$8.01* Better Portfolio Holdings 1 LLC27,141,628$0.00003$12,294,343 LCG4 Best LP23,203,001$3.84* 1/0 Mortgage Investment LLC25,704,813$0.03$10,873,136 1/0 Real Estate LLC6,522,761$0.32$867,527 BHFHC Distribution Trust65,000,000$10.00* Arnaud Massenet Merger Agreement 1,242,188$0.004$557,742 Merger Agreement 150,000$9.785* Merger Agreement (Public Warrants) 37,500$0.86* Michael Edelstein124,219$0.004$55,774 Prabhu Narasimhan Merger Agreement 828,125$0.004$371,828 Merger Agreement 50,000$9.785* Merger Agreement 12,500$0.86* Sangeeta Desai124,219$0.004$55,774 Zachary Frankel3,176,553$0.00003$1,438,883 Caroline Harding2,500$10.28 per unit * Kevin Ryan527,961$1.66* Nicholas Calamari5,978,074$0.022$2,576,550 The Nicholas J Calamari Family Trust1,222,903$0.00003$553,938 Paula Tuffin246,515$0.20$62,368 Technology Stock Holding Master Trust/Series Tuffin 2021 Trust 822,125$0.01$364,201 Sigurgeir Jonsson5,973,526$0.32$794,479 The Sigurgeir Orn Jonsson 2020 Family Trust3,103,721$0.00003$1,405,893 The Anika G Austin Descendants Trust1,222,903$0.00003$553,938 Vishal Garg69,968,642$0.00003$31,693,696 Unnamed Selling Securityholder764,142$1.66* _______________ *Represents no potential profit per share or a potential loss per share based on illustrative market price. (1)The potential aggregate profits are calculated assuming that all shares of Better Home & Finance Class A common stock were sold at a price of $0.453 per share (the closing prices of Better Home & Finance Class A common stock on December 1, 2023). Shares underlying warrants are not reflected in the table above because the exercise price of $11.50 is greater than the closing price of Better Home & Finance Class A common stock on December 1, 2023. The trading price of Better Home & Finance Class A common stock may be different at the time a selling securityholder decides to sell its securities. Table of Contents
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/BOWN_bowen_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/BOWN_bowen_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..760019a4f546731975f61719ef24af2e36b4b6ea
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/BOWN_bowen_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary — Transfer of Cash to and from Our Post-Combination Organization If We Acquire a Company Based in China (Post-Business Combination)" and see
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/BTDR_bitdeer_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/BTDR_bitdeer_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8d864e052daf244b9e0e4d9132a2ef6c38e4031d
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/BTDR_bitdeer_prospectus_summary.txt
@@ -0,0 +1 @@
+SUMMARY OF THE PROSPECTUS 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CART_maplebear_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CART_maplebear_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CART_maplebear_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CBIH_cannabis_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CBIH_cannabis_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..94c4682a0521004a4d77ef2792546e6f0012f3ca
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CBIH_cannabis_prospectus_summary.txt
@@ -0,0 +1,198 @@
+PROSPECTUS SUMMARY
+
+ 
+
+This summary highlights information contained
+elsewhere in this Prospectus. Because this is only a summary, it does not contain all information that may be important to you. You should
+read the entire Prospectus and should consider, among other things, the matters set forth under "Risk Factors," "Management s Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the notes
+thereto appearing elsewhere in this Prospectus before making an investment decision. This Prospectus contains forward-looking statements
+and information relating to the Company. See "Cautionary Notes."
+
+ 
+
+The Company is based in Houston, Texas, and was
+established in 2003. For more detailed information respecting its corporate history, see "Description of Business
+– History." The address of our principal executive office is 6201 Bonhomme Road, Suite 466S, Houston, TX 77036, and our
+telephone number is (832) 606-7500. Its website is www.chnc-hdh.com. The information contained thereon is not intended to be incorporated
+into this Prospectus or the registration statement of which it is a part.
+
+ 
+
+We provide educational and other services to
+the cannabis industry (the "Pharmacology University Business") (see "Description of Business –
+Business – Pharmacology University Business") and clinical trial services to Sponsors and CROs and clinical trials
+that we conduct as a Sponsor (the "Alpha Research Business") (see "Description of Business –
+Business – Alpha Research Business") "Sponsor" means a person who takes responsibility for and initiates
+a clinical investigation of a drug or medical device, including an individual or pharmaceutical company, governmental agency,
+academic institution, private organization, or other organization. "CRO" means a person that assumes, as an independent
+contractor with a Sponsor, one or more of the obligations of a Sponsor, such as the design of a protocol, selection or monitoring of
+investigations, evaluation of reports, and preparation of materials to be submitted to the U.S. Food and Drug Administration (the
+"FDA").
+
+ 
+
+Implications of Being an Emerging Growth Company
+
+ 
+
+We are an "emerging growth company"
+as defined in the Jumpstart Our Business Startups Act (known as the "JOBS Act"). Under the JOBS Act, we may utilize reduced
+reporting requirements that are otherwise applicable to public companies, including delaying auditor attestation of internal control
+over financial reporting, providing only two years of audited financial statements and related Management s Discussion and Analysis
+of Financial Condition and Results of Operations in this Prospectus and the reports that we will file with the U.S. Securities and Exchange
+Commission (the "SEC"), including reduced executive compensation disclosures.
+
+ 
+
+We are permitted to remain an emerging growth
+company for up to five years from the date of the first sale in this offering. However, if certain events occur before the end of that
+period, including our becoming a "large accelerated filer," our annual gross revenue s exceeding $1.07 billion or our
+issuance of more than $1.0 billion of nonconvertible debt in any three-year period, we will cease to be an emerging growth company.
+
+ 
+
+We have elected to take advantage of certain
+of the reduced disclosure obligations in this Prospectus and the registration statement of which it is a part and may elect to take advantage
+of other reduced reporting requirements in future filings. In particular, in this Prospectus, we have provided only two years of audited
+financial statements and have not included all of the information relating to executive compensation that would be required if we were
+not an emerging growth company. As a result, the information that we provide to our stockholders may be different from that which might
+be received from public reporting companies that are not emerging growth companies. We have irrevocably elected to avail ourselves of
+the extended transition period for complying with new or revised accounting standards and therefore, we will be subject to the same new
+or revised accounting standards as private companies.
+
+ 
+
+ 
+
+ 
+
+ 4 
+
+ 
+
+ 
+
+ 
+
+Recent Developments
+
+ 
+
+The COVID-19 pandemic has harmed the Company.
+
+ 
+
+Early in 2020, the COVID-19 pandemic resulted
+in decreased business activity and restrictions on the conduct of businesses, including mandatory lockdowns. Because of these restrictions,
+all our classrooms and public venues were closed and other Pharmacology University Business activities that required face-to-face contact,
+such as its consulting services and franchising and marketing efforts, were sharply reduced or terminated. Among other things, the Pharmacology
+University Business closed its seminars in Ecuador and the Dominican Republic; ceased holding classes at the University of Tadeo in Bogota,
+Cartagena and Santa Marta, Colombia; and ceased all travel. The business conducted by the Alpha Research Business has also been adversely
+affected because several of the clinical studies in which it was participating were deferred, shortened or canceled. These restrictions
+have been reduced or eliminated in many jurisdictions, but if the pandemic resurges, they could be reimposed. We have not been able to
+resume classroom teaching and seminars, consulting services, franchising and marketing efforts and the Alpha Research Business has continued
+to be adversely impacted.
+
+ 
+
+As a result of the pandemic, we experienced substantial
+reductions in our revenues and our losses increased in our educational and clinical trial businesses. See "Management s Discussion and Analysis of Financial Condition and Results of Operations – Impact of the COVID-19 Pandemic." To protect
+our business from disruption caused by the COVID-19 pandemic and to enable our students to continue to be educated, we created online
+courses. We currently have over 100 online videos in English, Spanish, Portuguese, Italian and Arabic. We also commenced the use of Zoom
+meetings to hold virtual classes to teach students and be able to respond to their questions in real time. We believe that these measures
+have helped us to manage our business prudently during the pandemic; nevertheless, much of our business depends on personal contacts,
+and we have not been able to reduce the adverse effects of the pandemic s reducing or eliminating personal contact.
+
+ 
+
+Risk Factors Summary
+
+ 
+
+Our business is subject to many risks and uncertainties
+of which you should be aware before deciding whether to invest in Common Stock, in addition to general business risks. These risks are
+more fully described in the section titled "Risk Factors" immediately following this Prospectus Summary. These risks include,
+among others, the following:
+
+ 
+
+ 
+ 
+ 
+ The COVID-19 pandemic and the impact of actions to mitigate the COVID-19 pandemic have materially and adversely impacted and will continue materially and adversely to impact our business, results of operations and financial condition. In particular, our revenues have decreased and our losses have increased, in each case materially, since the onset of the pandemic.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ The Company expects to encounter significant challenges in recovering from the adverse effects of the COVID-19 pandemic and can give no assurances respecting its success in meeting them.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ The Company has incurred net losses each year since its inception
+and may not be able to achieve profitability. It has incurred net losses of 1,032,579, $885,171 and $159,308 for the fiscal years ended
+May 31, 2023, May 31, 2022, and May 31, 2021, respectively. Its accumulated deficit for the fiscal years ended May 31, 2023, May 31,
+2022, and May 31, 2021, were 4,682,736, $3,650,156 and $2,764,985, respectively. 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ The Alpha Research Business is conducted in a highly competitive industry and may not be able to compete successfully with its current or future competitors.
+
+ 
+
+ 
+
+ 
+
+ 5 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Both the Pharmacology University Business and the Alpha Research Business are subject to a wide variety of complex, evolving, and, with respect to the Pharmacology University Business, sometimes inconsistent and ambiguous laws and regulations that may adversely impact their operations and could cause the Company to incur significant liabilities including fines and criminal penalties, which could have a material adverse effect on its business, results of operations, and financial condition.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ The Alpha Research Business is conducted in a highly competitive industry and may not be able to compete successfully with its current or future competitors.
+
+ 
+ 
+ 
+ 
+
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+ 
+ 
+ Following
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diff --git a/parsed_sections/prospectus_summary/2023/CETI_cyber_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CETI_cyber_prospectus_summary.txt
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@@ -0,0 +1 @@
+This prospectus is not an offer to sell any securities other than the shares of common stock offered hereby. This prospectus is not an offer to sell securities in any circumstances in which such an offer is unlawful. We have not authorized anyone, including any salesperson or broker, to give oral or written information about this offering, the Company, or the shares of common stock offered hereby that is different from the information included in this prospectus. You should not assume that the information in this prospectus, or any supplement to this prospectus, is accurate at any date other than the date indicated on the cover page of this prospectus or any supplement to it. 1 ABOUT THIS PROSPECTUS You should rely only on the information contained in this prospectus or contained in any prospectus supplement or free writing prospectus filed with the Securities and Exchange Commission (the SEC ). Neither we nor the selling stockholders have authorized anyone to provide you with additional information or information different from that contained in this prospectus filed with the SEC. The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date. As used in this prospectus, unless otherwise designated, the terms we, us, our, the Company, Cyber and our Company refer to Cyber Enviro- Tech, Inc., a Wyoming corporation, and its subsidiaries. CYBER ENVIRO-TECH, INC., the CYBER logo and other trademarks or service marks of CYBER appearing in this prospectus are the property of CYBER or its subsidiaries. Trade names, trademarks and service marks of other companies appearing in this prospectus are the property of their respective holders. IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY We are an emerging growth company, as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable SEC rules. We expect that we will remain an emerging growth company for the foreseeable future but cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company on or before the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include: being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced Management s Discussion and Analysis of Financial Condition and Results of Operations disclosure; not being required to comply with the requirement of auditor attestation of our internal controls over financial reporting; not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation; and not being required to hold a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the dates on which adoption of such standards is required for other public reporting companies. We are also a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies. We will remain a smaller reporting company until the end of the fiscal year in which (i) we have a public common equity float of more than $250 million, or (ii) we have annual revenues for the most recently completed fiscal year of more than $100 million and a public common equity float or a public float of more than $700 million. We also would not be eligible for status as a smaller reporting company if we become an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting company. We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests. 2 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This registration statement and the documents that are incorporated herein by reference contain certain forward-looking statements within the meaning of United States securities laws, including the Private Securities Limitation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts and may be identified by the use of words including, but not limited to the following; may, believe, will, expect, project, estimate, anticipate, plan, continue, or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. These forward-looking statements are based on the Company s current plans and expectations and are subject to a number of risks, uncertainties and other factors which could significantly affect current plans and expectations and our future financial condition and results. These factors, which could cause actual results, performance and achievements to differ materially from those anticipated. You should read this prospectus completely and with the understanding that actual future results may materially differ from expectations set forth in forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof, when evaluating the information presented in this registration statement or our other disclosures because current plans, anticipated actions, and future financial conditions and results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. We have not undertaken any obligation to publicly update or revise any forward-looking statements. All of our forward-looking statements speak only as of the date of the document in which they are made or, if a date is specified, as of such date. Subject to mandatory requirements of applicable law, we disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in expectations or any changes in events, conditions, circumstances or information on which the forward-looking statement is based. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the risk factors set forth in the section entitled Risk Factors in this prospectus. 3 PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including Risk Factors , Management s Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements, before making an investment decision. In this Prospectus, the terms Cyber Enviro-Tech, Inc. Company, we, us and our refer to Cyber Enviro-Tech, Inc. Overview We are a for-profit company and electing a fiscal year end of December 31. We were incorporated in the State of Wyoming in April of 1992 under the name of Biolectronics, Corp. Bio-Life Systems, Inc. until November 2001 Educational Services International, Inc. until November 2009 WindPower Innovations, Inc. until January 2014 NexGen Holdings Corp. until April 30, 2021 Cyber Enviro-Tech, Inc. current name Cyber Enviro-Tech, Inc. has a limited history of operations. The Company is an emerging growth company under the Jumpstart Our Business Startups Act. Our principal executive office is located at Cyber Enviro-Tech, Inc., 6991 E. Camelback Road, Suite D-300, Scottsdale, Arizona 85251 Our telephone number is 866 687-6856. Our Internet site is located at: www.cyberenviro.tech. We maintain our statutory registered agent's office at Registered Agents Inc. 30 N Gould St Ste R, Sheridan, WY 82801 USA Telephone Number. (307) 200-2803 GENERAL INTRODUCTION CYBER ENVIRO-TECH, INC. ( CETI ) is a water technology Company focusing on the remediation of contaminated industrial wastewater with an initial emphasis on the oil & gas industry. Our water filtration and alternative energy systems will have neural sensors, controls and networks - all connected to a cellular device. The Company has aggregated technologies to produce a water filtration system. CETI will be outsourcing the production of its water filtration systems. However, the Company intends to generate revenues from its retail sales net margins. At this time CETI has not entered into any outsourcing agreements with third parties. Mission Statement - To apply Oil and Water Technologies to efficiently and effectively pump oil and clean contaminated industrial wastewater. Water Filtration Technology - The Companies wastewater filtration technologies will enable them to make water usage & consumption safer, more efficient and less expensive. We plan to accomplish this by integrating into each water filtration system simplified controls, machine learning, digital automation, Artificial Intelligence, Online - Realtime Monitoring Systems, Closed Loop Controls, United Nations SDG6 Protocols, Electro Dialysis, Nanofiltration, Micro cavitation, Improved Selectivity Removal, Integrated SCADA Direct to EPA and creative online monitoring to insure and maintain water quality remotely in real-time. Oil Well Downhole Pumps, Sensors and Related Technologies in our Pilot Project In our initial water filtration project, we are using our technical expertise to not only filter water but also to increase the production capacity of stripper wells (oil wells producing less than 15 barrels a day). The Company uses a submersible pump technology to eliminate old sucker rod technology which could reduce downtime repairs and possibly increase revenue. The submersible downhole pumps can pump significantly more fluid in the same period of time than the old sucker rod technology and removes the eyesore of these pump jacks. 4 CETI also uses downhole monitoring through multiple down hole sensors. This is leveraged by being able to control hundreds of wells simultaneously and remotely through a neuro network on a cell phone or other electronic devices CETI wells operate off of a solar platform and ultimately by taking methane gas trapped in water and extracting the gas to use for power. Combined, this will enable CETI to reduce power which would result in overall lower production costs. Target Markets - Our target markets include some of the largest water contamination industries in the world which include the oil & gas industry. When funds permit, the company will review mining, agriculture, meat packing, dairy farms & feedlots and rural municipalities for the use of its water filtration system. Initial Target Market CETI s board has identified the oil & gas industry as its initial target market for rollout and execution of the Companies technologies. The reason for this is 3-fold: 1) The high level of contaminants found in oil production wastewater which will validate the capabilities of CETI s water filtration technologies. 2) The recurring revenue generated monthly to the Company from producing oil wells, and 3) The substantial increase in the price of oil. CETI s water filtration technology will assist both the Railroad Commission of Texas (RRC) and EPA to manage the 2021 regulatory EPA mandates for the injection of contaminated oil well water back into the ground. This could potentially reduce the water sourcing needed to clean the contaminated water. How The Water Filtration Industry and The Oil & Gas Industry are Related? High Water Usage: For every barrel of oil there is between 3 to 8 barrels of water produced out of the well. This is expected to increase up to 25 to 1 by 2025. Highly Contaminated Well Water: Oil well water typically contains extremely high levels of brine, Barium and Strontium which contains radioactive isotopes among many other lethal chemicals. Laws enacted in 2021: Recently established laws mandated by the Texas Railroad Commission and the EPA require contaminated oil well water to be cleaned before injecting it back into the ground. Costly To Truck Water: The alternative of trucking the contaminated water out of the field to be cleaned and trucking clean water back to the field can add significant expense to the cost of production. Fluid Dynamics: All fluids extracted downhole from a well must be replaced under Texas law. Additionally, the water injected back into the ground is what maintains field pressure for continued production. For its Pilot Project, CETI has acquired the oil & gas mineral rights to the Alvey Oil Field (a 479-acre Pilot oil field located in West Texas and is the registered operator of record with the Railroad Commission of Texas. The purpose for this Pilot oil field is to demonstrate CETI s oil & gas water filtration system, downhole pump and related technologies and to create recurring revenue to ensure Company overhead, operational costs, profit and investor return are covered on an ongoing basis. Revenue Model CETI has identified 5 revenue streams to the company within the oil & gas industry which are as follows: 1) CETI Retains Ownership of Producing Assets CETI has acquired the mineral right to a 479-acre oil field in West Texas. Not only will CETI benefit from the recurring revenue produced from said wells, but has the ability to add an additional 250 new wells. An independent geological report estimated recoverable inground reserves between 44.8MM to 57.6MM barrels of oil. 2) Income Sharing with Industry Field Operator Partners CETI intends to incorporate its downhole pump technologies with other small and medium oil field Operators. All increases in production and savings from lower lift costs resulting from our technologies will be split on an estimated 80% CETI 20% Operator basis. 5 3) Equipment Service Agreements (SLA s) CETI will enter into an SLA to service every water filtration system sold. This will create an additional revenue stream to the company and enable it to ensure the longevity, productivity and stability of each system sold and operating in the field. 4) Sales of Water Filtration Systems CETI will be outsourcing the production of its water filtration systems. However, the Company intends to generate revenues from its retail sales net margins. At this time CETI has not entered into any outsourcing agreements with third parties. 5) Equipment Leasing Ultimately, CETI will incorporate an in-house/private label equipment leasing program. This will create recurring revenue to the company, control of its technology, and ultimately create an asset base to the Company when the equipment comes off lease. Independent Auditor Explanatory Paragraph CETI s independent auditors have added an explanatory paragraph to their report of our audited financial statements for the calendar year 2022, stating that our net operating loss of $481,708, minimal revenues and dependence on our ability to raise additional capital to continue our business, raise substantial doubt about our ability to continue as a going concern. For the nine months ending September 30, 2023 the net loss from operations was $2,298,654 and minimal sales so there still is substantial doubt about our ability to continue as a going concern. Our financial statements and their explanatory notes included as part of this prospectus do not include any adjustments that might result from the outcome of this uncertainty. There is no guarantee that we will be able to raise funds through stock sales, debt instruments, or private financing. While we are pursuing a number of financing avenues, currently we have no agreements in place to raise money through debt instruments or private financing. If we fail to obtain additional financing, we may be forced to cease our planned business operations altogether. There is no assurance that the Company will be able to obtain any bank loans or private financing. We expect to continue to incur losses for at least the next 6 months since we expect that the revenue we generate, is insufficient to cover our expenses. Our current cash levels can carry us for 3 months or more but we do not have sufficient cash or cash equivalents to execute our plan of operations during the period of anticipated losses. While we are close to producing more revenue in our Pilot oil field project, we will need to obtain additional financing through equity security sales, debt instruments or private financing, to conduct our day-to-day operations, and to fully execute our business plan. We plan to raise the capital necessary to fund our business through the sale of equity securities, debt securities, debt instruments or private financing. (See MD&A section later in this document). DESCRIPTION OF PROPERTY Our corporate office is located at 6991 E. Camelback Road, Suite D-300, Scottsdale, Arizona 85251. We lease office space from an Executive office leasing company (Regis) in which we have access to private offices, conference rooms, training rooms and other corporate facilities on an as needed basis. There are currently no proposed programs for renovation, improvement or development of the facility currently in use. The company pays $125 a month on a month-to-month lease. PRINCIPAL OPERATIONS AND PRODUCTS OF THE COMPANY In the General Introduction above, it covered much of our principal operations and current products. However, to provide a brief summary: CETI is an oil and water technology company that designs water purification solutions for commercial applications and industries. CETI has aggregated technologies to produce water filtration system that can clean contaminated industrial wastewater. Pilot Project is in the Alvey Oil Field in West Texas. We are our own first client in that we are the operator of record and leaseholder of an oil field to demonstrate both our water filtration technology as well as our unique oil production processes and related technologies. Our principal purpose is to engage in environmentally friendly projects involving commercial water filtration and our initial project is in the oil industry, a heavy user of contaminated water. 6 RISK FACTORS The Company's financial condition, business, operations and prospects involve a high degree of risk. You are urged to carefully read and consider the risks and uncertainties beginning on page 9 of this prospectus entitled Risk Factors as well as the other information in this report before deciding to invest in our Company. All known materials risks are discussed in the Risk Factors section of this prospectus. If any of the risks beginning on page 9 of this Prospectus entitled Risk Factors are realized, our business, operating results and financial condition could be harmed and the value of our stock could go down. This means that our stockholders could lose all or a part of their investment THE OFFERING We have 125,818,142 shares of common stock issued and outstanding as of November 27, 2023. Through this offering we will register 8,397,721 shares held by existing shareholders (Selling Stockholders). We will not receive any of the proceeds from the 8,397,721 shares held by Selling Stockholders. Selling Stockholders Common stock offered by Selling Stockholders 8,397,721 shares of common stock. This number represents approximately 7% of our current outstanding common stock (1). Common stock outstanding before the offering (1) 125,818,142 shares of common stock as of November 27, 2023. Terms of the Offering The present Selling Security Holders will determine when and how they will sell the common stock offered in this prospectus. Use of proceeds, existing Security Holders Cyber Enviro Tech will not receive any of the proceeds of the offering from the existing Security Holders. The Selling Security Holders will receive all of the proceeds. Plan of Distribution The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriter, broker-dealers or agents. Registration of the common stock covered by this prospectus does not mean, however , that such shares necessarily will be offered or sold. See Plan of Distribution. Risk Factors The Common Stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See Risk Factors beginning on page 9. (1) Based on 125,818,142 shares of common stock outstanding as of November 27, 2023. This prospectus relates to the sale of up to 8,397,721 shares of our common stock by the selling shareholders identified in the section of this prospectus entitled Selling Stockholders. The number of common shares offered by this prospectus represents up to approximately 7% of the total common stock outstanding before the offering. We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future. The Company has no equity compensation plans and individual compensation arrangements except as noted in section Market for Common Equity and Related Shareholder Matters and does not intend to enter into any additional equity compensation plans and individual compensation arrangements in the future. Information regarding the Selling Stockholders (8,397,721 shares), the common shares being offered to sell under this prospectus, and the times and manner in which they may offer and sell those shares, is provided in the sections of this prospectus entitled "Selling Stockholders" and "Plan of Distribution." CETI will not receive any of the proceeds from the sale of the (22) Selling Stockholders 8,397,721 shares. The registration of common shares pursuant to this prospectus does not necessarily mean that any of those shares will ultimately be offered or sold by the Selling Stockholders. 7
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary highlights some of the information in, or incorporated by reference into, this prospectus and may not contain all of the information that may be important to you. Before deciding whether to invest in Senior Demand Notes, you should carefully read this entire prospectus and any applicable prospectus supplement, and the information that is incorporated by reference herein and therein. 1st FRANKLIN FINANCIAL CORPORATION 1st Franklin Financial Corporation has been engaged in the consumer finance business since 1941, particularly in making consumer loans to individuals in relatively small amounts for short periods of time. Other lending activities include the purchase of sales finance contracts from dealers and the making of first and second mortgage loans on real estate to homeowners. As of March 31, 2023, our business was operated through a network of 347 branch offices located in Alabama, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee, Texas and Virginia. We fund our loans through a combination of the issuance of short and longer-term debt securities, including our Senior Demand Notes and Variable Rate Subordinated Debentures, as well as with borrowings from time to time under our revolving credit facility. Our credit facility provides for secured borrowings of up to $230.0 million, or a lesser amount as determined based on our then-applicable borrowing base (as defined in our credit agreement). As of March 31, 2023, we had $149.4 million in availability under our credit facility. Borrowings against the credit facility at March 31, 2023 were $80.5 million. This credit facility matures on February 28, 2025, unless extended. We also offer optional credit insurance coverage to our customers when making a loan. This coverage may include credit life insurance, credit accident and health insurance, and/or credit property insurance. Customers may request credit life insurance coverage to help assure any outstanding loan balance is repaid if the customer dies before the loan is repaid, or they may request credit accident and health coverage to help continue loan payments if the customer becomes sick or disabled for an extended period of time. Customers may also choose credit property coverage to protect the value of loan collateral against damage, theft or destruction. We write these various insurance products as an agent for a non-affiliated insurance company. Under various agreements, our wholly-owned insurance subsidiaries reinsure the insurance coverage purchased by our customers and written on behalf of this non-affiliated insurance company. 1st FRANKLIN FINANCIAL CORPORATION IS NOT A BANK. THE SENIOR DEMAND NOTES ARE NOT BANK DEPOSITS OR SIMILAR OBLIGATIONS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE SECURITIES INVESTOR PROTECTION CORPORATION OR ANY OTHER FEDERAL OR STATE AGENCY. Our principal executive office is located at 135 East Tugalo Street, Toccoa, Georgia 30577, and our phone number at that address is (706) 886-7571 or (800) 282-0709. If an emerging growth company, indicated 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 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 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. 1ST FRANKLIN FINANCIAL CORPORATION $900,000,000 SENIOR DEMAND NOTES _________________________________________________ 1st Franklin Financial Corporation (the "Company" or "1st Franklin") is offering to sell Senior Demand Notes on a continuous basis. The Senior Demand Notes will have the following principal terms and features: General: The Senior Demand Notes will be senior, unsecured obligations of the Company and will be issued under an Indenture, as amended, between us and U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as Trustee. Principal amount: The principal amount of each Senior Demand Note held by an investor at any time will be equal to all amounts invested in such Senior Demand Note, together with accrued and unpaid interest, less redemptions. Denominations: Senior Demand Notes will be issued and sold in initial denominations of $25.00 or more, and in any amounts thereafter. Redemption: Senior Demand Notes will be payable or redeemable at any time upon request. We will honor partial redemption requests for redemption so long as the remaining outstanding balance is at least $1.00. In certain instances, a holder of Senior Demand Notes will be able to redeem all or a part of the holder's Senior Demand Notes by writing drafts against such balances. Interest rate: The interest rate payable on Senior Demand Notes will be a variable rate, compounded daily, and will depend upon a holder s then-current daily balance of Senior Demand Notes. We may establish, in our discretion, separate interest rates for Senior Demand Notes with daily balances from $1.00 to $2,499.99; $2,500.00 to $9,999.99; $10,000.00 to $49,999.99; $50,000.00 to $99,999.99; and $100,000.00 and over. When an interest rate is established for a range of balances, it will become effective for and applied to all Senior Demand Notes with a current daily balance within that range, whether existing or newly issued. These interest rates may be the same or different for each range of balances, and we may increase or decrease the interest rate for any range independently of the others without notice after the date of investment. A holder of Senior Demand Notes will not be expressly notified of changes in any applicable interest rate; then-current interest rates will be available by calling or visiting our executive offices, and on our website. Maturity: The Senior Demand Notes will have no stated maturity. They will be payable in whole or in part at any time upon the request of a holder, and will be callable by the Company upon written notice at any time without premium. We will publish the most recently determined and then applicable interest rate for each balance range in a newspaper of general circulation in Toccoa, Georgia, the location of the Company s principal place of business, and on our web site at http://www.1ffc.com. The information on our website is not a part of, or incorporated by reference into, this prospectus. You can also obtain a list of the most recently determined interest rates by calling or visiting our executive offices in Toccoa, Georgia. A prospectus supplement setting forth the most recently determined interest rates will be filed with the SEC, as appropriate. We are offering the Senior Demand Notes on a continuous basis, until such time as all of the Senior Demand Notes being offered hereunder have been sold, or until the registration statement relating hereto ceases to be effective with the SEC. The Senior Demand Notes will be offered directly to the public by us, without an underwriter. We cannot assure you that all or any portion of the Senior Demand Notes we are offering will be sold. We do not have to sell any minimum amount of Senior Demand Notes to accept and use the proceeds of this offering. Proceeds from the sale of the Senior Demand Notes will be placed in our general treasury when received. We have not made any arrangement to place any of the proceeds from this offering in an escrow, trust or similar account. Therefore, you cannot be guaranteed of the return of your investment. The Senior Demand Notes are not and will not be listed on any securities exchange and there is no and will be no public trading market for the Senior Demand Notes. We have the right to reject any subscription for Senior Demand Notes, in whole or in part, for any reason. You should carefully read this prospectus and any applicable prospectus supplement, including the information incorporated by reference, before you decide whether to invest in Senior Demand Notes. Investing in Senior Demand Notes involves risks. See Risk Factors beginning on page 5 for a description of these risks. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Senior Demand Notes, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. 1st FRANKLIN FINANCIAL CORPORATION IS NOT A BANK. THE SENIOR DEMAND NOTES ARE NOT BANK DEPOSITS OR SIMILAR OBLIGATIONS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE SECURITIES INVESTOR PROTECTION CORPORATION OR ANY OTHER FEDERAL OR STATE AGENCY. The Trustee has not provided or approved any information in this prospectus, takes no responsibility for any information contained in this prospectus and makes no representations as to the contents of this prospectus. Price to Public Underwriting Discounts and Commissions (1) Proceeds to Company (2) Per Senior Demand Note 100% None 100% Total $900,000,000 None $900,000,000 (1) The Senior Demand Notes are not being offered or sold pursuant to any underwriting or similar agreement, and no commissions or other remuneration will be paid in connection with their sale. The Senior Demand Notes will be sold at face value. (2) Before deduction of our expenses, estimated at $158,826. THE DATE OF THIS PROSPECTUS IS ____ __, 2023 You should rely only on the information contained or incorporated by reference in this prospectus and any applicable prospectus supplement. We have not authorized anyone to provide you with any different information. You should not assume that the information contained or incorporated by reference in this prospectus or any prospectus supplement is accurate as of any date other than as of the date of this prospectus, the applicable prospectus supplement or the date the documents incorporated by reference were filed with the SEC. We are offering to sell, and seeking offers to buy, the securities registered by this prospectus only in jurisdictions where these offers and sales are permitted. TABLE OF CONTENTS PROSPECTUS SUMMARY 3
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing in our securities. You should carefully read the entire prospectus, including Risk Factors as well as the documents that we incorporate by reference into this prospectus, including our financial statements and notes thereto, before making an investment decision. Corporate Overview We are a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of disease. We filed a Type II Drug Master File with the U.S. Food and Drug Administration ( FDA ) in 2014 for our lead drug candidate, Trappsol Cyclo (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease ( NPC ). NPC is a rare and fatal cholesterol metabolism disease that impacts the brain, lungs, liver, spleen, and other organs. In 2015, we launched an International Clinical Program for Trappsol Cyclo as a treatment for NPC. In 2016, we filed an Investigational New Drug application ( IND ) with the FDA, which described our Phase I clinical plans for a randomized, double blind, parallel group study at a single clinical site in the U.S. The Phase I study evaluated the safety of Trappsol Cyclo along with markers of cholesterol metabolism and markers of NPC during a 14-week treatment period of intravenous administration of Trappsol Cyclo every two weeks to participants 18 years of age and older. The IND was approved by the FDA in September 2016, and in January 2017 the FDA granted Fast Track designation to Trappsol Cyclo for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 we announced Top Line data showing a favorable safety and tolerability profile for Trappsol Cyclo in this study. We have also completed a Phase I/II clinical study approved by several European regulatory bodies, including those in the United Kingdom, Sweden and Italy, and in Israel. The Phase I/II study evaluated the safety, tolerability and efficacy of Trappsol Cyclo through a range of clinical outcomes, including neurologic, respiratory, and measurements of cholesterol metabolism and markers of NPC. Consistent with the U.S. study, the European/Israel study administered Trappsol Cyclo intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses). The first patient was dosed in this study in July 2017, and in March of 2021 we announced that 100% of patients who completed the trial improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale. Additionally, in February 2020 we had a face-to-face Type C meeting with the FDA with respect to the initiation of our pivotal Phase III clinical trial of Trappsol Cyclo based on the clinical data obtained to date. At that meeting, we also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol Cyclo . A similar request was submitted to the European Medicines Agency ( EMA ) in February 2020, seeking scientific advice and protocol assistance from the EMA for proceeding with a Phase III clinical trial in Europe. In October 2020 we received a Study May Proceed notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021 we commenced enrollment in TransportNPC, a pivotal Phase II study of Trappsol Cyclo for the treatment of NPC. Preliminary data from our clinical studies suggest that Trappsol Cyclo releases cholesterol from cells, crosses the blood-brain-barrier in individuals suffering from NPC, and results in neurological and neurocognitive benefits and other clinical improvements in NPC patients. The full significance of these findings will be determined as part of the final analysis of these clinical trials. On May 17, 2010, the FDA designated Trappsol Cyclo as an orphan drug for the treatment of NPC, which would provide us with the exclusive right to sell Trappsol Cyclo for the treatment of NPC for seven years following FDA drug approval. In April 2015, we also obtained Orphan Drug Designation for Trappsol Cyclo in Europe, which will provide us with 10 years of market exclusivity following regulatory approval, which period will be extended to 12 years upon acceptance by the EMA s Pediatric Committee of our pediatric investigation plan (PIP) demonstrating that Trappsol Cyclo addresses the pediatric population. On January 12, 2017, we received Fast Track Designation from the FDA, and on December 1, 2017, the FDA designated NPC a Rare Pediatric Disease. We are also exploring the use of cyclodextrins in the treatment of Alzheimer s disease. In January 2018, the FDA authorized a single patient IND expanded access program using Trappsol Cyclo for the treatment of Alzheimer s disease. After 18 months of treatment in this geriatric patient with late-onset disease, the disease was stabilized and the drug was well tolerated. The patient also exhibited signs of improvement with less volatility and shorter latency in word-finding. We prepared a synopsis for an early stage protocol using Trappsol Cyclo intravenously to treat Alzheimer s disease that was presented to the FDA in January of 2021. We received feedback from the FDA on this synopsis in April 2021 and incorporated the feedback into an IND for a Phase II study for the treatment of Alzheimer s disease with of Trappsol Cyclo that we submitted to the FDA in November 2021. In December of 2021, we received IND clearance from the FDA, allowing us to proceed with our Phase II study of Trappsol Cyclo for the treatment of Alzheimer s disease. We expect to begin enrollment in this study during 2022. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 We filed an international patent application in October 2019 under the Patent Cooperation Treaty directed to the treatment of Alzheimer s disease with cyclodextrins, and we are pursuing national and regional stage applications based on this international application. The terms of any patents resulting from these national or regional stage applications would be expected to expire in 2039 if all the requisite maintenance fees are paid. We also continue to operate our legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the treatment of disease from a business that had been primarily reselling basic cyclodextrin products. Risks Associated With our Business Our ability to execute our business strategy is subject to numerous risks, as more fully described in the section captioned Risk Factors immediately following this prospectus summary. You should read these risks before you invest in our securities. In particular, risks associated with our business include, but are not limited to, the following: We have suffered recent losses and our future profitability is uncertain. We need additional capital to fund our operations as planned. We have not received approval for any drug candidate for commercial sale and, as a result, we have never generated any revenue from the sale of biopharmaceutical products, and expect to continue to incur significant financial losses in the future, which makes it difficult to assess our future viability. We are largely dependent upon the success of our Trappsol Cyclo product, which may never receive regulatory approval. Even if Trappsol Cyclo receives regulatory approval, we may not be successful in our commercialization efforts and Trappsol Cyclo may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success. The results of our clinical trials may not support our product claims or may result in the discovery of adverse side effects. Clinical trials involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. Later discovery of previously unknown problems could limit our ability to market or sell Trappsol Cyclo , even if it is initially approved, and can expose us to product liability claims. We rely in part on third parties for research and clinical trials for products using Trappsol Cyclo . We currently have no marketing and sales organization for our pharmaceutical candidates and may have to invest significant resources to develop these capabilities. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to generate product revenue. We rely upon third parties for the manufacture of Trappsol Cyclo and are dependent on their quality and effectiveness. We face competition from well-funded companies to treat NPC. The rights we rely upon to protect our unpatented trade secrets may be inadequate. We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue, that patents based on our patent applications will not be challenged and rendered invalid and/or unenforceable, or that third parties will not find ways to circumvent our patent rights or claim co-ownership thereof. The pharmaceutical business is subject to increasing government price controls and other restrictions on pricing, reimbursement and access to drugs, which could adversely affect our future revenues and profitability. We are dependent on our executive officers, and we may not be able to pursue our current business strategy effectively if we lose them. Recent Registered Direct Offering and Concurrent Private Placement On January 3, 2023, we sold to the selling stockholder in a registered direct offering 930,000 shares of our common stock at a purchase price per share of $1.61, and pre-funded warrants to purchase up to an aggregate of 1,678,696 shares of common stock at a purchase price of $1.6099 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.0001 per share and remain exercisable until exercised in full. Amendment No. 1 to Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CYCLO THERAPEUTICS, INC. In a concurrent private placement, we also issued to the selling stockholder Series A-1 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of five years from the date of issuance, and Series A-2 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of three years from the date of issuance. This prospectus relates to the shares of common stock that may be acquired by the selling stockholder upon exercise of the Series A-1 warrants and Series A-2 warrants issued in that private placement (the Warrants ). H.C. Wainwright & Co., LLC acted as our exclusive placement agent in connection with the registered direct offering and concurrent private placement. We paid the placement agent a cash fee equal to 7.5% of the gross proceeds of the offering, a management fee equal to 1.0% of the gross proceeds of the offering, and reimbursed the placement agent for its non-accountable expenses in the amount of $35,000, for fees and expenses of its legal counsel, for other out-of-pocket expenses in the amount of $50,000, and for its clearing expenses in the amount of $15,950. We also issued to designees of the placement agent five-year warrants to purchase an aggregate of 156,522 shares of our common stock at an exercise price of $2.0125 per share. Corporate and other Information We were organized as a Florida corporation on August 9, 1990, with operations beginning in July 1992. In conjunction with a restructuring in 2000, we changed our name from Cyclodextrin Technologies Development, Inc. to CTD Holdings, Inc. We changed our name to Cyclo Therapeutics, Inc. in September 2019 to better reflect our current business, and on November 6, 2020, we reincorporated from the State of Florida to the State of Nevada. Our principal offices are located at 6714 NW 16th Street, Suite B, Gainesville, FL 32653, and our telephone number is (386) 418-8060. We maintain a website at www.cyclotherapeutics.com. Information contained on our website does not constitute part of this prospectus. We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our shares of common stock held by non-affiliates does not equal or exceed $250 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100 million during such completed fiscal year and the market value of our shares of common stock held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may also make it difficult to compare our financial statements with other public companies. Available Information Because we are subject to the information and reporting requirements of the Exchange Act, we file or furnish, as applicable, annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that website is www.sec.gov. We make available on our website at www.cyclotherapeutics.com, free of charge, copies of these reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. (Exact name of registrant as specified in its charter) Nevada 2860 59-3029743 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) The Offering Common stock Offered by the Selling Stockholder Up to 5,217,392 shares underlying the Warrants Common Stock Outstanding Prior to this Offering (1) 9,812,544 shares Common Stock Outstanding After this Offering (1) 15,029,936 shares Use Of Proceeds We will not receive any of the proceeds from the sale by the selling stockholder of shares of common stock in this offering. We may receive up to an aggregate of approximately $7,095,650 upon the exercise of the Warrants in full for cash at a price of $1.36 per share of common stock. We currently intend to use the proceeds that we may receive upon exercise of the Warrants to (i) continue with our pivotal Phase III trial for the treatment of NPC with Trappsol Cyclo , (ii) fund further development of our preclinical programs towards IND filings and clinical trials for the treatment of Alzheimer s disease with Trappsol Cyclo and (iii) fund working capital and general corporate purposes. See Use of Proceeds on page 7.
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+This summary highlights information contained in other parts of this prospectus or incorporated by reference into this prospectus from our filings with the Securities and Exchange Commission, or SEC, listed in the section of the prospectus entitled Incorporation of Certain Information by Reference. Because it is only a summary, it does not contain all of the information that you should consider before purchasing our securities in this offering and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere or incorporated by reference into this prospectus. You should read the entire prospectus, the registration statement of which this prospectus is a part, and the information incorporated by reference herein in their entirety, including the Risk Factors and our financial statements and the related notes incorporated by reference into this prospectus, before purchasing our securities in this offering. Unless the context requires otherwise, references in this prospectus to Biocept, we, us and our refer to Biocept, Inc. Our Company We are a molecular oncology diagnostics company that develops and commercializes proprietary clinical diagnostic laboratory assays designed to identify rare tumor cells and cell-free tumor DNA from blood and cerebrospinal fluid, or CSF. The identification of tumor cells and cell-free tumor DNA in CSF has become our principal development focus following our early commercial expansion into CSF in 2020. This product was branded and trademarked as CNSideTM in April 2021. The identification of circulating tumor cells, or CTCs, and circulating cell-free tumor DNA and RNA, or ctDNA and ctRNA, derived from solid tumors such as breast cancer, lung cancer and melanoma using a standard blood sample has been described as a liquid biopsy. This term reflects the ease with which peripheral blood can be drawn compared to performing a surgical biopsy, but this technology is not limited to a peripheral blood approach. In January 2020, we adapted and validated our proprietary blood-based liquid biopsy technology for commercial and clinical research use in CSF to identify tumor cells that have metastasized to the central nervous system, or CNS, in patients with advanced lung cancer or breast cancer. We have subsequently broadened the CNSide indications for use to include all carcinomas and melanomas. CNSide has been designed to improve the clinical management of patients with suspected metastatic cancer involving the CNS by enabling the quantitative analysis and molecular characterization of tumor cells and ctDNA and ctRNA in the CSF. Since then, we have worked extensively with leading neuro-oncologists and other cancer experts to further define and characterize the use of this unique assay. The initial disease focus for CNSide is in leptomeningeal metastasis, or LM. LM is a condition in which the primary tumor develops a secondary malignant growth in leptomeningeal tissue; that is, two of the three membranes surrounding human brain and spinal cord. These membranes are also known specifically as the arachnoid and pia mater. Clinically, this tissue is almost always unobtainable for biopsy purposes and CSF sampling is required for these patients. CSF continuously flows between these membranes and is used clinically to diagnose leptomeningeal disease. The incidence of LM among patients with solid tumors has risen over the past several decades. Epidemiologic studies suggest that 3-8% of patients with solid tumors will develop LM. However, at autopsy, the frequency of LM averages twenty percent and is much higher in some tumor types. The most common solid tumors giving rise to LM are breast cancer, lung cancer, melanoma, and gastrointestinal malignancies. Currently the survivability of leptomeningeal disease in solid tumors in patients not receiving treatment is measured in weeks. The gold standard for making the diagnosis of LM, is CSF cytology, which has a clinical sensitivity of approximately 50%. As a result, MRI imaging is heavily relied upon by oncologists but suffers from a limited Table of Contents The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED MAY 23, 2023 1,457,194 Shares of Common Stock Pre-Funded Warrants to Purchase up to 1,457,194 Shares of Common Stock Warrants to Purchase up to 2,914,388 Shares of Common Stock We are offering 1,457,194 shares of common stock and warrants to purchase up to 2,914,388 shares of our common stock at a combined public offering price of $ per share of common stock and accompanying warrants. We are also offering to those purchasers, if any, whose purchase of our common stock in this offering would otherwise result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of our outstanding common stock immediately following the consummation of this offering, the opportunity, in lieu of purchasing common stock, to purchase pre-funded warrants to purchase shares of our common stock, or Pre-Funded Warrants. Each Pre-Funded Warrant will be exercisable for one share of our common stock (subject to adjustment as provided for therein) at any time at the option of the holder until such Pre-Funded Warrant is exercised in full, provided that the holder will be prohibited from exercising Pre-Funded Warrants for shares of our common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of our common stock then issued and outstanding. However, any holder may increase such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice to us. The purchase price of each Pre-Funded Warrant will equal the price per share at which shares of our common stock and accompanying warrants to purchase common stock are being sold to the public in this offering, minus $0.0001, and the exercise price of each Pre-Funded Warrant will equal $0.0001 per share of common stock. For each Pre-Funded Warrant purchased in this offering in lieu of common stock, we will reduce the number of shares of common stock we are offering by one. Pursuant to this prospectus, we are also offering the shares of common stock issuable upon the exercise of the warrants and Pre-Funded Warrants offered hereby. Each share of our common stock, or Pre-Funded Warrant in lieu thereof, is being sold together with a warrant to purchase one share of our common stock. Each warrant will have an exercise price per of $ per share, will be immediately exercisable and will expire on the fifth anniversary of the original issuance date. The shares of our common stock and warrants are immediately separable and will be issued separately, but will be purchased together in this offering. Our common stock is listed on The Nasdaq Capital Market under the symbol BIOC. On May 18, 2023, the last reported sale price of our common stock on The Nasdaq Capital Market was $5.49 per share. The final public offering price of the securities offered hereby, as well as the exercise price of the warrants to purchase common stock, will be determined through negotiation between us and the lead underwriter in this offering and the recent market price used throughout the prospectus may not be indicative of the actual offering price. There is no established trading market for the warrants or Pre-Funded Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the warrants or Pre-Funded Warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the warrants and the Pre-Funded Warrants will be limited. Investing in our securities involves a high degree of risk. See Risk Factors beginning on page 6 of this prospectus for a discussion of information that should be considered in connection with an investment 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 is truthful or complete. Any representation to the contrary is a criminal offense. Per Share and Accompanying Warrants Per Pre-Funded Warrant and Accompanying Warrants Total Public offering price $ $ $ Underwriting discounts and commissions(1) $ $ $ Proceeds, before expenses, to us $ $ $ (1) See Underwriting beginning on page 12 for additional disclosure regarding underwriting discounts and commissions and reimbursement of expenses. We have granted the underwriters an option for a period of 45 days from the date of this prospectus to purchase up to an additional 218,579 shares of common stock and accompanying warrants to purchase up to 437,518 shares of common stock at the public offering price, less the underwriting discounts and commissions. We anticipate that delivery of the shares, Pre-Funded Warrants and warrants against payment will be made on or about , 2023. Sole Book-Running Manager EF HUTTON division of Benchmark Investments, LLC Lead Manager Brookline Capital Markets a division of Arcadia Securities, LLC The date of this prospectus is , 2023. Table of Contents specificity of approximately 77%. Additionally, previous attempts to create an MRI-based scorecard for leptomeningeal disease to assess treatment response/disease progression have had varied success. Given the challenges associated with diagnosing LM and the need for biomarker information to guide therapeutic management, the opportunity for advanced technologies to benefit these patients became clear. This is the context under which CNSide has been developed, allowing it to potentially address significant unmet medical needs. We summarize the unmet needs for managing metastatic brain cancer patients as follows: Is there tumor (diagnosis)? Is there target (presence of a biomarker to aid treatment selection)? Is there trend (a response to therapy)? The question Is there tumor? is essential for the diagnostic work-up of these patients. Tumor cells in the blood can be shed from either primary or metastatic tumors. They can be rapidly removed in the capillary beds of the spleen, liver, kidneys, lungs and other organs, so they are rarely found. Conversely, tumor cells in the CSF are the defining feature of leptomeningeal disease. To distinguish tumor cells derived from CSF and from blood we often refer to tumor cells in CSF as CSF tumor cells, rather than CTCs. Regarding the second clinical question, Is there target? our CNSide assay provides a vehicle for several different diagnostic assay profiles which combined with our molecular test menu can identify tumor cell biomarkers that are intended to help physicians make decisions related to the evolution or course of metastatic tumor that may inform treatment decisions. Cancer cells typically acquire genetic alterations which differ from that of normal cells. Metastatic cancers often acquire additional genetic alterations which distinguish them from the primary tumor site. This marked genetic variation between areas of tumor growth is termed genetic heterogeneity, and findings related to this were featured in our San Antonio Breast Cancer Symposium presentation in December 2021 illustrating the value of CNSide in identifying genetic heterogeneity of a targetable biomarker called HER2. Finally, regarding the third clinical question, Is there trend? over the past three years, having tested CNSide in more than one thousand patients, we have gained considerable experience with detecting CSF tumor cells of patients that have been sampled multiple times over the course of their treatment. The association of quantitative CSF tumor cell counts with response to treatment has been noted in both lung and breast cancer, as well as other tumors examined. In August 2021, at the Society for Neuro-Oncology (SNO) Brain Metastases meeting, we presented data obtained from a single institution showing how serial monitoring of CSF tumor cells by CNSide was used to determine the response to treatment in patients with Non-Small Cell Lung Cancer having LM. In addition, in November 2021 at the SNO annual meeting, we presented the early findings of several patients with breast cancer having LM which had been followed with multiple CSF samples drawn at different time points throughout each patient s treatment. The downward progression of tumor cell counts has been noted by several treating physicians to correlate with response to treatment and resolution of symptoms. Serial monitoring of genetic alterations present in CSF tumor cells may create opportunities to change the therapy of certain patients throughout treatment. These observations presented in abstracts and poster presentations in 2021 and 2022 have informed our clinical study strategy which is the basis for our ongoing efforts to further explore these observations in a prospective clinical trial. Recent Developments On May 11, 2023, at a special meeting of stockholders, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation, as amended, to effect a reverse split of our outstanding common stock, at a ratio ranging from 1-for-15 to 1-for-30, with the final ratio to be determined by our board of directors. On May 16, 2023, we filed a Certificate of Amendment to Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-30 reverse stock split of our outstanding common stock. The reverse stock split became effective at 4:05 p.m. Eastern Time on May 16, 2023. Table of Contents Our common stock began trading on The Nasdaq Capital Market on a split-adjusted basis on Wednesday, May 17, 2023. Corporate Information Our principal executive offices and our laboratory operations are located at 9955 Mesa Rim Road, San Diego, California 92121. Our telephone number is (858) 320-8200 and our website address is www.biocept.com. The information contained in, or that can be accessed through, our website is not incorporated into and is not part of this prospectus. We were incorporated in California on May 12, 1997 and reincorporated as a Delaware corporation on July 30, 2013. Implications of Being a Smaller Reporting Company We are a smaller reporting company, meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during our most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. For so long as we remain a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies. Table of Contents The Offering Common stock offered by us 1,457,194 shares (or 1,675,773 shares if the underwriters option to purchase additional shares and accompanying warrants is exercised in full). Pre-Funded Warrants offered by us We are also offering to those purchasers, if any, whose purchase of common stock in this offering would otherwise result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of our outstanding common stock immediately following the consummation of this offering, the opportunity, in lieu of purchasing common stock, to purchase Pre-Funded Warrants to purchase up to 1,457,194 shares of our common stock. For each Pre-Funded Warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one basis. The purchase price of each Pre-Funded Warrant will equal the price per share at which the shares of common stock and accompanying warrants to purchase common stock are being sold to the public in this offering, minus $0.0001, and the exercise price of each Pre-Funded Warrant will be $0.0001 per share of common stock. Each Pre-Funded Warrant will be exercisable immediately upon issuance and will not expire. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of such Pre-Funded Warrants. See Description of the Securities We are Offering-Pre-Funded Warrants for a discussion on the terms of the Pre-Funded Warrants. Each Pre-Funded Warrant is exercisable for one share of our common stock (subject to adjustment as provided therein) at any time at the option of the holder, provided that the holder will be prohibited from exercising its Pre-Funded Warrant for shares of our common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of our common stock then issued and outstanding. However, any holder may increase such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice to us. Warrants offered by us Warrants to purchase up to 2,914,388 shares of our common stock (or 3,351,546 shares if the underwriters option to purchase additional shares and accompanying warrants is exercised in full). Each share of our common stock, or Pre-Funded Warrant in lieu thereof, is being sold together with a warrant to purchase one share of our common stock. Each warrant will have an exercise price of $ per share, will be immediately exercisable and will expire on the fifth anniversary of the original issuance date. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of such warrants. Option to purchase additional shares and accompanying warrants We have granted the underwriters an option for a period of 45 days from the date of this prospectus to purchase up to an additional Table of Contents 218,579 shares of common stock and accompanying warrants to purchase up to 437,158 shares of common stock at the public offering price, less the underwriting discounts and commissions. Common stock outstanding after this offering 2,050,051 shares (assuming no sale of any Pre-Funded Warrants and (or 2,268,630 shares if the underwriters option to purchase additional shares and accompanying warrants is exercised in full) assuming none of the warrants to purchase common stock issued in this offering are exercised). Use of proceeds We currently expect to use the net proceeds from this offering for the advancement of our FORESEE trial for CNSide, working capital and general corporate purposes. For additional information please refer to the section entitled Use of Proceeds of this prospectus.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CIK0001078207_bowflex_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001078207_bowflex_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d38d3a980c743f8c356da5b14f3899ca5ca08c60
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001078207_bowflex_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights information contained elsewhere in this prospectus and the documents incorporated by reference herein. This summary does not contain all of the information that you should consider before deciding to invest in our securities. You should read this entire prospectus carefully, including the section entitled Risk Factors beginning on page 5 and our consolidated financial statements and the related notes and the other information incorporated by reference into this prospectus before making an investment decision. All references to the terms Nautilus, the Company, we, us or our in this prospectus refer to Nautilus, Inc., a Washington corporation, and its consolidated subsidiaries, unless the context requires otherwise. This prospectus and the information incorporated by reference herein contain references to trademarks, service marks and trade names owned by us or other companies. Solely for convenience, trademarks, service marks and trade names referred to in this prospectus and the information incorporated by reference herein, including logos, artwork, and other visual displays, may appear without the or symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and trade names. We do not intend our use or display of other companies trade names, service marks or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Other trademarks, trade names and service marks appearing in this prospectus and the documents incorporated by reference herein are the property of their respective owners. Overview Founded in 1986, Nautilus, Inc. and subsidiaries (collectively, Nautilus or the Company ) is a global leader in innovative home fitness solutions, headquartered in Vancouver, Washington and incorporated in the State of Washington in January 1993. We became a publicly traded company in May 1999 and are listed on the New York Stock Exchange and traded under ticker symbol: NLS. Our diverse brand portfolio includes Bowflex , Schwinn , JRNY and previously Nautilus , pursuant to which we sell a broad selection of exercise bikes, other cardio equipment, strength training products, and our JRNY digital fitness platform. We empower healthier living through individualized connected fitness experiences. We sell our products through two distinct distribution channels, Direct and Retail, which we consider to be separate business segments. Consistent with our North Star strategy, subsequent to our fiscal year end, we sold the Nautilus brand trademark assets and related licenses, which we view as non-core assets. We also derive a portion of our revenue from the licensing of our brands and intellectual property. Recent Developments Registered Direct Offering and Private Placement On June 15, 2023, we entered into a securities purchase agreement with the selling shareholder for the issuance and sale of 3,525,000 shares of Common Stock and pre-funded warrants to purchase up to an aggregate of 573,362 shares of Common Stock in a registered direct offering (the RD Offering ) and warrants (the Warrants ) to purchase 4,098,362 shares of Common Stock in a concurrent private placement (the Private Placement ). The public offering price was $1.22 for each share of Common Stock and $1.2199 for each Table of Contents pre-funded warrant. The Warrants have an exercise price of $1.35 per share, and are exercisable at any time beginning six months following their original issuance and will expire five and a half years from the original issuance date. The closing of the issuance and sale of these securities was consummated on June 15, 2023. The gross proceeds from the offering, prior to deducting offering expenses and placement agent fees and expenses payable by us, were approximately $5.0 million. On July 28, 2023, 573,362 shares of Common Stock were issued in connection with the exercise of pre-funded warrants that were originally issued in the RD Offering. This prospectus covers the resale or other disposition by the selling shareholder of the shares of Common Stock issuable upon the exercise of the Warrants. Corporate Information We were incorporated in Washington in 1993. Our principal executive offices are located at 17750 S.E. 6th Way, Vancouver, Washington 98683. Our telephone number is (360) 859-2900. Our common stock is traded on the New York Stock Exchange under the trading symbol NLS. Our website address is https://www.nautilusinc.com/. We have included our website address in this prospectus solely as an inactive textual reference. The information contained on the website is not incorporated by reference into this prospectus and should not be considered part of this prospectus. Table of Contents The Offering This prospectus relates to the resale or other disposition from time to time by the selling shareholder identified in this prospectus of up to 4,098,362 shares of Common Stock issuable upon exercise of the Warrants. None of the shares registered hereby are being offered for sale by us. Common Stock offered by the selling shareholder Up to 4,098,362 shares of Common Stock issuable upon exercise of the Warrants. Common Stock outstanding after this offering 40,188,340 shares of Common Stock, assuming the exercise in full of the Warrants. Use of proceeds We will not receive any proceeds from the shares of Common Stock offered by the selling shareholder under this prospectus. However, we will receive the proceeds of any cash exercise of the Warrants. We intend to use the net proceeds from any cash exercise of the Warrants for working capital and general corporate purposes. See Use of Proceeds. Listing Information Our common stock is listed on the New York Stock Exchange under the symbol NLS.
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001102942_innovaqor_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001102942_innovaqor_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001102942_innovaqor_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001409999_black_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001409999_black_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..f68bb707d9f7d5e485a06f23b349ba8a98adb6e3
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001409999_black_prospectus_summary.txt
@@ -0,0 +1,100 @@
+PROSPECTUS SUMMARY
+ 
+This summary highlights material information concerning our business and this offering. This summary does not contain all of the information that you should consider before making your investment decision. You should carefully read the entire prospectus and the information incorporated by reference into this prospectus, including the information presented under the section entitled Risk Factors and the financial data and related notes, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from future results contemplated in the forward-looking statements as a result of factors such as those set forth in Risk Factors and Cautionary Statement Regarding Forward-Looking Statements. 
+ 
+In this Prospectus, unless the context indicates otherwise, the terms Black Bird Biotech, Company, we, us, our, and ours refer and relate to Black Bird Biotech, Inc., a Nevada corporation, including its wholly-owned subsidiaries: Black Bird Potentials Inc., a Wyoming corporation ( BB Potentials ); Big Sky American Dist., LLC, a Montana limited liability company ( Big Sky American ); and Black Bird American Hemp Manager, LLC, a Montana limited liability company.
+ 
+Overview
+ 
+We were incorporated in the State of Nevada in 2006 under the name Cyprium Resources Inc. , which was changed in August 2009 to Digital Development Partners, Inc. Our corporate name was changed to Black Bird Biotech, Inc., effective June 14, 2021. Through 2014, our company was involved, first, in the mining industry and, then, in the communications industry. From 2015 until the January 2020 acquisition of Black Bird Potentials Inc., a Wyoming corporation (BB Potentials), our company was a shell company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934.
+ 
+We are the exclusive worldwide manufacturer and distributor of MiteXstream, an EPA-registered plant-based biopesticide effective in the eradication of mites and similar pests, including spider mites, a pest that destroys crops, especially cannabis, hops, coffee, and house plants, as well as molds and mildew. We manufacture and sell CBD products, including CBD Oils, gummies and pet treats, and CBD-infused personal care products, under the Grizzly Creek Naturals brand name. Big Sky American currently distributes an array of consumer products, including the Grizzly Creek Naturals products, to retail locations in Western Montana. (See Business ).
+ 
+Risk Factors
+ 
+There are numerous risks and uncertainties associated with an investment in our common stock, including those presented under Risk Factors herein. These risks and uncertainties include, but are not limited to, the following:
+ 
+ 
+ 
+our history of losses;
+ 
+ 
+we operate in industries that are highly competitive;
+ 
+ 
+we have limited experience marketing and selling our MiteXstream biopesticide;
+ 
+ 
+we face the risk of product liability claims;
+ 
+ 
+we are highly dependent upon our current management team;
+ 
+ 
+our MiteXstream biopesticide is subject to government regulation at the federal and state levels, as well as abroad;
+ 
+ 
+we may seek capital that would result in shareholder dilution or that would result in our issuing securities having rights senior to those of our common stock; and
+ 
+ 
+our Common Stock is a penny stock, which may impair trading liquidity.
+ 
+In addition, the report of our independent registered public accounting firm for the years ended December 31, 2022 and 2021, contains a statement with respect to substantial doubt as to our ability to continue as a going concern as a result of our accumulated deficit, net losses, and negative cash flows from operations.
+ 
+ 
+3
+
+Table of Contents
+ 
+Mast Hill Equity Line 
+ 
+On December 13, 2022, we entered into an Equity Purchase Agreement (the Mast Hill Agreement) with Mast Hill Fund, L.P. (Mast Hill, one of the Selling Stockholders), pursuant to which, and upon the terms and subject to the conditions thereof, Mast Hill is committed to purchase, on an unconditional basis, up to 400,000,000 shares of our common stock (the Purchase Shares) over the course of its term. The term of the Mast Hill Agreement will end on the earlier of (a) the date on which Mast Hill has purchased all of the 400,000,000 Shares pursuant to the Mast Hill Agreement, (b) December 13, 2024, (c) written notice of termination by us, (d) the date the Registration Statement is no longer effective, or (e) the date that, pursuant to or within the meaning of any Bankruptcy Law, we commence a voluntary case or any person commences a proceeding against us, a custodian is appointed for us or for all or substantially all of our property or we make a general assignment for the benefit of creditors.
+ 
+From time to time over the term of the Mast Hill Agreement, commencing on the date the Registration Statement registering the Shares becomes effective, we may, in our sole discretion, provide Mast Hill with a purchase notice (each a Purchase Notice ) to purchase a specified number of Purchase Shares (each a Purchase Amount Requested ) subject to the limitations discussed below and contained in the Mast Hill Agreement. Upon delivery of a Purchase Notice, we must deliver the Purchase Amount Requested as Deposit Withdrawal at Custodian (DWAC) shares to Mast Hill within one trading day.
+ 
+The actual amount of proceeds we receive pursuant to each Purchase Notice (each, the Purchase Amount ) is determined by multiplying the Purchase Amount Requested by the applicable purchase price. The Purchase Price for each of the Put Shares equals 90% of the average of the two (2) lowest volume weighted average prices of the common stock for seven trading days (the Valuation Period) following the clearing date associated with the relevant put notice. The minimum amount of each put shall be $20,000 and the maximum shall be the lower of 150% of the average daily trading volume and $500,000.
+ 
+In order to deliver a Purchase Notice, certain conditions set forth in the Mast Hill Agreement must be met. In addition, we are prohibited from delivering a Purchase Notice if the sale of Purchase Shares pursuant to such Purchase Notice would cause us to issue and sell to Mast Hill, or Mast Hill to acquire or purchase, a number of shares of our common stock that would result in Mast Hill beneficially owning more than 4.99% of the issued and outstanding shares of our common stock.
+ 
+By the terms of the Mast Hill Agreement, we agreed to file a registration statement to register the resale of the Purchase Shares. We agreed to (A) file the Registration Statement, (B) use reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act of 1933, as amended, as promptly as possible after the filing thereof, and (C) use our reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until all of the Shares have been sold thereunder or pursuant to Rule 144.
+ 
+Use of Proceeds
+ 
+We intend to use the proceeds, if any, from the Mast Hill Agreement for marketing and advertising, lab studies/testing, inventory, research and development, regulatory compliance, professional fees, general corporate purposes and working capital requirements. (See Use of Proceeds ).
+ 
+In the future, we intend to raise additional capital through equity and debt financings as needed, though there cannot be any assurance that such funds will be available to us on acceptable terms, on an acceptable schedule, or at all.
+ 
+ 
+4
+
+Table of Contents
+ 
+Corporate Information
+ 
+Our principal executive office is located at 11961 Hilltop Road, Suite 22, Argyle, Texas 76226; our telephone number is 833-223-4204; our corporate website is located at: www.blackbirdbiotech.com. No information found on, or connected to, our company s website is incorporated by reference into, any you must not consider the information to a part of, this Prospectus.
+ 
+The Offering
+ 
+Securities Offered by the Selling Shareholder
+ 
+581,468,572 shares of common stock (the Shares), 400,000,000 of which are issuable pursuant to the Mast Hill Agreement, 170,000,000 of which underlie the Mast Hill EPA Warrants and 11,468,572 of which underlie the Darbie Warrants.
+
+Common Stock Outstanding Before Offering
+ 
+503,824,830 shares of common stock.
+
+Common Stock Outstanding After Offering
+ 
+1,085,293,402 shares of common stock, assuming all 400,000,000 Shares are sold to Mast Hill under the Mast Hill Agreement, all 170,000,000 Shares are issued pursuant to the Mast Hill EPAWarrants and all 11,468,572 Shares are issued pursuant to the Darbie Warrants.
+
+Use of Proceeds
+ 
+We will not receive any of the proceeds from the sale of the Shares registered hereunder. We will, however, receive proceeds from our sales of common stock to Mast Hill under the Mast Hill Agreement. We intend to use such proceeds, if any, for marketing and advertising, lab studies/testing, inventory, research and development, regulatory compliance, professional fees, general corporate purposes and working capital requirements.
+
+Risk Factors
+ 
+An investment in the Shares involves a high degree of risk and could result in a loss of your entire investment. Further, the issuance to, or sale by, Mast Hill of a significant amount of shares being registered in the Registration Statement of which this Prospectus forms a part at any given time could cause the market price of our common stock to decline and to be highly volatile and we do not have the right to control the timing and amount of any sales by Mast Hill of such shares. Prior to making an investment decision, you should carefully consider all of the information in this Prospectus and, in particular, you should evaluate the risk factors set forth under the caption Risk Factors beginning on page 6.
+
+Trading Symbol
+ 
+BBBT
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001478069_contrafect_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001478069_contrafect_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..dbc7b9ed822479ba6f7f6f39b44801dd0baf21ef
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001478069_contrafect_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights, and is qualified in its entirety by, the more detailed information included elsewhere in this prospectus or incorporated by reference herein. This summary does not contain all of the information that may be important to you. You should read and carefully consider the entire prospectus, especially the Risk Factors section of this prospectus, before deciding to invest in our common stock. Unless the context otherwise requires, we use the terms ContraFect, we, our, us and the Company in this prospectus to refer to ContraFect Corporation. and its consolidated subsidiaries, unless otherwise specified. Overview We are a clinical-stage biotechnology company focused on the discovery and development of direct lytic agents, or DLAs, including lysins and amurin peptides, as new medical modalities for the treatment of life-threatening, antibiotic-resistant infections. We believe DLAs are fundamentally different than antibiotics and offer a potential paradigm shift in the treatment of antibiotic-resistant infections. According to one of the most recent and comprehensive reports on the global burden of bacterial antimicrobial resistance, or AMR, there were an estimated 4.95 million deaths associated with bacterial AMR in 2019, including 1.27 million deaths directly attributable to bacterial AMR. The six leading pathogens for deaths associated with resistance (Escherichia coli ( E. coli ), Staphylococcus aureus ( S. aureus ), Klebsiella pneumoniae ( K. pneumoniae ), Streptococcus pneumoniae, Acinetobacter baumannii ( A. baumannii ), and Pseudomonas aeruginosa ( P. aeruginosa )) were responsible for 929,000 deaths. Only one pathogen drug combination, methicillin-resistant S. aureus, or MRSA, caused more than 100,000 deaths in 2019. Lysins are recombinantly-produced enzymes; when applied to bacteria, they cleave a key component of the target bacteria s peptidoglycan cell wall, resulting in rapid bacterial cell death. In addition to the speed of action and potent cidality, we believe lysins are differentiated by their other hallmark features, which include the demonstrated ability to eradicate biofilms and synergistically boost the efficacy of conventional antibiotics in animal models. Amurin peptides are a new class of DLAs, discovered in our laboratories, which disrupt the outer membrane of Gram-negative bacteria, resulting in rapid bacterial cell death, offering a distinct mechanism of action from lysins. Our DLAs have a shown potent, broad spectrum of in vitro activity against a wide range of Gram-negative pathogens, including deadly, drug-resistant P. aeruginosa, K. pneumoniae, E. coli, A. baumannii and Enterobacter cloacae bacteria species as well as difficult to treat pathogens such as Stenotrophomonas, Achromobacter and some Burkholderia species. The highly differentiated properties of DLAs underscore their potential use in addition to antibiotics with the goal of improving clinical outcomes compared to antibiotics alone. The development of DLAs involves a novel clinical and regulatory strategy, using superiority design clinical trials with the goal of delivering significantly improved clinical outcomes for patients with serious and/or antibiotic-resistant bacterial infections, including biofilm-associated infections. We believe this approach affords potential clinical benefits to patients as well as the potential ability to mitigate against further development of antibiotic resistance. Exebacase Our first DLA product candidate, exebacase, is currently being studied in an ongoing Phase 1b/2 study being conducted in France in patients with chronic prosthetic joint infections, or PJIs, of the knee due to S. aureus or coagulase-negative Staphylococci, or CoNS. PJI is a devastating complication following total joint arthroplasty, or TJA, either total knee arthroplasty, or TKA, or total hip arthroplasty, or THA. It is a leading cause of morbidity and revision following TJA and a significant driver of healthcare costs. There are over 100,000 orthopedic prosthesis-related infections annually in the United States, representing approximately 2-3% of joint replacement patients; the prevalence of PJI related to resistant organisms is increasing. More importantly, Staphylococcus is the primary infecting organism and treatment failure is due to the presence of biofilms, or the Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to Completion, dated October 30, 2023. PROSPECTUS CONTRAFECT CORPORATION $15,000,000 Shares of Common Stock Class E Warrants to Purchase up to Shares of Common Stock Up to Shares of Common Stock underlying Class E Warrants Class F Warrants to Purchase up to Shares of Common Stock Up to Shares of Common Stock underlying Class F Warrants ContraFect Corporation is offering $15,000,000 of shares of common stock, Class E warrants to purchase shares of common stock and Class F warrants to purchase shares of common stock. The common stock, Class E warrants and Class F warrants will be sold in combination, with one-half of one Class E warrant to purchase one share of common stock and one Class F warrant to purchase one share of common stock accompanying each share of common stock sold. The combined purchase price for each share of common stock and accompanying warrants is $ . In addition to the foregoing, we are also offering up to shares of our common stock issuable upon exercise of our Class E warrants and up to shares of our common stock issuable upon exercise of our Class F warrants, which in each case represents the full number of shares issuable thereunder. Each Class E warrant will have an exercise price of $ for each whole share, will be exercisable upon the date of the publication by us of a press release containing the results of our Phase 1b/2 clinical trial on the use of intra-articular exebacase for the treatment of chronic Staphylococcal prosthetic joint infections of the knee with respect to the 42-day clinical response to the trial drug for cohort 1 of such trial (referred to herein as the PJI Data Release Date) and will expire on the date that is 60 days after the PJI Data Release Date. Each Class F warrant will have an exercise price of $ for each whole share, will be exercisable upon issuance and will expire five years from the date of issuance. The shares of common stock and the warrants are immediately separable from one another and will be issued separately, but must be purchased together in this offering. No fractional warrants will be issued in this offering. Our common stock is listed on the Nasdaq Capital Market under the symbol CFRX. On October 27, 2023, the last reported sale price of the common stock on the Nasdaq Capital Market was $0.2711 per share. There is no established trading market for the warrants and we do not expect a market to develop. In addition, we do not intend to list the warrants on any securities exchange or automated quotation system. INVESTING IN OUR SECURITIES INVOLVES RISKS. FOR EXAMPLE, WE CURRENTLY DO NOT MEET CERTAIN OF THE NASDAQ CAPITAL MARKET S CONTINUED LISTING REQUIREMENTS AND OTHER NASDAQ RULES, AND IF WE ARE UNABLE TO REGAIN COMPLIANCE, WE ARE LIKELY TO BE DELISTED. SEE THE RISK FACTORS ON PAGE 6 OF THIS PROSPECTUS CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES. Per Share and Accompanying Warrants Total Offering price $ $ Placement agent fees(1) $ $ Proceeds to us, before expenses $ $ (1) Excludes certain out-of-pocket expenses of the Placement Agent which we have agreed to reimburse. See the section captioned Plan of Distribution in this prospectus supplement for additional information. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. Delivery of the securities is expected to be made on or about , 2023. Sole Placement Agent Maxim Group LLC The date of this prospectus is , 2023. Table of Contents protective structures that allow bacteria to stick to implanted devices and shield themselves from both the immune system and conventional antibiotics. Once PJI is diagnosed, two-stage exchange arthroplasty remains the gold standard for treating PJI, since there is a high rate of treatment failure with current irrigation and debridement or one-stage exchange arthroplasty procedures. A two-stage exchange involves removal of the infected artificial joint components along with bone and soft tissue, followed by 12-16 weeks of IV and oral antibiotic therapy before a new artificial joint can be implanted. Unfortunately, systemic antibiotics are often unable to eradicate biofilms, resulting in poor outcomes. PJI significantly reduces the long-term quality of life, or QoL, and the high failure rates ultimately result in arthrodesis, amputation, or mortality. In fact, PJI is associated with a five-year mortality rate higher than that of breast cancer, melanoma, Hodgkin s lymphoma, and other common malignancies. In addition to the significant morbidity and mortality associated with PJI, the cost of treating PJI is substantial, with estimated annual hospital costs expected to increase to over $1.1 billion for TKA and to over $750 million for THA by 2030. Mean PJI treatment cost is approximately 3 to 4 times that for primary joint replacement, and when the causative pathogen is a resistant organism, such as MRSA, the mean PJI treatment cost increases nearly 60% compared to PJI caused by more susceptible microorganisms. The Phase 1b/2 study of exebacase is a randomized, double-blind, placebo-controlled two-part clinical study to assess the efficacy and safety of exebacase in patients with chronic PJI of the knee due to S. aureus and/or CoNS. Part 1 will evaluate the safety, pharmacokinetics, early clinical outcomes, and microbiologic response in patients through Day 42. Up to 2 dose levels of intra-articularly administered exebacase in addition to systemic antibiotics will be studied in up to 2 patient cohorts. Part 2 will consist of a long-term follow-up study of safety and efficacy parameters in patients who complete Part 1 of the study. Follow-up assessments will be performed on Days 90, 180, 360 and 720, including health resource utilization and QoL measures. Patients entering the study will be randomized 3:1 to either exebacase or placebo, with all patients receiving study drug in the setting of a debridement, antibiotics and implant retention procedure (referred to as a DAIR Procedure). We expect to report interim clinical data from the first cohort of patients in the first half of 2024. CF-370 Our next product candidate, CF-370, is designed to target a range of gram-negative bacteria, including P. aeruginosa, K. pneumoniae and A. baumannii, and has demonstrated potent in vivo activity against these pathogens, even against multidrug-resistant, or MDR, and extensively drug-resistant, or XDR, strains. Gram-negative pathogens are a major cause of morbidity and mortality in patients with hospital-acquired bacterial pneumonia, or HABP, and ventilator-associated bacterial pneumonia, or VABP. P. aeruginosa in particular remains a major medical challenge for cystic fibrosis patients with chronic lung infections. HABP/VABP are serious, potentially life-threatening infections that require new therapies to meet patient needs, particularly because of increasing antimicrobial resistance. HABP/VABP accounts for over 22% of all U.S. hospital infections and up to 40% of patients who undergo mechanical ventilation for more than 48 hours will develop a VABP. In-hospital mortality remains above 20% when a patient with pneumonia is ventilated. Immunocompromised patients are especially vulnerable to infection and potential loss of life. P. aeruginosa, A. baumannii, K. pneumoniae, E. coli and Enterobacter species are the most commonly implicated Gram-negative pathogens in HABP/VABP infections. Infections caused by MDR and XDR Gram-negatives, particularly MDR P. aeruginosa, and carbapenem-resistant A. baumannii and Enterobacteriaceae, are associated with significant mortality and are becoming increasingly difficult-to-treat. According to data from the United States Centers for Disease Control and Prevention, or CDC, HABP/VABP are currently the most common type of hospital-acquired infections in acute care hospitals and remain a significant issue in patients in the intensive care unit. Table of Contents We have studied CF-370 in multiple animal models with external organizations with both sensitive and resistant strains and using CF-370 in addition to either amikacin, meropenem, or tobramycin, demonstrating the superiority of the combination of CF-370 with SoC antibiotics. We believe the results from these studies provide in vivo proof-of-concept for CF-370 as a potential treatment for pulmonary infections caused by Gram-negative pathogens and for direct lytic agents as a potential new modality to combat the threat of MDR and XDR Gram-negative pathogens. The U.S. Food and Drug Administration (FDA) has completed the safety review of our Investigational New Drug ( IND ) application for CF-370 for the treatment of HABP and VABP and concluded that we may proceed with our Phase 1 clinical study. We expect to initiate the Phase 1 clinical study of CF-370 in healthy volunteers during the fourth quarter of 2023. Our Corporate Information We were incorporated under the laws of the State of Delaware in March 2008. Our principal executive offices are located at 28 Wells Avenue, 3rd Floor, Yonkers, NY 10701, and our telephone number is (914) 207-2300. Our website address is www.contrafect.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our securities. Our common stock is listed on the Nasdaq Capital Market under the symbol CFRX . Table of Contents
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CIK0001483646_blackstar_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001483646_blackstar_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..29a946dd68dde3cffe7a85c4ce18dcaf1581a31b
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001483646_blackstar_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including "Risk Factors," "Management s Discussion and Analysis of Financial Condition and Results of Operations," and the Financial Statements, before making an investment decision. In this Prospectus, the terms "BlackStar," "Company," "we," "us," and "our," refer to BlackStar Enterprise Group, Inc. COMPANY OVERVIEW GENERAL BlackStar Enterprise Group, Inc. is incorporated in the State of Delaware with operations located in Boulder, Colorado. We are engaged in Merchant Banking and Finance and intend to expand our services into the blockchain industry. International Hedge Group, Inc. ("IHG"), our parent company, owns 4,792,702 shares of common stock ( 0.61 %) and 1,000,000 of Class A Supermajority Voting Preferred Stock (100%); Class A Preferred has that number of votes equal to that number of common shares which is not less than 60% of the vote required to approve any action and has the right to convert all of the Class A Preferred Convertible Stock (1,000,000 shares) into shares of Common Stock of the Company, on the basis of 100 common shares for each share of Class A Preferred Stock. IHG is our controlling shareholder and is engaged in providing management services to companies, and, on occasion, capital consulting. IHG s strategy in investing in BlackStar Enterprise Group, Inc. is to own a controlling interest in a publicly quoted company which has the mission to engage in funding of start-up and developed business ventures using its stock for private placement or public offerings. IHG and BlackStar are currently managed and controlled by the same individuals, but IHG and BlackStar may each seek its funding from different and as yet, undetermined sources, with funding structures of different natures. Our corporate structure is as follows: INTERNATIONAL HEDGE GROUP, INC. (Parent Company – a Colorado corporation) BLACKSTAR ENTERPRISE GROUP, INC. (a Delaware corporation) Blockchain Equity Management Corp. (a Colorado corporation) Blockchain Equity SRO, Inc. (a Colorado non-profit corporation) PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED JUNE 16 , 2023 The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. BLACKSTAR ENTERPRISE GROUP, INC. 46,000,000 Shares of Common Stock Underlying Convertible Notes This Prospectus relates to the resale from time to time of an aggregate of up to 46,000,000 shares of common stock par value $0.001 per share, (the "Common Shares") of BlackStar Enterprise Group, Inc., a Delaware corporation, by the Selling Shareholders (each a "Selling Shareholder", and collectively, the "Selling Shareholders"), underlying, and pursuant to the conversion of convertible notes (the "Notes") which were acquired from the Company pursuant to subscription agreements for an aggregate purchase price of $803,275. This amount represents a good faith estimate of the shares of common stock underlying convertible notes issued by the registrant in private placements, with such amount equal to the maximum number of shares issuable upon conversion of such notes, assuming for purposes hereof that (x) such notes are convertible at $0.02 per share, and (y) interest on such note accrues at 10% per annum until the maturity dates of the convertible notes, without taking into account the limitations on the conversion of such notes (as provided for therein). The 46,000,000 shares being registered includes 1,386,459, 9,016,394, and 27,500,000 shares, respectively, that may be issued pursuant to the conversion of the principal amount of the Notes, as well as 110,917, 1,100,000, and 2,750,000 additional shares that may be issued pursuant to the conversion of accrued interest over the term of the Notes, assuming a conversion price of $0.024, $0.0244, and $0.02 per share, respectively, 300,000 shares issued to cure a default, and 3,836,230 additional shares to cover any differences in conversion price. The Selling Shareholders have informed us that they are not "underwriters" within the meaning of the Securities Act. The Securities and Exchange Commission ("SEC") may take the view that, under certain circumstances, any broker-dealers or agents that participate with the Selling Shareholders in the distribution of the Common Shares may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). Commissions, discounts or concessions received by any such broker-dealer or agent may be deemed to be underwriting commissions under the Securities Act. The Selling Shareholders may sell Common Shares underlying the Notes from time to time in the principal market on which the Registrant s Common Stock is quoted and traded at the prevailing market price or in negotiated transactions. We will not receive any of the proceeds from the sale of those Common Shares being sold by the Selling Shareholders. We did, however, receive net proceeds of approximately $803,275 pursuant to the sale of the Notes to the Selling Shareholders. We will pay the expenses of registering these Common Shares underlying the Notes. Pursuant to registration rights granted to the Selling Shareholders, we are obligated to register the Common Shares underlying the Notes. We will not receive any proceeds from the sale of the Common Shares by the Selling Shareholders. Our selling shareholders plan to sell common shares at market prices for so long as our Company is quoted on OTC Pink and as the market may dictate from time to time. There is a limited market for the common stock, which has been trading on the OTC Pink ("BEGI") at an average of $0.0004 in the past 5 days as of June 14 , 2023. Title Price Per Share Common Stock $0.0004 The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(c). The average trading price in the 5 days prior to this amended registration statement on June 14 , 2023 was $0.0004 (less than the original calculation), so no additional fee was required. Table of Contents HISTORY Our Company, BlackStar Enterprise Group, Inc., was originally formed on December 17, 2007 as NPI08, Inc. in the State of Delaware. Our name was changed in 2010 to BlackStar Energy Group, Inc. In August of 2016, our name was changed to BlackStar Enterprise Group, Inc. Our Company was divested from Kingsley Capital, Inc. in a bankruptcy proceeding in 2008, in which Kingsley was the debtor. Our Company attempted to start up in the energy business in 2010 without success, resulting in losses totaling $1,819,530 over a three-year period. Our Company was inactive until 2016 when new management and capital were introduced. DESCRIPTION OF BUSINESS Current Business We are based in Boulder, Colorado and are engaged in Merchant Banking and Finance in the United States. BlackStar s venue is private early-stage companies throughout various industries that, in our judgement, exhibit a potential for sustained growth. We are a publicly traded specialized merchant banking firm, facilitating joint venture capital to early stage revenue companies. We are actively seeking opportunities for discussion with revenue generating enterprises and emerging companies for financing. We have recognized net losses of ($1,225,207) in the year ended December 31, 2022. We have relied solely on sales of our securities, convertible note financing, and private loans to fund our operations. Our principal executive offices are located at 4450 Arapahoe Ave., Suite 100, Boulder, CO 80303 and our office telephone number is (303) 500-3210. We maintain a website at www.blackstarenterprisegroup.com, and such website is not incorporated into or a part of this filing. Proposed New Line of Business Since 2018, we have also been developing a blockchain-based software platform to trade electronic fungible shares of our common stock. Once completed, the platform design might enable us to license the technology as a Platform as a Service ("PaaS") for other publicly traded companies, providing revenue to finance our merchant banking. The completion of our software platform depends on our ability to license it to an existing Alternative Trading System ("ATS") or for us to possibly register as an ATS, which we do not intend to do at this time as we would prefer to license our platform to an existing ATS. The platform is not currently operational or in use by anyone. References throughout this registration statement to "digital shares" and similar terms refers to the typical way securities are held and traded and is the same as DTCC eligible book entry securities. We are not attempting to "tokenize" securities, but intend our concept to use distributed ledger technology to execute and record securities transactions with higher efficiency and lower cost, which is essentially a back-office function. Our software platform is in the final stages of software development and is working to initiate platform operations but will need further funding to fund operations of the merchant bank and to expand its services to licensees. To fund ongoing operations, we may raise funds in the future, which are not yet committed. BlackStar also intends to offer consulting and regulatory compliance services to companies desiring to issue digital shares and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in involvement in digital share related ventures though our wholly-owned subsidiary, Blockchain Equity Management Corp. ("BEMC") formed in September 2017. BEMC is currently non-operational, inactive and has no business or clients at this time. It is intended to offer advisory services as to how to implement use of a custom platform for the client s equity based off of the BDTP TM. BEMC has not established any anticipated time frames or key milestones for BEMC business. In addition to the services described above, on December 31, 2017, BlackStar formed a subsidiary nonprofit company, Blockchain Equity SRO, Inc., a self-regulatory membership organization for the digital share industry. Further details about the business plan for BEMC, the operating subsidiary of BlackStar, and Blockchain Equity SRO can be found in the "Current Business" section below. The Selling Shareholders are offering the Common Shares underlying the Notes. The Selling Shareholders may sell all or a portion of these Common Shares from time to time in market transactions through any market on which the Common Stock is then traded, in negotiated transactions or otherwise, and at prices and on terms that will be determined by the then prevailing market price or at negotiated prices directly or through a broker or brokers, who may act as agent or as principal or by a combination of such methods of sale. The Selling Shareholders will receive all proceeds from such sales of the Common Shares. For additional information on the methods of sale, you should refer to the section entitled "Plan of Distribution." In aggregate, the Selling Shareholders may sell up to 46,000,000 Common Shares under this Prospectus, which includes 37,902,853 shares to be issued upon conversion of the principal amount of convertible notes, as well as 3,960,917 additional shares that may be issued based on 10% interest per annum until the maturity date of the convertible notes, assuming a conversion price of $0.02 per share, 300,000 shares issued to cure a default, and 3,836,230 additional shares to cover any differences in conversion price and interest accruals. We are obligated to file a supplemental registration statement or registration statements in order to register all of the Common Shares, in the event that the conversion price is lower than $0.02 per share due to adjustments as is further described in this Registration Statement, resulting in additional shares being issued that have not been registered pursuant to this Registration Statement. We have one class of authorized common stock and the Company has also issued warrants for common stock. Outstanding shares of common stock represent approximately 40% of the voting power of our outstanding capital stock at the time of this registration, and outstanding shares of Class A Super Majority Voting Preferred Stock held by, or subject to voting control by, our parent company, International Hedge Group, Inc., the estate of our former CEO, John Noble Harris, and our interim CEO and CFO, Joseph Kurczodyna, represent approximately 60% of the voting power of our outstanding capital stock at the time of this registration statement. This offering involves a high degree of risk; see "RISK FACTORS" beginning on page 8 to read about factors you should consider before buying shares of the common stock. These securities have not been approved or disapproved by the Securities and Exchange Commission (the "SEC") or any state or provincial securities commission, nor has the SEC or any state or provincial securities commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. This offering will be on a delayed and continuous basis for sales of selling shareholders shares. The selling shareholders are not paying any of the offering expenses and we will not receive any of the proceeds from the sale of the shares by the selling shareholders. (See "Description of Securities – Shares"). The information in this prospectus is not complete and may be changed. These securities may not be sold until the date that the registration statement relating to these securities, which has been filed with the Securities and Exchange Commission, becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The date of this Prospectus is June 16 , 2023. Table of Contents As to the BEMC business model, the primary factor for its development is dependent upon whether the BDTP TM achieves regulatory approval by the SEC for the platform and an ATS arrangement has been achieved and approved as necessary by the SEC. Reports to Security Holders We are subject to the reporting requirements of Section 12(g) of the Exchange Act, and as such, we intend to file all required disclosures. You may read and copy any materials we file with the SEC in the SEC s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov. Jumpstart Our Business Startups Act We qualify as an "emerging growth company" as defined in Section 101 of the Jumpstart our Business Startups Act ("JOBS Act") as we did not have more than $1,235,000,000 in annual gross revenue and did not have such amount as of December 31, 2022, our last fiscal year. We may lose our status as an emerging growth company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1,235,000,000 or (ii) we issue more than $1,000,000,000 in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if at any time we are deemed to be a large accelerated filer. We will lose our status as an emerging growth company on the last day of our fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective registration statement. As an emerging growth company, we may take advantage of specified reduced reporting and other burdens that are otherwise applicable to generally reporting companies. These provisions include: - A requirement to have only two years of audited financial statement and only two years of related Management Discussion and Analysis Disclosures: - Reduced disclosure about the emerging growth company s executive compensation arrangements; and - No non-binding advisory votes on executive compensation or golden parachute arrangements. As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934. Such sections are provided below: Section 404(b) of the Sarbanes-Oxley Act of 2002 requires a public company s auditor to attest to, and report on, management s assessment of its internal controls. Sections 14A(a) and (b) of the Securities and Exchange Act, implemented by Section 951 of the Dodd-Frank Act, require companies to hold shareholder advisory votes on executive compensation and golden parachute compensation. We have already taken advantage of these reduced reporting burdens in our Form 10-K, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As long as we qualify as an emerging growth company, we will not be required to comply with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Table of Contents Act") for complying with new or revised accounting standards. We are choosing to irrevocably opt out of the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act. Implications of Being an Emerging Growth Company As a company with less than $1,235,000,000 of revenue during our last fiscal year, we qualify as an emerging growth company as defined in the JOBS Act, and we may remain an emerging growth company for up to five years from the date of the first sale in this offering. However, if certain events occur prior to the end of such five-year period, including if we become a large accelerated filer, our annual gross revenue exceeds $1,235,000,000, or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not emerging growth companies. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold equity interests. However, we have irrevocably elected not to avail ourselves of the extended transition period for complying with new or revised accounting standards, and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Summary of Financial Information The following tables set forth, for the periods and as of the dates indicated, our summary financial data. The statements of operations for the years ended December 31, 2022 and 2021, and the balance sheet data as of December 31, 2022 are derived from our audited financial statements included elsewhere in this prospectus. The audited financial statements include, in the opinion of management, all adjustments consisting of only normal recurring adjustments, that management considers necessary for the fair presentation of the financial information set forth in those statements. You should read the following information together with the more detailed information contained in "Selected Financial Data," "Management s Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes included elsewhere in this prospectus. Our historical results are not indicative of the results to be expected in the future and results of interim periods are not necessarily indicative of results for the entire year. You should read the following information together with the more detailed information contained in "Selected Financial Data," "Management s Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes included elsewhere in this prospectus. Our historical results are not indicative of the results to be expected in the future. March 31, December 31, 2023 2022 2021 Total Assets $289,298 $303,770 $683,339 Current Liabilities $1,097,685 $1,033,380 $806,953 Long-term Liabilities $— $— $— Stockholders Equity (Deficit) $(808,387) $(729,610) $(123,614) Three Months Ended March 31, 2023 (Unaudited) December 31, 2022 (Audited) December 31, 2021 (Audited) Revenues $ 0 $ 0 $ 0 Net Loss $ (117,204 ) $ (1,225,207 ) $ (2,183,567 ) Table of Contents At March 31, 2023, the accumulated deficit was $(9,492,171). At December 31, 2022, the accumulated deficit was $(9,374,967). We anticipate that we will operate in a deficit position and continue to sustain net losses for the foreseeable future. PRIVATE PLACEMENT OF CONVERTIBLE NOTES WITH REGISTRATION RIGHTS The following convertible promissory notes and corresponding securities purchase agreements are those that contain registration rights and those which underlying shares are being registered for resale in this registration statement. On November 20, 2020, BlackStar Enterprise Group, Inc. and Quick Capital, LLC. entered into a convertible promissory note totaling $33,275 and a securities purchase agreement. The note bears interest at 10%, with a default rate of 24%, and is convertible into shares of the Company s common stock. The conversion price is to be calculated at 60% of the 2 lowest trading prices of the Company s common stock for the previous 20 trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to this note, and the Company has reserved 12,000,000 shares for conversion. Net proceeds from the loan were $25,000, after legal fees and offering costs of $8,275. Details of the promissory note and securities purchase agreement can be found in the Form 8-K and exhibits filed on November 27, 2020. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The company filed a Form D with the Securities and Exchange Commission on November 27, 2020. On January 28, 2021 BlackStar Enterprise Group, Inc. and SE Holdings, LLC entered into a convertible promissory note totaling $220,000 and a securities purchase agreement. The note bears interest at 10%, with a default rate of 24%, and is convertible, at any time after the date of issuance. The conversion price is to be calculated at 50% of the average of the three lowest trading price of the Company s common stock for the previous twenty trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to this note, and the Company has reserved 44,000,000 shares for conversion. Net proceeds from the loan were $177,500, after original issue discount of $20,000 and legal fees and offering costs of $22,500. Details of the promissory note and securities purchase agreement can be found in the Form 8-K and exhibits filed on February 4, 2021. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The company filed a Form D with the Securities and Exchange Commission on February 4, 2021. On April 29, 2021 BlackStar Enterprise Group, Inc. and Adar Alef, LLC entered into a convertible promissory note totaling $550,000 and a securities purchase agreement. The Company initially reserved out of its authorized Common Stock 86,105,000 shares of Common Stock for conversion pursuant to the note. The note bears interest at 10%, with a default rate of 24%, and is convertible at the option of the holder, at any time after the date of issuance. The conversion price is to be calculated at 50% of the average of the three lowest closing bid prices of the Company s common stock for the previous 20 trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to the note. The Company received the net proceeds from the loan of $462,000, after original issue discount, legal fees and offering costs of $88,000. Copies of the promissory note, securities purchase agreement, and transfer agent letter can be found in the Form 10-Q and exhibits filed on May 17, 2021. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The company filed a Form D with the Securities and Exchange Commission on June 1, 2021. The Lender or Investor will instruct the Borrower through instruction to the Transfer Agent to either: Table of Contents A.Electronically transmit the Common Stock pursuant to the Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC"). Lender or Investor will supply 1) Name of Prime Broker and 2) Account Number. B.The Lender or Investor hereby request that the Borrower issue a certificate or certificates for the number of shares of Common Stock which numbers are based on the Holders calculation attached hereto in the name(s) specified. The Company has entered into several other convertible note and promissory note financing arrangements over the past several years and all arrangements are discussed further in Item 11 herein. The Offering We are registering 46,000,000 shares of common stock underlying convertible notes for sale on behalf of selling shareholders (the "Resale Shares"). The shares registered herein are common shares and if placed in a Broker Dealer account by the shareholder, they will be DWAC by DTCC (electronic fungible form); otherwise, the shareholder may hold the shares upon conversion in certificated form. Our common stock will be transferable immediately upon the effectiveness of the Registration Statement. (See "Description of Securities") Common shares outstanding before this registration statement1 790 ,292,999 Maximum common shares being offered by our selling shareholders 46,000,000 Maximum common shares outstanding after this offering 836 ,292,999 1)There are additionally warrants outstanding for the purchase of 321,200 shares of common stock, not included in this figure. We will not receive any proceeds from the sale of our securities offered by the selling stockholders under this prospectus. All the shares sold under this prospectus will be sold or otherwise disposed of for the account of the selling stockholders, or their pledgees, assignees or successors-in-interest. See "Use of Proceeds" beginning on page 19 of this prospectus. We are authorized to issue 2,000,000,000 shares of common stock with a par value of $0.001 and 10,000,000 shares of preferred stock. Our current shareholders, officers and directors collectively own 790 ,292,999 shares of common stock and 1,000,000 shares of preferred stock as of this date, with warrants outstanding for 321,200 shares of common stock. Currently there is a limited public trading market for our stock on OTC Pink under the symbol "BEGI." Forward Looking Statements This prospectus contains various forward-looking statements that are based on our beliefs as well as assumptions made by and information currently available to us. When used in this prospectus, "believe," "expect," "anticipate," "estimate," and similar expressions are intended to identify forward-looking statements. These statements may include statements regarding seeking business opportunities, payment of operating expenses, and the like, and are subject to certain risks, uncertainties and assumptions which could cause actual results to differ materially from projections or estimates. Factors which could cause actual results to differ materially are discussed at length under the heading "Risk Factors". Should one or more of the enumerated risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Investors should not place undue reliance on forward-looking statements, all of which speak only as of the date made. Table of Contents RISK FACTORS RISK FACTORS RELATED TO OUR BUSINESS OUR SUCCESS WILL DEPEND, TO A LARGE DEGREE, ON THE EXPERTISE AND EXPERIENCE OF THE MEMBERS OF OUR MANAGEMENT TEAM. We will rely exclusively on the skills and expertise of our management team in conducting our business. Our management team has experience in identifying, evaluating and acquiring prospective businesses for which we may ultimately provide loans, but there is no assurance our managements assessments will be successful in placing loans which are repaid with interest. Accordingly, there is only a limited basis upon which to evaluate our prospects for achieving our intended business objectives. We will be wholly dependent for the selection, structuring, closing and monitoring of all of our investments on the diligence and skill of our management team, under the supervision of our Board of Directors. There can be no assurance that we will attain our investment objective. The management team will have primary responsibility for the selection of companies to which we will loan or finance, the terms of such loans and the monitoring of such investments after they are made. However, not all of the management team will devote all of their time to managing us. These factors may affect our returns. We have limited resources and limited operating history. OUR OPERATIONS AS A MERCHANT BANK MAY AFFECT OUR ABILITY TO, AND THE MANNER IN WHICH, WE RAISE ADDITIONAL CAPITAL, WHICH MAY EXPOSE US TO RISKS. Our business will require a substantial amount of capital. We may acquire additional capital from the issuance of senior securities, including borrowings or other indebtedness, or the issuance of additional shares of our common stock. However, we may not be able to raise additional capital in the future on favorable terms or at all. We may issue debt securities, other evidences of indebtedness or preferred stock, and we may borrow money from banks or other financial institutions, which we refer to collectively as "senior securities". If the value of our businesses declines, we may be unable to satisfy loan requirements. If that happens, we may be required to liquidate a portion of our ventures and repay a portion of our indebtedness at a time when such sales may be disadvantageous. As a result of issuing senior securities, we would also be exposed to typical risks associated with leverage, including an increased risk of loss. If we issue preferred stock, the preferred stock would rank "senior" to common stock in our capital structure, preferred stockholders would have separate voting rights and might have rights, preferences, or privileges more favorable than those of our common stockholders. If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease. WE MAY ENGAGE IN BUSINESS ACTIVITIES THAT COULD RESULT IN US HOLDING INVESTMENT INTERESTS IN A NUMBER OF ENTITIES WHICH COULD SUBJECT US TO REGULATION UNDER THE INVESTMENT COMPANY ACT OF 1940. Although we will be subject to regulation under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, we believe we will not be subject to regulation under the Investment Company Act of 1940 (the "1940 Act") insofar as we will not be engaged in the business of investing or trading in securities within the definitions and parameters which would make us subject to the "1940 Act," or holding unconsolidated minority interests in multiple companies and cash which might fall within the "holding company" definitions. In the event we engage in business activities that result in us holding investment interests in a number of nonconsolidated entities, we might become subject to regulation under the 1940 Act. In such event, we would be required to register as an Investment Company and incur significant registration and compliance costs. Additionally, the 1940 Act requires that a number of structural safeguards, such as an independent board of directors and a separate investment adviser whose contract must be approved by a majority of the company s shareholders, be put in place within such companies. The 1940 Act also imposes significant disclosure and reporting requirements beyond those found in the Securities Act and the Exchange Act of 1934, as amended (the Exchange Act). Likewise, the 1940 Act contains its own anti-fraud provisions and private remedies, and it strictly limits investments made by one investment company in another to prevent pyramiding Table of Contents of investment companies, leading to consolidated investment companies acting in the interest of other investment companies rather than in the interest of securities holders. The labeling of the Company as an investment company could significantly impair our business plan and operations and have a material adverse effect on our financial condition. Compliance with the 1940 Act is prohibitively expensive for small companies, in our estimation, and even if it meant divestiture of assets, we would intend to avoid being classified as an Investment Company. WE ARE DEPENDENT UPON OUR PART-TIME MANAGEMENT FOR OUR SUCCESS WHICH IS A RISK TO OUR INVESTORS. Our lack of full-time management may be an impediment to our business achievement. Without full-time officers, we may not have sufficient devoted time and effort to find successful loan prospects, additional capital, or manage our loan portfolio, which could impair our ability to succeed in our business plan and could cause investment in our Company to lose value. WE HAVE A LIMITED AMOUNT OF FUNDS AVAILABLE FOR INVESTMENT IN VENTURES AND AS A RESULT OUR VENTURES MAY LACK DIVERSIFICATION. Based on the amount of our existing available funds, it is unlikely that we will be able to commit our funds to loans to large number of ventures. We intend to operate as a diversified merchant bank. Prospective investors should understand that our venture investments are not, and in the future may not be, substantially diversified. We may not achieve the same level of diversification as larger entities engaged in similar activities. Therefore, our assets may be subject to greater risk of loss than if they were more widely diversified. The loss of one or more of our limited number of investments could have a material adverse effect on our financial condition. WE HAVE A LACK OF REVENUE HISTORY AND STOCKHOLDERS CANNOT VIEW OUR PAST PERFORMANCE SINCE WE HAVE A LIMITED OPERATING HISTORY. We were incorporated on December 17, 2007 for the purpose of engaging in any lawful business and have adopted a plan as a small and micro-cap market merchant banking company. During the period of inception through March 31, 2023, we have not recognized revenues. We are not profitable. We must be regarded as a new venture with all of the unforeseen costs, expenses, problems, risks and difficulties to which such ventures are subject. WE ARE NOT DIVERSIFIED, AND WE WILL BE DEPENDENT ON ONLY ONE BUSINESS, MERCHANT BANKING. Because of the limited financial resources that we have, it is unlikely that we will be able to diversify our operations. Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within the merchant banking industry and therefore increase the risks associated with our operations due to lack of diversification. WE CAN GIVE NO ASSURANCE OF SUCCESS OR PROFITABILITY TO OUR STOCKHOLDERS. There is no assurance that we will ever operate profitably. There is no assurance that we will generate revenues or profits, or that the market price of our common stock will be increased thereby. WE MAY HAVE A SHORTAGE OF WORKING CAPITAL IN THE FUTURE WHICH COULD JEOPARDIZE OUR ABILITY TO CARRY OUT OUR BUSINESS PLAN. Our capital needs consist primarily of expenses related to general and administrative, legal and accounting, and software development and could exceed $500,000 in the next twelve months. Such funds are not currently committed, and we have cash of approximately $36,603 as of March 31, 2023. Table of Contents WE WILL NEED ADDITIONAL FINANCING FOR WHICH WE HAVE NO COMMITMENTS, AND THIS MAY JEOPARDIZE EXECUTION OF OUR BUSINESS PLAN. We have limited funds, and such funds may not be adequate to carry out our business plan in the small and micro-cap market merchant banking industry. Our ultimate success depends upon our ability to raise additional capital. We are investigating the availability, sources, and terms that might govern the acquisition of additional capital. We have no commitment at this time for additional capital. If we need additional capital, we have no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to us. If not available, our operations will be limited to those that can be financed with our modest capital. WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD CAUSE A LOSS OF CONTROL BY OUR PRESENT MANAGEMENT AND CURRENT STOCKHOLDERS. We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance, represent a majority of the voting power and equity of our Company. The result of such an issuance would be those new stockholders and management would control our Company, and persons unknown could replace our management at this time. Such an occurrence would result in a greatly reduced percentage of ownership of our Company by our current stockholders, which could present significant risks to stockholders. WE HAVE AUTHORIZED AND DESIGNATED A CLASS A PREFERRED SUPER MAJORITY VOTING CONVERTIBLE STOCK, WHICH HAVE VOTING RIGHTS OF 60% OF OUR COMMON STOCK AT ALL TIMES. Class A Preferred Super Majority Voting Convertible Stock (the "Class A Preferred Stock"), of which 1,000,000 shares of preferred stock have been authorized for the Class A out of 10,000,000 total preferred shares authorized, and which have super majority voting rights (60%) over common stock voting at all times. At this time, all shares of the Class A Preferred Stock have been issued to International Hedge Group, Inc. which is controlled by Mr. Kurczodyna, an officer and director. OUR OFFICERS AND DIRECTORS MAY HAVE CONFLICTS OF INTERESTS AS TO CORPORATE OPPORTUNITIES WHICH WE MAY NOT BE ABLE OR ALLOWED TO PARTICIPATE IN AND MAY RECEIVE COMPENSATION FROM OUR PARENT COMPANY. Presently there is no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. We have no intention of merging with or acquiring a business opportunity from any affiliate or officer or director. Our current officers and directors also currently serve our parent company, International Hedge Group, Inc., which may have consulting agreements with some of our venture companies and as such is a direct conflict and such officers and directors may be paid by such parent. We intend to diversify and/or expand our Board of Directors in the future. WE HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY DELAWARE STATUTES. Delaware General Corporation Laws provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person s promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us that we will be unable to recoup. Table of Contents OUR DIRECTORS LIABILITY TO US AND STOCKHOLDERS IS LIMITED Delaware General Corporation Laws exclude personal liability of our directors and our stockholders for monetary damages for breach of fiduciary duty except in certain specified circumstances. Accordingly, we will have a much more limited right of action against our directors that otherwise would be the case. This provision does not affect the liability of any director under federal or applicable state securities laws. We have no full-time employees which may impede our ability to carry on our business. Our officers are independent consultants who devote up to 40 hours per week to Company business. The lack of full-time employees may very well prevent the Company s operations from being efficient, and may impair the business progress and growth, which is a risk to any investor. RISK FACTORS OF THE COMPANY THERE CAN BE NO CERTAINTY AS TO MARKET ACCEPTANCE OF THE PROPOSED BDTP TM. The Company has no certainty as to whether the market will accept our proposed business concept and use the idea of the BDTP TM, should it become operational, nor is there any certainty as to how the BDTP TM translates to profits for the Company. There is no assurance of market acceptance or profitability of the concept or Company. The BDTP TM is not yet functional and may never be functional. THERE CURRENTLY IS A LIMITED LIQUID TRADING MARKET FOR OUR COMMON STOCK AND WE CANNOT ASSURE INVESTORS THAT A ROBUST TRADING MARKET WILL EVER DEVELOP OR BE SUSTAINED FOR OUR COMMON STOCK. To date, there has been a limited trading market for our common stock on the OTC Pink Market. We cannot predict how liquid the market for our common stock may become. A lack of an active market may impair investor s ability to sell their shares at the time they wish to sell them or at a price they consider reasonable. The lack of an active trading market may impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies by using our common stock as consideration. For companies where securities are traded in the OTC Pink Market, it is generally more difficult to obtain accurate quotations, to obtain coverage for significant news events (because major media channels generally do not publish presses releases about such contingencies) and to obtain needed capital. WE MAY NOT REALIZE RETURNS ON OUR INVESTMENTS IN VENTURES FOR SEVERAL YEARS. THUS, AN INVESTMENT IN SHARES OF OUR COMMON STOCK IS ONLY APPROPRIATE FOR INVESTORS WHO DO NOT NEED SHORT TERM LIQUIDITY IN THEIR MONEY. We intend to make loans as quickly as possible consistent with our business objectives in those investments that meet our criteria. However, it is likely that a significant period of time will be required before we are able to achieve repayment and any additional value from warrants or stock conversions that we hold in an eligible venture company. COMPETITION FOR LOANS AND INVESTMENTS. We expect to encounter competition from other entities having similar business objectives, some of whom may have greater resources than us. Historically, the primary competition for venture capital investments has been from venture capital funds and corporations, venture capital affiliates of large industrial and financial companies, small business investment companies, and wealthy individuals. Additional competition is anticipated from foreign investors and from large industrial and financial companies investing directly rather than through venture capital affiliates. Virtually all of our competitors will have a competitive advantage and are much larger. The need to compete for loans or investment opportunities may make it necessary for us to offer venture companies more attractive transaction terms than otherwise might be the case. We anticipate being a co-investor with other venture capital groups, and these relationships with other groups may expand our access to business opportunities. Table of Contents RISKS OF COMPETITION FOR OUR VENTURE COMPANIES. Most emerging markets are highly competitive. We anticipate that nearly all our venture companies will compete against firms with greater financial resources, more extensive development, manufacturing, marketing, and service capabilities, and a larger number of qualified managerial and technical personnel. ILLIQUID NATURE OF OUR INVESTMENTS. We anticipate that substantially all of our ventures (other than short-term investments) will consist of controlling interests in ventures that at the time of acquisition are unmarketable, illiquid and for which no ready market will exist, if such a market does in fact exist. Our venture investments are intended to be in companies in which we will have controlling interest and will be privately negotiated transactions. There is not anticipated to be any market for the ventures until such until such have developed successful businesses. Because of the illiquid nature of our venture investments, a substantial portion of our assets will be carried on our books adjusted for accrued losses, depreciation and impairment which could in some cases result in a write off. This value will not necessarily reflect the amount which could be realized upon a sale, or payoff in the future. RISKS OF OUR NEED FOR ADDITIONAL CAPITAL TO FUND OUR VENTURE COMPANIES. We expect that most venture companies will require additional financing to satisfy their working capital requirements. The amount of additional financing needed will depend upon the maturity and objectives of the particular opportunity. Each round of venture financing (whether from us or other investors) is typically intended to provide a venture company with enough capital to reach the next major valuation milestone. If the funds provided are not sufficient, a company may have to raise additional capital at a price or at terms unfavorable to the existing investors, including our Company. This additional financing or the availability of any form of equity or debt capital is generally a function of capital market conditions that are beyond our control or any venture company. Our management team may not be able to predict accurately the future capital requirements necessary for success of our Company or venture companies. Additional funds may not be available from any source. OUR VENTURE PORTFOLIO IS AND MAY CONTINUE TO BE CONCENTRATED IN A LIMITED NUMBER OF VENTURE COMPANIES AND INDUSTRIES, WHICH WILL SUBJECT US TO A RISK OF SIGNIFICANT LOSS IF ANY OF THESE COMPANIES FAIL OR BY A DOWNTURN IN THE PARTICULAR INDUSTRY. Our venture is and may continue to be concentrated in a limited number of venture companies and industries. We do not have fixed guidelines for diversification, and since we are targeting some specific industries, our venture investments could continue to be, concentrated in relatively few industries. As a result, the aggregate returns we realize may be significantly adversely affected if our venture investments perform poorly or if we need to write down the value of any one investment. Additionally, a downturn in any particular industry in which we are invested could also significantly impact the aggregate returns we realize. WE INTEND TO CONTROL ALL OF OUR VENTURES. We will control all of our venture companies, and we will maintain financial supervision until divestiture, spin-off or liquidation. WE MAY NOT REALIZE GAINS FROM OUR VENTURES. Our goal is ultimately to dispose of our control interests we receive from our venture companies to attempt to realize gains upon our disposition of such interests by sale, for cash spin-off, or liquidation. However, any interests we hold may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from any venture interests, and any gains that we do realize on the disposition of any venture interests may not be sufficient to offset any other losses we experience. Table of Contents THE INABILITY OF OUR VENTURE COMPANIES TO COMMERCIALIZE THEIR TECHNOLOGIES OR CREATE OR DEVELOP COMMERCIALLY VIABLE PRODUCTS OR BUSINESSES WOULD HAVE A NEGATIVE IMPACT ON OUR INVESTMENT RETURNS. The possibility that our venture companies will not be able to commercialize their technology, products or business concepts presents significant risks to the value of our ventures. Additionally, although some of our venture companies may already have a commercially successful product or product line when we invest, technology related products and services often have a more limited market or life span than have products in other industries. Thus, the ultimate success of these venture companies often depends on their ability to continually innovate in increasingly competitive markets. Their inability to do so could affect our investment return. We cannot assure you that any of our venture companies will successfully acquire or develop any new technologies, or that the intellectual property the companies currently hold will remain viable. Even if our venture companies are able to develop commercially viable products, the market for new products and services is highly competitive and rapidly changing. Neither our venture companies nor we have any control over the pace of technology development. Commercial success is difficult to predict, and the marketing efforts of our venture companies may not be successful. RISK FACTORS RELATING TO OUR BUSINESS WE HAVE INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES. As of March 31, 2023, we had an accumulated deficit of $(9,492,171). Future losses are likely to occur until we are able to receive returns on our loans and investments since we have no other sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2014 through 2022, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern. OUR EXISTING FINANCIAL RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING EXPENSES. We have no sources of income at this time and insufficient assets to meet our ongoing operating expenses. In the short term, unless we are able to raise additional debt and/or equity we shall be unable to meet our ongoing operating expenses. On a longer-term basis, we intend to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can be no assurance that these events will be successfully completed. UNFAVORABLE CONDITIONS IN OUR INDUSTRY OR THE GLOBAL ECONOMY OR REDUCED ACCESS TO LENDING MARKETS COULD HARM OUR BUSINESS. Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our potential customers. Current or future economic uncertainties or downturns could adversely affect our business and results of operations. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, warfare, public health issues, such as the recent outbreak of coronavirus (COVID-19), and terrorist attacks on the United States, Europe, the Asia Pacific region, or elsewhere, could cause a decrease in business investments or decrease access to financing which would harm our business. To the extent that our platform is perceived by potential customers as too costly, or difficult to deploy or migrate to, our revenue may be disproportionately affected by delays or reductions in general technology spending. Also, we may have competitors, many of whom may be larger and have greater financial resources than we do and may respond to market conditions by attempting to lure away our customers. We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry. Table of Contents BECAUSE INSIDERS CONTROL OUR ACTIVITIES, THAT MAY CAUSE US TO ACT IN A MANNER THAT IS MOST BENEFICIAL TO THEM AND NOT TO OUTSIDE SHAREHOLDERS WHICH COULD CAUSE US NOT TO TAKE ACTIONS THAT OUTSIDE INVESTORS MIGHT VIEW FAVORABLY Our executive officers, directors, and holders of 5% or more of our issued and outstanding common stock, including International Hedge Group, Inc., beneficially own approximately 1.74 % of our issued and outstanding common stock, in addition to the Super Majority Voting Class A Preferred Stock. As a result, they effectively control all matters requiring director and stockholder approval, including the election of directors, the approval of significant corporate transactions, such as mergers and related party transaction. These insiders also have the ability to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring or preventing a change in control of our company that you might view favorably. OUR OFFICERS AND DIRECTORS HAVE THE ABILITY TO EFFECTIVELY CONTROL SUBSTANTIALLY ALL ACTIONS TAKEN BY STOCKHOLDERS. Mr. Kurczodyna, an officer and director of the Company and of our parent, International Hedge Group, Inc. ("IHG"), controls approximately 1. 15 % of our issued and outstanding common stock and 100% of our issued and outstanding preferred shares through IHG plus his own holdings; he has significant influence over all actions taken by our stockholders, including the election of directors, based on the BlackStar Super Majority Voting Class A Preferred Stock held by IHG. On December 18, 2020, the IHG shareholders voted to issue 1,000,000 IHG Class A Preferred shares to Mr. Kurczodyna as compensation for services provided to IHG, giving Mr. Kurczodyna supermajority voting rights over IHG and the ability to convert the IHG Class A Preferred Stock into shares of IHG common stock at the rate of one (1) IHG Class A Preferred for two-hundred ten (210) IHG common shares. This is a significant increase to the control of IHG by Mr. Kurczodyna, which effectively means that Mr. Kurczodyna has control of BlackStar through IHG s ownership of BlackStar Super Majority Voting Class A Preferred Stock. Mr. LaPointe owns 0. 04 % of the issued and outstanding common stock. Such concentration of ownership could also have the effect of delaying, deterring, or preventing a change in control that might otherwise be beneficial to stockholders and may also discourage the market for our stock due to the concentration. WE MAY DEPEND UPON OUTSIDE ADVISORS, WHO MAY NOT BE AVAILABLE ON REASONABLE TERMS AND AS NEEDED. To supplement the business experience of our officers and directors, we may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. Our Board, without any input from stockholders, will make the selection of any such advisors. Furthermore, it is anticipated that such persons may be engaged on an "as needed" basis without a continuing fiduciary or other obligation to us. In the event we consider it necessary to hire outside advisors, we may elect to hire persons who are affiliates, if they are able to provide the required services. RISKS RELATING TO OUR VENTURE INVESTMENTS THE INABILITY OF OUR VENTURE COMPANIES TO ADEQUATELY EXECUTE THEIR GROWTH OR EXPANSION STRATEGIES WOULD HAVE A NEGATIVE IMPACT ON OUR LOAN OR INVESTMENT RETURNS. The possibility that our venture companies will not be able to fully carry out or execute on their expansion or growth plans presents significant risk. Our venture investments success in our subsidiary companies will ultimately depend on the success of our ventures. If the intended expansion or growth plan that was one of the main reasons we had originally formed the venture does not come to fruition or is otherwise impeded, the value of the venture may negatively reflect this information, making our investment not profitable or may subject us to a substantial loss. In such case, we may incur an entire loss of our investment. Table of Contents OUR VENTURE COMPANIES WILL LIKELY HAVE SIGNIFICANT COMPETITION FROM MORE ESTABLISHED COMPANIES AS WELL AS INNOVATIVE EARLY-STAGE COMPANIES. Emerging growth companies often face significant competition, both from early-stage companies and from more established companies. Early-stage competitors may have strategic capabilities such as an innovative management team or an ability to react quickly to changing market conditions, while more established companies may possess significantly more experience and greater financial resources than our venture companies. These factors could affect our investment returns. OUR INVESTMENT RETURNS WILL DEPEND ON THE SUCCESS OF OUR VENTURES AND, ULTIMATELY, THE ABILITIES OF THEIR KEY PERSONNEL. Our success will depend upon the success of our ventures. Their success, in turn, will depend in large part upon the abilities of their key personnel. The day-to-day operations of our ventures will remain the responsibility of their key personnel. The loss of one or a few key managers can hinder or delay a company s implementation of its business plan. Our ventures may not be able to attract qualified managers and personnel. Any inability to do so may negatively impact our financial picture. SOME OF OUR VENTURE COMPANIES MAY NEED ADDITIONAL CAPITAL, WHICH MAY NOT BE READILY AVAILABLE. Ventures in which we may make investments will often require substantial additional financing to fully execute their growth strategies. Each round of venture financing is typically intended to provide a company with only enough capital to reach the next stage of development, or in the case of our financings, the turn-around stage or offering stage which might provide us with a liquidity event. We cannot predict the circumstances or market conditions under which our ventures may seek additional capital. It is possible that one or more of our ventures will not be able to raise additional financing or may be able to do so at a price or on terms which are unfavorable to us, either of which could negatively impact our success. A likely economic downturn due to the recent pandemic known as coronavirus (COVID-19) may also cause lasting damage to the markets and potential ventures, from capital access and lack of investment issues to staffing and supply chain issues. RISKS RELATING TO OWNERSHIP OF OUR COMMON STOCK A LIMITED PUBLIC MARKET EXISTS FOR OUR COMMON STOCK AT THIS TIME, AND THERE IS NO ASSURANCE OF A FUTURE MARKET. There is a limited public market for our common stock, and no assurance can be given that a market will continue or that a shareholder ever will be able to liquidate his investment without considerable delay, if at all. If a market should continue, the price may be highly volatile. Factors such as those discussed in the "Risk Factors" section may have a significant impact upon the market price of the shares offered hereby. Due to the low price of our securities, many brokerage firms may not be willing to effect transactions in our securities. Even if a purchaser finds a broker willing to effect a transaction in our shares, the combination of brokerage commissions, state transfer taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of our shares as collateral for any loans. OUR STOCK WILL, IN ALL LIKELIHOOD, BE THINLY TRADED AND AS A RESULT YOU MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR SHARES. The shares of our common stock may be thinly traded and even more so as our shares trade on OTC Pink. We are a small company which is relatively unknown to stock analysts, stock brokers, institutional stockholders and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early-stage company such as ours or purchase or recommend the purchase of any of our securities until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our securities is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on Securities price. We cannot give you any Table of Contents assurance that a broader or more active public trading market for our common securities will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give stockholders no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their securities. OUR COMMON STOCK MAY BE VOLATILE, WHICH SUBSTANTIALLY INCREASES THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SECURITIES AT OR ABOVE THE PRICE THAT YOU MAY PAY FOR THE SECURITY. Because of the possible price volatility, you may not be able to sell your shares of common stock when you desire to do so. The inability to sell your securities in a rapidly declining market may substantially increase your risk of loss because of such illiquidity and because the price for our securities may suffer greater declines because of our price volatility. The price of our common stock that will prevail in the market after this offering may be higher or lower than the price you may pay. Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to the following: Variations in our quarterly operating results; Loss of a key relationship or failure to complete significant transactions; Additions or departures of key personnel; Fluctuations in stock market price and volume; Changes to the Distributed Ledger Technology industry; and Regulatory developments, particularly those affecting digital shares. Additionally, in recent years the stock market in general, has experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price, regardless of our operating performance. In the past, class action litigation often has been brought against companies following periods of volatility in the market price of those company s common stock. If we become involved in this type of litigation in the future, it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on your investment in our stock. THE REGULATION OF PENNY STOCKS BY THE SEC AND FINRA MAY DISCOURAGE THE TRADABILITY OF OUR SECURITIES. We are a "penny stock" company, as our stock price is less than $5.00 per share. If we are able to obtain an exchange listing for our stock, we cannot make an assurance that we will be able to maintain a stock price greater than $5.00 per share and if the share price was to fall to such prices, that we wouldn t be subject to the Penny Stocks rules. None of our securities currently trade in any market and, if ever available for trading, will be subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited stockholders. For purposes of the rule, the phrase "accredited stockholders" means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse s income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser s written agreement to the transaction prior to the sale. Effectively, this discourages broker-dealers from executing trades in penny stocks. Consequently, the rule will affect the ability of purchasers in this offering to sell their securities in any market that might develop therefore because it imposes additional regulatory burdens on penny stock transactions. In addition, the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute "penny stocks" within the meaning of the rules, the rules would apply to us and to our securities. The rules will further affect the ability of owners of shares to sell our Table of Contents securities in any market that might develop for them because it imposes additional regulatory burdens on penny stock transactions. Stockholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. Inventory in penny stocks have limited remedies in the event of violations of penny stock rules. While the courts are always available to seek remedies for fraud against us, most, if not all, brokerages require their customers to sign mandatory arbitration agreements in conjunctions with opening trading accounts. Such arbitration may be through an independent arbiter. Stockholders may file a complaint with FINRA against the broker allegedly at fault, and FINRA may be the arbiter, under FINRA rules. Arbitration rules generally limit discovery and provide more expedient adjudication, but also provide limited remedies in damages usually only the actual economic loss in the account. Stockholders should understand that if a fraud case is filed an against a company in the courts it may be vigorously defended and may take years and great legal expenses and costs to pursue, which may not be economically feasible for small stockholders. That absent arbitration agreements, specific legal remedies available to stockholders of penny stocks include the following: If a penny stock is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment. If a penny stock is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages. The fact that we are a penny stock company will cause many brokers to refuse to handle transactions in the stocks, and may discourage trading activity and volume, or result in wide disparities between bid and ask prices. These may cause stockholders significant illiquidity of the stock at a price at which they may wish to sell or in the opportunity to complete a sale. Stockholders will have no effective legal remedies for these illiquidity issues. WE WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE. We have not paid dividends on our common stock and do not ever anticipate paying such dividends in the foreseeable future. Stockholders whose investment criteria are dependent on dividends should not invest in our common stock. RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE. All of the outstanding shares of common stock are held by our present officers, directors, and affiliate stockholders as "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that a person who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a company s outstanding common stock or the average weekly trading volume during the four calendar weeks prior to the sale. There is no limit on the amount of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of two years. A sale under Rule 144 or under any Table of Contents other exemption from the Act, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop. OUR STOCKHOLDERS MAY SUFFER FUTURE DILUTION DUE TO ISSUANCES OF SHARES FOR VARIOUS CONSIDERATIONS IN THE FUTURE. There may be substantial dilution to BlackStar Enterprise Group, Inc. stockholders as a result of future decisions of the Board to issue shares without shareholder approval for cash, services, or acquisitions. WE ARE A REPORTING COMPANY We are subject to the reporting requirements under the Securities and Exchange Act of 1934, Section 13a, due to the effectiveness of our Registration Statement on Form 10 under Section 12(g) which became effective on or about February 27, 2017. As a result, stockholders will have access to the information required to be reported by publicly held companies under the Exchange Act and the regulations thereunder. As a result, we will be subject to legal and accounting expenses that private companies are not subject to and this could affect our ability to generate operating income. WE HAVE NOT IDENTIFIED ANY OTHER VENTURES IN WHICH WE MAY INVEST IN A VENTURE. We have only loaned money to one company, Meshworks Media Corporation, (and that loan has been assigned) and it may take time to find other ventures, none of which are identified as of the date of this filing. OUR OTC MARKET STATUS HAS BEEN LOWERED FROM OTCQB TO OTC Pink. Due to the low trading price of the common stock of the Company, we have been demoted from the OTCQB to OTC Pink for not maintaining the $0.01 bid test. The Company has sought financing through convertible promissory notes in order to develop the BDTP TM app; some of the notes have in turn been converted to common stock and then traded on the market in large quantities, lowering the bid prices. The change in status from OTCQB to OTC Pink will make it harder to access investors and financing to continue to fund our operations. Additionally, OTC Markets has removed the "Shell Risk" label on the Company s profile, indicating that they believe we now meet certain criteria. We believe that we are not a shell company based on our history of operations and specific software development, the label has been removed from the BEGI profile on OTC Markets. OTC Markets may choose to downgrade our profile if we do not maintain adequate proof that we are not, in fact, a shell company. BLACKSTAR ELECTRONIC FUNGIBLE SHARES AND DIGITAL SHARES IN GENERAL MAY BE SUBJECT TO UNIQUE RISKS NOT ASSOCIATED WITH PAPER CERTIFICATED SHARES. The digital form of BlackStar common stock (BlackStar Electronic Fungible Shares when traded on BDTP TM) and digital or electronic shares in general may be subject to timing delays, electronic transfer errors, electronic systems outages, and cybersecurity threats. BlackStar Electronic Fungible Shares carry the same risks as electronic fungible shares from DTCC that have been DWAC and placed in Broker Dealers accounts for customers. The intended functionality of the BlackStar Digital Trading Platform TM is to encrypt the buy/sell orders (including all transaction and customer information) placed by broker dealers and customers, in order to provide additional security and ease of access over the existing systems, but not all risks can be mitigated due to unforeseen future threats and/or disruptions, transmission errors, and electronic systems issues. Electronic fungible shares of common stock, including BlackStar Electronic Fungible Shares, are the same class of common stock and hold the same rights as paper certificated shares of common stock; the only difference is the format. Digital shares would be the electronic fungible shares on account. The difference in the two is the mode of sale or transfer; however, the transfer agent maintains records of all shareholder activity, regardless of the form. While electronic fungible shares are now commonplace, there is still risk involved with electronic transmission of information and that transmission may be compromised. The record-keeping requirements of transfer agents, broker dealers, and issuers remain unchanged with electronic fungible shares, however, the risk of error or omission cannot be ruled out. Table of Contents INSURANCE WILL NOT BE OBTAINED FOR OUR ELECTRONIC FUNGIBLE SHARES WHICH POSES RISKS. We do not intend to attempt to obtain any insurance at this time for shares in electronic fungible form, so there will be no insurance for covering liability in the event of losses from the form or mode of transfer of Electronic Fungible Shares. AN ARTICLE PUBLISHED ON APRIL 17, 2023 BY COINTELEGRAPH.COM MAY EXPOSE US TO LIABILITY FOR VIOLATIONS OF SECTION 5 OF THE SECURITY ACT. On April 17, 2023, cointelegraph.com published an article by Ana Paula Pereira making various statements which were erroneous about BlackStar and our platform. When the publication of the article came to the attention of the Company, management felt that it was necessary to issue a press release (see the Current Report on Form 8-K ) correcting the article such that the public and existing security holders received factual information and were not misled by the article. In responding to the article, the Company made statements about this Registration Statement, which was not yet effective, in order to remove any confusion that the article may have caused and to reinforce that it was NOT effective; the Company also clarified that the SEC was not approving the BDTPTM platform and that this Registration Statement is a resale registration for common shares underlying convertible notes for select noteholders. While the Company believes that the article and the Company s response do not constitute offers or sales of securities in the absence of an effective registration statement, the Company cannot eliminate the possibility that it may have liability for a violation of the Securities Act of 1933 (the " 33 Act"). Violations of the registration provisions of Section 5 of the 33 Act give a purchaser of securities a one-year right to rescind the transaction, pursuant to Sections 12(a)(1) and 13 of the Act, as against any "seller" of the securities who has violated Section 5. In the event that there is a finding of a violation of Section 5 of the 33 Act, certain investors may have a right of rescission. Section 5 allows purchasers to sue sellers for offering or selling a non-exempt security without registering it. If the purchaser can prove a direct link between the purchaser and the seller, and the suit is within the statute of limitations, the purchaser may obtain rescission, with interest, or damages if the investor sold his securities for less than he purchased them. In addition to the civil liability from lawsuits brought by investors, the Company and management could face civil or criminal action brought by the federal or state government, depending on the nature of the violation. Criminal liability under Section 5 subjects the defendant to not more than $10,000 in fines and not more than five years imprisonment. Any lawsuits, judgments, penalties, or orders against the Company or its management could have a significant impact on the Company, may prevent or delay it from pursuing the proposed business plan, and would likely have a negative effect on the stock price. RISK FACTORS RELATED TO OUR PLATFORM AND BLOCKCHAIN/DISTRIBUTED LEDGER TECHNOLOGY THE OPERABILITY OF OUR PLATFORM DEPENDS ON OUR ABILITY TO ENTER INTO A LICENSE AGREEMENT WITH A BROKER DEALER OR AN ALTERNATIVE TRADING SYSTEM. Our plan to operate the BlackStar Digital Trading Platform TM relies on our ability to enter into a license agreement with a broker dealer or an alternative trading system ("ATS"). The BDTP TM operates as an encrypted platform for the transmission of customer information, dollar amount, number of shares, and account number to be sent over a secured network to/from the broker dealer and/or customer. Whether we license the platform to a broker dealer or an ATS, we will rely on the licensee to comply with all relevant laws, rules and regulations including, but not limited to, FINRA and/or SEC registration, the Customer Protection Rule (Rule 15c3-3 of the Securities Exchange Act of 1934, as amended), the Exchange Act requirements for books, records and financial reporting, and the Securities Investor Protection Act of 1970 ("SIPA"), as applicable. The duties of settlement, safekeeping, and reporting of customers assets will remain with the traditional custodians – the Broker Dealers retained by customers for their own account. The BDTP TM will provide encrypted transmission of order information, as discussed above. Once established, any disruption in our relationship with a broker dealer or ATS may cause a temporary or permanent service disruption of BDTP TM, unless and until we are able to reestablish a new licensee. If we are unable at any time to establish the necessary relationship, BDTP TM may never become functional. If we are unable to license BDTP TM to an ATS in this way, we may reevaluate whether we may apply for ATS status. Table of Contents If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed. We plan to rely upon trademarks, copyright and trade secret protection (and possibly also patents in the future), as well as non-disclosure agreements and invention assignment agreements with employees, consultants and third parties, to protect all confidential and proprietary information. Significant elements of our intended products and services are based on unpatented trade secrets and know-how that are not publicly disclosed. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. The security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and the recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time consuming, and the outcome is unpredictable. In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed. INTELLECTUAL PROPERTY RIGHTS CLAIMS MAY ADVERSELY AFFECT THE DISTRIBUTE LEDGER TECHNOLOGY. Third parties may assert intellectual property claims relating to their source code, including Distributed Ledger Technology. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in distributed ledger technology s long-term viability may adversely affect an investment in us. Additionally, a meritorious intellectual property claim could prevent us, our ventures, and other end-users from accessing the distributed ledger technology. As a result, an intellectual property claim against us could adversely affect an investment in us. WE MAY DEPEND ON THIRD PARTIES TO PROVIDE EXECUTION OF OUR TRADING PLATFORM, INTERNET, TELECOMMUNICATION AND FIBER OPTIC NETWORK CONNECTIVITY TO OUR DATA CENTER, AND ANY DELAYS OR DISRUPTIONS IN SERVICE COULD ADVERSELY AFFECT AN INVESTMENT IN US. We may rely on third-party service providers. In particular, we will depend on third parties to provide real time quotation and trading execution with our trading platform, Internet, telecommunication, and fiber optic network connectivity to our servers in our data center, and we have no control over the reliability of the services provided by these suppliers. We may in the future experience difficulties due to service failures unrelated to our systems and services. OUR INTERACTIONS WITH A BLOCKCHAIN MAY EXPOSE US TO SDN OR BLOCKED PERSONS OR CAUSE US TO VIOLATE PROVISIONS OF LAW THAT DID NOT CONTEMPLATE DISTRIBUTE LEDGER TECHNOLOGY. If our BDTP TM becomes operational, we may be required to comply with the Office of Financial Assets Control ("OFAC") of the U.S. Department of Treasury s sanction program and not conduct business with persons named on its specially designated nationals ("SDN") list. We anticipate that we will not to our knowledge engage in transactions with persons named on OFAC s SDN list, as the sales of shares occurring with the use of the platform will be required to comply with existing rules and regulations applicable to the information required to transfer securities. Moreover, federal law prohibits any U.S. person from knowingly or unknowingly possessing any visual depiction commonly known as child pornography. Recent media reports have suggested that persons have imbedded such depictions on one or more blockchains. Because our business requires us to download and retain one or more blockchains to effectuate our ongoing business, it is possible that such digital ledgers contain prohibited depictions without our knowledge or consent. To the extent government enforcement authorities literally enforce these and other laws and regulations that are impacted by decentralized distributed ledger technology, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and affect the value of our common stock. Table of Contents THE POSSIBILITY OF TRADING OCCURING ON MULTIPLE EXCHANGES MEANS THAT THERE MAY BE DISCREPANCIES IN TRADING PRICES OF COMMON STOCK. The trading market operating on the BDTP TM, once operational, is distinct and separate from the OTC market on which the common shares currently trade, which could cause discrepancies between the trading prices of common shares between the two venues, whether resulting from different liquidity in the markets or otherwise. If approved for trading, shareholders may take advantage of any discrepancies between the trading prices and trade shares of common stock where it is beneficial to them. THE POSSIBILITY OF REGULATORY DEVELOPMENTS RELATED TO CRYPTO ASSETS AND CRYPTO ASSET MARKETS MAY POSE AN UNINTENDED RISK TO OUR PROPOSED BUSINESS. The Company does not believe that any pending crypto legislation or regulation is likely to affect the business, financial condition, or results of operations at this stage. In the event that our proposed business plans, including BDTP TM, fall into the definitions of any future crypto legislation or regulation, the Company will evaluate the operations to ensure compliance with any new rules or laws. The Company has worked to create the proposed business plan within the confines of the existing rules, regulations, and laws. If, however, abundant operational changes are necessary for compliance, there may be material effects on the business. THE COMPANY MAY FACE REPUTATIONAL HARM, LOSS OF FINANCING, STOCK PRICE VOLATILITY, AND/OR LOW DEMAND FOR SERVICES BY PROXIMITY TO THE CRYPTO ASSET MARKET. The Company does not operate in the crypto asset markets, does not have crypto asset holdings, and is not proposing to participate in the crypto asset industry, including crypto securities, crypto currencies, and tokens. The use of a blockchain in our proposed platform often gets conflated with crypto asset markets due to blockchain s use in those industries as well. Although the Company does not believe that any reputational harm, loss of financing, stock price volatility, risk of legal proceedings, and/or low demand for our services will occur as a result of disruptions to and volatility in the crypto asset markets, the Company could nonetheless potentially be harmed as a result of our proximity to crypto asset markets.
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+PROSPECTUS SUMMARY 1 RISK FACTORS 10 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 36 USE OF PROCEEDS 37 DILUTION 38 DIVIDEND POLICY 40 CAPITALIZATION 41 PRICE RANGE OF OUR ORDINARY SHARES 42 ENFORCEABILITY OF CIVIL LIABILITIES 42 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS44 BUSINESS 65 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 89 PRINCIPAL SHAREHOLDERS 94 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 96 DIRECTOR AND EXECUTIVE COMPENSATION 98 DESCRIPTION OF SHARE CAPITAL 99 SHARES ELIGIBLE FOR FUTURE SALE 107 TAXATION 108 UNDERWRITING 116 EXPERTS AND LEGAL MATTERS 126 WHERE YOU CAN FIND ADDITIONAL INFORMATION 126 EXPENSES OF THIS OFFERING 127 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F-1 i Neither we nor the underwriters have authorized anyone to provide you with information that is different from that contained in this prospectus, any amendment or supplement to this prospectus, or in any free writing prospectus we may authorize to be delivered or made available to you. Neither we nor the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell ordinary shares and seeking offers to purchase ordinary shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of ordinary shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus. Neither we nor any of the underwriters have taken any action to permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. Unless the context otherwise requires, references in this prospectus to the terms the Company, Roan, we, us and our refer to Roan Holdings Group Co., Ltd., a company limited by shares incorporated under the laws of the British Virgin Islands, and all references to China or PRC and the Chinese government refer to the People s Republic of China and its government. In this prospectus, all references to Renminbi, or RMB are to the legal currency of China and all references to USD U.S. dollars, dollars, $ or US$ are to the legal currency of the United States. Our functional currency is the U.S. Dollar ( USD ). The functional currency of our PRC operating subsidiaries is Chinese Yuan ( RMB ). For financial reporting purposes, the financial statements of our PRC operating subsidiaries were prepared using RMB and translated into our functional currency, the USD, at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and owners equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in shareholders equity. The unaudited financial statements for the six months ended June 30, 2022 and 2021 and the audited financial statements for the years ended December 31, 2021, 2020 and 2019, included in this prospectus have been prepared in accordance with accounting principles generally accepted in the United States ( U.S. GAAP ). All references to shares in this prospectus refer to the pre-reverse split ordinary shares of Roan Holdings Group Co. Ltd., no par value. ii MARKET, INDUSTRY AND OTHER DATA This prospectus contains estimates, projections and other information concerning our industry, our business, and the markets for our products. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources. In addition, assumptions and estimates of our and our industry s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Risk Factors. These and other factors could cause our future performance to differ materially from our assumptions and estimates. See Cautionary Statement Regarding Forward-Looking Statements. iii PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before deciding to invest in our securities, you should read this entire prospectus carefully, including the sections of this prospectus entitled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and the related notes included elsewhere in this prospectus. Overview of the Company We are an offshore holding company incorporated in the British Virgin Islands. As a holding company with no material operations of our own, our operations are conducted in China by our subsidiaries. This is an offering of Ordinary Shares of the offshore holding company incorporated in the British Virgin Islands, instead of shares of our operating companies in China. Therefore, you will not directly hold any equity interests in our operating companies. We do not have a Variable Interest Entities ( VIE ) structure, but rather we use a direct shareholding model where our operating subsidiaries in China are majority- or wholly-owned by us, either directly or indirectly through one or more subsidiaries that are majority- or wholly-owned by us, so restrictive laws in China or disclosure requirements under U.S. securities laws regarding use of a VIE structure already introduced in China or the U.S. or whether possibly so introduced in the future, may not have a significant impact on us. We are subject to certain legal and operational risks associated with our subsidiaries operations in China, which could cause the value of our Ordinary Shares to significantly decline or be worthless and lead to our Ordinary Shares being unable to continue listing on a foreign exchange. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in our subsidiaries operations, significant depreciation of the value of our Ordinary Shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in antimonopoly enforcement. As confirmed by our PRC counsel, we are not affected now by the Measures for Cybersecurity Censorship because our customers are located in China mainland and we do not have over one million users personal information. Since these statements and regulatory actions are new, however, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, ability to accept foreign investments, and listing on the Nasdaq Stock Market. PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries ability to increase their registered capital or distribute profits to us, or otherwise expose us or our PRC resident shareholders to liabilities or penalties. Recent joint statement by the SEC and the 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. In May 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act ( HFCAA or the Act ) requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company s auditors for three consecutive years, the issuer s securities are prohibited to trade on a national securities exchange. Our auditor, ZH CPA, LLC, is headquartered in Denver, Colorado and is subject to inspection by the PCAOB on a regular basis and is not subject to the determinations approved by the PCAOB. Cash is transferred among Roan, Adrie Global Holdings Limited (BVI) and its Hong Kong subsidiary, Fortis Health Industrial Group Limited and its PRC subsidiaries, or Lixin Financial Holding Group Limited (Cayman), Lixin Financial Holding (BVI) Limited, Linx Financial Holding Group Limited (HK) and its PRC subsidiaries, in the following manner: (i) We may transfer funds to the PRC subsidiaries, through our Cayman subsidiary, BVI subsidiaries and Hong Kong subsidiaries in the form of additional capital contributions or shareholder loans (ii) dividends or other distributions may be paid by PRC subsidiaries to us through our Cayman subsidiary, BVI subsidiaries and Hong Kong subsidiaries. As a holding company, our ability to pay dividends, if any, to our shareholders will rely on dividends and other distributions on equity paid by our BVI subsidiaries, Hong Kong subsidiaries and PRC subsidiaries. Since 2017, none of our PRC subsidiaries have issued any dividends or distributions to their respective holding companies, including us, or any investors as of the date of this prospectus. In the future, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us through our BVI companies and subsidiaries in Hong Kong to our Chinese subsidiaries via capital contribution or shareholder loans, as the case may be. For more information, please see Risk Factors Risks Related to Doing Business in China Our Chinese subsidiaries ability to pay dividends to us may be restricted due to foreign exchange control and other regulations of China, Risk Factors Risks Related to Doing Business in China Our Chinese subsidiaries ability to pay dividends to us may be restricted due to foreign exchange control and other regulations of China, and Risk Factors Risks Related to Doing Business in China We have not paid dividends on our ordinary shares since 2017 and we do not anticipate paying any further dividends in the foreseeable future. Consequently, any gains from an investment in our ordinary shares will likely depend on whether the price of our ordinary shares increase, which may not occur. 1 At present, there are no substantial obstacles to our cash transferring from overseas to our PRC companies if the registration procedures for return investment are fulfilled. As for dividends to overseas shareholders, if the procedures of tax payment and foreign exchange registration of foreign-invested enterprises are performed normally out, there are no substantial obstacles and risks to the remittance of dividends abroad. Neither the U.S. Securities and Exchange Commission ( SEC ) nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Our Business We are a comprehensive solution provider for industrial operations and capital market services in China and focus our services on the new energy industry, new materials industry, which develops new materials for product manufacturing ( New Materials ), and semiconductor industry. We provide our industrial operations services to industrial parks under development, in some instances partnering with governments. These industrial operations services include initial planning, regulatory approvals and compliance, government relations, and construction management. We also intend to assist our project partners to manage the industrial parks when completed, to set up an industrial chain in the industrial parks, and to build a sustainable industrial ecosystem involving industrial park occupants and their customers and vendors. Our capital market services in the past have involved making loans to micro-, small- and medium-sized enterprises ( MSMEs ) and purchasing loans made by other lenders to MSMEs, providing loan guarantees to our customers, and providing associated assessment services and debt collection services to our customers. Going forward, capital market services are planned to involve attempting to arrange debt and equity financing for companies occupying those industrial parks we provide services to and for the customers and supply chain of such companies. We also engage in providing financial, insurance, and healthcare related solutions to individuals and MSMEs in China. We serve institutional and local government clients across the entire industrial chain and have offices in Hangzhou and Beijing. Our business has experienced substantial changes in recent years. We were originally incorporated under the name DT Asia Investment Limited ( DT Asia ). Following our business combination with Adrie Global Holdings Limited ( Adrie ) (the Business Combination ), we changed our name to China Lending Group and operated as a holding company for a PRC-based group of companies specializing in providing loan facilities to MSMEs and sole proprietors in Xinjiang Uygur Autonomous Regions ( Xinjiang ). Due to the slowdown of the Chinese economy, government regulations and policy changes related to loans to MSMEs, since 2018, we have adjusted our business model and substantially reduced direct loan business starting in 2018 and we did not renew any pre-existing loans in 2019. In September 2020, we disposed of the direct lending business that we had acquired from Adrie. In 2019, we acquired a 65.0177% interest in Lixin Financial Holdings Group Limited ( Lixin ) (the Lixin Acquisition ), which, through its subsidiaries, provides a wide range of financing solutions and related peripheral services, including financial management, assessment and consulting services, debt collection services, and financial guarantee services to individuals and MSMEs in China. Through Lixin, as of June 30, 2022, we have substantial direct loans outstanding to third parties, we have purchased and service additional loans to third parties originally made by other lenders, and we have guaranteed loans of third parties made by other lenders. Since the closing of the Lixin Acquisition (for more detailed information see History and Development of the Company - Corporate History and Structure of our PRC Operation) in December 2019, our customers are MSMEs and individual proprietors located in Zhejiang Province and Guangdong Province. Those customers are involved in commerce and service businesses, including real estate, technology promotion and application services, construction, finance, wholesale and retail industries, among others. In 2021, we successfully expanded our business to provide industrial operation services based on our past experiences, capability, customer resources, market channels, and relationships with institutional organizations and government. We provide services related to the development of industrial parks located in the Yangtze River Delta of China and once such parks are constructed, we plan to provide management services related to them. We plan to organize land reserves for industrial parks, devise solutions for the tenants in industrial parks, work with tenants in the implementation of our strategic production solutions, negotiate with related governments for subsidies and other forms of government assistance, and provide construction and management services to these projects. As of the date of this prospectus, we have not developed any industrial parks. For the six months ended June 30, 2022 and the year ended December 31, 2021, we conducted management and assessment services, made and guaranteed loans to third parties and purchased and serviced outstanding loans made to third parties by other lenders, and provided financial consulting, healthcare, and industrial operation services. As of June 30, 2022, we had a cash balance of $1,035,674 and a positive working capital of $50,361,534. In addition to the cash balance, the working capital was mainly comprised of restricted cash of $26,339,708, accounts receivable of $7,122,604, loan receivable due from third parties of $26,375,018 and other receivables of $745,964. The balances of these assets are expected to be repaid on maturity dates and will also be used for working capital. 2 COVID-19 Impact Our business operations have been affected and may continue to be affected by the ongoing COVID-19 pandemic. After the second quarter of 2020, the COVID-19 outbreak in China was gradually controlled. Our business initially returned to normal operations, although management assessed that our results of operations had been negatively impacted for the year. In 2021, Omicron variants emerged, resulting in continued disruption to our business and the global economy and supply chain. Recently, the Chinese government ordered officials to cut back on mass testing and regional lockdowns. The COVID-19 pandemic had outbreaks in many areas of mainland China. If the current outbreak of COVID-19 is not effectively and timely controlled, or if government responses to current outbreaks or potential outbreaks are severe or long-lasting, it could negatively affect the execution of customer contracts, the collection of customer payments, or disrupt our supply chain, and the continued uncertainties associated with COVID-19 may cause our revenue and cash flows to underperform in the next 12 months. The extent of the future impact of the COVID-19 pandemic on our business and results of operations is still uncertain. The following diagram illustrates our corporate structure, except as otherwise indicated, as of the date of this prospectus, including our principal subsidiaries and other entities: Recent Developments Reverse Split At our annual general meeting of shareholders held on _______________, 2023, our shareholders voted to approve a reverse share split of our ordinary shares within a range of [1:10 to 1:150] (the Reverse Split ), to be effective at the ratio and on a date to be determined by our board of directors (the Board of Directors ). Although our shareholders approved the Reverse Split, all per share amounts and calculations in this prospectus and the accompanying consolidated financial statements do not reflect the effects of the Reverse Split, as the Board of Directors has not determined the ratio or the effective date of the Reverse Split. New Subsidiaries of Roan On June 23, 2022, Zhongtan Future Industrial Operation (Hangzhou) Co., Ltd. ( ) ( Zhongtan Industrial Operation ), our wholly-owned subsidiary, was incorporated under the laws of the PRC. Zhongtan Industrial Operation provides industrial operation services focusing on new energy storage, New Materials, and semiconductor industries. On August 25, 2022, Zhongtan Future Industrial Operation (Jiaxing) Co., Ltd. ( ) ( Zhongtan Industrial Operation (JX) ), our wholly-owned subsidiary, was incorporated under the laws of the PRC. Zhongtan Industrial Operation (JX) provides industrial operation services focusing on new energy storage, New Materials, and semiconductor industries. 3 Joint Venture Investments On December 16, 2021, Hangzhou Zeshi Investment Partnership (Limited Partnership) ( ( ) ( Hangzhou Zeshi ), our wholly-owned subsidiary, subscribed RMB 2 million as registered capital (approximately $0.31 million) in Zhongtan Future New Energy Industry Development (Zhejiang) Co., Ltd. ( Zhongtan Future ), for 2% of its equity. Zhongtan Future will develop new energy storage battery manufacturing headquarters in Jiaxing Economic and Technological Development Zone and an energy storage system equipment manufacturing industry park in Zhejiang Shangyu Cao e River Economic Development Zone. On December 31, 2021, Hangzhou Zeshi entered into an agreement with ZhongTan Future, pursuant to which it will provide supply chain financial, financial leasing, industrial operation, and related services to Zhongtan Future. On April 2, 2022, Hangzhou Zeshi, subscribed RMB 22 million (approximately $3.41 million) as registered capital to Zhongxin Future (Hangzhou) Semiconductor Technology Industry Development Co., Ltd. ( ) ( ZhongXin ), a joint venture, for 22% of the equity in ZhongXin. ZhongXin will develop industrial parks by collaborating with the local governments in multiple areas in the Yangtze River Delta of China for the manufacturing, marketing and distribution of semiconductor products and new ecofriendly and high technology materials. On April 7, 2022, Hangzhou Zeshi entered into an agreement with ZhongXin, pursuant to which it will provide supply chain financial, industrial operation, and related services to ZhongXin. On July 19, 2022, Zhongtan Industrial Operation subscribed RMB 30 million (approximately $4.63 million) as registered capital in Hangzhou Zhongtan New Energy Enterprise Management Partnership (Limited Partnership) Zhongtan New Energy (HZ) for 60% of its equity. On August 30, 2022, Zhongtan New Energy (HZ) increased the registered capital from RMB 50 million to RMB 100 million, and the shares held by Zhongtan Industrial Operation was decreased to 30% accordingly. On August 30, 2022, Zhongtan Industrial Operation subscribed RMB 200 million (approximately $30.87 million) as registered capital in Jiaxing Zhongtan Future Energy Storage Technology Partnership (Limited Partnership) Zhongtan Energy Storage (JX) for 40% of its equity. The registered capital of the joint ventures above have not been paid as of the date of this prospectus. 4 Corporate Background We were established on April 8, 2014 under the laws of the British Virgin Islands ( BVI ) as a shell company with the purpose of acquiring, engaging in share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combinations with one or more businesses or entities. Our principal executive office is located at 147 Ganshui Lane, Yuhuang Shannan Fund Town, Shangcheng District Hangzhou, Zhejiang China and our telephone number is +86-571-8662-1775. Our web address is www.roanholdingsgroup.com. The information contained on our website or available through our website is not incorporated by reference into and should not be considered a part of this prospectus, and the reference to our website in this prospectus is an inactive textual reference only. Any website references (URLs) in this prospectus are inactive textual references only and are not active hyperlinks. The contents of our website are not part of this prospectus, and you should not consider the contents of our website in making an investment decision with respect to our ordinary shares. [___________] is our agent in the United States, and its address is [___________________________]. All per share amounts and calculations in this prospectus and the accompanying financial statements do not reflect the effects of the planned Reverse Split. Our independent registered public accounting firm indicated in its report on our financial statements for the year ended December 31, 2021, as included elsewhere in this prospectus, that management believes that we will continue as a going concern in the following 12 months. Implications of Being a Foreign Private Issuer We currently report and will continue to report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we continue to qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations with respect to a security registered under the Exchange Act; the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial statements and other specified information, and current reports on Form 8-K upon the occurrence of specified significant events, although we intend to report our results of operations voluntarily on a quarterly basis. Foreign private issuers are also exempt from certain more stringent executive compensation disclosure rules. We will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by U.S. residents, and any one of the following three circumstances applies: (i) the majority of our executive officers or directors are U.S. citizens or residents, (ii) more than 50% of our assets are located in the United States or (iii) our business is administered principally in the United States. In this prospectus, we have taken advantage of certain of the reduced reporting requirements as a result of being a foreign private issuer. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold equity securities. 5 Summary
\ No newline at end of file
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@@ -0,0 +1,264 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+This
+summary highlights information about our company, this offering and information contained in greater detail in other parts of this prospectus
+or incorporated by reference into this prospectus from our filings with the SEC listed in the section entitled "Information Incorporated
+by Reference." Because it is only a summary, it does not contain all of the information that you should consider before purchasing
+our securities in this offering and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information
+appearing elsewhere or incorporated by reference into this prospectus. You should read the entire prospectus, the registration statement
+of which this prospectus is a part, and the information incorporated by reference into this prospectus in their entirety, including the
+"Risk Factors" and our financial statements and the related notes incorporated by reference into this prospectus, before
+purchasing our securities in this offering.
+
+ 
+
+Except
+as otherwise indicated herein or as the context otherwise requires, references in this prospectus to "the Company," "we,"
+"us" and "our" refer to Motus GI Holdings, Inc. and our subsidiaries.
+
+ 
+
+Corporate
+Overview 
+
+ 
+
+Motus
+GI Holdings, Inc. ("we," "us," "our" or the "Company"), has developed the Pure-Vu System,
+a medical device that has been cleared by the U.S. Food and Drug Administration (the "FDA") to help facilitate the cleansing
+of a poorly prepared gastrointestinal tract during colonoscopy and to help facilitate upper gastrointestinal ("GI") endoscopy
+procedures. The Pure-Vu System is also CE marked in the European Economic Area (EEA) for use in colonoscopy. The Pure-Vu System integrates
+with standard and slim colonoscopes, as well as gastroscopes, to improve visualization during colonoscopy and upper GI procedures while
+preserving established procedural workflow and techniques. Through irrigation and evacuation of debris, the Pure-Vu System is designed
+to provide better-quality exams. Challenges exist for inpatient colonoscopy and endoscopy, particularly for patients who are elderly,
+with comorbidities, or active bleeds, where the ability to visualize, diagnose and treat is often compromised due to debris, including
+fecal matter, blood, or blood clots. We believe this is especially true in high acuity patients, like GI bleeding where the existence
+of blood and blood clots can impair a physician s view and removing them can be critical in allowing a physician the ability to
+identify and treat the source of bleeding on a timely basis. We believe use of the Pure-Vu System may lead to positive outcomes and lower
+costs for hospitals by safely and quickly improving visualization of the colon and upper GI tract, potentially enabling effective diagnosis
+and treatment without delay. In multiple clinical studies to date, involving the treatment of challenging inpatient and outpatient cases,
+the Pure-Vu System has consistently helped achieve adequate bowel cleanliness rates greater than 95% following a reduced prep regimen.
+We also believe that the technology may be useful in the future as a tool to help reduce user dependency on conventional pre-procedural
+bowel prep regimens. Based on our review and analysis of 2019 market data and 2021 projections for the U.S. and Europe, as obtained from
+iData Research Inc., we believe that during 2022 approximately 1.5 million inpatient colonoscopy procedures were performed in the U.S.
+and approximately 4.8 million worldwide. Upper GI bleeds occurred in the U.S. at a rate of approximately 400,000 cases per year in 2019,
+according to iData Research Inc. The Pure-Vu System has been assigned an ICD-10 code in the US. The system does not currently have unique
+codes with any private or governmental third-party payors in any other country or for any other use; however, we may pursue reimbursement
+activities in the future, particularly in the outpatient colonoscopy market. We received 510(k) clearance in October 2023 from the FDA for the Pure-Vu EVS System for use in the Upper GI
+tract as well as an enhanced version for the colon. We expect to begin market introduction of these products in the coming months. The
+Company does not expect to generate significant revenue from product sales until it further expands its commercialization efforts, which
+is subject to significant uncertainty.
+
+ 
+
+ 3
+
+ 
+
+ 
+
+ 
+
+Recent Developments
+
+ 
+
+2021 Loan Amendment
+
+ 
+
+On July 16, 2021 (the "Effective
+Date"), we entered into a loan facility (the "2021 Loan Agreement") with a private institutional lender (the
+"Lender"). Under the 2021 Loan Agreement, the Lender agreed to provide us with access to term loans in an aggregate
+principal amount of up to $12.0 million (the "Loan") in three tranches as follows: (a) on the Effective Date, a loan in the aggregate principal amount of $4.0 million (the "Convertible Note", or "Tranche A"), (b)
+on the effective date of the Loan, a loan in the aggregate principal amount of $5.0 million ("Tranche B"), and (c)
+available until December 31, 2021, a loan in the aggregate principal amount of $3.0 million ("Tranche C" and, together
+with Tranche B, the "Term Loan"). The 2021 Loan Agreement contains customary representations and warranties,
+indemnification provisions in favor of the Lender, events of default and affirmative and negative covenants, including, among
+others, covenants that limit or restrict our ability to, among other things, incur additional indebtedness, merge or consolidate,
+make acquisitions, pay dividends or other distributions or repurchase equity, make investments, dispose of assets and enter into
+certain transactions with affiliates, in each case subject to certain exceptions. Outstanding borrowings under the Loan are secured
+by a first priority security interest on substantially all of our personal property assets, including our material intellectual
+property and equity interests in its subsidiaries. There are no liquidity or financial covenants.
+
+ 
+
+The Convertible Note and Tranche B were funded
+on the effective date. As of December 31, 2021, we drew down the full $3 million aggregate principal amount of Tranche C.
+
+ 
+
+The Convertible Note requires forty-eight
+monthly interest only payments at 7.75% per annum commencing after the Effective Date and thereafter full payment of the then outstanding
+principal balance of the Convertible Note on July 1, 2025. The Tranche B loan requires interest only monthly payments commencing on the
+Effective Date until September 30, 2022 and, thereafter, thirty-three (33) monthly payments of principal and interest accrued thereon
+until June 1, 2025. The Tranche C loan, to the extent drawn on or prior to December 31, 2021, requires monthly payments of interest only
+commencing on the date drawn until September 30, 2022 and, thereafter, thirty-three (33) monthly payments of principal and interest accrued
+thereon until June 1, 2025. Interest on the Tranche B and Tranche C loans accrues at 9.5% per annum.
+
+ 
+
+The 2021 Loan Agreement contains features
+that would permit the Lender to convert all or any portion of the outstanding principal balance of the Convertible Note at any time,
+pursuant to which the converted part of the Convertible Note will be converted into that number of shares of our common stock to be
+issued to the Lender at a price per share equal to the conversion price, of $420.00 per share. Following the conversion of any
+portion of the outstanding principal balance of the Convertible Note, the principal balance of the Convertible Note remaining
+outstanding shall continue to bear interest at 7.75% per annum.
+
+ 
+
+On November 28, 2023, we and the Lender entered
+into a First Amendment to the 2021 Loan Agreement (the "Amendment"), pursuant to which, among other things, (a)(i) on the
+effective date of the Amendment, we paid to the Lender a sum of $750,000 in cash via wire transfer in immediately available funds (the
+"Amendment Execution Date Payment"), and (ii) upon consummation of a First Amendment Capital Raise (as defined below) and
+immediately following the Convertible Note Securities Exchange (as defined below), we will prepay to the Lender a sum of $1,500,000 in
+cash via wire transfer in immediately available funds (the "Closing Payment"), which sums set forth in (i) and (ii) shall
+be applied towards partial prepayment of the outstanding principal balance of the Term Loan; and (b) subject to the satisfaction (or
+waiver by Lender) of certain Exchange Conditions (as defined in the Amendment), immediately following the consummation of a First Amendment
+Capital Raise, which we assume this offering will be, $4.0 million (the "Conversion Amount") of the outstanding aggregate
+principal balance of the Convertible Note will automatically convert into such number of shares of our common stock (the "Convertible
+Note Securities Exchange") at a price per share equal to the public offering price per share in the First Amendment Capital Raise
+representing the Conversion Amount; provided, that, (A) the Lender shall have executed a customary lock-up agreement for a 90-day period
+following the Convertible Note Securities Exchange, (B) the Lender shall receive the same warrant coverage (the "Conversion Common
+Warrants") per share of common stock, if any, as investors purchasing securities in the First Amendment Capital Raise and (C) the
+Lender shall receive a pre-funded warrant (the "Conversion Pre-Funded Warrant") in lieu of shares of common stock otherwise
+issuable upon the Convertible Note Securities Exchange for such number of shares that would represent more than 4.5% of the pre-exercise
+outstanding shares of common stock, providing that the Lender will not own (x) more than 4.99% of the post-exercise outstanding shares
+of common stock at any time and (y) to the extent required under the rules of The Nasdaq Capital Market, more than 19.99% of the shares
+of common stock outstanding immediately prior to the Convertible Note Securities Exchange (but after the consummation of the First Amendment
+Capital Raise) unless applicable shareholder approval is obtained. "First Amendment Capital Raise" means the Company raising
+additional cash through one equity financing registered under the Securities Act (to be consummated no later than December 29, 2023)
+with gross proceeds of at least $5.0 million. The securities issued to Lender in the Convertible Note Securities Exchange will be issued
+in reliance on the exemption from registration set forth in Section 3(a)(9) of the Securities Act, and this offering does not relate
+to the issuance of such securities. We also agreed to file a resale registration statement to register the securities being issued to
+Lender in the Convertible Note Securities Exchange as promptly as practicable (and in no event later than 91 calendar days after the
+closing of the Convertible Note Securities Exchange). Assuming this offering will satisfy the definition of the First Amendment Capital
+Raise, we will issue to the Lender an aggregate of 1,007,556 shares of our common stock (or Conversion Pre-Funded Warrants in lieu
+thereof) and Conversion Common Warrants to purchase 2,015,112 shares of our common stock at an exercise price equal to the exercise
+price and a term of each of the classes of the Common Warrants sold in this offering, based on the assumed combined public
+offering price of $3.97 per share of common stock and accompanying Common Warrants, which is the last reported sale price
+of our common stock on The Nasdaq Capital Market on December 8, 2023. We do not intend to price this offering for less than $5.0
+million in gross proceeds.
+
+ 
+
+Nasdaq
+Deficiencies and Reverse Stock Split
+
+ 
+
+As
+previously disclosed, we received a letter from the Nasdaq Stock Market, LLC ("Nasdaq") indicating that we are not in compliance
+with the minimum stockholders equity requirement for continued listing on Nasdaq under Rule 5550(b)(1) (the "Equity Rule").
+In addition, as previously disclosed on the Current Report on Form 8-K filed April 5, 2023, we received a letter from Nasdaq indicating
+that the bid price of the Company s common stock had failed to close above the minimum $1 requirement for the past 30 trading days
+in violation of Listing Rule 5550(a)(2) (the "Bid Price Rule"). The Company was provided 180 calendar days, or until September
+27, 2023, to regain compliance with the Bid Price Rule. On September 27, 2023, we received notice that the Nasdaq Hearings Panel (the
+"Hearings Panel") granted us an extension to regain compliance with the Equity Rule and the Bid Price Rule until January
+2, 2024.
+
+ 
+
+At
+our annual meeting of stockholders held on September 21, 2023, our stockholders approved a proposed amendment to our Certificate of Incorporation
+to effect a reverse stock split of our outstanding common stock at a ratio of not less than two-for-one (2:1) and not greater than twenty-for-one
+(20:1), at any time prior to the one year anniversary date of our annual meeting of stockholders, with the exact ratio to be determined
+by our Board of Directors. On November 2, 2023, we effected a reverse stock split of our issued and outstanding common stock at a ratio
+of 1-for-15 (the "2023 Reverse Stock Split"), and on November 21, 2023, we received a letter from Nasdaq confirming that we had regained compliance with the
+Bid Price Rule. All historical information in this prospectus (other than information incorporated by reference herein dated prior to November
+2, 2023) has been retroactively adjusted for the 2023 Reverse Stock Split. We intend to regain compliance with the Equity Rule through the consummation of this offering and the Convertible
+Note Securities Exchange. Even if we regain compliance with the Equity Rule prior to the January 2, 2024 deadline, we expect that we will
+need to raise additional capital to remain in compliance with the Equity Rule for future reporting periods, which capital raises may result
+in additional dilution to investors in our securities. 
+
+ 
+
+ 4
+
+ 
+
+ 
+
+ 
+
+Operations in Israel
+
+ 
+
+We have research and development capabilities
+in electrical and mechanical engineering with laboratories in our facility in Israel for development and prototyping, and electronics
+design and testing. Currently, the workstation and loading fixture component of our Pure-Vu System is manufactured by Sanmina Corporation
+at their facilities in Israel. The disposable portion of the Pure-Vu EVS is manufactured by Sterling Industries in their Michigan, U.S.
+facility. The disposable portion of our Gen 2 Pure-Vu System is manufactured by Polyzen, Inc., at their facilities in North Carolina,
+U.S. Both Sterling Industries and Polyzen use Medacys in Shenzhen, China as key sub-supplier for the injection molded parts in the Pure
+Vu disposables. On October 7, 2023, the "Swords of Iron" war stroke between Israel and the terrorist organizations in the
+Gaza Strip, following a surprise attack on Israel led by certain armed groups in the Gaza Strip. To date, our operations in Israel have
+not been significantly impacted by the ongoing war or the October 7, 2023 terrorist attack.
+
+ 
+
+For additional information, see "Risk
+Factors—Risks Related to Our Operations in Israel."
+
+ 
+
+Implications
+of Being an Emerging Growth Company
+
+ 
+
+We
+are an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business
+Startups Act of 2012 (the "JOBS Act"). As such, we are eligible for and intend to take advantage of certain exemptions from
+various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue
+to be an emerging growth company, including, but not limited to, (i) the exemption from the auditor attestation requirements with respect
+to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, (the "Sarbanes
+Oxley Act"), (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced
+disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
+
+ 
+
+Our
+eligibility to qualify as an emerging growth company will end on December 31, 2023 (which is the last day of the fiscal year following
+the fifth anniversary of the closing of our initial public offering, which occurred during 2018). In addition, the JOBS Act provides
+that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.
+This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply
+to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will adopt new or revised
+accounting standards on the relevant dates on which adoption of such standards is required for non-public companies instead of the dates
+required for other public companies.
+
+ 
+
+Corporate
+Information
+
+ 
+
+We
+are a Delaware corporation formed in September 2016 under the name Eight-Ten Merger Corp. In November 2016, we changed our name to Motus
+GI Holdings, Inc. We are the parent company of Motus GI Medical Technologies Ltd., an Israeli corporation, and Motus GI, LLC (formerly
+Motus GI, Inc.), a Delaware limited liability company. Motus GI, Inc. was converted from a Corporation into a Limited Liability Company
+effective January 1, 2021.
+
+ 
+
+Our
+principal executive offices are located at 1301 East Broward Boulevard, 3rd Floor, Ft. Lauderdale, FL 33301. Our phone number is (954)
+541-8000 and our web address is www.motusgi.com. Our website and the information contained on, or that can be accessed through, our website
+will not be deemed to be incorporated by reference in, and are not considered part of, this prospectus. You should not rely on any such information in making your decision whether to purchase our common stock.
+
+ 
+
+"Motus
+GI," "Pure-Vu," and our other registered or common law trademarks, service marks or trade names appearing herein are
+the property of Motus GI Holdings, Inc. Some trademarks referred to in this report are referred to without the and symbols,
+but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under
+applicable law, their rights thereto. We do not intend the use or display of other companies trademarks and trade names to imply
+a relationship with, or endorsement or sponsorship of us by, any other companies.
+
+ 
+
+ 5
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001713832_hc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001713832_hc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..df71f2c7abe7370d633549309e5f849005fbd47f
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights selected information from this prospectus. It does not contain all of the information that may be important to you. We encourage you to carefully read this entire prospectus and the documents incorporated by reference herein or therein, especially the Risk Factors section on page S-6 and the Risk Factors section in each of our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022, or other documents that are incorporated by reference before making an investment decision. Unless the context otherwise requires, when we refer to HyreCar, we, our, us and the Company in this prospectus supplement, we mean HyreCar, Inc. and its subsidiaries on a consolidated basis. References to you refer to a prospective investor. About HyreCar Inc. Our founders identified the need for a car-sharing platform for individuals who wanted to drive for ride-sharing companies such as Uber Technologies Inc. ( Uber ) and Lyft, Inc. ( Lyft ), but whose automobiles could not meet the standards imposed by the ride-sharing companies. For example, Uber maintains strict guidelines regarding the types of cars a driver can use. Although guidelines relating to cars can differ by state, in general the use of two door coupes, motorcycles and cars that are 12 years or older are excluded. Our founders, before deciding to purchase qualifying sedans that met Uber s strict guidelines, first inquired as to whether there were any rental options available from Uber that would allow them to drive for the ride-sharing platform. To their surprise, there were no rental options available, other than a shadow industry of individuals renting cars to one another. HyreCar is a car-sharing marketplace that allows car owners (collectively, Owners ) to rent their idle cars to ride-sharing service drivers (collectively, Drivers ). By sourcing vehicles from individual Owners, part-time Drivers may more easily enter and exit the market and our business model allows us to satisfy fluctuating transportation demand in cities around the United States by matching Owners and Drivers. Our vehicle supply also includes commercial owners of vehicles including car dealerships and fleet owners to help increase activity levels. Our business is based on a proprietary car-sharing marketplace developed to: (i) onboard Owners and Drivers, (ii) facilitate the matching of Owners and Drivers, and (iii) log rental activity for Owners and Drivers. All transactions related to the rental (including, but not limited to, background checks, rentals, deposits and insurance costs) are run securely through the HyreCar platform. Drivers and Owners access their rental or car dashboards through a unique login. Drivers can initiate, terminate or extend a rental through the platform while Owners can manage their car or fleet of cars through the platform. We believe we have a competitive advantage with our commercial automobile insurance policy that covers both Owners and Drivers. The policy is specifically designed to cover the period of time in which a Driver is operating an Owner s vehicle while not actively operating a vehicle on a ride-sharing platform, such as Uber or Lyft. During the periods when Drivers are actively operating on a ride-sharing platform, the insurance subordinates to the state mandated insurance provided by the third-party ride-sharing business. To our knowledge, we are the only provider of this car-matching service utilizing this unique insurance product. Industry and Market Opportunities Our company was founded to capitalize on a combination of two growth markets: ridesharing (an industry led by Uber and Lyft) and car-sharing (an industry led by companies such as Turo, Inc. and Getaround, Inc.). Our customers are the drivers who use our car-sharing platform to rent a car and then use that car to earn income driving for rideshare companies (or otherwise utilize the vehicle for commercial purposes, such as food delivery). Finding enough cars and drivers to meet demand has historically been a problem for ride-sharing companies. Our target market also includes drivers who provide delivery services with companies like Instacart and Doordash. The transportation industry represents a massive market. In the United States alone, consumer expenditures on transportation were approximately $1.2 trillion and $1.4 trillion in 2020 and 2019, respectively. In 2021, the demand for transportation ($1.9 trillion) accounted for 8.4 percent of GDP, increasing by 9.2 percent from 2020 and marking the highest year-over-year increase since 2002. The large upturn in 2021 was due to an increase in personal consumption expenditures of transportation services. In 2021, transportation was the second largest household expenditure after housing and was more than twice as large as healthcare and three times as large as entertainment. We believe we are still in the relatively early phases of potentially capturing part of the opportunity in the industry. A 2016 survey by BCG found that 57% of U.S. respondents who used sharing services said that well-priced and convenient offerings could cause them to give up ownership altogether. In another study, researchers found that the removal of rideshare options in a city resulted in a 30-percent increase in the probability of switching to personal vehicles and a 23-percent increase in trip-making for an individual who is inconvenienced by such a service suspension, suggesting strong public policy motivations for ongoing support and promotion of transportation networking companies. These market dynamics complement the expected growth in rideshare-based employment, with overall employment of passenger vehicle drivers projected to grow 12 percent from 2021 to 2031, much faster than the 5-percent average for all occupations. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 HyreCar Inc. (Exact name of registrant as specified in its charter) Delaware 7514 47-2480487 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) 915 Wilshire Blvd, Suite 1950 Los Angeles, California 90017 (888) 688-6769 (Address, including zip code, and telephone number, including area code, of principal executive offices) Eduardo Iniguez Interim Chief Executive Officer and Chief Financial Officer 915 Wilshire Blvd, Suite 1950 Los Angeles, California 90017 (888) 688-6769 (Address, including zip code, and telephone number, including area code, of agent for service) Copy to: Bryan N. Wasser Shashi N. Khiani Polsinelli PC 2049 Century Park East, Suite 2900 Los Angeles, California 90067 Telephone: (310) 556-1801 Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective. 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. Table of Contents Recent Developments On January 6, 2023, in connection with that certain purchase agreement, dated January 6, 2023, and subsequently amended on January 12, 2023 (as amended, the Purchase Agreement ), by and among the Company and the selling stockholders, we issued 502 shares of our Series B Preferred Stock (the Registered Securities ) to the selling stockholders pursuant to the Company s registration statement on Form S-3 (File No. 333-257372), including a base prospectus, dated July 8, 2021, and a prospectus supplement, dated January 6, 2023. The net proceeds from the sale of the Registered Securities, after deducting the placement agent s fees and estimated offering expenses, was approximately $398,000. As described in further detail under the section titled Description of Securities, on January 6, 2023, we also filed the Certificate of Designation (as defined below) to create the Series B Preferred Stock On January 6, 2023, in connection with the Purchase Agreement, which was subsequently amended on January 12, 2023, we also issued in a concurrent private placement (the Concurrent Offering ) to the selling stockholders (i) 4,222 shares of Series B Preferred Stock at a per share price of $900.00 convertible into up to 46,973,972 (assuming no anti-dilution adjustments) shares of Common Stock based on the current Conversion Price (as defined under the section titled Description of Securities ) and (ii) Warrants exercisable for up to 6,125,000 shares of Common Stock at a per share exercise price equal to $1.00 (assuming no anti-dilution adjustments or other adjustments as set forth in the Warrants) (the Warrants and the 4,222 shares of Series B Preferred Stock, together, the Issued Unregistered Securities ). The Issued Unregistered Securities were sold for total proceeds to us of approximately $3.8 million. Pursuant to the Purchase Agreement and as described in greater detail under the section titled Description of Securities, we have also agreed to issue $8,888,888 in aggregate principal amount of Debentures convertible into up to 98,897,287 shares of Common Stock (assuming no anti-dilution adjustments) (the Debentures, together with the Issued Unregistered Securities, the Unregistered Securities ) on a date (the Second Closing Date ) within five trading days of the later of (i) the date of the Shareholder Approval and (ii) the effective date of the registration statement of which this prospectus forms a part. The Company has agreed to issue the Debentures for total proceeds of $8,000,000. Also on January 6, 2023, we entered into a registration rights agreement with the selling stockholders, which was subsequently amended on January 12, 2023, (as amended the Registration Rights Agreement ), pursuant to which we are obligated to file with the SEC a registration statement to register for resale under the Securities Act of 1933, as amended (the Securities Act ), up to 158,121,259 aggregate shares of Common Stock underlying the Unregistered Securities. This prospectus forms a part of such registration statement and is intended to satisfy our obligation under such Registration Rights Agreement. We intend to seek stockholder approval to, amongst other things, (i) increase the number of shares of Common Stock we are permitted to issue under our Amended and Restated Charter and (ii) permit the issuance of 20% or more of our outstanding Common Stock as of January 6, 2023, and (iii) to effectuate a reverse stock split on the form and amounts to be determined by the Company. Prior to Stockholder Approval, the selling stockholders may only convert or exercise the Series B Preferred Stock and Warrants, as the case may be, and sell up to 561,427 of the Shares pursuant to this prospectus. On January 6, 2023, certain stockholders (the Voting Stockholders ) entered into a voting agreement to vote in favor of Stockholder Approval to (i) issue the shares of Common Stock underlying the Series B Preferred Stock and the Warrants in the Concurrent Offering, (ii) to increase our authorized capital stock and (iii) to effectuate a reverse stock split in the form and amounts to be determined by us. We entered into an exchange agreement on January 12, 2023, with the Voting Stockholders pursuant to which we agreed to issue in a private placement to accredited investors, pursuant to exemptions from registration in Section 4(a)(2) under the Securities Act and/or the safe harbors under Rule 506 of Regulation D promulgated thereunder, an aggregate of 2,100 shares of the Series B Preferred Stock and warrants (the Exchange Warrants ) exercisable for up to 1,050,000 shares of the Company s Common Stock and in exchange, such Voting Stockholders would surrender 3,480,297 shares of our Common Stock held by such Voting Stockholders (the Exchange ). The Exchange Warrants are substantially similar to the Warrants, with an exercise price of $1.00 per share of Common Stock (assuming no anti-dilution or other adjustments as set forth in the Exchange Warrants) and a five-year term, as well as certain anti-dilution price and share adjustments. The Voting Stockholders further agreed that the shares of Series B Preferred Stock and the warrants held by such Voting Stockholders will not be convertible or exercisable, respectively, until the Series B Preferred Stock issued, and Debentures to be issued, pursuant to the Purchase Agreement to the Purchasers (as defined in the Purchase Agreement) have been converted into shares of our Common Stock. On August 27, 2021, as further described in the Company s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed with the SEC on November 14, 2022, a putative securities class action complaint captioned Baron v. Hyrecar Inc. et al., Case No. 21-cv-06918, was filed in the United States District Court for the Central District of California against the Company; its Chief Executive Officer during the time period alleged in the litigation, Joseph Furnari; and its former Chief Financial Officer, Robert Scott Brogi. This action asserts claims and seeks damages for alleged violations of sections 10(b) and 20(a) of securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On October 18, 2022, the Court issued an order that the Court found the Motion to Dismiss appropriate for decision without oral argument, and thereby vacated the hearing and took the Motion to Dismiss under submission. On December 5, 2022, the Court issued an order denying Defendants Motion to Dismiss. Pursuant to the Court s scheduling order, Plaintiff must file its Motion for Class Certification by May 12, 2023, and trial is currently set for September 17, 2024. The Company believes that the claims in this lawsuit are without merit and will continue to vigorously defend against them. The Company s chances of success on the merits are still uncertain and any possible loss or range of loss cannot be reasonably estimated. Table of Contents 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 post-effective amendment filed pursuant to Rule 462(d) 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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging Growth Company If an emerging growth company, 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 registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant files a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents Corporate Information We were incorporated in the State of Delaware on November 24, 2014. Our principal executive offices and mailing address are 915 Wilshire Boulevard, Suite 1950, Los Angeles, California 90017. Our main telephone number is (888) 688-6769. Our corporate website address is: www.hyrecar.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus supplement or the accompanying prospectus and should not be relied upon with respect to this offering. Emerging Growth Company We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act ), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) ending December 31, 2023, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year s second fiscal quarter; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to emerging growth company shall have the meaning associated with it in the JOBS Act. Smaller Reporting Company Additionally, we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our Common Stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our Common Stock held by non-affiliates exceeds $700 million as of the prior June 30. Table of Contents The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the Securities and Exchange Commission declares this registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JANUARY 12, 2023 PRELIMINARY PROSPECTUS HyreCar Inc. Up to 46,973,972 Shares of Common Stock Issuable Upon Conversion of the Series B Convertible Preferred Stock Up to 12,250,000 Shares of Common Stock Issuable Upon Exercise of Warrants Up to 98,897,287 Shares of Common Stock Issuable Upon Conversion of the 6% Original Issue Discount Secured Convertible Debentures This prospectus relates to the resale or other disposition from time to time of (i) up to 46,973,972 shares of our common stock, par value $0.00001 ( Common Stock ), which is the maximum amount of Common Stock underlying 4,222 shares of Series B convertible preferred stock, par value $0.00001 (the Series B Preferred Stock ), issued on January 6, 2023, in private placements to the selling shareholders named in this prospectus (together with their permitted transferees, the selling stockholders ), assuming no anti-dilution adjustments, (ii) up to 12,250,000 shares of Common Stock, or 200% of 6,125,000 shares of Common Stock which is the maximum amount of Common Stock underlying four common stock purchase warrants (the Warrants ) issued on January 6, 2023, in private placements to the selling stockholders, assuming no anti-dilution adjustments and (iii) up to 98,897,287 shares of Common Stock, which is the maximum amount of Common Stock underlying the 6% Original Issue Discount Secured Convertible Debentures (the Debentures ) having a principal amount of $8,888,888, which, pursuant to the Purchase Agreement (as defined below), will be issued following the Stockholder Approval (as defined herein) and the effective date of the registration statement of which this prospectus forms a part on the Second Closing Date (as defined herein), assuming no anti-dilution adjustments (the aggregate 158,121,259 shares of Common Stock being registered that underlies the Series B Preferred Stock, Warrants and Debentures, together, the Shares ). We intend to seek stockholder approval to, amongst other things, (i) increase the number of shares of Common Stock we are permitted to issue under our Amended and Restated Certificate of Incorporation (the Amended and Restated Charter ), (ii) permit the issuance of 20% or more of our outstanding Common Stock as of January 6, 2023, and (iii) to effectuate a reverse stock split on the form and amounts to be determined by the Company (the approvals of clauses (i)-(iii), together, the Stockholder Approval ). Prior to Stockholder Approval, the selling stockholders may only convert or exercise the Series B Preferred Stock and Warrants, as the case may be, and sell up to 561,427 of the Shares pursuant to this prospectus. No Debentures will be issued prior to the Stockholder Approval. We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of shares of Common Stock by the selling stockholders, except with respect to amounts received by us upon exercise of Warrants to the extent such Warrants are exercised for cash. We may receive up to an aggregate of approximately $6,125,000 from the exercise of all Warrants, assuming the exercise in full of all such Warrants for cash at a price of $1.00 per share of Common Stock, assuming no anti-dilution adjustments or other adjustments as set forth in the Warrants. We will pay all expenses associated with the sale of Common Stock pursuant to this prospectus. The selling stockholders may sell or otherwise dispose of the Common Stock described in this prospectus in a number of different ways and at varying prices. See Plan of Distribution for more information about how the selling stockholders may sell or otherwise dispose of the Common Stock being registered pursuant to this prospectus. Our Common Stock is quoted on the Nasdaq Capital Market under the symbol HYRE . On January 9, 2023, the last reported sale of our Common Stock on the Nasdaq Capital Market was $0.48 per share. Investing in our Common Stock involves a high degree of risk. See Risk Factors beginning on page 6 of this prospectus before making a decision to purchase our Common Stock. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2023. Table of Contents THE OFFERING Common Stock offered by the selling stockholders Up to an aggregate of 158,121,259 shares of our Common Stock underlying the Unregistered Securities ( Common Stock outstanding before the offering 30,733,402 shares, as of December 29, 2022, which excludes the up to 5,585,252 shares of Common Stock underlying the Registered Securities issued on January 6, 2023, and up to 158,121,259 shares of Common Stock underlying the Unregistered Securities being registered hereunder. Use of proceeds We will receive no proceeds from the sale of the Securities by the selling stockholders in this offering. We may receive up to $6,125,000 in aggregate gross proceeds from the exercise of all Warrants, assuming the exercise in full of all such Warrants for cash at a price of $1.00 per share of Common Stock (assuming no anti-dilution adjustments or other adjustments as set forth in the Warrants). Any proceeds that we receive from the exercise of such Warrants will be used for general corporate purposes, which may include operating expenses, working capital, and for potential strategic acquisitions and relationships. See Use of Proceeds. Nasdaq Capital Market Trading Symbol HYRE
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+TAX CONSEQUENCES The tax consequences of the Exchange Offer are complex and will vary depending on your particular facts and circumstances. The U.S. federal income tax consequences to you of participating in the Exchange Offer are complex and will vary depending on certain facts and circumstances. We intend to treat the exchange of the Shares for the Trust Preferred Securities as a recapitalization pursuant to Section 368(a)(1)(E) of the Code. Assuming the exchange is so treated, you generally will recognize gain for U.S. federal income tax purposes equal to the excess, if any, of the fair market value of the Trust Preferred Securities received in the exchange (including any fractional share) over your tax basis in the Shares. You will not be able to recognize any loss realized in the recapitalization (except with respect to cash received in lieu of a fractional share). Cash received in lieu of a fractional share will generally be treated as received in exchange for the fractional share, and you will generally recognize the gain or loss thereon. Please see Exchange Offer Section 13. Because the U.S. federal income tax consequences of the Exchange Offer are complex, you are urged to consult with your own tax advisor. MARKET AND INDUSTRY DATA In this prospectus, we rely on and refer to information and statistics regarding our industry. Where possible, we obtained this information and these statistics from third party sources, such as independent industry publications, government publications or reports by market research firms, including company research, trade interviews, and public filings with the SEC. Additionally, we have supplemented third party information where necessary with management estimates based on our review of internal surveys, information from our customers and vendors, trade and business organizations and other contacts in markets in which we operate, and our management s knowledge and experience. However, these estimates are subject to change and are uncertain due to limits on the availability and reliability of primary sources of information and the voluntary nature of the data gathering process. As a result, you should be aware that industry data included in this prospectus, and estimates and beliefs based on that data, may not be reliable. NOTICE TO INVESTORS We have no contract, arrangement or understanding relating to, and will not, directly or indirectly, pay any commission or other remuneration to any broker, dealer, salesperson, agent or any other person for soliciting tenders in the Exchange Offer. No dealer, salesman or other person has been authorized to give any information or to make any representations with respect to the matters described in the Exchange Offer, other than those contained in, or incorporated by reference into, the Exchange Offer. If given or made, such information or representations may not be relied upon as having been authorized by us. In making an investment decision, holders must rely on their own examination of us and the terms of the Exchange Offer, including the merits and risks involved. The information contained in the Exchange Offer is correct in all material respects as of the date hereof. Neither the delivery of this prospectus with respect to the Trust Preferred Securities nor the consummation of the Exchange Offer will create the implication that the information contained herein is correct at any time after the date hereof however, if a material change occurs in the information contained in this prospectus, we will disseminate promptly disclosure of the change to you. Our business, financial condition, results of operations and prospects may change after that date. No representation is made to any holder regarding the legality of an investment in the Trust Preferred Securities under any applicable legal investment or similar laws or regulations. The contents of this prospectus are not to be construed as legal, financial or tax advice. Holders should consult their own attorneys, financial advisors or tax advisors as to legal, financial or tax advice with respect to the Exchange Offer. Questions regarding the Exchange Offer, requests for assistance in tendering your shares of Common Stock or requests for additional copies of this prospectus or the Letter of Transmittal should be directed to the Company s Information Agent, D.F. King Co., Inc., toll-Free (800) 848-340. Holders of shares of Common Stock may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Exchange Offer. PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before deciding to invest in our securities, you should read this entire prospectus carefully, including the section of this prospectus entitled Risk Factors. Air T, Inc. and Air T Funding Overview Air T, Inc. (the Company, Air T, we or us or our ) is a holding company with a portfolio of operating businesses and financial assets. Our goal is to prudently and strategically diversify Air T s earnings power and compound the growth in its free cash flow per share over time. We currently operate in four industry segments Overnight air cargo, which operates in the air express delivery services industry Ground equipment sales, which manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers Commercial jet engines and parts, which manages and leases aviation assets supplies surplus and aftermarket commercial jet engine components provides commercial aircraft disassembly part-out services commercial aircraft parts sales procurement services and overhaul and repair services to airlines and Corporate and other, which acts as the capital allocator and resource for other consolidated businesses. Further, Corporate and other is also comprised of insignificant businesses that do not pertain to other reportable segments. Each business segment has separate management teams and infrastructures that offer different products and services. The following table provides segment operating income for each of the last two fiscal years. (Dollars in thousands) Fiscal Year Ended March 31, 2023 2022 Overnight Air Cargo $90,543 $74,409 Ground Equipment Sales 48,485 42,239 Commercial Jet Engines and Parts 101,737 57,689 Corporate and other 6,558 2,740 $247,323 $177,077 Air T Funding Air T Funding (the Trust ) is a statutory business trust formed under Delaware law pursuant to (i) the Trust Agreement and (ii) the filing of a certificate of trust with the Delaware Secretary of State on September 28, 2018. Air T Funding s business and affairs are conducted by the Property Trustee, Delaware Trustee and two individual Administrative Trustees who are officers of the Company. Air T Funding exists for the exclusive purposes of (i) issuing and selling the Trust Preferred Securities, (ii) using the proceeds from the sale of the Trust Preferred Securities to acquire the Junior Subordinated Debentures issued by the Company, and (iii) engaging in only those other activities necessary, advisable or incidental thereto (such as registering the transfer of the Trust Preferred Securities). Accordingly, the Junior Subordinated Debentures are the sole assets of Air T Funding, and payments by the Company under the Junior Subordinated Debentures and the Expense Agreement are the sole revenues of Air T Funding. All of the Common Securities of the Trust are owned by the Company. The Common Securities rank pari passu, and payments will be made thereon pro rata, with the Trust Preferred Securities, except that upon the occurrence and during the continuance of an event of default under the Trust Agreement, as amended resulting from an event of default under the Indenture, the rights of the Company as holder of the common securities to payment in respect of distributions and payments upon liquidation, redemption or otherwise will be subordinated to the rights of the holders of the Trust Preferred Securities. See Description of Trust Preferred Securities, Junior Subordinated Debentures and Guarantee -- Subordination of Common Securities of Air T Funding Held by the Company. Air T Funding has a term of 30 years, but may terminate earlier as provided in the Trust Agreement, as amended. The Trust Agreement was most recently amended on March 3, 2021 and on January 28, 2022 and currently allows the issuance of up to $100,000,000 of Trust Preferred Securities. As of the date of this prospectus, there are $31,002,125 in Trust Preferred Securities outstanding. Additional Information Air T, Inc. was incorporated under the laws of the State of Delaware in 1980. The principal place of business of Air T and of Air T Funding is 11020 David Taylor Drive, Suite 305, Charlotte NC, 28262. We maintain an internet website at http www.airt.net and our SEC filings may be accessed through links on our website. The information on our website is available for information purposes only and is not incorporated by reference into, and does not constitute a part of, this prospectus. Exchange Offer We are making the Exchange Offer because the Company believes it is in the best interest of the Company to repurchase shares of its common stock and that at this time the Exchange Offer described in this Exchange Offer is a prudent and effective way to do so and to provide value and offer our stockholders the opportunity to exchange their Shares for a security that is traded on a national securities exchange that currently pays an 8.0% annual distribution. We believe an Exchange Offer at the exchange ratio offered will provide value to our stockholders. Conversely, the Exchange Offer also affords stockholders the option not to participate and, thereby, to increase their relative percentage interest in the Company and its future results. In addition, our Board believes the Exchange Offer provides stockholders with an opportunity to exchange their shares for securities that currently pays a distribution that is traded on a national securities exchange, without potential disruption to the share price and the usual transaction costs inherent in open market purchases and sales. The Board may consider undertaking additional offer(s) based upon a variety of factors, including the performance of the market price of the Shares. See Exchange Offer - Section 2. Current holders of Shares will be able to tender their Shares and receive 1.40 Trust Preferred Securities for each Share validly tendered in Exchange Offer. You should read the discussions under the headings Purpose of the Exchange Offer Certain Effects of the Exchange Offer and Procedures for Tendering Shares included in the Exchange Offer, respectively, for more information about the Exchange Offer. Exchange Offer Until the Expiration Date, holders can tender Shares in exchange for 1.40 Trust Preferred Securities for each Share validly tendered. A holder may tender as few or as many Shares as the holder elects. Shares may only be exchanged for whole Trust Preferred Securities. In lieu of issuing fractional Trust Preferred Securities, any holder of Shares who would otherwise have been entitled to receive fractional Trust Preferred Securities will, after aggregating all such fractional Trust Preferred Securities of such holder, be paid cash (without interest) in an amount equal to such fractional part of a Trust Preferred Securities Share multiplied by the last sale price of the Trust Preferred Securities on The NASDAQ Global Market on the last trading day prior to the Expiration Date. Expiration Date The Exchange Offer will expire on the Expiration Date, which is at 5 00 p.m., eastern time, on _______ ___, 2023 unless extended by us at our sole discretion. Procedure for Participating in the Exchange Offer In all cases, the issuance of Trust Preferred Securities pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of the Shares, the Letter of Transmittal (or a facsimile thereof) properly completed and duly executed and any required signature guarantees and other documents required by the Letter of Transmittal. In lieu of physically completing and signing the Letter of Transmittal and delivering it to the Exchange Agent, DTC participants may electronically transmit their acceptance of the Exchange Offer through DTC s automated tender offer program, for which the transaction will be eligible. By signing or agreeing to be bound by the Letter of Transmittal and other required documents, you will represent to us that, among other things any Trust Preferred Securities that you receive will be acquired in the ordinary course of your business you have no arrangement or understanding with any person to participate in the distribution of the Trust Preferred Securities you are not our affiliate, as defined in Rule 405 under the Securities Act if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the Trust Preferred Securities and if you are a broker-dealer, that you will receive Trust Preferred Securities for your own account in exchange for Shares that were acquired as a result of market-making activities or other trading activities and that you will deliver a prospectus in connection with any resale of such Trust Preferred Securities. Procedures for Tendering Units Through a Custodian If you are a beneficial owner of Shares, but the holder of such Shares is a custodial entity such as a bank, broker, dealer, trust company or other nominee, and you seek to tender your Shares pursuant to the Exchange Offer, you must provide appropriate instructions to such holder of the Shares in order to participate through DTC s automated tender offer program with respect to such Shares. Withdrawal of Participation in the Exchange Your right to tender any Shares pursuant to the Exchange Offer will expire at the Expiration Date. Return of Shares If we do not accept any Shares tendered in the Exchange Offer for any reason described in the terms and conditions of the Exchange Offer or if any Shares tendered are withdrawn pursuant to the terms of the Exchange Offer, we will return such Shares without expense to the exercising holder. Conditions to the Exchange Offer The Exchange Offer is subject to certain customary conditions, which we may amend or waive. We have the right, in our sole discretion, to terminate or withdraw the Exchange Offer if any of the conditions described in this prospectus are not satisfied or waived. See Exchange Offer Section 7. Exchange Agent Information Agent D.F. King Co., Inc. is serving as the Exchange Agent and Information Agent in connection with the Exchange Offer. Questions or requests for assistance, or for additional copies of the Exchange Offer documents, Letter of Transmittal or other materials should be directed to D.F. King Co., Inc., 48 Wall Street, 22nd Floor, New York, NY 10005. Depositary Equiniti Trust Company, LLC is serving as the Depositary in connection with the Exchange Offer. Deliveries should be addressed to Equiniti Trust Company, LLC c o Reorganization Department, 6201 15th Avenue, Brooklyn, NY 11219. United States Federal Income Tax Considerations We recommend that you consult with your own tax advisor with regard to the possibility of any federal, state, local or other tax consequences of the Exchange Offer. See Exchange Offer Section 13 for a discussion of the material U.S. Federal Income Tax Consequences of participating in the Exchange Offer. Registration The Trust Preferred Securities issued at the closing will be registered pursuant to this registration statement. Risk Factors See Risk Factors and other information included in this prospectus for a discussion of factors you should consider carefully before investing pursuant to the terms of this prospectus. Trust Preferred Securities Issued in the Exchange In exchange for Shares tendered pursuant to the terms of the Exchange Offer, the Air T Funding will issue Trust Preferred Securities in book-entry form. The material provisions of the Trust Preferred Securities are set forth herein but are only a summary and are qualified in their entirety by the provisions of the Trust Agreement, as amended and the other governing documents of the Trust, which have been filed as exhibits to this registration statement, of which this prospectus forms a part. Copies of these documents are also available to security holders of the Company and prospective investors upon request. Issuer Air T Funding, a Delaware statutory trust. Securities offered Up to 193,200 shares of the Air T Funding s Alpha Income Trust Preferred Securities (also referred to as the 8.0% Cumulative Securities), par value $25.00 per share (the Trust Preferred Securities ). Risk factors See Risk Factors and other information included in this prospectus for a discussion of factors you should consider carefully before investing pursuant to the terms of this prospectus. The Trust Preferred Securities will be registered pursuant to this registration statement at the time the Trust Preferred Securities are issued. The Trust Preferred Securities will be listed on The NASDAQ Global Market under the symbol AIRTP. Who is offering to purchase my shares We, Air T, Inc. are offering to exchange your shares of Air T, Inc. common stock, par value $0.25 per share (the Shares ) for shares of Air T Funding s Alpha Income Trust Preferred Securities (also referred to as the 8.0% Cumulative Securities) par value $25.00 per share (the Trust Preferred Securities ). Air T Funding is a wholly-owned subsidiary of Air T. See Exchange Offer - Section 1. What will be the Exchange Ratio for the shares We are offering to exchange up to 138,000 Shares, upon the terms and subject to the conditions of the Exchange Offer, at an exchange ratio of one Share for 1.40 Trust Preferred Securities, less any applicable withholding taxes and without interest. A minimum of at least 25,000 Shares must be tendered in the Exchange Offer. A maximum of 193,200 Trust Preferred Securities may be issued in the Exchange Offer. What will be the form of exchange If your Shares are exchanged in the Exchange Offer, you will receive that 1.40 Trust Preferred Securities for each Share validly tendered pursuant to the Exchange Offer plus cash for any fractional Trust Preferred Securities, less any applicable withholding taxes and without interest. The applicable number of Trust Preferred Securities will be issued promptly after the expiration of the Exchange Offer period. See Exchange Offer - Section 5. How many Shares will the Company acquire in the Exchange Offer We will acquire up to 138,000 Shares, or a lower amount depending on the number of Shares properly tendered and not properly withdrawn pursuant to the Exchange Offer. Assuming that the conditions to the Exchange Offer are satisfied or waived and the Exchange Offer is fully subscribed, we would acquire 138,000 Shares, representing approximately 4.9% of our outstanding Shares as of the date of this Exchange Offer and Air T Funding would issue 193,200 Trust Preferred Securities. The Exchange Offer is conditioned on a minimum number of 25,000 Shares being tendered. See Exchange Offer - Section 7. How will the Company exchange the shares We will cause Air T Funding to issue Trust Preferred Securities in the Exchange Offer and use our available cash on hand to pay for fractional Trust Preferred Securities in order to exchange shares in the Exchange Offer and to pay related expenses. See Exchange Offer - Section 9. The Trust Preferred Securities to be delivered in the Exchange Offer will be registered with the Commission and currently trade on Nasdaq under the trading symbol AIRTP. How long do I have to tender my Shares You may tender your Shares until the Exchange Offer expires. The Exchange Offer will expire on _______ ___, 2023, at 5 00 P.M., Eastern Time, unless we extend or withdraw the Exchange Offer (such date and time, as the same may be extended, the Expiration Date ). We may choose to extend the Exchange Offer for any reason. We cannot assure you that the Exchange Offer will be extended or, if extended, for how long. See Exchange Offer - Sections 1 and 14. If a broker, dealer, commercial bank, trust company or other nominee holds your Shares, it is likely that such nominee has an earlier deadline for accepting the Exchange Offer. Accordingly, beneficial owners wishing to participate in the Exchange Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Exchange Offer. Can the Exchange Offer be extended, amended or terminated, and under what circumstances We can extend or amend the Exchange Offer in our sole discretion. If we extend the Exchange Offer, we will delay the acceptance of any Shares that have been tendered. We can terminate the Exchange Offer under certain circumstances. See Exchange Offer - Sections 7 and 14. How will I be notified if the Company extends the Exchange Offer or amends the terms of the Exchange Offer We will issue a press release no later than 9 00 a.m., Eastern Time, on the business day after the previously scheduled expiration date if we decide to extend the Exchange Offer. We will announce any amendment to the Exchange Offer by making a public announcement of the amendment. In the event that the terms of the Exchange Offer are amended, we will file a Form 8-K with the Commission and include the amendment to our Exchange Offer. See Exchange Offer - Section 14. What is the purpose of the Exchange Offer The Board determined that it is in the best interest of the Company to repurchase shares of its common stock and that at this time the Exchange Offer described in this Exchange Offer is a prudent and effective way to do so and to provide value and offer our stockholders the opportunity to exchange their shares for a security that is traded on a national securities exchange that currently pays an 8.0% annual distribution. We believe an Exchange Offer at the Exchange Ratio offered will provide value to our stockholders. Conversely, the Exchange Offer also affords stockholders the option not to participate and, thereby, to increase their relative percentage interest in the Company and its future results. In addition, our Board believes the Exchange Offer provides stockholders with an opportunity to exchange their shares for securities that currently pay a distribution that are traded on a national securities exchange, without potential disruption to the share price and the usual transaction costs inherent in open market purchases and sales. The Board may consider undertaking additional offer(s) based upon a variety of factors, including the performance of the market price of the Shares. See Exchange Offer - Section 2. Are there any conditions to the Exchange Offer Yes. Our obligation to accept and exchange Trust Preferred Securities for your tendered Shares depends on a number of conditions, including, but not limited to A minimum of 25,000 Shares are tendered in the Exchange Offer. No legal action shall have been threatened, instituted or pending that challenges or relates to the Exchange Offer or that, in our reasonable judgment, could materially and adversely affect our business, condition (financial or otherwise), assets, income, operations or prospects or otherwise materially impair the contemplated future conduct of our business or our ability to exchange Shares in the Exchange Offer. No general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter markets in the United States or the declaration of a banking moratorium or any suspension of payment in respect of banks in the United States shall have occurred. No commencement or escalation of war, armed hostilities, or other international or national calamity, including, but not limited to, an act of terrorism, shall have occurred. No changes in the general political, market, economic or financial conditions in the United States or abroad that, in our reasonable judgment, could materially and adversely affect our business, condition (financial or otherwise), assets, income, operations or prospects. No decline shall have occurred in the market price for our Shares or the Trust Preferred Securities or in the Dow Jones Industrial Average, New York Stock Exchange Index, Nasdaq Composite Index or the Standard and Poor s 500 Composite Index by more than 10% from the close of business on _________ ___, 2023, the business day prior to the announcement by the Company of the commencement of the Exchange Offer. No tender or exchange offer for any or all of our Shares (other than this Exchange Offer) shall have been proposed, announced or made by any person or shall have been publicly disclosed other than in the ordinary course of business. No change in law or in the official interpretation or administration of law, or relevant position or policy of a governmental authority with respect to any laws, applicable to the Exchange Offer, shall have occurred. In addition, the Exchange Offer is condition on the registration of the Trust Preferred Securities to be delivered in the Exchange Offer with the Commission. The Exchange Offer is subject to a number of other conditions described in greater detail in Exchange Offer - Section 7. How do I tender my shares To tender your shares, prior to 5 00 P.M. Eastern Time, on _______ ___, 2023, unless the Exchange Offer is extended if your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact such nominee and have such nominee tender your Shares for you if you hold certificates in your own name, complete and sign a Letter of Transmittal according to its instructions and deliver it, together with any required signature guarantees, the certificates for your Shares and any other documents required by the Letter of Transmittal, to the Depositary at its address shown on the Letter of Transmittal or if you are an institution participating in The Depository Trust Company ( DTC ), which we refer to as the Book-Entry Transfer Facility, tender your Shares according to the procedure for book-entry transfer described in Exchange Offer - Section 3. Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadline for participation in the Exchange Offer. Accordingly, beneficial owners wishing to participate in the Exchange Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Exchange Offer. If you want to tender your Shares, but your certificates for the Shares are not immediately available or cannot be delivered to the Depositary, you cannot comply with the procedure for book-entry transfer or you cannot deliver the other required documents to the Depositary by the Expiration Date of the Exchange Offer, you will not be able to tender your Shares. This can occur, for example, if you purchased shares of our common stock at, or within one or two days of, the Expiration Date, not allowing sufficient time for such purchase transaction to settle. There are no guaranteed delivery procedures available under the terms of this offer as an alternative delivery mechanism. How will the Exchange Offer affect the number of our Shares and the number of Trust Preferred Securities outstanding As of June 30, 2023, we had 2,817,754 outstanding Shares. If the conditions to the Exchange Offer are satisfied or waived and the Exchange Offer is fully subscribed at the maximum amount, we will have 2,679,754 Shares outstanding immediately following the exchange of Shares tendered in the Exchange Offer, representing an approximate 4.9% reduction in the number of outstanding Shares. The actual number of Shares outstanding immediately following completion of the Exchange Offer will depend on the number of Shares tendered and exchanged in the Exchange Offer. See Exchange Offer - Section 2. As of June 30, 2023, there were 1,240,085 Trust Preferred Securities outstanding (includes 200,000 shares held by affiliated entities). If the conditions to the Exchange Offer are satisfied or waived and the Exchange Offer is fully subscribed, Air T Funding will have 1,433,285 Trust Preferred Securities outstanding immediately following the exchange of shares tendered in the Exchange Offer, representing an approximate 15% increase in the number of outstanding Trust Preferred Securities. The actual number of Trust Preferred Securities outstanding immediately following completion of the Exchange Offer will depend on the number of Shares tendered and exchanged in the Exchange Offer. Stockholders who do not have their Shares exchanged in the Exchange Offer will realize a proportionate increase in their relative ownership interest in the Company following the exchange of Shares pursuant to the Exchange Offer. See Exchange Offer - Section 2. Can I change my mind after I have tendered Shares in the Exchange Offer Yes. You may withdraw any Shares you have tendered at any time before the expiration of the Exchange Offer, which will occur at 5 00 p.m. Eastern Time, on _______ ___, 2023, unless we extend or withdraw it. See Exchange Offer - Section 4. How do I withdraw Shares I previously tendered You must deliver on a timely basis a written or facsimile notice of your withdrawal to the Depositary at the address appearing on the back cover of this Exchange Offer. Your notice of withdrawal must specify your name, the number of Shares to be withdrawn and the name of the registered holder of such Shares. Some additional requirements apply if the certificates for Shares to be withdrawn have been delivered to the Depositary or if your Shares have been tendered under the procedure for book-entry transfer set forth in Exchange Offer - Section 3. In what order will the Company exchange tendered Shares If the terms and conditions of the Exchange Offer have been satisfied or waived and 138,000 Shares are properly tendered and not properly withdrawn prior to the Expiration Date, we will acquire up to 138,000 Shares properly tendered and not properly withdrawn. If less than 138,000 Shares (and more than 25,000 Shares) are tendered, we will exchange all of the Shares at the exchange ratio of 1.40 Trust Preferred Securities per Share. If the conditions to the Exchange Offer have been satisfied or waived and more than 138,000 Shares have been properly tendered and not properly withdrawn prior to the Expiration Date, we will exchange Shares first, subject to the conditional tender provisions described in Exchange Offer - Section 6, on a pro rata basis from all other stockholders who properly tender Shares and do not properly withdraw them before the expiration of the Exchange Offer and second, if necessary to permit us to exchange up to 138,000 Shares, from holders who have tendered Shares conditionally (for which the condition was not initially satisfied) by random lot, to the extent feasible. To be eligible for exchange by random lot, stockholders whose Shares are conditionally tendered must have properly tendered all of their Shares and not properly withdrawn them before the expiration of the Exchange Offer. Therefore, we may not exchange all of the Shares that you tender. See Exchange Offer - Section 1. Has the Company or its Board adopted a position on the Exchange Offer While our Board has authorized the Exchange Offer, it has not, nor has the Company, the Information Agent or the Depositary made, any recommendation to you as to whether you should tender or refrain from tendering your Shares. We cannot predict how our stock or the Trust Preferred Securities will trade after expiration of the Exchange Offer, and it is possible that our stock price will trade above the exchange ratio or that the Trust Preferred Securities will trade below the exchange price after expiration of the Exchange Offer. You must make your own decision as to whether to tender your Shares and, if so, how many Shares to tender. In doing so, you should read carefully all of the information in this Exchange Offer, in the related Letter of Transmittal and in the other exchange offer materials. Will the Company s directors and executive officers tender Shares in the Exchange Offer The Company s directors and executive officers are entitled to participate in the Exchange Offer on the same basis as other stockholders. See Exchange Offer - Section 11. If I decide not to tender, how will the Exchange Offer affect my Shares Stockholders who choose not to tender will own a greater percentage interest in our outstanding shares of common stock following the completion of the Exchange Offer. When and how will the Company complete the Share exchange We will cause Air T Funding to issue Trust Preferred Securities to stockholders that tender Shares and we will pay in cash any amounts necessary to pay for fractional Trust Preferred Securities, less any applicable withholding taxes and without interest. The exchange of shares will occur promptly after the expiration of the Exchange Offer and the acceptance of the Shares for exchange, by depositing the Trust Preferred Securities and the aggregate purchase price with the Depositary. The Depositary will act as your agent and will transmit to you the Trust Preferred Securities and any payment for fractional shares. See Exchange Offer - Section 5. What is a recent market price for the Shares and the Trust Preferred Securities On July 21, 2023, the last reported sale price of the Shares on the Nasdaq was $23.98 per share. On July 21, 2023, the last reported sale price of the Trust Preferred Securities on the Nasdaq was $21.72 per share. You are urged to obtain current market quotations for the shares. See Exchange Offer - Section 8. Will I have to pay brokerage fees and commissions if I tender my Shares If you are a holder of record of your Shares and you tender your Shares directly to the Depositary, you will not incur any brokerage fees or commissions. If you hold your Shares through a broker, dealer, commercial bank, trust company or other nominee and such nominee tenders Shares on your behalf, such nominee may charge you a fee for doing so. We urge you to consult your broker or other nominee to determine whether any charges will apply. See Exchange Offer - Sections 5 and 16. Does the Company intend to repurchase any Shares other than pursuant to the Exchange Offer during or after the Exchange Offer The Company s Board approved an open-market share repurchase program, which allows the Company to opportunistically buy back Shares in the market from time to time at prevailing market prices. However, we and our affiliates are prohibited from purchasing any Shares or Trust Preferred Securities, other than exchanging Shares for Trust Preferred Securities pursuant to the Exchange Offer, until at least ten business days after the expiration of the Exchange Offer. Beginning ten business days after the Expiration Date of the Exchange Offer, we may make stock repurchases from time to time on the open market and or in private transactions. Whether we make additional repurchases will depend on many factors, including, without limitation, the number of Shares, if any, that we acquire in this Exchange Offer, our business and financial performance and situation, the business and market conditions at the time, including the price of the Shares, and such other factors as we may consider relevant. Upon commencement of the Exchange Offer, the Company suspended a 10b5-1 trading plan that provides for the repurchase of shares of common stock. The plan terminates December 31, 2023 and provides for the repurchase of up to $50,000 a week of common stock following July 1, 2023. The program and prior repurchase authorization does not obligate the Company to acquire any specific number of Shares and may be suspended, terminated or modified at any time. Any of these repurchases may be on the same terms or on terms that are more or less favorable to the stockholders in those transactions than the terms of the Exchange Offer. What are the U.S. federal income tax consequences if I tender my Shares Generally, the U.S. federal income tax consequences to you of participating in the Exchange Offer are complex and will vary depending on certain facts and circumstances. We intend to treat the exchange of the shares for the Trust Preferred Securities as a recapitalization pursuant to Section 368(a)(1)(E) of the Code. Assuming the exchange is so treated, you generally will recognize gain for U.S. federal income tax purposes equal to the excess, if any, of the fair market value of the Trust Preferred Securities received in the exchange (including any fractional share) over your tax basis in the Shares. You will not be able to recognize any loss realized in the recapitalization (except with respect to cash received in lieu of a fractional share). Cash received in lieu of a fractional share will generally be treated as received in exchange for the fractional share, and you will generally recognize the gain or loss thereon. Please see Exchange Offer Section 13. Because the U.S. federal income tax consequences of the Exchange Offer are complex, you are urged to consult with your own tax advisor. Will I have to pay stock transfer tax if I tender my Shares If you hold your Shares in street name through a broker or other nominee, or instruct the Depositary in the Letter of Transmittal to issue shares and make any payment necessary for the Shares to the registered holder, you will not incur any stock transfer tax. See Exchange Offer - Section 5. Have there been any recent developments of which I should be aware For a description of recent developments of the Company and Air T Funding, please refer to our Forms 10-K and 10-K A filed for such fiscal year ended March 31, 2023 and our Definitive Proxy Statement for our Annual Meeting of Stockholders scheduled for August 16, 2023. We have also filed Current Reports on Form 8-K on July 27, 2023 and August 21, 2023. See Where You Can Find More information and Incorporation of Certain Documents by Reference.
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001764974_turnstone_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001764974_turnstone_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, Special Note Regarding Forward-Looking Statements, and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, references to we, us, our, the company and Turnstone USA refer to Turnstone Biologics Corp., a Delaware corporation, and our wholly owned subsidiaries, Turnstone Biologics Inc., a corporation under the Canada Business Corporations Act, which we refer to in this prospectus as Turnstone Canada, and Myst Therapeutics, LLC, a Delaware limited liability company. Overview We are a clinical stage biotechnology company focused on developing new medicines to treat and cure patients with solid tumors. Approved immunotherapies represent a significant advancement in the treatment of solid tumors, but many patients either do not respond or experience relapsed disease following an initial response. We believe the most significant challenge to creating curative immunotherapies in these patients is the low numbers of T cells that can recognize and attack the tumor, which we refer to as tumor-reactive T cells. To address this problem, we are pioneering a differentiated approach to tumor infiltrating lymphocytes, or TILs. We are developing next generation TIL therapies by selecting the most potent (meaning able to mediate an anti-tumor response) and tumor-reactive T cells, which we refer to as Selected TILs. Unlike other approaches that rely on standard bulk TILs that have demonstrated objective responses in clinical trials only in limited tumor types, we are developing our Selected TILs for potential treatment across the majority of solid tumors. We have initiated two Phase 1 clinical trials for TIDAL-01, including a multi-site trial for the treatment of breast cancer, colorectal cancer, and uveal melanoma, and an investigator sponsored trial with H. Lee Moffitt Cancer Center and Research Institute, Inc., or Moffitt, in both cutaneous and non-cutaneous melanomas. We discuss the nature of this investigator-sponsored trial, including how this trial differs from a clinical trial sponsored by our company, as well as our roles and responsibilities in the trial, in more detail below. We intend to provide an initial clinical update across these two trials in mid-2024. We are also actively advancing our preclinical pipeline programs including TIDAL-02, our next Selected TIL program, and our TIDAL-01 viral immunotherapy combination program. We define objective response as a patient experiencing a partial response or complete response to any given therapy. Solid tumors present a major burden to society, with high mortality and poor outcomes associated with more advanced disease. Several key factors, such as tumor heterogeneity (meaning differences in the characteristics, including variable tumor antigen expression, between cancer cells within a patient s tumor, between tumors within the same patient and/or between different patients tumor(s)) and challenging tumor microenvironments, or TMEs, have made treatment of solid tumors more difficult than treatment of hematologic cancers. Immunotherapies that activate the immune system to enhance and/or create anti-tumor immune responses, such as immune checkpoint inhibitors, or ICIs, have improved outcomes for some patients. However, more than 85% of cancer patients fail to respond to ICI therapy. The effectiveness of ICIs is heavily dependent on the presence of tumor-reactive T cells that ICIs can reinvigorate, and many patients lack a sufficient number of T cells that recognize the target tumor. Therefore, we believe new treatments that can expand and enhance the patient s tumor-reactive T cells are needed. TILs are a type of cell therapy that harness the patient s own immune cells to target their own tumors. TIL therapy involves the isolation of lymphocytes from the patient s tumor, expansion of the isolated cells outside the body, and then infusion of the cells back into the patient. TILs have the ability to penetrate, recognize, and kill cancer cells and offer potential to treat or cure solid tumors. Because TILs include an expansive breadth of lymphocytes that are specific to the patient s tumor antigens, we believe they have the potential to overcome tumor heterogeneity which often presents a significant challenge for other therapies. Clinical trials with standard bulk Table of Contents The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to Completion Preliminary Prospectus dated July 17, 2023 P R O S P E C T U S 5,800,000 Shares Common Stock This is Turnstone Biologics Corp. s initial public offering. We are selling 5,800,000 shares of our common stock. We expect the initial public offering price to be between $12.00 and $14.00 per share. Currently, no public market exists for the shares of our common stock. We have applied to list our common stock on the Nasdaq Global Market, or Nasdaq, under the symbol TSBX. However, no assurance can be given that our listing application will be approved. If our listing application is not approved by Nasdaq, we will not be able to consummate this offering. We are an emerging growth company and a smaller reporting company as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company disclosure standards. See the section titled Prospectus Summary Implications of Being an Emerging Growth Company and a Smaller Reporting Company. Investing in our common stock involves risks that are described in the Risk Factors section beginning on page 16 of this prospectus. Per Share Total Public offering price $ $ Underwriting discount(1) $ $ Proceeds before expenses, to us $ $ (1) We refer you to the section titled Underwriting beginning on page 232 of this prospectus for additional information regarding underwriting compensation. The underwriters may also exercise their option to purchase up to an additional 870,000 shares of common stock from us, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The shares will be ready for delivery on or about , 2023. Joint Book-Running Managers BofA Securities Leerink Partners Piper Sandler The date of this prospectus is , 2023. Table of Contents TILs, the first generation of TIL therapy that involves isolation and expansion of all of the TILs in the tumor sample, have shown objective responses in clinical trials in limited solid tumor types. To date, several hundred patients in the United States have received bulk TIL therapies, with the greatest success observed in metastatic melanoma. In metastatic melanoma patients refractory to ICI therapy, specifically PD-(L)1 treatments (meaning monoclonal antibodies targeting the immune checkpoint PD-1), bulk TIL monotherapy has yielded objective response rates (meaning the percentage of patients experiencing a partial response or complete response in any given study) of approximately 30% to 50%, with complete response rates (meaning the percentage of patients with complete eradication of measurable disease in the patient and no new lesions) ranging from approximately 5% up to 20%. If a complete response lasts the lifespan of a patient it would be considered as a cure in general clinical practice patients are referred to as cured if they remain in complete response for greater than five years as the probability of their disease recurrence is low. Beyond metastatic melanoma, bulk TIL therapy has demonstrated therapeutic potential in a limited number of solid tumors, including squamous cell carcinoma of the head and neck, cervical cancer, and non-small cell lung cancer. We believe that the activity of TILs is driven by the subset of tumor-reactive T cells, and that the key limitation for bulk TILs is the small number and proportion of tumor-reactive T cells that make up the bulk TIL product (reported median less than 3%, Lowery et al., 2022). We believe increasing the proportion and diversity of tumor-reactive T cells in a TIL product can expand the utility of TILs to a greater breadth of tumor types, where bulk TILs have not shown objective responses in clinical trials to date. Our Solution: Selected TILs We are developing next generation TIL therapies for the potential treatment of multiple solid tumors. There are no TIL therapies that have received FDA approval to date. To our knowledge, at present there are no therapies in clinical development that provide curative outcomes for the majority of patients in our chosen solid tumor indications. Our innovative Selected TIL approach focuses on selecting and expanding the most potent tumor-reactive T cells to overcome the limitations of bulk TILs. This approach expands upon work conducted in academia that demonstrated improved clinical responses for certain selected TILs in solid-tumor types where bulk TILs have not shown objective responses in clinical trials. We are leveraging this work to establish a standardized manufacturing process for large scale production of our Selected TILs. Our Selected TIL approach employs the following foundational principles with the goal of yielding the greatest number and proportion of tumor-reactive T cells in our TIL product candidates: (1) Unbiased identification of patient-specific tumor antigens: We seek to identify the most comprehensive set of patient-specific tumor antigens. We use an unbiased identification process that aims to find and capture the greatest diversity of antigens with the potential to drive the most robust T cell response. Our proprietary approach is unlike other TIL products that are biased toward a specific subset or class of antigen(s), which may miss relevant tumor antigens or focus on the wrong targets. (2) Selection of greatest breadth of tumor-reactive T cells from patient extracted TILs: Our goal is to capture and isolate the greatest number and proportion of a patient s tumor-reactive T cells that have the potential to attack and destroy heterogeneous solid tumors. We aim to select the greatest diversity of T cells by using a function-based screening process that confirms reactivity to the identified patient-specific tumor antigens rather than relying on a bioinformatics-based prediction algorithm that may not be truly predictive. (3) Expansion of tumor-reactive T cells and removal of non-tumor-reactive bystander cells: We expand our selected tumor-reactive TIL population to magnitudes consistent with bulk TIL products and Table of Contents TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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+Prospectus Summary 1
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001780097_baudax_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001780097_baudax_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained in other parts of this prospectus and in the documents we incorporate by reference herein. Because it is only a summary, it does not contain all of the information that you should consider before investing in our securities and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus, any applicable free writing prospectus and the documents incorporated by reference herein. You should read all such documents carefully, especially the risk factors and our consolidated financial statements and the related notes included or incorporated by reference herein, before deciding to buy our securities. Unless the context requires otherwise, references in this prospectus to Baudax, we, us and our refer to Baudax Bio, Inc. and our subsidiaries. Overview Baudax Bio, Inc. is a biotechnology company focused on developing T cell receptor ( TCR ) therapies utilizing human regulatory T cells ( Tregs ), as well as a portfolio of clinical stage Neuromuscular Blocking Agents ( NMBs ) and an associated reversal agent. Our TCR Treg programs primarily focus on immune modulating therapies for orphan diseases or complications associated with such diseases, as well as the treatment of autoimmune disorders. We believe that our TCR Treg programs have the potential to provide valuable therapeutic options to patients suffering from diseases for which there are limited treatment options and significant unmet need, as well as to prescribers and payers in these markets. On June 29, 2023, we acquired TeraImmune, a Delaware corporation. TeraImmune was a privately-held biotechnology company focused on discovery and development of novel Treg-based cell therapies for autoimmune diseases. TeraImmune s proprietary and patented technology platforms include a method for expansion of the Treg without losing its function and stability, as well as a method to target specific receptors including TCRs, Chimeric Antigen Receptors ( CARs ) and B cell Antigen Receptors ( BARs ). TeraImmune has also in-licensed through an exclusive, sublicensable, royalty-bearing license, a patent family covering methods of producing T cell populations enriched for regulatory T cells and cell culture compositions from U.S. Department of Health and Human Services, as represented by National Institute of Allergy and Infectious Diseases of the National Institutes of Health. In addition, TeraImmune has developed Treg manufacturing procedures in accordance with regulatory guidance from the U.S. Food and Drug Administration ( FDA ). In June 2022, TeraImmune s Investigational New Drug ( IND ) application to commence clinical trials of a Factor VIII ( FVIII ) TCR-Treg treatment for Hemophilia A with inhibitors was cleared by the FDA. Tregs are designed to recognize and target certain cells through the engagement of target-specific receptors by peptide antigens presented on the surface of the target cell by the major histocompatibility complex. Our proprietary and patented technology platform consists of two approaches: (1) TREGable , which involves the isolation of natural Tregs, and (2) TREGing , which involves engineering effector T ( Teff ) cells into antigen-specific Tregs. Each approach is intended to recognize and attack pathogens while avoiding an attack on healthy cells and tissues. The lead product candidate we acquired in the acquisition with TeraImmune, TI-168, is being developed for the treatment of Hemophilia A with inhibitors, which received IND clearance in 2022. We have in-licensed two patent families relating to TI-168, nucleic acids constructs encoding TCRs, methods of producing TI-168, immunosuppressive induced regulatory T cells from the Henry M. Jackson Foundation for the Advancement of Military Medicine, Inc. ( HJF ) under two worldwide, exclusive, sublicensable royalty-bearing licenses. We also exclusively license a family of pending U.S. and foreign patent applications directed to immunosuppressive induced regulatory T cells and methods of producing these cells, which if issued would expire in 2041 subject to any applicable disclaimer or extensions. Table of Contents We also hold exclusive global rights to two new molecular entities, which are centrally acting NMBs, BX1000, an intermediate duration of action NMB that recently completed a successful Phase II clinical trial, and BX2000, an ultra-short acting NMB currently undergoing a Phase I clinical trial. A proprietary blockade reversal agent, BX3000, is currently being evaluated in preclinical studies intended to support an IND filing in 2023. BX3000 is an agent that is expected to rapidly reverse BX1000 and BX2000 blockade. All three agents are licensed from Cornell University. We believe these agents, when an NMB and BX3000 are administered in succession, allow for a rapid onset of centrally acting neuromuscular blockade, followed by a rapid reversal of the neuromuscular blockade with BX3000. These novel agents have the potential to meaningfully reduce time to onset and reversal of blockade and improve the reliability of onset and offset of neuromuscular blockade. This can potentially reduce time in operating rooms or post operative units, resulting in potential clinical and cost advantages, as well as valuable cost savings for hospitals and ambulatory surgical centers and has the potential for an improved clinical profile in terms of safety. Our pipeline also includes other early-stage product candidates, including two novel NMBs and a related proprietary chemical reversal agent and Dex-IN, a proprietary intranasal formulation of dexmedetomidine ( Dex ), an alphA-4 adrenergic agonist that we are evaluating for possible partnering. In mid-2020, we launched our first commercial product, ANJESO, in the United States. ANJESO was the first and only 24-hour, intravenous, analgesia agent. ANJESO is a cyclooxygenase-2 preferential, non-steroidal anti-inflammatory drug ( NSAID ) for the management of moderate to severe pain, which could be administered alone or in combination with other non-NSAID analgesics. We discontinued commercial sales of ANJESO in December 2022 and further withdrew its New Drug Application ( NDA ) related to ANJESO in late March 2023. We believe that we can bring valuable therapeutic options for patients suffering from certain orphan diseases and autoimmune disorders for which there are limited treatment options and significant unmet need, and prescribers and payers in these markets, as well as to the acute care and related markets. We believe we can create value for our shareholders through the development, and potential approval and commercialization of TI-168 for treatment of Hemophilia A with inhibitors, as well as our other pipeline product candidates we develop for the treatment of autoimmune disorders utilizing Treg-based therapies. In addition to our Treg pipeline, we continue to modestly progress the NMB and related assets, and will consider select acquisitions, especially those that could contribute revenue and cash flow. Corporate Information We were incorporated in Pennsylvania in 2019 and our office headquarters is located at 490 Lapp Road, Malvern, Pennsylvania 19355. Available Information Our website address is www.baudaxbio.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it in any way part of this prospectus and should not be relied upon in connection with making any decision with respect to an investment in our securities. We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the SEC ). You may obtain any of the documents filed by us with the SEC, at no cost from the SEC s website at www.sec.gov. Implications of Being an Emerging Growth Company We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the JOBS Act ). We will remain an emerging growth company until December 31, 2024, unless our gross revenue exceeds $1.07 billion in any fiscal year before that date, we issue more than $1.0 billion of Table of Contents non-convertible debt in any three-year period before that date or the market value of our common stock held by non-affiliates exceeds $700.0 million as of the last business day of the second fiscal quarter of any fiscal year before that date. We have elected to take advantage of certain of the scaled disclosure available for emerging growth companies in this prospectus as well as our filings under the Exchange Act of 1934 ( the Exchange Act ), including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation and financial statements in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote to approve executive compensation and shareholder approval of any golden parachute payments not previously approved. We will take advantage of these reporting exemptions until we are no longer an emerging growth company. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we are subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Risks Associated with this Offering This offering is subject to numerous risks and uncertainties, including those highlighted in the section entitled Risk Factors immediately following this prospectus summary and the similarly titled sections in the documents incorporated by reference into this prospectus. These risks include, but are not limited to, the following: Risks Related to this Offering It is not possible to predict the actual number of shares we will sell under the Purchase Agreement to the Selling Shareholder, or the actual gross proceeds resulting from those sales. Investors who buy shares in this offering at different times will likely pay different prices. The issuance of common stock to the Selling Shareholder may cause substantial dilution to our existing shareholders and the sale of such shares acquired by the Selling Shareholder could cause the price of our common stock to decline. Future sales of our common stock could cause the market price for our common stock to decline. Our management will have broad discretion over the use of the net proceeds from our sale of shares of common stock to Alumni Capital, you may not agree with how we use the proceeds and the proceeds may not be invested successfully. Risks Related to Our Finances and Capital Requirements Our losses, negative cash flows from operations and accumulated deficit raise substantial doubt about our ability to continue as a going concern absent obtaining adequate new debt or equity financings. If we are unable to meet the initial listing standards of Nasdaq by November 13, 2023, or otherwise regain compliance with the listing standards of Nasdaq, our common stock may become delisted, which could have a material adverse effect on the liquidity of our common stock and our ability to raise capital. Table of Contents
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+S-1/A 1 wbba_s1a2.htm S-1/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1/A AMENDMENT NO. 2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT WB Burgers Asia, Inc. (Exact name of registrant as specified in its charter) Date: September 22, 2023 Nevada 5812 00-0000000 (State or Other Jurisdiction of Incorporation) (Primary Standard Classification Code) (IRS Employer Identification No.) 3F K s Minamiaoyama 6-6-20 Minamiaoyama, Minato-ku, Tokyo, Japan 107-0062 Issuer's telephone number: +81-90-6002-4978 Company email: kishizuka@waybackintl.com (Address, including zip code, and telephone number, including area code, of registrant s principal mailing address) Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. 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. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, 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(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |X| Smaller reporting company |X| Emerging growth company |X| If an emerging growth company, 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. |_| CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Offering Price Per Share (1) Underwriting Discounts and Commissions Maximum Net Proceeds Common Stock, $0.0001 par value (Direct Public Offering) $0.20 none 30,000,000 Common Stock, $0.0001 par value (by Selling Shareholders) $0.20 none 24,647,995.40 Common Stock, $0.0001 par value (per unit/ share basis) $0.20 none 0.20 Title of Each Class of Securities to be Registered Proposed Maximum Offering Price Per Share (1) Underwriting Discounts and Commissions Maximum Net Proceeds Amount of Registration Fee (2) Common Stock, $0.0001 par value (Total; Inclusive of Direct Public Offering and Resale Offering) $0.20 none 54,647,995.40 $5,065.87 (1) The offering price has been arbitrarily determined by the Company and bears no relationship to assets, earnings, or any other valuation criteria. No assurance can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price. (2) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933. The Registrant hereby amends this Registration Statement (the "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 the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale is not permitted. There is no minimum purchase requirement for the offering to proceed. PRELIMINARY PROSPECTUS WB Burgers Asia, Inc. 273,239,977 SHARES OF COMMON STOCK $0.0001 PAR VALUE PER SHARE The common stock of WB Burgers Asia, Inc. is quoted on the OTC Markets Group Inc. s Pink Open Market (the "OTC Pink") under the symbol WBBA. Upon completion of this Offering, we will attempt to have the shares quoted on the OTCQB operated by OTC Markets Group, Inc. In this public offering we, "WB Burgers Asia, Inc." are offering 150,000,000 shares of our common stock and our selling shareholders are offering 123,239,977 shares of our common stock. We will not receive any of the proceeds from the sale of shares by the selling shareholders. The offering is being made on a self-underwritten, "best efforts" basis. There is no minimum number of shares required to be purchased by each investor. The shares offered by the Company will be sold on our behalf by our sole officer and Director, Koichi Ishizuka. There is uncertainty that we will be able to sell any of the 150,000,000 shares being offered herein by the Company. Koichi Ishizuka will not receive any commissions or proceeds for selling the shares on our behalf. All of the shares being registered for sale by the Company will be sold at a fixed price, with a maximum offering price of $0.20 per share for the duration of the Offering. Assuming all of the 150,000,000 shares being offered by the Company are sold, the Company will receive a maximum of $30,000,000 in net proceeds. Assuming 112,500,000 shares (75%) being offered by the Company are sold, the Company will receive a maximum of $22,500,000 in net proceeds. Assuming 75,000,000 shares (50%) being offered by the Company are sold, the Company will receive a maximum of $15,000,000 in net proceeds. Assuming 37,500,000 shares (25%) being offered by the Company are sold, the Company will receive a maximum of $7,500,000 in net proceeds. There is no minimum amount we are required to raise from the shares being offered by the Company and any funds received will be immediately available to us. There is no guarantee that we will sell any of the securities being offered in this offering. Additionally, there is no guarantee that this Offering will successfully raise enough funds to further our Company's business plan going forward, and additional funding avenues may be necessary. This primary offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this Prospectus, unless extended by our director for an additional 90 days. We may however, at any time and for any reason terminate the offering. Koichi Ishizuka will be selling shares of common stock on behalf of the Company simultaneously to selling shares of common stock in the Company from his own personal account(s). A conflict of interest may arise as a result of Koichi Ishizuka selling shares from his own personal account(s), and in selling shares on the Company s behalf. Currently, Koichi Ishizuka, through his direct, and the indirect ownership of the Company via White Knight Co., Ltd., owns and controls approximately 1,626,939,150 shares of our Common Stock and 0 shares of our Preferred Stock. Currently, we have 2,072,642,444 shares of common stock, $0.0001 par value, issued and outstanding and 0 shares of preferred stock, $0.0001 par value, issued and outstanding. As of the date of this Registration Statement, Koichi Ishizuka, through his direct and indirect ownership of the Company, via White Knight Co., Ltd., is able to control approximately 79.30% of the voting power of the Company. As such, Mr. Ishizuka has the ability to control matters requiring shareholder approval, including the election of directors, amendment of organizational documents, and approval of major corporate transactions, such as a change in control, merger, consolidation, or sale of assets. We operate through our wholly owned subsidiary, WB Burgers Japan Co., Ltd., which holds the rights to the "Master Franchise Agreement" with Jakes Franchising LLC, a Delaware Limited Liability Company, as it pertains to the establishment and operation of Wayback Burger Restaurants within the country of Japan. The Master Franchise Agreement provides WB Burgers Japan Co., Ltd. the right to establish and operate Wayback Burgers restaurants in the country of Japan, and also license affiliated and unaffiliated third parties ("Franchisees") to establish and operate Wayback Burgers restaurants in the Country of Japan. The Master Franchise Agreement, amongst other things, also provides WB Burgers Japan Co., Ltd. the right of first refusal to enter into a subsequent Master Franchise Agreement with Jake s Franchising, LLC to establish and operate Wayback Burgers restaurants in the Countries of Indonesia, Malaysia (Eastern Malaysia only, Western Malaysia if it becomes available as it is currently licensed to another party), the Philippines, Vietnam, China, India, Korea, Thailand, Singapore, and Taiwan. We seek to make "Wayback Burgers" a nationally recognized brand, if not a household name, within the country of Japan through the promotion and opening of various Wayback Burgers Restaurants. Our first , ' ': flagship location has just opened up this past March 11th of 2022 in the popular shopping plaza of Omotesando, located in the Tokyo prefecture of Japan. All shares being offered pursuant to this Registration Statement will be sold at a fixed price, not to exceed a maximum of $0.20 per share for the duration of the offering. The Company estimates the costs of this offering at about $55,000. All expenses incurred in this offering are being paid for by the Company. For the duration of the offering any and all sellers of the shares being registered herein agree to provide this prospectus to potential investors in its entirety. The proceeds from the sale of the securities sold on behalf of the Company will be placed directly into the Company s account and or the account of one of its subsidiaries; any investor who purchases shares will have no assurance that any monies, beside their own, will be subscribed to the prospectus. If an investor decides to invest in this offering, there are no assurances that additional investors will also invest. All proceeds from the sale of the securities are non-refundable, except as may be required by applicable laws. The Company qualifies as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, which became law in April 2012 and will be subject to reduced public company reporting requirements. THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS OF YOUR INVESTMENT. PLEASE REFER TO , ' ': RISK FACTORS BEGINNING ON PAGE 6. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely on it. The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus. TABLE OF CONTENTS PART I PROSPECTUS PAGE PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY Investors are cautioned that you are not directly buying shares of a China-based operating company but instead are buying shares of a holding company issuer with no material operations of its own that conducts substantially all of its operations through its subsidiaries in China. This summary highlights certain information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including our financial statements and related notes and the risks described under "Risk Factors" beginning on page 25. We note that our actual results and future events may differ significantly based upon a number of factors. The reader should not put undue reliance on the forward-looking statements in this document, which speak only as of the date on the cover of this prospectus. Overview QinHong International Group is a holding company incorporated in the Cayman Islands. As a holding company with no material operations of its own, our Cayman Islands holding company conducts a substantial majority of its operations through its operating entities established in China. Our ordinary shares offered in this prospectus are shares of our Cayman Islands holding company. The approval of PRC regulatory agencies may be required in connection with this offering under a PRC regulation or any new laws, rules or regulations to be enacted, and if required, we may not be able to obtain such approval. For a description of our corporate structure, see "Corporate Structure." Our Business We are an emerging provider of financial facilitation and referral services in Sichuan Province, People s Republic of China (which we refer to herein as the PRC or China) with operations conducted through our subsidiaries in China. We offer our clients, primarily small-to-medium enterprises (or SMEs) and financial institutions, a variety of services in connection with the monetization of negotiable instruments, accounts receivable and other rights to payment, all of which we collectively refer to as RTPs. Our operating subsidiaries commenced operations in July 2017 and have since built a network of SMEs, commercial banks, factoring companies and other financial and non-financial institutions which enables us to effectively and efficiently help our SME clients to obtain greater cash flows at lower costs through disposition of their RTPs and assist our financial institution clients in finding diversified investment opportunities with attractive returns by referring to them SMEs with RTP financing requirements. Through the extensive experience of our founders in the transfers of negotiable instruments, we strategically focus on the facilitation of transfers of banker s acceptance bills (or BA bills), which is a type of negotiable instrument commonly used in trades in China), typically with an aggregate face value of more than RMB10 million (approximately $1.55 million) per transaction. Such transactions bring us higher revenue per transaction with relatively lower operating costs than transactions that trade other types of negotiable instruments as we can focus our resources on servicing fewer clients with higher transaction value. As of June 30, 2023, we had facilitated transfers of negotiable instruments, all of which were BA bills for our SME clients with an aggregate face value of approximately RMB 12.7 billion (approximately $1.9 billion) over the past five fiscal years. Leveraging on our expanding network of SMEs and financial institutions, in August 2019, we started offering referral services to one financial institution whose business is to purchase low risk RTPs at a discount. We presently service one third-party factoring company based in Shenzhen City, China and had successfully referred 33 RTP holders to this client and facilitated its purchase of RTPs in the aggregate amount of approximately RMB 161.7 million (approximately $24.3 million) as of June 30, 2023. We receive service fees for our facilitation and referral services, which generally range from 0.2% to 0.3% of the face value of RTPs for SME clients and 0.1% to 4% of proceeds for referral services. For the fiscal years ended June 30, 2023 and 2022, we generated revenue of approximately $629,000 and $1,438,000, respectively, among which approximately $355,000 and $1,271,000 were derived from our facilitation services (before deducting sales taxes) to our SME clients. Classification of and Market for Negotiable Instruments in China Pursuant to the Negotiable Instruments Law of the PRC, negotiable instruments include bills of exchange, promissory notes and checks. There are two types of bills of exchange: bank drafts and commercial drafts. Commercial drafts include commercial acceptance bills and BA bills. For a commercial acceptance bill, a non-financial entity agrees to pay the amount indicated on the draft to the beneficiary or bearer at the request of the drawer without any condition; while for a BA bill, the bank promises to pay the amount indicated on the draft to the beneficiary or bearer at the request of the drawer without any condition. The negotiable instrument market in China includes both a primary market and a secondary market. The primary market is where the negotiable instruments are issued, while the secondary market is where those instruments are traded. In the primary market, negotiable instruments mainly serve as credit vouchers and payment and settlement instruments and the transactions in the primary market consist of the issuance and acceptance of negotiable instruments. In the secondary market, negotiable instruments may be endorsed and transferred, discounted, interbank discounted and rediscounted. As a consulting service provider, we facilitate our clients with transfer of negotiable instruments (BA bills) by endorsement to financial institutions or discounting of instruments to commercial banks. There are a large number of sole proprietors providing similar services in the negotiable instrument market. There are no public records or market statistics about these sole proprietors. Negotiable instruments may be used as a payment method or financing tool. Due to the rapid growth and wide usage of electronic payment methods in China, the payment function of negotiable instruments has become less prominent and negotiable instruments have been primarily used as a financing tool. According to statistics issued by the Shanghai Commercial Paper Exchange, in 2020, the negotiable instrument market was RMB148.24 trillion (approximately $22.93 trillion), representing a 12.8% increase from the previous year. In 2020, the total face value of BA bills issued was RMB18.47 trillion (approximately $2.86 trillion), representing a 6.43% increase from the previous year. A total of 7,819 companies consummated transactions for an aggregate of $46.98 billion via electronic commercial drafts in 2020. In 2020, the commercial draft acceptance market in China was RMB3.62 trillion (approximately $0.56 trillion), which represents an increase of 19.8% over the previous year. As all of the BA bills we facilitate are issued and transferred electronically through the People s Bank of China ("PBOC") system, we believe the exposure to any risk of bill fraud has been minimized due to the electronic and instant nature of the PBOC system, as opposed to BA bills in paper form. There have been some instances of internal fraudulent activities within certain PRC commercial banks while processing the BA bills electronically and any damages caused by those activities are generally indemnified by the commercial banks. We conduct due diligence for our own information and records only; however, we do not verify the authenticity or validity of the RTPs. See "Business – Risk Management." Our Strengths We believe that the following strengths differentiate us from our competitors and provide us with advantages for realizing the potential of market opportunity: Our focus on monetization of RTPs with high profit margins, Trusted relationship with our clients, Our expeditious and seamless services that address clients needs, and An experienced management team. Our Strategies We believe our dedicated and efficient services are attracting increasing numbers of SMEs and financial institutions to work with our company. To gain competitive advantages, we plan to implement the following strategies: Invest in human capital to expand facilitation and referral services to our clients; Build a scalable platform for the transfer of negotiable instruments; and Pursue formation or acquisition of a factoring business (although as of the date of this prospectus, we have not identified or engaged in any material discussions regarding any potential factoring business acquisition) Corporate Structure The following diagram illustrates our corporate structure as of the date of this prospectus, including our subsidiaries. On November 18, 2019, WFOE entered into a series of agreements (the "VIE Agreements") separately with each of QinHong Technology, QinHong Management and their respective shareholders. On March 7, 2022, all of the VIE Agreements with QinHong Technology were terminated, and on April 7, 2022, all of the VIE Agreements with QinHong Management were terminated. On April 7, 2022, WFOE entered into an equity transfer agreement with QinHong Management and the shareholders of QinHong Management. Pursuant to the equity transfer agreement, each of the shareholders of QinHong Management transferred to WFOE their respective equity interests in QinHong Management for no consideration. As a result, we hold 100% of the equity interests of both QinHong Technology and QinHong Management. As of the date of this prospectus, we and our PRC subsidiaries have received from PRC authorities all requisite licenses, permissions or approvals needed to engage in the businesses currently conducted in China, and no permission or approval has been denied. Such licenses and permissions only include business licenses. The following table provides details on the licenses and permissions held by our PRC subsidiaries. Company License/Permission Issuing Authority Validity WFOE Business License Administration For Market Regulation of Chengdu Long-term QinHong Technology Business License Administration For Market Regulation of Chengdu Long-term QinHong Management Business License Administration For Market Regulation of Chengdu Jinniu District Long-term QinHong Consulting Business License Administration For Market Regulation of Chengdu Wuhou District Long-term The following table sets forth the summary consolidated balance sheets data as of June 30, 2023 and 2022 of (i) the parent company, QinHong International Group, (ii) its subsidiary, which is QinHong Capital Group Limited, (iii) WFOE, which is Chengdu Xiyuan Supply Chain Management Co., Ltd., and (iv) QinHong Technology, QinHong Management and QinHong Consulting, all three of which are subsidiaries of WFOE, and the summary of the consolidated statement of income and cash flows for the fiscal years ended June 30, 2023 and 2022. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. Our historical results are not necessarily indicative of results expected for future periods. You should read this information together with our consolidated financial statements and the related notes and "Management s Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. Selected Condensed Consolidated Balance Sheets Data (Expressed in U.S. dollars) June 30, 2023 Parent Subsidiary WFOE WFOE s subsidiaries Elimination Total Cash and cash equivalents $ — $ — $ 48,325 $ 395,832 $ — $ 444,067 Accounts receivable — — 12,404 77,549 — 89,953 Loans receivable — — 2,632,449 813,165 — 3,445,614 Total current assets — — 2,716,506 1,298,626 — 4,015,132 Investment in WFOE and its subsidiaries 3,855,433 — — — (3,855,433 ) — Property and equipment, net — — 43,263 921 — 44,184 Total non-current assets 3,855,433 — 43,263 50,297 (3,855,433 ) 93,560 Amount due from WFOE — — — — — — Total Assets $ 3,855,433 $ — $ 2,759,769 $ 1,348,923 $ (3,855,433 ) $ 4,108,692 Total current liabilities $ — $ — $ 22,977 $ 230,282 $ — $ 253,259 Amounts due to WFOE s subsidiaries — — — — — — Total Liabilities — — 22,977 230,282 — 253,259 Total Shareholders Equity 3,855,433 — 2,736,792 1,118,641 (3,855,433 ) 3,855,433 Total Liabilities and Shareholders Equity $ 3,855,433 $ — $ 2,759,769 $ 1,348,923 $ (3,855,433 ) $ 4,108,692 June 30, 2022 Parent Subsidiary WFOE WFOE s subsidiaries Elimination Total Cash and cash equivalents $ — $ — $ 3,750 $ 12,292 $ — $ 16,042 Accounts receivable — — 133,505 983,514 — 1,117,019 Loans receivable — — 2,016,009 1,120,004 — 3,136,013 Total current assets — — 2,165,759 2,145,370 — 4,311,129 Investment in WFOE and its subsidiaries 3,930,537 — — — (3,930,537 ) — Property and equipment, net — — 2,972 2,045 — 5,017 Total non-current assets 3,930,537 — 2,972 2,045 (3,930,537 ) 5,017 Amount due from WFOE — — — 134,401 (134,401 ) — Total Assets $ 3,930,537 $ — $ 2,168,731 $ 2,281,816 $ (4,064,938 ) $ 4,316,146 Total current liabilities $ — $ — $ 18,411 $ 367,198 $ — $ 385,609 Amounts due to WFOE s subsidiaries — — 134,401 — (134,401 ) — Total Liabilities — — 152,812 367,198 (134,401 ) 385,609 Total Shareholders Equity 3,930,537 — 2,015,919 1,914,618 (3,930,537 ) 3,930,537 Total Liabilities and Shareholders Equity $ 3,930,537 $ — $ 2,168,731 $ 2,281,816 $ (4,064,938 ) $ 4,316,146 For the Fiscal Year Ended June 30, 2023 Parent Subsidiary WFOE WFOE s subsidiaries Elimination Total Revenues $ — $ — $ 273,652 $ 354,848 $ — $ 628,500 Share of income of subsidiaries $ 237,757 $ — $ — $ — $ (237,757 ) $ — Net income (loss) $ 237,757 $ — $ (20,473 ) $ 258,230 $ (237,757 ) $ 237,757 For the Fiscal Year Ended June 30, 2022 Parent Subsidiary WFOE WFOE s subsidiaries Elimination Total Revenues $— $— $346,663 $1,091,087 $— $1,437,750 Share of income of subsidiaries $1,140,963 $— $— $— $(1,140,963) $— Net income $1,140,963 $— $123,164 $1,017,799 $(1,140,963) $1,140,963 Selected Condensed Consolidated Cash Flows Data For the Fiscal Year Ended June 30, 2023 Parent Subsidiary WFOE WFOE s subsidiaries Elimination Total Net cash provided by operating activities $ — $ — $ 92,867 $ 976,568 $ — $ 1,069,435 Net cash used in investing activities — — (851,596 ) (575,324 ) 805,454 (621,466 ) Net cash provided by financing activities — — 805,454 — (805,454 ) — For the Fiscal Year Ended June 30, 2022 Parent Subsidiary WFOE WFOE s subsidiaries Elimination Total Net cash provided by (used in) operating activities $— $— $60,914 $(66,597) $— $(5,683) Net cash (used in) provided by investing activities — — (65,258) 1,253,986 (1,239,484) (50,756) Net cash provided by financing activities — — — (1,239,484) 1,239,484 — Recent Government Regulations We are subject to certain legal and operational risks associated with being based in China. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of our subsidiaries, significant depreciation of the value of our ordinary shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with very short advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus, none of the Cayman Islands holding company, our subsidiaries have been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our PRC counsel, Beijing DOCVIT Law Firm, we are not subject to cybersecurity review with the CAC under the Measures for Cybersecurity Review, since we currently do not have over one million users personal information and do not anticipate that we will be collecting over one million users personal information in the foreseeable future, which we understand might otherwise subject us to the Measures for Cybersecurity Review. Our PRC subsidiaries are required to have, and each has, a business license issued by the PRC State Administration for Market Regulation and its local counterparts. The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of CSRC prior to the listing and trading of such special purpose vehicle s securities on an overseas stock exchange. Substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. Although we believe, based on advice of counsel, that CSRC s approval is not required for the listing and trading of our ordinary shares on Nasdaq in the context of this offering, we cannot assure you that relevant PRC governmental agencies, including the CSRC, would reach the same conclusion as we do. On July 6, 2021, the relevant PRC government authorities made public the Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. As these opinions are recently issued, official guidance and related implementation rules have not been issued yet and the interpretation of these opinions remains unclear at this stage. See "Risk Factors – Risks Related to Doing Business in China – The approval of the CSRC may be required in connection with this offering under a regulation adopted in August 2006, as amended, and, if required, we cannot predict whether we will be able to obtain such approval." On December 28, 2021, CAC published the Measures for Cybersecurity Review which became effective on February 15, 2022, which required that any "network platform operator" controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review. We do not believe we are a "network platform operator" as mentioned above; however, the definition of "network platform operator" is unclear and it is also unclear on how it will be interpreted and implemented by the relevant PRC governmental authorities. On February 17, 2023, the CSRC published the Trial Measures, which became effective on March 31, 2023. The Trial Measures lay out the filing regulation arrangement for both direct and indirect overseas listing, and clarify the determination criteria for indirect overseas listing in overseas markets. Among other things, if a domestic enterprise intends to indirectly offer and list securities in an overseas market, the record-filing obligation is with a major operating entity incorporated in China appointed by the issuer and such filing obligation shall be completed within three business days after the overseas listing application is submitted. According to the CSRC Answered Reporter Questions ("CSRC Answers"), starting from March 31, 2023, enterprises that have been listed overseas or satisfy all of the following conditions shall be deemed as "Grandfathered Issuers" and are not required to complete the overseas listing filing with the CSRC immediately, but shall complete filings as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC, including that (i) the application for indirect overseas offering or listing has been approved by the relevant overseas regulatory authority or stock exchange prior to March 31, 2023 (as the SEC does not approve or disapprove of an offering, this requirement is interpreted to be the SEC s declaration of the registration statement to be effective with respect to this offering), (ii) the enterprise is not required to reapply for the approval of the relevant overseas regulatory authority or stock exchange, and (iii) such overseas securities offering or listing has been completed before September 30, 2023. Starting from March 31, 2023, domestic enterprises that have submitted valid applications for overseas offerings and listing but have not obtained the approval from relevant overseas regulatory authority or overseas stock exchange shall complete filings with the CSRC prior to their overseas offering and listings. As advised by our PRC legal counsel, Beijing DOCVIT Law Firm, since our registration statement on the Form F-1 has not been declared effective by the SEC and we have not obtained the Nasdaq approval of this offering prior to March 31, 2023, we are required to comply with the filing requirements under the Trial Measures in connection with this offering. In addition, any future securities offerings and listings outside of mainland China by our Company, including but not limited to follow-on offerings, secondary listings, and going private transactions, will be subject to the filing requirements with the CSRC under the Trial Measures. We have submitted a filing with the CSRC with respect to this offering. As of the date of this prospectus, we have not completed the filing procedures with the CSRC. There can be no assurance that we can complete the filing procedures in a timely manner or at all. Cash Transfers and Dividend Payments Our operations are conducted by our subsidiaries in China. Investment in Chinese companies, which are governed by the Foreign Investment Law, and the dividends and distributions from our subsidiaries are subject to regulations and restrictions on dividends and payment to parties outside of China are subject to restrictions. Applicable PRC law permits payment of dividends to us by our WFOE only out of their net income, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are required to set aside a portion of their net income, if any, each year to fund general reserves for appropriations until such reserves have reached 50% of the relevant entity s registered capital. These reserves are not distributable as cash dividends. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. In addition, registered share capital and capital reserve accounts are also restricted from withdrawal in China, up to the amount of net assets held in each operating subsidiary. In contrast, there is presently no foreign exchange control or restrictions on capital flows into and out of Hong Kong. Hence, our Hong Kong subsidiary is able to transfer cash without any limitation to the Cayman Islands under normal circumstances. As of the date of this prospectus, our subsidiaries have not made any dividends or distributions to their parent company or the Cayman Islands holding company, and no dividends or distributions have been made by the Cayman Islands holding company to its shareholders, including U.S. investors, except that QinHong Technology paid dividends of RMB 4.0 million (approximately $0.6 million) to WFOE in April 2022, and QinHong Management paid dividends of RMB 4.0 million (approximately $0.6 million) to WFOE in June 2022. For the fiscal years ended June 30, 2023 and 2022, there was no cash transferred from the Cayman Islands holding company to its subsidiaries. Cash flow among the subsidiaries primarily consists of transfers for working capital purposes and payment of dividends. During the fiscal year ended June 30, 2023, QinHong Technology and QinHong Management paid dividends of $0.50 million and $0.43 million, respectively, to WFOE. For the fiscal year ended June 30, 2023, WFOE made an interest-free loan of approximately $0.3 million to QinHong Technology and QinHong Technology repaid approximately $0.2 million to WFOE. During the fiscal year ended June 30, 2022, QinHong Technology made an interest-free loan of approximately $0.6 million to WFOE and WFOE repaid $0.6 million to QinHong Technology. During the fiscal year ended June 30, 2022, QinHong Management made an interest-free loan of approximately $1.4 million to WFOE and WFOE repaid $1.4 million to QinHong Management. Our operating subsidiaries generate and retain cash generated from operating activities and re-invest it in their business. In the future, cash proceeds raised from overseas financing activities, including the cash proceeds from this offering, may be transferred by us through our Hong Kong subsidiary to WFOE via capital contribution and shareholder loans, as the case may be. WFOE then will transfer funds to our operating subsidiaries to meet the capital needs of their business operations. The transfer of funds among companies are subject to the Provisions of the Supreme People s Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (2020 Revision, the "Provisions on Private Lending Cases"), which was implemented on August 20, 2020 to regulate the financing activities between natural persons, legal persons and unincorporated organizations. The Provisions on Private Lending Cases set forth that private lending contracts will be upheld as invalid under the circumstance that (i) the lender swindles loans from financial institutions for relending; (ii) the lender relends the funds obtained by means of a loan from another profit-making legal person, raising funds from its employees, illegally taking deposits from the public; (iii) the lender who has not obtained the lending qualification according to the law lends money to any unspecified object of the society for the purpose of making profits; (iv) the lender lends funds to a borrower when the lender knows or should have known that the borrower intended to use the borrowed funds for illegal or criminal purposes; (v) the lending is violations of public orders or good morals; or (vi) the lending is in violations of mandatory provisions of laws or administrative regulations. As advised by our PRC counsel, Beijing DOCVIT Law Firm, the Provisions on Private Lending Cases does not prohibit using cash generated from one subsidiary to fund another subsidiary s operations. We have not been notified of any other restriction which could limit our PRC subsidiaries ability to transfer cash between subsidiaries. See "Regulations – Regulations Relating to Private Lending." The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. Substantially all of the income of our subsidiaries is received in RMB and shortages in foreign currencies may restrict our ability to transfer cash out of China, pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the State Administration of the Foreign Exchange ("SAFE") in mainland China as long as certain procedural requirements are met. Approval from appropriate government authorities is required if RMB is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders. There can be no assurance that the PRC government will not intervene or impose restrictions on our ability to transfer or distribute cash within our organization or to foreign investors, which could result in an inability or prohibition on making transfers or distributions outside of China and may adversely affect our business, financial condition and results of operations. See "Risk Factors – PRC regulation of foreign loans to and foreign direct investment in mainland China entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business" and "Risk Factors – PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital directly into our PRC subsidiaries, limit our PRC subsidiaries ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us." Relevant PRC laws and regulations permit the PRC companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, our PRC subsidiaries can only distribute dividends upon approval of their shareholders after they have met the PRC requirements for appropriation to the statutory reserves. Under PRC laws, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, after making an allocation to the statutory reserve funds from their after-tax profits, our subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. As a result of these and other restrictions under the PRC laws and regulations, our PRC subsidiaries are restricted to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances, which restricted portion amounted to $816,390 and $581,151 as of June 30, 2023 and 2022, respectively. Even though the Company currently does not require any such dividends, loans or advances from our PRC subsidiaries for working capital and other funding purposes, the Company may in the future require additional cash resources from its PRC subsidiaries due to changes in business conditions, to fund future acquisitions and developments, or merely declare and pay dividends or distributions to the Company s shareholders. The PRC Enterprise Income Tax Law and its implementing rules provide that dividends paid by a PRC entity to a nonresident enterprise for income tax purposes is subject to PRC withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with China. Our Hong Kong subsidiary, QinHong Capital Group Limited, may be considered a non-resident enterprise for tax purposes, so any dividends our WFOE pays to our Hong Kong subsidiary, QinHong Capital Group Limited, may be regarded as China sourced income and, as a result, may be subject to PRC withholding tax at a rate of up to 10%. If we are required under the PRC Enterprise Income Tax Law to pay income tax for any dividends we receive from our WOFE, or if our Hong Kong subsidiary, QinHong Capital Group Limited, is determined by PRC government authority as receiving benefits from a reduced income tax rate due to a structure or arrangement that is primarily tax-driven, it would materially and adversely affect the amount of dividends, if any, we may pay to our shareholders. However, pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise. Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or SAT Circular 81, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (1) it must be a company; (2) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (3) it must have directly owned such required percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends. According to Announcement of the State Administration of Taxation on Issues relating to "Beneficial Owners" in Tax Treaties, promulgated on February 3, 2018, and current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to be eligible for the 5% lower PRC withholding tax rate. As such a tax resident certificate is issued by the Hong Kong tax authority on a case-by-case basis, there is no assurance that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to QinHong Capital Group Limited. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. If the PRC tax authorities determine that our Cayman Islands holding company is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of our ordinary shares if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders, and any gain realized on the transfer of our ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% which in the case of dividends may be withheld at source. Any such tax may reduce the returns on your investment in our ordinary share s See "Risk Factors – We will rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business." As of the date of this prospectus, we have not made any dividends nor distributions to any U.S. investors. Summary of Risks Affecting Our Company Our business is subject to numerous risks described in the section titled "Risk Factors" and elsewhere in this prospectus. The main
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001804189_t1v-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001804189_t1v-inc_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001805586_gladstone_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001805586_gladstone_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001823575_zerofox_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001823575_zerofox_prospectus_summary.txt
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001829966_ebet-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001829966_ebet-inc_prospectus_summary.txt
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@@ -0,0 +1 @@
+II-6 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Las Vegas, Nevada, on March 17, 2023. EBET, INC. (Registrant) By: /s/ Aaron Speach Aaron Speach President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors of EBET, Inc., a Nevada corporation, that is filing a registration statement on Form S-1 with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Aaron Speach and Matthew Lourie their true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments, exhibits thereto and other documents in connection therewith) to the registration statement , any subsequent registration statement filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933, as amended, which relates to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all interests and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated: SIGNATURE TITLE DATE /s/ Aaron Speach Chief Executive Officer, President and Director March 17, 2023 Aaron Speach (Principal Executive Officer) /s/ Matthew Lourie Chief Financial Officer March 17, 2023 Matthew Lourie (Principal Financial Officer and Principal Accounting Officer) /s/ Michael Nicklas Director March 17, 2023 Michael Nicklas /s/ Dennis Neilander Director March 17, 2023 Dennis Neilander /s/ Christopher S. Downs Director March 17, 2023 Christopher S. Downs II-7
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001841800_nogin-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001841800_nogin-inc_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001851860_smart-for_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001851860_smart-for_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001859639_cazoo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001859639_cazoo_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001861785_sos_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001861785_sos_prospectus_summary.txt
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+PROSPECTUS SUMMARY The following summary highlights selected information appearing elsewhere in this prospectus and does not contain all of the information that you should consider before making your investment decision. To understand our business and this registration statement fully, you should read this entire prospectus carefully, including the section called "Risk Factors" beginning on page 12, and the financial statements and the related notes beginning on page F-1. When we refer in this prospectus to "SOS," the "Company," "our company," "we," "us" and "our," we mean SOS Hydration Inc., a Nevada corporation. This prospectus contains forward-looking statements and information relating to the Company. See "Cautionary Note Regarding Forward Looking Statements" on page 10. Overview SOS Hydration, Inc. is a high-growth company in the hydration category that provides products with 1/10th of the amount of sugar found in traditional sports drinks. SOS specializes in providing electrolyte-enhanced products to consumers and organizations worldwide. The founders used the base line formula the World Health Organization ("WHO") developed and labeled as an oral rehydration solution. SOS s proprietary formulation improves on the WHO s oral rehydration solution formula by lowering the sugar content, optimizing the added electrolytes for active lifestyles, and including the minerals zinc and magnesium. SOS s products balance low sugar content with high electrolyte concentration to activate the sodium glucose cotransport system which is the body s mechanism for transporting water and electrolytes into its cells. SOS s proprietary formulation is focused on low sugar content and fast electrolyte absorption to combat the debilitating effects of dehydration and SOS s products are hypotonic, meaning that electrolytes can rapidly and efficaciously enter the bloodstream for optimal rehydration results. We offer our products in powder form in five flavors and ready-to-drink bottles in three flavors. Our products are distributed across the U.S. and U.K through a diverse network of major retailers in the food, drug, mass, natural and ecommerce channels. We believe that consumers increasingly select beverage products based on perceived health benefits, natural ingredients and with general wellness in mind, all of which have benefited the SOS brand and resulted in the establishment of the hydration category. The Company seeks to impact social change by educating and addressing the needs of consumers to enable healthier lifestyles. All of our products have less sugar than that of competitive brands, while providing the same or better levels of electrolyte replacement. Consumers can purchase our products through ecommerce channels, including the Company s own websites, and at 9,000 brick-and-mortar retail stores including Walmart, CVS, Kroger (and its subsidiaries), Whole Foods, and other retail locations. Our mission is to be the world s leading hydration company by providing the very best products through a commitment to research, innovation and creating enduring social impact. We seek to do this by inspiring and supporting active lifestyles, health, and well-being worldwide through providing the most effective and highest quality hydration products. Our products reduce fatigue, provide long lasting energy, aid mental acuity and concentration, and boost immunity, as a result of our hypotonic, low-sugar formulation that helps you maximize performance even when indulging in dehydrating vices. Our mission is founded on the following core principles Helping the World Stay Hydrated: We manufacture fast-acting electrolyte hydration solutions and distribute them through myriad distribution channels, improving the overall health and wellness of the customers and communities we serve. Drastically Reducing Sugar Intake: James Mayo, the Company s Co-Founder and CEO, who formerly served in the military and was a professional track athlete, was pre-diabetic resulting from excess consumption of hydration drinks high in sugar, marketed to combat the effects of dehydration from athletic and military activities. Our CEO s first-hand understanding of the negative effects that excess sugar intake can cause was the genesis of SOS s mission to provide healthy hydration solutions. Sugar consumption, and specifically sugary drink intake, is creating a health crisis through higher incidence of diabetes, obesity, and other life-threatening conditions. The same also goes for zero sugar drinks which tend to use synthetic sweeteners that the body does not recognize as a sugar and cannot break down, leading to the same end-result. Supporting reduction in obesity through active lifestyles and reduced sugar intake: We are committed to educating and encouraging an active lifestyle to reduce obesity. Our products are also competitively priced and distributed through retail channels with a focus on being accessible to as many communities as possible. Focusing on Environmental Sustainability: We are very sensitive to our environmental impact and will continuously iterate our packaging and manufacturing processes to minimize our environmental footprint. We currently sell our ready-to-drink products in a recyclable plastic bottle but are evaluating more sustainable alternatives as production ramps up. In addition, our core powder product offering comes in a small pouch and can be added to reusable water bottles, eliminating the need to use a new bottle when you hydrate. Our box packaging is recyclable, and we intend to continue innovating processes and methods to minimize SOS s environmental impact. Creating a Positive and Inclusive Company Culture: We aim to be a leader in inclusiveness, equity and diversity by instituting progressive hiring and human resources policies. As we grow, we seek to carefully vet prospective candidates to ensure they are just as passionate as the founders and leadership team are about the Company s mission of providing healthy hydration products. 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 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a) may determine. SOS began in retail with a 6-store test in Kroger and is now national with Walmart and CVS. We benefit from sustained shifts across the liquid refreshment beverage market, as consumers move from sugary sports drinks to healthier options. Consumers are becoming more health conscious and focused on reducing sugar in their diets and are increasingly averse to products high in synthetic sugar alternatives. We believe that these shifts represent a significant change in consumer habits around the world. Our low-sugar, health-focused hydration products support positive social impact and SOS is positioned to appeal to a broad range of consumer needs in our current markets and beyond. Consumers can purchase our products in both brick and mortar and ecommerce channels. SOS was initially distributed in select Kroger locations, and we have now expanded to approximately 9,000 retail locations, including approximately 6,900 CVS locations and 2,000 Walmart locations in the U.S. We have expanded our presence online through our webstore and into other ecommerce channels including Amazon, Target.com and Walmart.com. Online sales represented 13% of our revenue for the year ended December 31, 2022. Our presence in high profile bricks and mortar locations has created a platform for SOS product awareness, trial, and engagement with SOS s educational website and webstore purchasing option. Our business is supported by a flexible and efficient supply chain that currently has the capacity to support our continued growth. SOS powder and ready-to-drink beverages are produced and distributed through a third-party contract manufacturer and multiple distribution centers. We have strong, long-standing relationships across our supply chain, creating an expansive supply network with large capacity for continued growth. We have experienced significant sales growth over the past several years, increasing our net revenues from approximately $1,100,000 for the year ended December 31, 2019, to approximately $3,100,000 for the year ended December 31, 2022. We incurred a net loss of $7,531,851 in the year ended December 31, 2022. As a result of our net loss for the year ended December 31, 2022, and our net capital deficiency as of December 31, 2022, our independent auditors issued an audit opinion with respect to our consolidated financial statements for the year ended December 31, 2022, that indicated that there is a substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. However, if included, these adjustments would likely reflect a substantial impairment of the carrying amount of our assets and potential contingent liabilities that may arise if we are unable to fulfill various operational commitments. In addition, the value of our securities, including common stock issued in this offering, would be greatly impaired. Our powder and ready-to-drink accounted for 81.25% and 18.75% of sales, respectively, for the year ended December 31, 2022. We believe there is significant room for growth for both our powder and ready-to-drink offerings in our existing retail markets and we intend to continue to invest in innovation, new product development, supply chain capabilities and marketing initiatives, as we believe the demand for our products will continue to increase globally across both brick and mortar and ecommerce channels. We also believe that our asset light model (see "Our Strengths - Asset Light and Scalable Business Model", below) drives an attractive financial profile with strong gross margins and modest capital expenditures. Industry Overview We believe there is a sustained shift in consumer demand for better-for-you products that is transforming the liquid refreshment beverages market. This market is comprised of a broad set of categories that includes both current and potential SOS offerings: soft drinks, energy drinks, ready-to-drink teas and coffees, mixers, juices, kids beverages, sparkling water, isotonics, hydration drinks and oral rehydration solutions. The global beverages industry is comprised primarily of legacy, multinational category leaders. Consumer mega-trends, including growing concerns about the negative health impacts of sugar, consumers perception of artificial ingredients and the proliferation of sugar alternatives, have allowed for emerging brands with reduced sugar content and natural product formulations to disrupt the industry. The next evolution of electrolyte hydration drinks is a rapidly growing segment of the beverage industry, marketed by a variety of different brands. We believe SOS to be uniquely positioned as a functional beverage drink and leading provider of electrolyte hydration drinks and powders for daily drinking to prevent dehydration and quench thirst in this growing market. Consumer behavior focused on "being healthy" is evolving and so is the need for a functional beverage able to meet the demands of oral electrolyte solution development in a rapidly growing market. Our Strengths Proprietary Formulation for Daily Use We believe we are well positioned within the oral rehydration beverage market to capitalize on growing consumer demands for low sugar, healthy alternatives as compared to competing brands that are high in sugars and artificial ingredients. We believe our brand competes favorably with products across the energy drink, hydration drink and functional water verticals because of consumers positive perception of our healthy and family-focused attributes. SOS s proprietary formulation is focused on low sugar content and fast electrolyte absorption to combat the debilitating effects of dehydration. Powerful, Health-Focused and Family-Friendly Brand The SOS brand revolves around enabling healthier lifestyles by delivering premium hydration products that have consumer-appeal and are enjoyable to drink. We are focused on combatting the excessive use of sugar and synthetic sugar-alternatives in the beverage market and enabling individuals to reap the benefits of proper hydration through our carefully crafted formulation. SOS packaging is designed to "pop" on the shelves with bright and aesthetically appealing colors that are meant to symbolize energy, vitality and growth. The SOS name also stands out next to competitors within retail locations as it delivers a simple but effective message that the product is here to support healthy hydration and effectively fight off the side effects of suboptimal hydration. Furthermore, the simple message of the SOS brand makes it easy for customers to remember and continue finding products on the shelves and on the internet. EXPLANATORY NOTE This registration statement contains two forms of prospectus. One form of prospectus, which we refer to as the initial public offering prospectus, is to be used in connection with an initial public offering of $8,000,000 worth of our common stock (plus an over-allotment option for an additional $1,200,000 worth of common stock). The other form of prospectus, which we refer to as the resale prospectus, is to be used in connection with the potential resale by certain selling stockholders on the Nasdaq Capital Market, including ordinary brokers transactions, privately negotiated transactions or through sales to one or more dealers for resale of such securities as principals of an aggregate of 2,656,866 shares of our common stock issued by us, and issuable upon exercise of warrants issued by us, in private placement offerings (it being understood that none of the shares being registered for resale by the selling stockholders on this prospectus may be sold pursuant to this prospectus prior to the effectiveness of this registration statement, and only then in compliance with applicable laws, rules and regulations). The initial public offering prospectus and the resale prospectus will be identical in all respects except for the alternate pages for the resale prospectus included herein which are labeled "Alternate Page for Resale Prospectus." Authenticity is also a root element of the SOS brand. The Company was created as a result of the founder s search for a healthier and more effective hydration product following a career as a military officer and professional track athlete with first-hand experience with the adverse effects of sugary sports drinks. The management team embodies the SOS brand and the values of the Company s target customers, promoting trust in the brand and its ideals. Additionally, the SOS team is committed to producing qualified research and educating consumers about health, hydration and the benefits of a low-sugar lifestyle. Established Retail and Distributor Relationships SOS has established and maintained robust relationships with retailers and distributors that positions its products to grow into additional stores and find its way to an increasing number of locations within each store. SOS is strategically priced to compete with alternatives while also offering attractive margins to the Company and its retailers. We hold a relationship-focused approach with our retail network and aim to collaborate with retailers so we can deliver on terms that are mutually beneficial. Our growing relationship with Walmart, CVS, Kroger and Whole Foods highlights our ability to adhere to the high standards of the nation s largest retailers. We will look to capitalize on the market validation provided by our blue-chip retail clients to further penetrate the retail market and continue growing the Company s presence in stores. Our performance has been supported with increased shelf space and distribution points for SOS products. Asset Light and Scalable Business Model Through the use of third-party contract manufacturing, packaging and logistics, we have the ability to substantially increase revenue in the future without capacity constraints or capital expenditure requirements. This scalable model enables our team to focus on product innovation, marketing execution and other key objectives. Through careful diligence, we have established trusted production partners that allow us to deliver high products to our customers. We call this business model – one that does not rely on investment into manufacturing or sophisticated distribution facilities, but rather relies on third parties for these functions – an "asset light" model. It offers us significant financial flexibility that can be leveraged to allocate our resources effectively for growth. The reduced overhead and fixed-cost structure allow us to position the business for expansion by recruiting top talent focused on sales, marketing, product innovation and ensuring that the Company culture continues to prioritize environmental and social initiatives. The benefits SOS experiences from scale will grow with time as its production partners gain additional efficiencies, lowering cost of goods sold and expanding gross profit margins as sales volume continues to increase. The Company can intensely focus on growing the SOS brand and benefit from efficiencies long-term. SOS balances effective long-term relationship cultivation with its production and logistics partners. Company Culture Dedicated to Diversity, Equity, Inclusion, and Healthy Lifestyles SOS takes pride in being an innovative and mission-driven company. We make our mission clear to those inside and outside the organization and truly believe that our shared mission is embraced by our team members and customers. We seek to promote healthy lifestyles for all individuals. We also promote personal development, diversity, inclusion and equity, striving to make every employee and customer as dedicated to our mission as the founders and management team. It is also of the upmost importance to us that we combat the harmful effects of excessive sugar intake and artificial ingredients. This vision is closely aligned with our objective of enabling individuals to live healthy lifestyles. We believe that our mission and objectives allow us to attract likeminded individuals who are in tune with our company and can help us continuously make a difference in the world. Our employees are our greatest assets and believe they are at SOS to help make a difference. Employees receive competitive compensation packages and above-market benefits. We are motivated to provide training and growth opportunities for our employees along our journey to enabling healthy lifestyles. Growth Strategies Increase Direct-to-Consumer Conversion Our brand platform is built around our mission to provide low-sugar hydration solutions that support healthier lifestyles. Our brand was created to provide a healthier hydration drink than the current offerings which are high in sugar content and slower in absorption. We will continue to expand as consumers become more educated on the harmful effects of sugar. Our products reduce fatigue, provide long lasting energy, aid mental acuity and concentration, and boost immunity, as a result of our hypotonic, low-sugar formulation that helps you maximize performance even when indulging in dehydrating vices. We market SOS Hydration under one brand across multiple categories, including Fast-Hydrating Powders, Ready-To-Drink Hydration and Immunity Beverages, and SOS Kids. We believe our brand has extensive consumer appeal that targets families in need of a one stop healthy daily hydration vitamin and mineral solution. Our focus on healthy hydration has resonated well with consumers and retailers alike, as SOS s products are sold in over 9,000 retail points of sale. The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED APRIL ___, 2023 SOS HYDRATION INC. 1,600,000 Shares of Common Stock This is an initial public offering of securities of SOS Hydration Inc. We are offering in a firm commitment public offering shares of our common stock in an initial public offering. No public market currently exists for our common stock The estimated initial public offering price per share is between $4.00 and $6.00, and the number of shares offered hereby is based upon an assumed offering price of $5.00 per share, the midpoint of such estimated price range. We have received conditional approval to list our common stock on the Nasdaq Capital Market ("Nasdaq") under the symbol "SOSH", provided that we have satisfied the initial listing requirements of Nasdaq. No assurance can be given that we will meet those requirements. If our common stock is not approved for listing on Nasdaq, we will not consummate this offering. We are an "emerging growth company," as that term is used in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") and, under applicable Securities and Exchange Commission ("SEC") rules, we have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings. See "Prospectus Summary – Implications of Being an Emerging Growth Company." Investing in our securities is highly speculative and involves a high degree of risk. See "Risk Factors" beginning on page 12 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. Per Share Total Public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds to us, before expenses $ $ (1) Does not include warrants that are
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+This summary highlights certain significant aspects of our business and the offering and is a summary of information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before making your investment decision. You should carefully read this entire prospectus, including the information presented under the sections titled Risk Factors, Cautionary Note Regarding Forward-Looking Statements, Management s Discussion and Analysis of Financial Condition and Results of Operations, and the consolidated financial statements and the related notes thereto included elsewhere in this prospectus before making an investment decision. Unless the context indicates otherwise, references in this prospectus to the Company, we, us, our and similar terms prior to the Closing are intended to refer to Founder SPAC, and after the Closing, to Rubicon Technologies, Inc. and its consolidated subsidiaries. Business Summary Overview Founded in 2008, we are a digital marketplace for waste and recycling and provide cloud-based waste and recycling solutions to businesses and governments. As a digital challenger to status quo waste companies, we have developed and commercialized a proven, cutting-edge platform that brings transparency and environmental innovation to the waste and recycling industry, enabling customers and hauling and recycling partners to make data-driven decisions that can lead to more efficient and effective operations and yield more sustainable outcomes. Using proprietary technology in Machine Learning, Artificial Intelligence ( AI ), computer vision, and Industrial Internet of Things ( IoT ), for which we have secured more than 60 U.S. and international patents, we have built an innovative digital platform aimed at modernizing the outdated, approximately $1.6 trillion global waste and recycling industry. Through our suite of cutting-edge solutions, we have driven innovation in the waste and recycling industry, reimagined the customer experience, and empowered a wide range of customers, from small businesses to Fortune 500 companies, to municipal and city agencies, to better optimize their waste handling and recycling programs. The implementation of our solutions enables customers to find economic value in their physical waste streams by improving business processes, reducing costs, and saving energy while helping those customers execute their sustainability goals. We are a leading provider of cloud-based waste and recycling solutions for businesses, governments, and organizations worldwide. Our platform brings new transparency to the waste and recycling industry empowering our customers and hauling and recycling partners to make data-driven decisions that can lead to more efficient and effective operations as well as more sustainable waste outcomes. Our platform primarily serves three constituents waste generator customers, hauling and recycling partners, and municipalities/governments. We believe we have built one of the world s largest digital marketplaces for waste and recycling services. Underpinning this marketplace is a cutting-edge, modular platform that powers a modern, digital experience and delivers data-driven insights and transparency for our customers and hauling and recycling partners. We provide our waste generator customers with a digital marketplace that delivers pricing transparency, self-service capabilities, and a seamless customer experience while helping them achieve their environmental goals. We enhance our hauling and recycling partners economic opportunities by democratizing access to large, national accounts that typically engage suppliers at the corporate level. By providing telematics-based and waste-specific solutions as well as access to group purchasing efficiencies, we help large national accounts optimize their businesses. We help governments provide more advanced waste and recycling services that allow them to serve their local communities more effectively by digitizing their routing and back-office operations and using our computer vision technology to combat recycling material contamination at the source. Over the past decade, this value proposition has allowed us to scale our platform considerably. Our digital marketplace now services over 8,000 waste generator customers, including numerous large, blue-chip customers such as Apple, Dollar General, Starbucks, Walmart, Chipotle, and FedEx, which together are representative of our broader customer base. Our waste generator customers are serviced by our network of over 8,000 hauling and recycling partners across North America. We have also deployed our technology in over 100 municipalities within the United States and operate in 20 countries. Furthermore, we have secured a robust portfolio of intellectual property, having been awarded more than 60 patents and 15 trademarks. 1 Table of Contents Strengths and Competitive Advantages Our business model provides a transparent marketplace that digitizes the waste and recycling sector for private companies and municipalities. We gain, maintain, and grow our customer relationships by providing what we believe are superior solutions that can help waste generators and government entities save money. We believe we have expertise and competitive advantages that will allow us to continue to maintain and grow our market share. Cloud-Based Model Reduces Costs and Benefits from the Network Effect Our business model is highly scalable because of its digital, cloud-based nature; it does not depend on owning any physical infrastructure such as trucks or waste facilities. Without any physical infrastructure and the working capital requirements inherent in those operations, we can efficiently and effectively deploy our platform around the world without the capital investment or the exposure that comes along with owning and operating this infrastructure. Our platform also benefits from significant network effects. As more waste generator customers join our platform, increased waste and recycling volumes improve our ability to negotiate with haulers and recyclers. Increased waste and recycling volumes also create efficiencies within haulers and recyclers routes and operations, because the marginal cost of servicing additional locations within an existing route is comparatively low, which can improve service and pricing for our customers. Additionally, as the network expands, the amount of data we collect increases, allowing us to learn and further improve our solutions, benefiting all network participants. As our pricing improves with haulers and recyclers and as our expanding data asset improves its ability to deliver new circular solutions, our overall value proposition improves for our waste generator customers. Business Model and Customer Interests are Aligned Benefiting Us and Providing Greater Value to Customers Our platform provides service and cost transparency to both our customers and partners along with automated business processes, allowing them to make informed decisions based on their priorities, whether it s business growth, cost savings, or environmental outcomes. Our incentives are aligned with our customers, both economically and environmentally. Landfill owners and operators often generate revenues through collection volumes and tipping fees, so they are incentivized to collect bins more frequently than necessary even when they are not full. Because we do not own landfills, we are not motivated by maximizing volumes and / or tipping fees. Therefore, we can work with our customers to optimize service levels for their business needs. In practice, we advise our waste generator customers on the implementation of new source separated recycling programs and educate store-level employees on how to safely and efficiently manage such program implementation and execution. Additionally, we will work upstream with our customers to design and effect reverse supply chain programs to aggregate valuable waste stream materials at central locations, or even to design programs that create internalized, circular solutions or reduce waste at the source. Further, using our proprietary computer vision-based technology and our team of subject matter experts to examine the contents of a waste stream, we can assess the material composition of the waste stream. This information provides multiple benefits, including providing more detailed information about the contents and allowing customers to identify opportunities to divert certain materials from landfills. Using this information, we and our customers can generate better environmental outcomes, and, to the extent we can sell the materials to recycling and processing facilities, we can also create significant economic benefits. For RUBICONPro, RUBICONPremier, and RUBICONSmartCity, our SaaS offerings, the core of services is about maximizing the use of scarce resources. We do this by optimizing routes and full fleet operations, by providing data for preventative vehicle maintenance, and by focusing on improving driver safety and behavior, which can improve outcomes for all constituents: drivers, supervisors, governments officials, and residents. 2 Table of Contents Superior Technology Our user-friendly platform is vertically integrated and gives us control of all critical operations and transaction elements, which facilitates a fast, simple, and consistent user experience. We believe our ground-breaking technology is what the industry has needed for many years. Our technology can affect all parties within the waste and recycling ecosystem: We service waste generators needs through our network of haulers and recyclers and with vendor management, compliance, invoicing, payments, and receipts managed on our digital platform. We service requests through our proprietary customer portal RUBICONConnect or directly from waste generators via FMS / OMS system integrations, with real-time confirmation of service. We equip haulers and recyclers with technology to detect location, load, and capacity. Haulers and recyclers digitally receive dispatched orders to be configured into their existing routes. Municipal fleets are equipped with telematics and AI cameras to collect data for asset optimization. The resultant operational efficiencies can drive taxpayer savings, turning a garbage truck into a roaming data center that can deliver critical infrastructure assessments for governments all while performing its primary functions. Our technology also helps implement advanced recycling programs, coordinating multiple vendors, directing the waste feedstock to specific processing facilities, and tracking end-destinations for traceability. We enable data-driven waste management for all our partners, and integrated landfill operators process volumes contracted to us. Depth & Quality of Hauling & Recycling Network Benefits All Constituent Parties We work with a network of more than 8,000 hauling and recycling partners. The scale of our network means we have access to vastly more hauling and recycling options through our digital platform. Our ability to access this extensive network benefits our customers and enables us to mitigate business risks for our customers associated with sole sourcing, including labor shortages, cost offsets (overages, contamination, etc.), and unaccommodating supplier scheduling. The stickiness of the supplier side of our marketplace is ensured by the valuable services we provide them. Foremost is that we offer our hauling and recycling partners new business opportunities to service our waste generator customers. Given that many of our customers have a national or even global presence, often the only way a local supplier can get access to these important locations is through us. We also offer our hauling and recycling partners a digital platform that is simple and efficient and can help them improve their routing, fleet operations, and driver behavior. Lastly, we offer the benefits of scale to even the smallest hauler/recycler through a buying consortium where haulers and recyclers can save money on items critical to their businesses (fuel, parts, tires, insurance, etc.). We have not yet monetized this buying consortium but have plans to do so in the near term. Number of Blue-chip Customers Creating Barrier to Entry Our platform has been validated by a diverse group of over 8,000 customers in businesses and governments, most of which are under long-term contracts. Our typical customer agreement has a term of 3 years, providing confidence in and visibility towards future revenue streams. Our large and national accounts have also attracted many haulers and recyclers to the platform. Some of our blue-chip customers include Apple, Starbucks, Walmart, Dollar General, Chipotle, and FedEx. 3 Table of Contents Our Growth Strategies The foundation of our business is our digital marketplace platform where it seamlessly transacts with our customers and hauling and recycling partners. The majority of our revenue is generated via this digital marketplace, which allows us to capture additional revenue streams through solutions designed to modernize hauling and recycling operations. We believe we have multiple proven avenues for future growth, including through increasing our geographic reach and the depth of our customer, hauling, and recycling networks in those markets. Organic Customer Growth Through New Customer and Contract Wins Based on the Strengths of our Solutions We have built a first-class sales and marketing organization that has helped build our base of more than 8,000 customers. We combine cutting-edge and sorely needed technology solutions with deep subject matter expertise in a mission-critical sector. Our products are designed to save customers money, provide for a more transparent and seamless customer experience, and help customers achieve positive environmental outcomes. This differentiated proposition creates a strong product-market fit within an industry that is ripe for change. Additionally, we are uniquely capable of providing a one-stop-shop solution for all the waste generator customers waste and recycling needs. We offer a tiered solution, beginning with simply auditing and administering an incumbent hauler s existing program for waste generators, through to the creation and provisioning of a full zero-waste program. Organic customer growth is expected to continue to be a core driver of growth for us for the foreseeable future as a result of these and other strengths. Growing Revenues with Existing Customers We have proven our ability to expand our customer relationships. This is achieved both by expanding our geographic penetration across a customer s footprint over time as well as by working collaboratively with our customers to identify incremental services that can be offered to further enhance their waste and recycling programs. Our waste generator account managers are empowered and incentivized to expand our existing customer relationships. Adding More Service Capabilities We have demonstrated our ability to expand our capabilities in the past. We have expanded our waste marketplace service capabilities to over 150 material types and multiple fleet types, and even beyond waste and recycling. We intend to continue to add service capabilities and invest in product development and have the platform, vision, and data to fuel growth. From a customer perspective, we currently service national and small and medium size business ( SMB ) waste generator accounts, predominately within the U.S. market. Through our SaaS-based offerings, we have already expanded our footprint internationally and expect to continue this expansion first by leading with technology, then by building out digital marketplace offerings in these markets. As our business expands in its breadth and depth, we will continue to refine how we monetize our products and relationships. Today we earn money from licensing our technology, from waste and recycling services within our digital marketplace, and by participating in recyclable commodity sales transactions. By servicing all the constituents within the waste and recycling ecosystem, we have gathered valuable datasets that we have begun and will continue to offer on their own as data subscriptions. Further, we expect to be a larger player in establishing recycling and recyclable commodity marketplaces. International Expansion within Existing Markets and into New Markets We believe we are a global innovator in the waste and recycling industry and have successfully deployed our solutions in 20 countries though we currently generate the vast majority of our revenue within the United States. We intend to continue selling our solutions globally. Strategic Acquisitions We intend to grow by acquiring other businesses and the customers they serve. We have proven our ability to identify and execute on attractive acquisition targets. We have acquired and successfully integrated multiple businesses and have established a repeatable process for identifying and integrating complementary companies. Furthermore, we have spent considerable efforts building relationships across the industry, helping to build a large pipeline of additional acquisition opportunities. 4 Table of Contents Organizational Structure The diagram below depicts a simplified version of our equity ownership and organizational structure immediately following the Business Combination, assuming no Warrant exercises and not accounting for (1) any issuances of shares of Class A Common Stock pursuant to the deferred fee arrangements entered into in connection with the Business Combination (the Deferred Fee Arrangements ) which includes (i) 443,341 shares of Class A Common Stock (the Cowen Deferred Fee Shares ) issued to Cowen Investments II LLC ( Cowen ) in satisfaction of outstanding amounts owed to Cowen and Company, LLC for financial advisory services provided in connection with the Business Combination, comprised of (a) 440,529 shares of Class A Common Stock issued to Cowen on November 18, 2022 and (b) 2,812 shares of Class A Common Stock issued to Cowen on December 6, 2022 (the Cowen Deferred Fee Arrangement ), (ii) 4,373,210 shares of Class A Common Stock (the Moelis Deferred Fee Shares ) issued to Moelis & Company Group LP ( Moelis ) on December 13, 2022 in satisfaction of outstanding amounts owed to Moelis & Company LLC for financial advisory services provided in connection with the Business Combination (the Moelis Deferred Fee Arrangement ), (iii) 2,485,604 shares of Class A Common Stock (the Cohen Deferred Fee Shares ) issued to J.V.B. Financial Group, LLC ( Cohen ) on December 19, 2022 in satisfaction of outstanding amounts owed to Cohen for financial advisory services provided in connection with the Business Combination (the Cohen Deferred Fee Arrangement ), and (iv) 3,877,750 Jefferies Deferred Fee Shares issued to Jefferies in satisfaction of the post-closing deferred fee obligation owed to Jefferies pursuant to the Underwriting Agreement, dated as of October 14, 2021 (as amended on August 15, 2022) by and between Rubicon (f/k/a Founder SPAC) and Jefferies LLC; (2) any issuances of shares of Class A Common Stock pursuant to the Insider Convertible Debentures; (3) any issuances of shares of Class A Common Stock to the Yorkville Investor pursuant to the YA Convertible Debentures or YA Warrant; (4) any issuances of shares of Class A Common Stock pursuant to the RBT-1 Convertible Debenture and RBT-2 Convertible Debenture, each as amended; (5) any issuance of shares of Class A Common Stock pursuant to the Chico PIPE Agreements; (6) any issuance of shares of Class A Common Stock pursuant to the May 2023 Equity Agreements; (7) any issuance of shares of Class A Common Stock pursuant to the Mizzan Warrants and Star Strong Warrants; or (8) any issuance of shares of Class A Common Stock pursuant to the Loan Conversion Agreement. For more information regarding the Business Combination, see Introductory Note Regarding the Business Combination and Certain Other Transactions. Percentages set forth below reflect the voting power and implied ownership interest in Rubicon, but do not give effect to the exercise of Warrants or exchange of any Class B Units. 5 Table of Contents Summary of Risk Factors An investment in our securities involves risks and uncertainties. You should carefully consider the following risks as well as the other information included in this prospectus, including Cautionary Note Regarding Forward-Looking Statements, Management s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and the related notes thereto included elsewhere in this prospectus, before investing in our securities. See Risk Factors for a more detailed discussion of the risk factors listed below. Risk Related to Our Business and Industry We have a history of net losses and project net losses in future periods. We may not appropriately manage our expenses, nor achieve nor maintain profitability in the future. We may be unable to manage our growth effectively. The waste and recycling industry is highly competitive, and if we cannot successfully compete in the marketplace, our business, financial condition and operating results may be materially adversely affected. Our sales cycles can be long and unpredictable, and our sales efforts require considerable investment of time and expense. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our operating results and growth would be harmed. Our customers and the third parties with whom we contract, including waste haulers, are participants in the waste and recycling industry and are therefore subject to a number of unique risks specific to this industry, which directly or indirectly subjects our business to many of the same risks to which their respective operations are subject. Demand for our solutions is subject to volatility in our accounts and our haulers underlying businesses. Demand for our solutions can be affected by changes in recyclable commodity prices and quantities. Risks Related to Ownership of Our Securities Certain existing shareholders purchased securities in Rubicon at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price. Future investors in Rubicon may not experience a similar rate of return. Substantial future sales of shares of Class A Common Stock could cause the market price of our shares of Class A Common stock to decline. The issuances of additional shares of Class A Common Stock under certain of our contracts and arrangements may result in dilution of holders of Class A Common Stock and have a negative impact on the market price of the Class A Common Stock. A significant portion of the total outstanding shares of Class A Common Stock (or shares of Class A Common Stock that may be issued in the future pursuant to an exchange or redemption of Class B Units) are subject to lock-up restrictions, but may be sold into the market in the near future. This could cause the market price of our securities to drop significantly. 6 Table of Contents The Public Warrants may never be in the money and they may expire worthless, and the terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least a majority of the then-outstanding Public Warrants approve of such amendment. There can be no assurance that the Class A Common Stock and Public Warrants will continue to be listed on NYSE and that we will continue to comply with the continued listing standards of NYSE. The market price and trading volume of Class A Common Stock may be volatile and could decline significantly following the Business Combination. Rubicon may be subject to securities litigation, which is expensive and could divert management attention. Risks Related to Operating as a Public Company, the Up-C Structure and the Tax Receivable Agreement Our management does not have prior experience in operating a public company. Rubicon will depend on distributions from Holdings LLC to pay any taxes and other expenses, including payments under the Tax Receivable Agreement. Rubicon is required to pay to the TRA Holders most of the tax benefits Rubicon receives from tax basis step-ups (and certain other tax benefits) attributable to its acquisition of Legacy Rubicon Units (as defined below) in connection with the Business Combination and in the future, and the amount of those payments is expected to be substantial. In certain circumstances, Holdings LLC will be required to make distributions to us and the continuing members of Holdings LLC, and the distributions that Holdings LLC will be required to make may be substantial. Risks Related to our Indebtedness Our current liquidity, including negative cash flows and a lack of existing financial resources, raises substantial doubt about our ability to continue as a going concern, which may materially and adversely affect our business, financial condition, results of operations and prospects. 7 Table of Contents Corporate Information We were incorporated on April 26, 2021 as a Cayman Islands exempted company, and on August 15, 2022, in connection with the Domestication and the Business Combination, became a Delaware corporation and changed our name to Rubicon Technologies, Inc. See Introductory Note Regarding the Business Combination and Certain Other Transactions. Our principal executive office is located at 335 Madison Avenue, 4th Floor New York, NY 10017, and our telephone number is (844) 479-1507. Our website address is www.rubicon.com. The information contained in or accessible from our website does not constitute part of and is not incorporated into this prospectus or the registration statement of which it forms a part, and you should not consider it part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. 8 Table of Contents
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+II-4 POWER OF ATTORNEY We, the undersigned officers and directors of Squarex Pharmaceutical Corporation, hereby severally constitute and appoint Hugh McTavish, to sign any and all amendments (including post-effective amendments) to this registration statement (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and his agent(s) or any of them, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated: Name Position Date /s/ Hugh McTavish Chief Executive Officer April 4, 2023 Hugh McTavish and Director (Principal Executive Officer) /s/ Constantine Kardaras Chief Financial Officer April 4, 2023 Constantine Kardaras (Principal Financial and Accounting Officer) /s/ Wayne I. Danson Director April 4, 2023 Wayne I. Danson /s/ Michael Myers Director April 4, 2023 Michael Myers Director Arkadiusz Dudek /s/ Mark W. Schwartz Director April 4, 2023 Mark Schwartz II-5
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+PROSPECTUS SUMMARY This is only a summary of the Prospectus and, while it contains material information about the Trust and its Shares, it does not contain or summarize all of the information about the Trust and the Shares contained in the Prospectus that is material and/or that may be important to you. You should read this entire Prospectus before making an investment decision about the Shares. For a glossary of defined terms, see Appendix A. Overview of the Trust The Global X Bitcoin Trust (the "Trust") is an exchange-traded fund that issues common shares of beneficial interest (the "Shares") that trade on the Cboe BZX Exchange, Inc. (the "Exchange") under the ticker symbol [" "]. The Trust s investment objective is to reflect the performance of bitcoin less the Trust s expenses and other liabilities. In seeking to achieve its investment objective, the Trust will hold bitcoin. The Trust will value its Shares daily based on the value of bitcoin as reflected by the CoinDesk Bitcoin Price Index (XBX) (the "Index"), a real-time, U.S. dollar equivalent spot rate for bitcoin. The Index leverages real-time prices from multiple constituent exchanges to provide a representative spot price. Each constituent exchange is weighted proportionally to its trailing 24-hour liquidity with adjustments for price variance and inactivity. Given the potential for anomalies or manipulation at individual exchanges, constituent weights may dynamically adjust using CoinDesk Indices proprietary Constituent Weighting Adjustment Algorithm (CWAA). The algorithm is designed to calculate a real-time index that is an accurate and reliable reflection of the market price of each digital asset, using multi-sourced spot prices and dynamically reduce the weights of individual exchanges with lower liquidity, inactivity, and higher price variance. The Index is administered in alignment with the IOSCO Principles for Financial Benchmarks. The Index price is calculated using methodology not consistent with U.S. generally accepted accounting principles ("GAAP") and is not used in the Trust s financial statements. Global X Digital Assets, LLC is the sponsor of the Trust, Delaware Trust Company (the "Trustee") is the trustee of the Trust, and Coinbase Custody Trust Company, LLC (the "Bitcoin Custodian") will hold all of the Trust s bitcoin on the Trust s behalf as custodian. The Sponsor is affiliated with both Global X Management Company, LLC ("Global X") and Mirae Asset Global Investments Co., Ltd. ("Mirae"). The Trust will process all creations and redemptions of Shares in transactions with financial firms that are authorized to do so (known as "Authorized Participants"). When the Trust issues or redeems its Shares, it will do so only in "in-kind" transactions in blocks of [ ] Shares (a "Basket") based on the quantity of bitcoin attributable to each Share of the Trust (net of accrued but unpaid Sponsor fees and any accrued but unpaid extraordinary expenses or liabilities). When purchasing Baskets, Authorized Participants or their agents will deliver bitcoin to the Trust s account with the Bitcoin Custodian in exchange for Baskets. When redeeming Baskets, Authorized Participants or their agents will receive bitcoin from the Trust through the Bitcoin Custodian. The Trust will not purchase or, barring a liquidation or extraordinary circumstances described herein, sell bitcoin directly. The initial Authorized Participant is [ ]. To support the ability of Authorized Participants to provide liquidity at prices that reflect the value of the Trust s assets and to facilitate orderly transactions in the Shares, the Trust will ordinarily process redemptions of Baskets on the next day when the Exchange is open for regular trading (a "Business Day") following receipt of a redemption request by an Authorized Participant. Baskets are expected to be created when there is sufficient demand for Shares, including when the market price per Share is at a premium to the net asset value ("NAV") of the Shares of the Trust. Authorized Participants are expected to sell such Shares to the public at prices that reflect, among other factors, the value of the Trust s assets, supply of and demand for Shares, and market conditions at the time of a transaction. Similarly, Baskets are expected to be redeemed when the market price per Share is at a discount to the NAV. Investors seeking to purchase or sell Shares on any day are expected to transact in the secondary market, on the Exchange or other national securities exchanges, at the market price per Share, rather than through the creation or redemption of Baskets. The Sponsor believes that the design of the Trust will enable investors to effectively and efficiently implement strategic and tactical asset allocation strategies that use bitcoin by investing in the Shares rather than directly in bitcoin. The Trust s Expenses The Trust will pay the Sponsor a unified fee of [ ]% per annum (the "Sponsor Fee") as compensation for services performed under the Trust Agreement (as defined herein). The Trust s only ordinary recurring expense is the Sponsor Fee. The Sponsor Fee will be accrued daily and paid monthly on the first Business Day of the month in kind in bitcoin, and will be calculated by the Administrator based on the quantity of bitcoin held by the Trust. Because the Sponsor Fee is paid in bitcoin and calculated by reference to the quantity of bitcoin held by the Trust, the expenses of the Trust as a percentage of its assets will generally not be affected by fluctuations in the value of bitcoin. Except as noted below, the Sponsor has agreed to pay all of the Trust s ordinary expenses out of the Sponsor s unified fee, including, but not limited to, the Trustee s fees, the fees of The Bank of New York Mellon (the "Administrator" and the "Transfer Agent"), the fees of the Bitcoin Custodian, the fees of [ ] (the "Marketing Agent"), Exchange listing fees, Securities and Exchange Commission ("SEC") registration fees, printing and mailing costs, legal costs, and audit fees. The Sponsor also paid the costs of the Trust s organization. The Trust may incur certain extraordinary expenses that are not contractually assumed by the Sponsor. These include, but are not limited to, litigation and indemnification expenses, judgments, transactional expenses, taxes, and other expenses not incurred in the ordinary course of the Trust s business. In such extraordinary circumstances, the Trust may sell bitcoin to pay such expenses. When the Trust sells bitcoin to pay such extraordinary expenses, the Trust will generally attempt to do so in an amount that minimizes the Trust s holdings of cash or other assets other than bitcoin. The Trust s Legal Structure The Trust is a Delaware statutory trust, formed on July 13, 2021, pursuant to the Delaware Statutory Trust Act ("DSTA"). The Trust continuously issues common shares representing fractional undivided beneficial interest in and ownership of the Trust that may be purchased and sold on the Exchange. The Trust operates pursuant to its Declaration of Trust and Trust Agreement, dated as of July 12, 2021, which is expected to be amended and restated prior to commencement of operations of the Trust (the "Trust Agreement"). Delaware Trust Company, a Delaware trust company, is the Trustee. The Trust is managed and controlled by the Sponsor. The Trust s Service Providers The Sponsor Global X Digital Assets, LLC is the Sponsor of the Trust. The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering, the listing of Shares on the Exchange, and valuing the bitcoin held by the Trust. The Sponsor is a limited liability company formed in the state of Delaware on July 9, 2021, and is affiliated with both Global X and Mirae. Global X, Mirae, and their affiliates, including the Sponsor, provide global asset management solutions. The Sponsor is not registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and is not required to register thereunder. The Trustee Delaware Trust Company, a Delaware trust company, acts as the Trustee of the Trust as required to create a Delaware statutory trust in accordance with the Trust Agreement and the DSTA. The Administrator The Bank of New York Mellon serves as the Trust s administrator (the "Administrator"). The Administrator s principal address is 240 Greenwich Street, New York, New York 10286. Under the Fund Administration and Accounting Agreement, the Administrator provides necessary administrative, tax and accounting services, and financial reporting for the maintenance and operations of the Trust, including valuing the Trust s bitcoin and calculating the NAV and NAV per Share, and supplying pricing information to the Sponsor for the Trust s website. In addition, the Administrator makes available the office space, equipment, personnel, and facilities required to provide such services. The Transfer Agent The Bank of New York Mellon also serves as the Transfer Agent for the Trust. The Transfer Agent is responsible for (1) issuing and redeeming Shares, (2) responding to correspondence by holders of the Shares ("Shareholders") and others relating to its duties, (3) maintaining Shareholder accounts, and (4) making periodic reports to the Trust. The Bitcoin Custodian Coinbase Custody Trust Company, LLC serves as the Trust s Bitcoin Custodian and is a fiduciary under 100 of the New York Banking Law. Under the custodian agreement with the Bitcoin Custodian (the "Custodian Agreement"), the Bitcoin Custodian is responsible for (1) safekeeping all of the bitcoin owned by the Trust, (2) opening an account that holds the Trust s bitcoin, and (3) facilitating the transfer of bitcoin required for the operation of the Trust, as directed by the Sponsor. The Bitcoin Custodian is chartered as a limited purpose trust company by the New York State Department of Financial Services ("NYDFS") and is authorized by the NYDFS to provide digital asset custody services. The Bitcoin Custodian is subject to extensive regulation and has among the longest track records in the industry of providing custodial services for digital asset private keys. The Trust s assets with the Bitcoin Custodian are held in segregated accounts on the bitcoin blockchain, commonly referred to as "wallets," and therefore are not commingled with corporate or other customer assets. After diligent investigation, the Sponsor believes that the Bitcoin Custodian s policies, procedures, and controls for safekeeping, exclusively possessing, and controlling the Trust s bitcoin holdings are consistent with industry best practices to protect against theft, loss, and unauthorized and accidental use of the private keys. Although the Bitcoin Custodian carries insurance, the Bitcoin Custodian s insurance does not cover any loss in value to bitcoin and only covers losses caused by certain events such as fraud or theft and, in such covered events, it is unlikely the insurance would cover the full amount of any losses incurred by the Trust. Authorized Participants Only Authorized Participants may purchase or redeem Baskets from the Trust. When purchasing Baskets, Authorized Participants or their agents will deliver bitcoin to the Trust s account with the Bitcoin Custodian in exchange for Baskets. When redeeming Baskets, Authorized Participants or their agents will receive bitcoin from the Trust through the Bitcoin Custodian. Authorized Participants are expected to sell Shares to the public at prices that reflect, among other factors, the value of the Trust s assets, supply of and demand for Shares, and market conditions at the time of a transaction. The initial Authorized Participant is [ ]. The Marketing Agent [ ] serves as the Trust s Marketing Agent. The Marketing Agent is responsible for reviewing and approving the marketing materials prepared by the Sponsor for compliance with applicable SEC and Financial Industry Regulatory Authority advertising laws, rules, and regulations. Custody of the Trust s Assets The Trust s Bitcoin Custodian will keep custody of the Trust s bitcoin. The Bitcoin Custodian provides insured safekeeping of digital assets using a multi-layer, multi-party cold storage security platform designed to provide offline security of the digital assets held by the Bitcoin Custodian. The Bitcoin Custodian has insurance coverage as a subsidiary under its parent company, Coinbase Global, Inc., which procures fidelity (crime) insurance to protect the organization from risks such as theft of funds in hot or cold storage. The insurance program is provided by a syndicate of industry-leading insurers. The Bitcoin Custodian is not FDIC-insured. Bitcoin may be held across multiple wallets, any of which will feature the following safety and security measures to be implemented by the Bitcoin Custodian: Cold Storage: Cold storage in the context of bitcoin means keeping the reserve of bitcoin offline, which is a widely-used security precaution, especially when dealing with a large amount of bitcoin. Bitcoin held under custodianship with the Bitcoin Custodian will be kept in high-security, offline, multi-layer cold storage vaults. This means that the private keys, the cryptographic component that allows a user to access bitcoin, are stored offline on hardware that has never been connected to the internet. Storing the private key offline minimizes the risk of the bitcoin being stolen. Multiple Private Keys: All private keys are securely stored using multiple layers of high-quality encryption and in Bitcoin Custodian-owned offline hardware vaults in secure environments. No customers or third parties are given access to the Bitcoin Custodian s private keys. The use of multiple private keys makes retrieving bitcoin from the wallet more difficult, and aims to further reduce the risk of hacking theft and/or robbery. Whitelisting: Transactions are only sent to vetted, known addresses. The Bitcoin Custodian s platform supports pre-approval and test transactions. Audit Trails: Audit trails exist for all movement of bitcoin within Bitcoin Custodian-controlled bitcoin wallets, and are audited annually for accuracy and completeness by an independent external audit firm. In addition to the above measures, in accordance with the Custodian Agreement, bitcoin held in custody with the Bitcoin Custodian will be segregated from both the proprietary property of the Bitcoin Custodian and the assets of any other customer in accounts that clearly identify the Trust as the owner of the accounts. Therefore, in the event of an insolvency of the Bitcoin Custodian, assets held in the segregated accounts would not become property of the Bitcoin Custodian s estate and would not be available to satisfy claims of creditors of the Bitcoin Custodian. The Bitcoin Custodian maintains an Internal Audit team that performs periodic internal audits over custody operations. Systems and Organizational Control ("SOC") attestations are also performed on the Bitcoin Custodian s services. The SOC 1 Type 2 and SOC 2 Type 2 reports produced cover private key management controls. The Trust s Transfer Agent will facilitate the settlement of Shares in response to the placement of creation orders and redemption orders from Authorized Participants. The Trust generally does not intend to hold cash or cash equivalents. However, there may be situations where the Trust will hold cash on a temporary basis. The Trust has entered into a cash custody agreement with [ ] under which [ ] acts as custodian of the Trust s cash and cash equivalents. Net Asset Value Determinations The NAV of the Trust is used by the Trust in its day-to-day operations to measure the net value of the Trust s assets. The NAV is calculated on each business day and is equal to the aggregate value of the Trust s assets less its liabilities based on the Index price. In determining the NAV of the Trust on any business day, the Administrator will calculate the price of the bitcoin held by the Trust as of 4:00 p.m. ET on such day. The Administrator will also calculate the "NAV per Share" of the Trust, which equals the NAV of the Trust divided by the number of outstanding Shares. For purposes of making these calculations, a business day means any day other than a day when Cboe BZX Exchange is closed for regular trading. The Index is a real-time, USD-equivalent spot rate for bitcoin. The Index leverages real-time prices from multiple constituent exchanges to provide a representative spot price. Each constituent exchange is weighted proportionally to its trailing 24-hour liquidity with adjustments for price variance and inactivity. Given the potential for anomalies or manipulation at individual exchanges, constituent weights may dynamically adjust using CoinDesk Indices proprietary Constituent Weighting Adjustment Algorithm (CWAA). The algorithm is designed to calculate a real-time index that is an accurate and reliable reflection of the market price of each digital asset, using multi-sourced spot prices and dynamically reduces the weights of individual exchanges with lower liquidity, inactivity, and higher price variance. The Index is administered in alignment with the IOSCO Principles for Financial Benchmarks. The Administrator will rely on the Index as the index price to be used when determining NAV. However, determining the value of Trust s bitcoin using the Index is not in accordance with GAAP, and therefore is not used in the Trust s financial statements. The Trust s bitcoins are carried, for financial statement purposes, at fair value, as required by GAAP. The Trust determines the fair value of bitcoin based on the price provided by the bitcoin market that the Trust considers its "principal market" as of 4:00 p.m., ET on the valuation date. The net asset value of the Trust determined on a GAAP basis is referred to in this prospectus as a "Principal Market NAV" and the net asset value of the Trust per Share determined on a GAAP basis is referred to as "Principal Market NAV per Share." The Trust also uses the Index to calculate an Intraday Indicative Value ("IIV"). The IIV is intended to to provide updated information relating to the Trust for use by Shareholders and market professionals. It is calculated by using the prior day s closing NAV as a base and updating that value throughout the trading day to reflect changes in the most recently reported price of bitcoin as reported by the Index or another reporting service. The IIV will be disseminated on a per Share basis every 15 seconds during regular Exchange core trading session hours of 9:30 a.m. ET to 4:00 p.m. ET. NAV and NAV per Share are not measures calculated in accordance with GAAP, and are not intended as substitute for Principal Market and Principal Market NAV per Share, respectively. Emerging Growth Company Status The Trust is an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. For as long as the Trust is an emerging growth company, unlike other public companies, it will not be required to, among other things: Provide an auditor s attestation report on management s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002; or Comply with any new audit rules adopted by the Public Company Accounting Oversight Board after April 5, 2012, unless the SEC determines otherwise. The Trust will cease to be an "emerging growth company" upon the earliest of (i) it having $1.235 billion or more in annual revenues, (ii) at least $700 million in market value of Shares being held by non-affiliates, (iii) it issuing more than $1.0 billion of non-convertible debt over a three-year period, or (iv) the last day of the fiscal year following the fifth anniversary of its initial public offering. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Trust intends to take advantage of the benefits of the extended transition period. Plan of Distribution The Trust is an exchange-traded fund. Shareholders who decide to buy or sell Shares of the Trust will place their trade orders through their brokers and may incur customary brokerage commissions and charges, as well as any potential bid-ask spread. Such trades may occur at a premium or discount relative to the NAV per Share of the Trust. When the Trust issues or redeems its Shares, it will do so only in "in-kind" transactions in one or more Baskets. Only Authorized Participants may purchase or redeem Baskets from the Trust. When purchasing Baskets, Authorized Participants or their agents will deliver bitcoin to the Trust s account with the Bitcoin Custodian in exchange for Shares. Authorized Participants are expected to sell such Shares to the public at prices that reflect, among other factors, the value of the Trust s assets, supply of and demand for Shares, and market conditions at the time of a transaction. The initial Authorized Participant is [ ]. Shareholders who decide to buy or sell Shares of the Trust will place their trade orders through their brokers and will incur customary brokerage commissions and charges. Prior to this offering, there has been no public market for the Shares. The Shares are expected to be listed for trading, subject to notice of issuance, on the Exchange under the ticker symbol [" "]. Federal Income Tax Considerations It is expected that owners of Shares will be treated, for U.S. federal income tax purposes, as if they own a proportionate share of the assets of the Trust, as if they directly receive a proportionate share of any income of the Trust, and as if they incur a proportionate share of the expenses of the Trust. Consequently, each sale of bitcoin by the Trust (which includes, under current Internal Revenue Service guidance, using bitcoin to pay expenses of the Trust, including the Sponsor Fee) would give rise to taxable gain or loss to Shareholders. See "U.S. Federal Income Tax Consequences—Taxation of U.S. Shareholders." Use of Proceeds Proceeds received by the Trust from the issuance of Baskets consist of bitcoin. Such bitcoin is held by the Bitcoin Custodian on behalf of the Trust until (i) delivered in connection with redemptions of Baskets, (ii) transferred to the Sponsor to pay the Sponsor Fee, or (iii) sold by the Bitcoin Custodian at the direction of the Trust to pay for extraordinary expenses and liabilities not assumed by the Sponsor. Bitcoin and the Bitcoin Network Bitcoin is a digital asset the ownership and behavior of which are determined by participants in an online, peer-to-peer network that connects computers that run publicly accessible, or "open source," software that follows the rules and procedures governing the Bitcoin network, commonly referred to as the Bitcoin protocol. The value of bitcoin, like the value of other digital assets, is not backed by any government, corporation or other identified body. Ownership and the ability to transfer or take other actions with respect to bitcoin is protected through public-key cryptography. The supply of bitcoin is constrained or formulated by its protocol instead of being explicitly delegated to an identified body (e.g., a central bank or corporate treasury) to control. Bitcoin and certain other types of digital assets are sometimes referred to as digital currencies or cryptocurrencies. No single entity owns or operates the Bitcoin network, the infrastructure of which is collectively maintained by (1) a decentralized group of participants who run computer software that results in the recording and validation of transactions (commonly referred to as "miners"), (2) developers who propose improvements to the Bitcoin protocol and the software that enforces the protocol, and (3) users who choose what Bitcoin software to run. Bitcoin was released in 2009 and, as a result, there is little data on its long-term investment potential. Bitcoin is not backed by a government-issued legal tender. Bitcoin is "stored" or reflected on a digital transaction ledger commonly known as a "blockchain." A blockchain is a type of shared and continually reconciled database, stored in a decentralized manner on the computers of certain users of the digital asset. A blockchain is a record of every digital asset: the blockchain records every "coin" or "token," balances of digital assets, every transaction, and every address associated with a quantity of a particular digital asset. Bitcoin utilizes the blockchain to record transactions into and out of different addresses, facilitating a determination of how much bitcoin is in each address. Bitcoin is created by "mining." Mining involves miners using a sophisticated computer program to repeatedly solve complex mathematical problems on specialized computer hardware. The mathematical problem involves a computation involving all or some bitcoin transactions that have been proposed by the Bitcoin network s participants. When this problem is solved, the computer creates a "block" consisting of these transactions. As each newly solved block refers back to and "connects" with the immediately prior solved block, the addition of a new block adds to the blockchain in a manner similar to a new link being added to a chain. A miner s proposed block is added to the blockchain once a majority of the nodes on the network confirm the miner s work. A miner that is successful in adding a block to the blockchain is automatically awarded a fixed amount of bitcoin for its efforts plus any transaction fees paid by transferors whose transactions are recorded in the block. This reward system is the means by which new bitcoin enter circulation. This reward system, called proof of work, also ensures that the local copies of the Bitcoin blockchain maintained by participants in the Bitcoin network are kept in consensus with one another. The Bitcoin Market Bitcoin had a total market capitalization of approximately $527 billion as of September 30, 2023. Bitcoin spot trading occurs on venues in the U.S. that are licensed to conduct that business by the NYDFS, other venues in the U.S., and non-U.S. venues. In addition, bitcoin futures and options trading occur on exchanges in the U.S. regulated by the CFTC. The market for trading of CFTC-regulated bitcoin derivatives has developed substantially since the first regulated derivative offerings were launched in December 2017. For the three months ending on September 30th, 2023, CME Bitcoin Futures traded approximately $1.08 billion per day and maintained an average open interest of approximately $1.34 billion per day. The ecosystem has further expanded beyond these contracts with growing volumes seen in both CME s Options on Bitcoin Futures and Micro Bitcoin Futures, which launched in January 2020 and May 2021, respectively. Principal Investment Risks of an Investment in the Trust An investment in the Trust involves a high degree of risk. Any investment made in the Trust may result in a total loss of the investment. There is no assurance that the Trust will generate a profit for investors. Some of the risks you may face are summarized below. A more extensive discussion of these risks appears under
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+of the VIE Agreements, please see "Summary of this Prospectus — MMV s VIEs and China Operations." We are the primary beneficiary of the VIEs, for accounting purposes, based upon the VIE Agreements. Accordingly, under U.S. GAAP, the results of the VIEs will be consolidated in our financial statements. However, neither our investors nor us have an equity ownership in, direct foreign investment in, or control of, through such ownership or investment, the VIEs. As used in this prospectus, "we", "us", "our" or "MMV" refers to MultiMetaVerse Holdings Limited, and its subsidiaries, and in the context of describing our operations and consolidated financial information, the VIEs. References to "Legacy MMV" refer to MultiMetaVerse Inc., a Cayman Islands exempted company and a wholly owned subsidiary of MMV. We are a holding company in the British Virgin Islands primarily operating in China through our subsidiaries and contractual arrangements with variable interest entities. Cash is transferred among MMV, Shanghai Mi Ting Culture and Creative Co., Ltd., or the WFOE, and the VIEs, in the following manners: (i) funds are transferred to the WFOE, from MMV as needed through Legacy MMV and MultiMetaVerse HK Limited, or the Hong Kong Subsidiary in the form of capital contributions or shareholder loans, as the case may be; (ii) funds may be paid by Shanghai Jupiter, to the WFOE, as service fees according to the VIE Agreements; (iii) dividends or other distributions may be paid by the WFOE, to MMV through the Hong Kong Subsidiary and Legacy MMV; and (iv) the WFOE and Shanghai Jupiter, lend to and borrow from each other from time to time for business operation purpose. As a holding company, we may rely on dividends and other distributions on equity paid by our subsidiaries, including the WFOE and other subsidiaries based in the PRC for our cash and financing requirements. If the WFOE or any other subsidiaries in PRC incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to us. Current PRC regulations permit WFOE to pay dividends to us through the Hong Kong Subsidiary and Legacy MMV only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. We are permitted under the laws of British Virgin Islands to provide funding to our subsidiaries in mainland China and Hong Kong Special Administrative Region of China ("Hong Kong" or "Hong Kong SAR") through loans or capital contributions without restrictions on the amount of the funds. Hong Kong Subsidiary is also permitted under the laws of Hong Kong SAR to provide funding to us through dividend distributions without restrictions on the amount of the funds. As of the date of this registration statement/prospectus, we have not transferred funds to the WFOE. In the future, however, cash proceeds raised from overseas financing activities, including the Business Combination, may be transferred by us to the WFOE via capital contribution or shareholder loans. As of the date of this registration statement/ prospectus, there have not been any such dividends or other distributions from WFOE to the Hong Kong Subsidiary. In addition, none of our subsidiaries have ever issued any dividends or distributions to us or their respective shareholders outside of China. As of the date of this prospectus, Shanghai Jupiter has not remitted any services fees to the WFOE. We currently have not maintained any cash management policies that dictate the purpose, amount and procedure of cash transfers between MMV, the WFOE, the VIEs, or investors. Rather, the funds can be transferred in accordance with the applicable laws and regulations. For more details, see "Summary of the Prospectus — Assets Transfer between MMV and the VIEs", "Summary of the Prospectus — Dividends or Distributions Made to MMV and U.S. Investors by MMV s Subsidiaries and the VIEs and Tax Consequences", "Summary of the Prospectus — VIE Consolidation Schedule" and "Consolidated Financial Statements". Our corporate structure will be subject to risks relating to the contractual arrangements with Shanghai Jupiter and its shareholders. Our VIE Agreements have not been tested in a court of law in the PRC. If the PRC government finds these contractual arrangements non-compliant with the restrictions on direct foreign investment in the relevant industries, or if the relevant PRC laws, regulations, and rules or the interpretation thereof change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIEs or forfeit our rights under the contractual arrangements. We and investors in our ordinary shares and warrants will face uncertainty about potential future actions by the PRC government, which could affect the enforceability of the contractual arrangements with Shanghai Jupiter and, consequently, significantly our financial condition and results of operations. If we are unable to claim our right to control the assets of the VIEs. Our ordinary shares and warrants may decline in value or become worthless. See "Risk Factors — Risks Related to MMV s Corporate Structure." We face various legal and operational risks and uncertainties relating to doing business in China. We operate our business primarily in China, and is subject to complex and evolving PRC laws and regulations. For example, we face risks relating to regulatory approvals on overseas listings, anti-monopoly regulatory actions, and oversight on cybersecurity, data security and data privacy. Further, the PRC government has significant oversight and discretion over the conduct of our business and may intervene with or influence our operations as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies like us. Recent statements and regulatory action by China s government, such as those related to the use of VIEs and cybersecurity, data privacy or anti-monopoly concerns, have or may impact the ability of us and/or the VIEs to conduct business, accept foreign investments, or list on a U.S. or other foreign exchange. Uncertainties in the PRC legal system and the interpretation and enforcement of PRC laws and regulations could limit the legal protection available to the investors in our ordinary shares and warrants, hinder the our ability to offer or continue to offer our ordinary Shares and warrants, result in a material adverse effect on our business operations, and damage our reputation, which might further cause our ordinary shares and warrants to significantly decline in value or become worthless. See "Risk Factors — Risks Related to Doing Business in China." Recently, the PRC government initiated a series of regulatory actions and made a number of public statements on the regulation of business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. For example: PRC regulators have been increasingly focused on regulation in areas of data security and data protection and the PRC regulatory requirements regarding cybersecurity are constantly evolving. Various regulatory bodies in China, specifically the Cyberspace Administration of China (the "CAC"), have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. According to Article 7 of the Measures of Cybersecurity Review (the New CAC Measures") which was promulgated by the CAC, together with 12 other departments on December 28, 2021 and entered into force and effect on February 15, 2022, a network platform operator that holds personal information of more than one million users shall report to Cybersecurity Review Office for cybersecurity review when it seeks to list its securities overseas. Shanghai Jupiter received a notification (No. 2022072101) from the Cyber Security Review Office, the department of the CAC in charge of cybersecurity review, advising that the Business Combination and the planned listing on Nasdaq is not subject to cybersecurity review. China Securities and Regulatory Commission (the "CSRC") released the Overseas Securities Offering and Listing by Domestic Companies (the "Overseas Listing Trial Measures") on February 17, 2023, which has become effective on March 31, 2023. The Overseas Listing Trial Measures lay out the filing regulation arrangement for both direct and indirect overseas securities offering and listing by PRC domestic companies, and clarify the determination criteria for indirect overseas listing in overseas markets. Where an issuer submits an application for public offering or registration to competent overseas regulators, such issuer must submit a filing with the CSRC within three business days after such application is submitted. If an issuer fails to comply with the filing requirements prescribed in the Overseas Listing Trial Measures or commits fraud or misrepresentation, the CSRC s authority is authorized to fine the issuer, its relevant shareholders and its subsidiaries in the PRC. Issuers that have completed overseas public offering and listing prior to March 31, 2023 shall be regarded as existing issuers and are not required to submit filings with CSRC immediately. We have consummated the Business Combination and our overseas listing before March 31, 2023. As advised by Global Law Office, our PRC legal counsel, as an existing issuer, we will not be required to comply with the filing requirements under the Overseas Listing Trial Measures in connection with this offering. However, pursuant to the Overseas Listing Trial Measures, our subsequent securities offerings in the same overseas market where we have previously offered and listed shall also be filed with the CSRC within three business days after such offering is completed. In addition, since the Overseas Listing Trial Measures and relevant guidelines were newly promulgated, their interpretation, application and enforcement remain unclear and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel. As advised by Global Law Office, our PRC legal counsel, currently, no PRC laws and regulations are in force requiring that MMV obtain permission from PRC authorities to consummate this offering. However, any future securities offerings and listings outside of mainland China by MMV, including but not limited to follow-on offerings, secondary listings and going private transactions, will be subject to the filing requirements with the CSRC under the Overseas Listing Trial Measures, and we cannot assure you that we will be able to comply with such filing requirements in a timely manner. In addition, the aforesaid laws, regulatory requirement and interpretations thereof are evolving. There remains uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offering and other capital markets activities and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel. If it is determined in the future that the approval, filing or other administrative procedures of the CSRC, the CAC or any other regulatory authority is required for our subsequent securities offering and we fail to complete and obtain such approval, filing or other administrative procedures in a timely manner or at all, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations, as well as the trading price of our securities. The CSRC, the CAC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt any securities offering we may undertake in the future. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur. In addition, if the CSRC, the CAC or other regulatory PRC agencies later promulgate new rules requiring that we obtain their approvals in the future, we may be unable to obtain such approvals or a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect on the trading price of our securities. These legal and operational risks and uncertainties associated with being based in China may materially and adversely change our operations, affect the value of our securities, significantly limit or completely hinder our ability to offer or continue to offer securities to investors could cause the value of our securities to significantly decline or be worthless. Recent statements and regulatory action by China s government, such as those related to the use of VIEs and cybersecurity, data privacy or anti-monopoly concerns, have or may impact the ability of us and/or the VIEs to conduct business, accept foreign investments, or list on a U.S. or other foreign exchange. Therefore, we face risks associated with regulatory approvals of offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy. The PRC government may also intervene with or influence our operations, as the government deems appropriate to further regulatory, political and societal goals. For further details and for risks related to regulatory approvals on overseas listings, see "Risk Factors — Risks Related to Doing Business in China — The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing" and "Risk Factors — Risks Related to Doing Business in China — MMV faces challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data protection, and user attitude toward data privacy and protection. The Chinese government exerts substantial influence over the manner in which the operating entities conduct their business activities, and may intervene or influence such operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in such operations and the value of our ordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and cause the value of our securities to significantly decline or be of no value. Many of these laws and regulations are subject to change and uncertain interpretation, and any actual or alleged failure to comply with related laws and regulations regarding cybersecurity, information security, data privacy and protection could materially and adversely affect our business and results of operations." On December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under the Holding Foreign Companies Accountable Act (the "HFCAA"). Under such rules, an issuer that has filed an annual report containing an audit report issued by a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction will be identified by the SEC as a "Commission-Identified Issuer." The SEC will impose a trading prohibition on an issuer after it is identified as a Commission-Identified Issuer for three consecutive years. If MMV is identified as a Commission-Identified Issuer and has a "non-inspection" year, there is no assurance that it will be able to take remedial measures in a timely manner. Besides, pursuant to the HFCAA, on December 16, 2021, the PCAOB issued its determinations (the "PCAOB Determination") that they are unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong. The PCAOB Determination includes lists of public accounting firms headquartered in mainland China and Hong Kong that the Board is unable to inspect or investigate completely. On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the "Protocol") with the China Securities Regulatory Commission (the "CSRC") and the Ministry of Finance ("MOF") of the People s Republic of China, which governs inspections and investigations of audit firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol released by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was signed into law, which reduced the number of consecutive non-inspection years required for triggering the listing and trading prohibitions under the HFCAA from three years to two years. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our auditor s control, including positions taken by authorities of the PRC. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong. The possibility of being a "Commission-Identified Issuer" and risk of delisting could continue to adversely affect the trading price of our securities. Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, the PCAOB will make determinations under the HFCAA as and when appropriate. Our auditor, Marcum Asia CPAs LLP ("MarcumAsia"), an independent registered public accounting firm headquartered in Manhattan, New York, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. MarcumAsia, whose audit report is included in this prospectus, as of the date of this prospectus, was not included in the list of Identified Firms in the PCAOB Determination. Although we believe that the HFCAA and the related regulations do not currently affect us, we cannot assure you that there will not be any further implementations and interpretations of the HFCAA or the related regulations, which might pose regulatory risks to and impose restrictions on us because of our operations in mainland China. Recent developments with respect to audits of China-based companies, such as MMV, create uncertainty about the ability of their auditor to fully cooperate with the PCAOB s request for audit workpapers without the approval of the Chinese authorities. As a result, our investors may be deprived of the benefits of PCAOB s oversight of our auditor through such inspections. For more details, see "Risk Factors — Risks Related to Doing Business in China — MMV s independent registered public accounting firm s audit documentation related to their audit reports include audit documentation located in China. PCAOB may not be able to inspect audit documentation located in China and, as such, you may be deprived of the benefits of such inspection which could result in limitations or restrictions to our access to the U.S. capital markets. MMV s ordinary shares may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to adequately inspect audit documentation located in China. The delisting of MMV s ordinary shares or the threat of their being delisted, may have a material adverse impact on our listing and trading in the U.S. and the trading prices of our ordinary shares." Mr. Yiran Xu holds a majority of our voting power. Accordingly, we are a controlled company under Nasdaq Listing Rule 5615 (c). For so long as we remain as a controlled company under that definition, we are permitted to elect to rely on certain exemptions from corporate governance rules. As a result, the investors may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. Our status as a controlled company could cause our securities to look less attractive to certain investors or otherwise harm the trading price. Please see "Risk Factors — As a "controlled company" under the rules of the NASDAQ Listing Rule, MMV may choose to exempt from certain corporate governance requirements that could have an adverse effect on the public shareholders." Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading "Risk Factors" beginning on page 15 of this prospectus, and under similar headings in any amendment or supplements to this prospectus. We are an "emerging growth company" under applicable federal securities laws and are subject to reduced public company reporting requirements. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2023. TABLE OF CONTENTS Page Frequently Used Terms ii Cautionary Note Regarding Forward-Looking Statements iv Summary of the Prospectus 1
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+Prospectus Summary 1 The Offering 12 Summary Historical and Other Combined Financial Data 13 Risk Factors 17 Special Note Regarding Forward-Looking Statements 41 Use of Proceeds 42 Dividend Policy 43 Capitalization 44 Dilution 45 The Separation Transaction 46 Unaudited Pro Forma Condensed Combined Financial Statements 48 Selected Historical and Other Combined Financial Data 52 Management s Discussion and Analysis of Financial Condition and Results of Operations 55 Business 65 Management 68 Executive and Director Compensation 75 Certain Relationships and Related Party Transactions 81 Principal Shareholders 84 Description of Securities 85 Material U.S. Federal Tax Consequences 88 Certain Canadian Federal Income Tax Consequences to Holders of our Common Shares that are Non-Resident in Canada 93 Shares Eligible for Future Sale 95 Underwriting 96 Legal Matters 104 Experts 104 Where You Can Find More Information 104 Index to Financial Statements F-1 Neither the Company nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by or on behalf of the Company. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide to you. We are offering to sell, and seeking offers to buy, Common Shares only under circumstances and in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Common Shares. Unless the context requires otherwise, (a) references to "Strong Global Entertainment," the "Company," "we," "us" and "our" refer to Strong Global Entertainment, Inc., and its consolidated subsidiaries after giving effect to the transactions described under the section titled "The Separation Transaction" (the "Separation"), and (b) references to "FG Group Holdings" and "Parent" refer to FG Group Holdings Inc., Strong Global Entertainment s indirect parent, and its consolidated subsidiaries other than Strong Global Entertainment and Strong Global Entertainment s subsidiaries. Unless the context requires otherwise, statements relating to our history in this prospectus describe the history of FG Group Holdings Entertainment operating segment (the "Entertainment Business"). i You may only rely on the information contained in this prospectus or that we have referred you to. We have not authorized anyone to provide you with different information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the Common Shares offered by this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any Common Shares in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made in connection with this prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or that the information contained by reference to this prospectus is correct as of any time after its date. Until , 2023, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. INDUSTRY AND OTHER DATA We obtained the industry, market and competitive position data in this prospectus from our own internal estimates and research as well as from industry and general publications and research, surveys and studies conducted by third parties. While we believe that the statistical data, market data and other industry data and forecasts are reliable, we have not independently verified the data. Information that is based on estimates, forecasts, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information based on various factors, including those discussed in the section titled "Risk Factors." TRADEMARKS, SERVICE MARKS AND TRADE NAMES We own or have rights to use a number of registered and common law trademarks, service marks and/or trade names in connection with our business in the United States and/or in certain foreign jurisdictions. Strong Global Entertainment will own these trademarks after completion of the Separation. Solely for convenience, most trademarks, service marks, logos and trade names referred to in this prospectus are without the and symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This prospectus contains additional trademarks, service marks and trade names of others, which are the property of their respective owners. All trademarks, service marks and trade names appearing in this prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies. ii PROSPECTUS SUMMARY This summary highlights certain information about us and this offering contained elsewhere in this prospectus, but it is not complete and does not contain all of the information you should consider before investing in our Common Shares. In addition to this summary, you should read this entire prospectus carefully, including the risks of investing in our Common Shares and the other information discussed in the section titled "Risk Factors," and the financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements." You should read the entire prospectus carefully, including the "Risk Factors" beginning on page 17, and our financial statements and the notes to the financial statements included elsewhere in this prospectus, and our management s discussion and analysis of financial condition and results of operations. As used throughout this prospectus, the terms "Strong Global Entertainment," the "Company," "we," "us," or "our" refer to Strong Global Entertainment, Inc. We describe in this prospectus the businesses that will be contributed to us by FG Group Holdings (previously known as Ballantyne Strong, Inc.) as part of our separation from FG Group Holdings as if they were our businesses for all historical periods described. Please see the section titled "The Separation Transaction" for a description of the Separation. Our historical and unaudited pro forma financial information included in this prospectus is not necessarily indicative of our future financial condition, results of operations or cash flows, nor does it reflect what our financial condition, results of operations or cash flows would have been as an independent public company during the periods presented. In particular, the historical financial information included in this prospectus is not necessarily indicative of our future results of operations, financial condition or cash flows. General We believe Strong Global Entertainment is positioned to be a leader in the entertainment industry, as FG Group Holdings has provided mission critical products and services to cinema exhibitors and entertainment venues for over 90 years. We believe that we have cultivated a leadership position built on our exceptional reputation for quality and service in the industry. We manufacture and distribute premium large format projection screens, provide comprehensive managed services, technical support and related products and services primarily to cinema exhibitors, theme parks, educational institutions, and similar venues. As a manufacturer and distributor of projection screens systems, we have contractual relationships to supply projection screens to major cinema exhibitors, including IMAX Corporation ("IMAX"), AMC Entertainment Holdings ("AMC"), and Cinemark Holdings, Inc. ("Cinemark"), and other cinema operators worldwide. In addition to traditional projection screens, we also manufacture and distribute our Eclipse curvilinear screens, which are specially designed for theme parks, immersive exhibitions, as well as simulation applications. We also provide maintenance, repair, installation, network support services and other services to cinema operators, primarily in the United States. Many of our customers choose annual managed service arrangements for maintenance and repair services. We also provide maintenance services to customers on a time and materials basis. Our field service and Network Operations Center ("NOC") staff work hand in hand to monitor and resolve system and other issues for our customers. Our NOC, staffed by software engineers and systems technicians, operates 24/7/365 and monitors our customers networked equipment remotely, often providing proactive solutions to systems issues before they cause system failures. In March 2022, we launched Strong Studios, Inc. ("Strong Studios"), a Delaware corporation and a wholly owned subsidiary of Strong Technical Services, Inc. ("STS"). The goal in launching Strong Studios is to expand our Entertainment Business to include content creation and production of feature films and series. The launch of Strong Studios is intended to further diversify our revenue streams and increase our addressable markets, while leveraging and expanding our existing relationships in the industry. The coronavirus pandemic ("COVID-19") and inflationary pressures have been posing and may continue to pose challenges for our business. The COVID-19 global pandemic resulted in a significant impact to our customers and their ability and willingness to purchase our products and services. A significant number of our customers temporarily ceased operations at times during the pandemic, some of which continue to operate under COVID-19 restrictions. As such, we have experienced, and may continue to experience an impact on our results of operations. Key Trends Driving our Markets The following trends positively impact the outlook for the entertainment industry: Post-COVID-19 Recovery — We believe there is pent-up demand for out-of-home entertainment that will drive favorable trends post-COVID-19 in the cinema exhibition and theme park industries. For example: Avatar: The Way of Water ranks in the top 10 of highest grossing films globally of all time Domestic box office gross receipts during 2022 increased approximately 64% over 2021 The Batman was IMAX s largest March opening since 2019 Spider-man ranks #3 of top grossing films domestically of all time Spider-man delivered Cinemark s biggest opening night of all time The industry-wide reopening post-COVID has resulted in a recovery of our revenue amounts: -1- Blockbuster Studio Releases – According to the Hollywood Reporter, "Box Office Rebound: "Exhibitor Carnage Is in the Past," the pace of Hollywood blockbuster movies scheduled for release to cinemas is poised to accelerate and is already creating stronger-than-expected demand trends. According to CNBC, 2023 is expected to have a much stronger slate of films than 2022, both in terms of number of films and diversity of content. These factors, along with the return of exclusive theatrical releases, is encouraging industry analysts who are predicting movie theaters to rebound to near pre-pandemic levels by 2023. Box Office Performance Driven by Hollywood Blockbusters Increasing Trend of Outsourcing in the Cinema Industry — We believe that cinema operators are increasing their use of outsourced services as they seek to reduce internal operating costs and maintain operational flexibility post-COVID-19. In September 2020, we became the exclusive provider of managed services for all of Marcus Theatres cinema locations nationwide. These managed services include 24x7x365 monitoring, technical support, and maintenance on all projection and audio equipment across more than 1,100 screens. Upgrade Cycle from Xenon to Laser Projection — We believe the transition from xenon projection to laser protection in the cinema exhibition industry will accelerate and continue over the next decade. Several exhibitors have publicly discussed plans to upgrade to an all-laser projection strategy, notably Cinemark and IMAX, to further improve the quality of the theatrical experience. In addition, in April 2022, AMC announced an agreement with Cinionic, Inc. to install Barco laser projectors in 3,500 of its U.S. auditoriums through 2026. We expect this upgrade cycle to drive increased demand for screen replacement as well as for our services to de-install, install and upgrade new and existing projection equipment. Consolidating Industry – The cinema exhibition industry was consolidating via mergers and acquisitions pre-COVID-19. We expect consolidation of the supplier side of the cinema exhibition industry to accelerate post-COVID-19. -2- Growing Demand for Content and Convergence of Streaming and Cinema – The global entertainment business continues to grow and evolve, with the following factors contributing to increasingly favorable environment for content. Spending for new content continues to rise — In 2022, the top nine streaming giants spent $140.5 billion on content, and with a projected 10% annual increase, they are expected to increase that spend to a combined $172 billion by 2025. Convergence of streaming and cinema — Amazon announced in November 2022 that they plan to spend $1 billion per year to produce movies for theatrical release. In March 2023, Apple also announced plans to invest $1 billion per year for content that will be released directly to theatres. Global subscribers to streaming services is up — Since 2019, the number of global customers subscribing to streaming video platforms has grown from 642 million to more than 1.1 billion, a 71% leap. Over the next few years, this rise is expected to continue to 1.6 billion in 2025. Competitive Strengths We believe the following strength and attributes position Strong Global Entertainment for accelerating growth. Partnerships with Industry Leaders — We believe our reputation for superior quality and customer service have made us the go-to screen provider for many of the leading operators in the industry. We provide projection screens and managed services to all of the top cinema operators in North America, including AMC, IMAX, Cinemark, Regal and many other regional cinema operators. We believe that we provide a majority of the large format projection screens used by the major operators in North America, including exclusive supply contracts with AMC and Cinemark, and we believe we also supply IMAX with substantially all of its projection screens globally. There is greater pressure on theaters to differentiate their experience from the at-home experience. We believe the global trend for premium entertainment plays to Strong Global Entertainment s strengths. The table below includes the top cinema companies in North America, all of which are our customers: Circuits Screens Sites Customer Exclusive AMC Entertainment Holdings, Inc.1 7,712 591 X X Regal Cinemas (Cineworld Group PLC)2 6,474 478 X Cinemark Holdings, Inc.1 4,392 318 X X Cinepolis3 4,317 516 X Cineplex Entertainment LP4 1,641 158 X Marcus Theaters Corp.5 1,053 84 X X 1)Represents the quantity in the United States as of December 2022, for which we are the exclusive supplier of screen products. 2)Represents the quantity in the United States as of December 2022. 3)Represents the quantity in the United States and Mexico as of February 2023. 4)Represents the quantity in Canada as of December 2022. 5)Represents the quantity in the United States as of December 2022, for which we are the exclusive provider of both screen products and technical services. Innovator in the Industry — We are constantly innovating as exemplified by our new, rapidly growing Eclipse curvilinear screen division which specially designs screens with proprietary coatings for maximum viewer engagement in media-based attractions and immersive projection environments. Our screens were used in the much publicized Van Gogh: The Immersive Experience exhibit that wowed audiences with its all-encompassing experience of art, light, sound, movement and imagination. In July 2021, we also collaborated with Illuminarium Intermediate (Cayman), LLC in Atlanta, Georgia and plan to assist them in other cities as they expand their sensory cinema business. Eclipse screens are also used in theme parks and military simulation applications. -3- Turn-Key, Vertically Integrated Partner — We offer a comprehensive turn-key solution for our customers, offering projection and audio equipment, projection screen systems, as well as installation, break/fix on demand and outsourced managed services providing customers with a one-stop shop for their needs. World-Class and Scalable Manufacturing and Research & Development ("R&D") — We manufacture our screens in an approximately 80,000 square-foot facility in Joliette, Quebec, Canada (the "Joliette Plant") that we plan to lease on a long term basis from Strong/MDI (as defined below). The Joliette Plant is unique with two 90-foot-high screen coating towers which allows us to produce and finish large screens to precise specifications. The Joliette Plant also includes polyvinyl chloride ("PVC") welding operations with programmable automations and areas dedicated to the manufacture of our paints and coatings used on all our screens, as well as dedicated in-house chemists and R&D capabilities. We believe that our quality control procedures, in-house paint and coating capabilities and the quality standards for the products that we manufacture contribute significantly to our reputation for high performance and reliability. Strong Studios launches with proven management and a portfolio of content and projects — In March 2022, we launched Strong Studios with an experienced team and the acquisition of rights to a slate of motion picture and television series from Landmark Studio Group LLC ("Landmark"), a Chicken Soup for the Soul Entertainment, Inc. (Nasdaq: CCSE) ("CSSE") company. One new scripted television series, Safehaven, commenced production in 2022 and another scripted television series, Flagrant, is expected to begin production in 2023. The Company has agreed to sell the distribution rights of Safehaven to Screen Media Ventures LLC ("SMV"), a CSSE subsidiary, for a total of $6.5 million and will also participate in a share of the profits of the series. Growth Strategy Increase Our Sales Efforts to Grow Our Customer Base and Increase Our Share of Our Customers Businesses — We have expanded our direct sales force to position Strong Global Entertainment to gain market share post-COVID-19. We intend to continue to increase our sales efforts to grow our customer base and increase the share of our existing customer s businesses. Geographic expansion — Although we believe we are a market leader in North America, we also believe we have a significant opportunity to expand our projection screen business and our services in the European and Asian markets. We have opened a new outsourced screen finishing facility in China and believe that local presence will allow us to better serve our existing customers in the market and potentially to expand our reach. We opened an outsourced finishing facility in Belgium and may pursue similar strategies in other markets to better serve our customers and open additional growth opportunities. Strategic Acquisitions and Industry Partnerships — We believe the cinema equipment and service markets are highly fragmented and that we can materially increase our revenues and scope through selected acquisitions and/or increased strategic partnerships with other players in the industry. In August 2021, we announced a preferred commercial relationship with Cinionic, Inc., the world s leading provider of laser cinema solutions, to enhance the services to operators across North America. We believe this relationship enhances our ability to service our valued customers by providing increased access to technology, better training for our technicians and will strengthen our global reach due to closer relationships with their international sales teams. Diversify Screen Business into Theme Parks and Other Non-Cinema Applications — Over the past several years, we began to diversify our business beyond cinema, including our Eclipse immersive product line and other products targeted to theme parks and immersive exhibits. Our Eclipse curvilinear screen division, designs screens with proprietary coatings for maximum viewer engagement in media-based attractions and immersive projection environments. In addition, the innovation of immersive art experiences reflects the market opportunity evidenced by the success of the nationwide tour of Van Gogh; The Immersive Experience, for which Strong Global Entertainment provided the projection screens. We believe Strong Global Entertainment is uniquely positioned to benefit from trends outside the theatrical cinema market. Capitalize on Laser Upgrade Cycle — Cinema operators have begun upgrading from Xenon lamp projectors to Laser projectors which we expect will drive additional demand for new screens and managed services. Laser projectors offer better quality than lamp alternatives, require less frequent bulb replacement, and consume up to 80% less energy lowering overall operating costs for the exhibitor. -4- Recent Developments On March 3, 2022, Strong Studios, a wholly-owned subsidiary of STS, acquired, from Landmark, original feature films and television series, and has been assigned third party rights to content for global multiplatform distribution. The transaction entailed the acquisition of certain projects which are in varying stages of development, none of which have, as yet, produced revenue. In connection with such assignment and purchase, Strong Studios agreed to pay to Landmark approximately $1.7 million in four separate payments, $0.3 million of which was paid by FG Group Holdings upon the closing of the transaction. Strong Studios expects to reimburse FG Group Holdings for the $0.3 million paid to Landmark. We also have agreed to issue to Landmark no later than 10 days after the consummation of this offering, a warrant to purchase up to 150,000 of our Common Shares of the Company, exercisable for three years beginning six months after the consummation of this offering, at an exercise price equal to the per-share offering price of our Common Shares in this offering (the "Landmark Warrant"). The Landmark Warrant allows for cashless exercise in certain limited circumstances and provides for certain registration rights for such warrant shares. The Company reviewed the acquisition of the projects from Landmark from an accounting perspective and concluded substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets. Therefore, the Company determined the transaction was not the acquisition of a business, but instead should be treated as an asset acquisition. Costs of acquiring and producing films and television programs are capitalized when incurred. In connection with the transaction, the Company allocated the $1.7 million acquisition price to the various projects under development based upon the historical costs incurred by Landmark, which the Company believes approximates fair value. The Company also recorded a liability for the $1.4 million of remaining installment payments it will make to Landmark. Finally, the Company also determined the fair value of the Landmark Warrant and allocated an additional $0.4 million to the various projects under development. The Company will recognize the remaining payment obligations due to Landmark when the contingencies are resolved and the amounts become payable. During the second quarter of 2022, Safehaven 2022, Inc. ("Safehaven 2022") was established to manage the production and financing of the Safehaven television series, one of the projects acquired from Landmark. Strong Studios owns 49% of Safehaven 2022 and the remaining 51% is owned by Unbounded Services, LLC ("Unbounded"). Unbounded will serve as a co-producer on the project and will manage the day to day activities of the project. As part of the Landmark transaction, Strong Studios entered into a distribution agreement with SMV, pursuant to which SMV agreed to purchase the global distribution rights to Safehaven 2022 for $6.5 million upon delivery. This distribution agreement, along with the project s intellectual property, was assigned to Safehaven 2022 and serves as collateral for the production financing at Safehaven 2022. The Company reviewed its ownership in Safehaven 2022 and concluded that it has significant influence, but not a controlling interest, in Safehaven 2022 based on its ownership being less than 50% along with having one of three representatives on the board. The Company also reviewed whether it otherwise had the power to make decisions that significantly impact the economic performance of Safehaven 2022 and concluded that it did not control the entity and is not the primary beneficiary. Accordingly, the Company will apply the equity method of accounting to its equity holding in Safehaven 2022 and will record its proportionate share of the net income/loss resulting from the equity holding as a new single line item captioned "equity method holding income (loss)" on its statement of operations. In September 2022, Strong/MDI announced the introduction of its new HGA ReAct 1.4 Screen. The HGA React 1.4 was specifically developed for the new generation of high-resolution laser projectors. In September 2022, STS introduced its new digital content delivery service. The new service enables STS customers to upload and distribute content from one convenient digital feed rather than downloading content files from multiple file-hosting services. In December 2022, Strong/MDI announced that it entered into an exclusive three-year cinema screen supply agreement with Marcus Theatres. In January 2023, Strong Studios amended its agreement with SMV resulting in Strong Studios retaining the worldwide global distribution rights for the Flagrant series and releasing SMV from the obligation to purchase the distribution rights for the series. In January 2023, Strong/MDI entered into a demand credit agreement (the "2023 Credit Agreement") with a bank, which amended and restated the 2021 Credit Agreement (as defined below). The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$5.0 million and a 20-year installment loan for up to CAD$3.1 million. In connection with the Separation, the amount available under the revolving line of credit decreased to CAD$3.4 million, and the bank has provided an undertaking to Strong/MDI to a release of security required to effect the Separation. Industry Challenges Recent challenges and negative trends for the industry and the Company include the continuing impact of COVID-19 on the global economy and on cinema and amusement operators, and as detailed below: Our business and the operations of our customers were severely impacted by the pandemic, and may continue to be impacted in future periods as a result of the pandemic. Although, most cinema operators in the United States are now open and studios have started to accelerate the release of new content to exhibitors, the COVID-19 pandemic and the additional variants may increase the possibility of additional closures or other measures in the future that could negatively impact the industry, and the Company s business as a result. In addition, COVID-19 accelerated the adoption of streaming and changes to the theatrical window which may negatively impact the cinema exhibition industry in the future. We have also seen inflationary pressures and disruptions in our supply chain recently that could impact the availability of certain products we sell to our customers, as well as the cost of materials, labor and freight, which could pose challenges to our ability to maintain or increase margins. For example, certain projector manufacturers are experiencing supply chain constraints, which could impact lead times for delivery of laser projectors to our customers and thereby affect the timing and amount of our revenues. Certain of the larger exhibitors in the cinema industry carry high levels of debt on their balance sheets resulting from pre-COVID acquisitions. Cineworld Group Plc, the parent company of Regal Cinemas and one of the largest cinema operators, initiated Chapter 11 bankruptcy proceedings on September 7, 2022 to restructure their balance sheet and alleviate their debt burden. Financial stress at our customers in general, and the Cineworld proceedings specifically, could impact our business by reducing overall exhibitor purchasing and payment on accounts receivable. The Separation Currently, we are a wholly-owned subsidiary of Strong/MDI Screen Systems, Inc. ("Strong/MDI"), a company incorporated under the laws of Quebec, Canada, which owns all of our outstanding Common Shares and will own all of our outstanding Class B Shares. Strong/MDI owns all of the outstanding Common Shares of Strong/MDI Screen Systems, Inc., a company incorporated under the laws of British Columbia ("Strong Entertainment Subco"). Strong/MDI is wholly-owned by FG Group Holdings. FG Group Holdings also owns all of the outstanding capital stock of STS. -5- Prior to the completion of this offering, we will enter into various agreements that will govern the Separation of the Entertainment Business from FG Group Holdings and its contribution to us. A summary of these agreements is set forth under the heading "Certain Relationships and Related Party Transactions". These agreements will take effect immediately prior to the closing of this offering and provide for, among other things, the contribution: (i) from Strong/MDI to Strong Entertainment Subco of assets comprising Strong/MDI s operating business, except the Joliette Plant and the installment 20-year loan collateralized by the Joliette Plant, pursuant to the Master Asset Purchase Agreement; (ii) from FG Group Holdings to STS of a limited number of contracts and intellectual property used in the Entertainment Business, pursuant to an asset transfer agreement between FG Group Holdings and STS (the "FG Group Holdings Asset Transfer Agreement"); and (iii) of 100% of the outstanding Common Shares of Strong Entertainment Subco and 100% of the outstanding shares of capital stock of STS through certain share transfer agreements between FG Group Holdings and Strong/MDI and Strong/MDI and us (collectively, the "Share Transfer Agreements"). In addition to the above contributions, Strong/MDI has committed under the Master Asset Purchase Agreement (upon closing of this offering), to lease the Joliette Plant to Strong Entertainment Subco under a long term lease agreement (fifteen (15) year lease, with the option of Strong Entertainment Subco to renew for five (5) consecutive periods of five years each, with a right of first refusal to purchase the Joliette Plant in the event that Strong/MDI wishes to sell the property to a third-party in the future) (the "Joliette Plant Lease")." For more information regarding the assets and liabilities to be transferred to us, see our unaudited pro forma condensed combined financial statements and the related notes included elsewhere in this prospectus. As a result of the transactions noted above, we will lease the Joliette Plant under a long-term lease, and acquire all of the assets and liabilities related to the screen manufacturing business held by Strong/MDI and/or FG Group Holdings and all of the shares of STS. In exchange, we will issue to Strong/MDI additional Common Shares and Class B Shares. In addition, in connection with the Separation, effective upon the closing of this offering, we and FG Group Holdings intend to enter into a management services agreement (the "Management Services Agreement") that will provide a framework for our ongoing relationship with FG Group Holdings. For a description of this agreement, see "Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings—Management Services Agreement." We refer to the separation transactions, as described in the section titled "The Separation Transaction" as the "Separation." The diagram below depicts a simplified version of our current organizational structure, together with the governing law of each corporate entity. -6- The diagram below depicts a simplified version of our organizational structure immediately following the completion of the Separation and the closing of this offering, together with the governing law of each corporate entity, assuming the underwriters do not exercise their over-allotment option. * The percentage calculation does not take into account the restricted stock units ("RSUs") to be issued to our directors and officers upon the completion of this offering (see "Executive and Director Compensation—Long-Term Incentives—Equity Grants"). Controlled Company Immediately following the completion of this offering, we expect that FG Group Holdings will control approximately 85.7% of our outstanding Common Shares (or approximately 83.9% if the representative of the underwriters exercises its over-allotment option in full), which percentage calculation does not take into account the RSUs to be issued to our directors and officers upon the completion of this offering (see "Executive and Director Compensation—Long-Term Incentives—Equity Grants"), and 100% of our Class B Shares. Accordingly, we will be considered a "controlled company" under the NYSE American rules. Under these rules, a "controlled company" may elect not to comply with certain corporate governance requirements, including the requirement to have a board comprised of a majority of independent directors. We do not intend to take advantage of these exemptions following the completion of this offering, but may do so. See "Management— Director Independence and Controlled Company Exception." Emerging Growth Company Status We are an "emerging growth company" within the meaning of the JOBS Act. For as long as we are an emerging growth company, we will not be required to comply with certain requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these exemptions until we are no longer an emerging growth company. We may remain an emerging growth company for up to five years, although we will lose that status as of the last day of the fiscal year in which we have more than $1.235 billion of revenues, have more than $700 million in market value of our Common Shares held by non-affiliates (assessed as of the most recently completed second quarter), or if we issue more than $1.0 billion of non-convertible debt over a three-year period. -7- In addition, Section 107 of the JOBS Act also provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have irrevocably elected not to avail ourselves of this exemption and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Implications of Being a Smaller Reporting Company Additionally, we are a "smaller reporting company" as defined in Rule 10(f)(1) of Regulation S-K of the Securities Act ("Regulation S-K"). Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company for future fiscal years so long as (1) the market value of our Common Shares held by non-affiliates is less than $250 million as of the end of that year s second fiscal quarter, or (2) our annual revenues are less than $100 million for the previous fiscal year and the market value of our Common Shares held by non-affiliates does not equal or exceed $700 million as of the end of such future fiscal year s second fiscal quarter. Corporate Information We were incorporated on November 9, 2021, under the Business Corporations Act (British Columbia) (the "BCBCA"). Our principal executive offices are located at 5960 Fairview Road, Suite 275, Charlotte, NC 28210, and our telephone number is (704) 471-6784. The Company s website address is www.strong-entertainment.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our Common Shares. -8- Summary Risk Factors We face numerous risks that could materially affect our business, financial condition, results of operations, and cash flows. Many of the risks summarized below and described herein historically relate to our operations as part of FG Group Holdings. Following the Separation, these risks will apply to us and our business going forward. Our management believes that the most significant of these risks include the following: Our operating results could be materially harmed if we are unable to accurately forecast demand for our products and services and adequately manage our inventory. The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our financial condition, results of operations and strategic objectives. We may fail to achieve the expected benefits of the Separation, including enhancing strategic and management focus, providing a distinct investment identity and allowing us to efficiently allocate resources and capital. Any failure to maintain the security of information relating to our customers, employees and suppliers, whether as a result of cybersecurity attacks or otherwise, could expose us to litigation, government enforcement actions and costly response measures, and could disrupt our operations and adversely affect our business and reputation. Any potential future acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or joint ventures may subject us to significant risks, any of which could harm our business. We have no history of operating as an independent company, and our historical and unaudited pro forma financial information is not necessarily representative of the results that we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results. Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Separation. -9- Some of our directors and officers may have actual or potential conflicts of interest because of their equity ownership in FG Group Holdings, and some of our officers and directors may have actual or potential conflicts of interest because they also serve as officers and directors of FG Group Holdings. We need to make certain capital investments to bring the Joliette Plant into compliance with applicable environmental standards and certain building codes, which if not done properly or quickly enough could result in financial penalties and potential interruptions in production. There may not be an active, liquid trading market for our Common Shares. We will be a "controlled company" within the meaning of the rules of the NYSE American and, as a result, will qualify for exemptions from certain corporate governance requirements. While we do not intend to avail ourselves of these exemptions, we may do so, and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to such requirements. The special rights and restrictions attached to the Class B Shares, including the transfer restrictions and right to nominate or elect fifty percent (50%) or a majority of our board could impede or discourage an acquisition attempt or other transaction that some, or a majority, of shareholders might believe to be in its best interests or in which a shareholder might receive a premium for the Company s Common Shares over the market price of the Common Shares. Such a right will also limit the right of holders of our Common Shares to nominate or elect directors to our board. The future sales by FG Group Holdings or others of our Common Shares, or the perception that such sales may occur, could depress the price of our Common Shares. -10- We are governed by the corporate laws of British Columbia, Canada, which in some cases have a different effect on the rights of shareholders than the corporate laws of the United States. Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation. We are entering a new line of business with the launch of Strong Studios, which could require additional capital and increase the volatility of our reported revenues and results of operations. Canada does not have a system of exchange controls, and control of the Company by "non-Canadians" may be subject to review and further government action. For further discussion of these and other risks, see "Risk Factors" beginning on page 17. -11- The Offering Common Shares offered by us 1,000,000 Common Shares Common Shares outstanding prior to this offering 6,000,000 Common Shares (after issuing 5,999,999 Common Shares to Strong/MDI) Common Shares to be outstanding after this offering 7,000,000 Common Shares Option to purchase additional Common Shares We have granted the representative of the underwriters a 45-day option to purchase up to 150,000 additional Common Shares from us at the public offering price, less underwriting discounts and commissions. Use of proceeds We estimate the net proceeds to us in this offering will be approximately $2.3 million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. This assumes an initial public offering price of $5.00 per share; and assumes no exercise of the underwriters over-allotment option to purchase additional Common Shares. We plan to use the proceeds of the offering for general corporate purposes, which may include (i) working capital, (ii) capital expenditures, including those related to bringing the Joliette Plant (which we expect to be leased to us post-Separation pursuant to the Joliette Plant Lease) into compliance with certain codes and environmental permits, and a potential expansion of the Joliette Plant, (iii) operational purposes, including working capital to accelerate growth in our new content business and expand our cinema screen and services offerings and (iv) potential acquisitions in complementary businesses. While we do not currently have any agreement with respect to an acquisition, we intend to evaluate potential opportunities and could use proceeds of the offering to invest in one or more complementary businesses. The principal reasons for this offering are to increase our working capital, create a public market for our Common Shares, improve our ability to access the capital markets in the future, and to provide capital for general corporate purposes. See "Use of Proceeds" for a more complete description of the intended use of proceeds from this offering. Dividend policy We do not anticipate declaring or paying any cash dividends to holders of our Common Shares in the foreseeable future. We currently intend to retain future earnings, if any, to finance the growth of our business. See "Dividend Policy." Risk factors Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 17 and the other information in this prospectus for a discussion of the factors you should consider carefully before you decide to invest in our Common Shares. NYSE American trading symbol Our Common Shares have been approved for listing on the NYSE American under the symbol "SGE," subject to official notice of issuance. Transfer Agent and Registrar The transfer agent and registrar for our Common Shares is Broadridge Corporate Issuer Solutions, Inc. Lock-up Agreements We have agreed with the representative that, without the prior written consent of the representative, subject to certain exceptions, our directors and executive officers, for a period of twelve (12) months, and we and any other holder of our outstanding Common Shares, for a period of twelve (12) months, will not in either case, following the date of this prospectus, offer or contract to sell any of our Common Shares. See "Underwriting." Unless otherwise indicated, all information in this prospectus, including information regarding the number of Common Shares outstanding: assumes an initial public offering price of $5.00 per share; assumes no exercise of the underwriters over-allotment option to purchase additional Common Shares, if any; assumes no exercise of representative s warrants to be issued upon consummation of this offering, which would be for a maximum of 57,500 shares underlying such representative s warrants assuming a total of 1,150,000 shares are issued in this offering with the exercise of the underwriters over-allotment option, at an exercise price equal to 125% of the initial offering price; gives effect to the Separation and related transactions; assumes no issuance or exercise of the Landmark Warrant, which is to be issued within 10 days of the closing of this offering, and which exercise would be for a maximum of 150,000 shares underlying such Landmark Warrant at an exercise price equal to the initial offering price; excludes an aggregate 1,000,000 Common Shares reserved for issuance under our 2023 Share Compensation Plan that we adopted in connection with this offering, which includes the Common Shares underlying (i) the aggregate of 160,000 RSUs to be issued to our officers upon completion of this offering, with the weighted average grant date fair value of $5.00 per share, the assumed initial public offering price, one-half of which will vest immediately, and one-half of which will vest in one-third annual installments, beginning on the first anniversary of the grant date, subject to continued employment, (ii) the aggregate of 94,000 RSUs to be issued to our non-officer employees with the weighted average grant date fair value of $5.00 per share, the assumed initial public offering price, with the RSUs vesting in three annual installments, beginning on the first anniversary of the grant date, subject to continued employment, (iii) the aggregate of 156,000 stock options to be issued to our non-officer employees with the exercise price of $5.00 per share, the assumed initial public offering price, with the stock options vesting in five annual installments, beginning on the first anniversary of the grant date, subject to continued employment, (iv) the aggregate of 90,000 RSUs to be issued to our directors upon completion of this offering, all of which will vest immediately and (v) the aggregate of 20,000 RSUs with an aggregated value of $100,000 and the weighted average grant date fair value of $5.00 per share, the assumed initial public offering price, to be issued to the four non-employee directors upon completion of this offering, all of which will vest on the anniversary of the grant date, subject to continued service. See "Executive and Director Compensation—Long-Term Incentives—Equity Grants". -12- SUMMARY HISTORICAL AND OTHER COMBINED FINANCIAL DATA The summary historical condensed combined statements of income of Strong Global Entertainment for the years ended December 31, 2022 and December 31, 2021 have been derived from the audited combined financial statements of Strong Global Entertainment included elsewhere in this prospectus. The selected historical condensed combined statements of income of Strong Global Entertainment for the years ended December 31, 2020 and December 31, 2019 have been derived from the audited combined financial statements of Strong Global Entertainment not included elsewhere in this prospectus. Our historical results are not necessarily indicative of our results in any future period. To ensure a full understanding of the summary financial data, the information presented below should be reviewed in combination with the audited combined financial statements and the related notes thereto included elsewhere in this prospectus. This information is only a summary and should be read in conjunction with "Management s Discussion and Analysis of Financial Condition and Results of Operations of Strong Global Entertainment" and the financial statements of Strong Global Entertainment and the notes thereto included elsewhere in this prospectus. Our historical combined financial statements, which are discussed below, are prepared on a stand-alone basis in accordance with U.S. generally accepted accounting principles ("GAAP") and are derived from FG Group Holdings consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributed to our operations, and include allocations of expenses from FG Group Holdings. Our combined results are not necessarily indicative of our future performance and do not reflect what our financial performance would have been had we been a stand-alone public company during the periods presented. FG Group Holdings currently provides certain services to us, and costs associated with these functions have been allocated to us. The allocations include costs related to corporate services, such as information technology, legal, finance and accounting, human resources, tax, treasury, and other services. These costs were allocated on a basis of revenue, headcount or other measures we have determined as reasonable. Stock-based compensation includes expense attributable to our employees are also allocated from FG Group Holdings. These allocations are reflected within operating expenses in our combined statements of income. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these allocations may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods prior to the offering or of the costs we will incur in the future. Following the completion of this offering, we expect FG Group Holdings to continue to provide certain services to us and we expect to provide certain services to FG Group Holdings pursuant to the Management Services Agreement. See the section titled "Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings – Management Services Agreement". Pursuant to the Management Services Agreement, we will charge FG Group Holdings a fee based on our actual costs for providing those services to FG Group Holdings (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). In turn, FG Group Holdings will also charge us a fee that is based on its actual costs for providing those services to us in the future (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). In addition, we expect the Joliette Plant will be leased to us post-Separation pursuant to the Joliette Plant Lease to be entered into as part of the Separation between Strong Entertainment Subco and Strong/MDI, which will result in additional expense in the future. Following the completion of this offering, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We will be required to establish procedures and practices as a stand-alone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including audit, investor relations, stock administration and regulatory compliance costs. These additional costs will differ from the costs that were historically allocated to us from FG Group Holdings. -13- Years Ended December 31, 2022 2021 2020 2019 Statement of Income Data: Net product sales $ 30,119 $ 19,631 $ 15,987 $ 26,448 Net service revenues 9,748 6,341 4,833 10,921 Total net revenues 39,867 25,972 20,820 37,369 Cost of products sold 22,729 14,078 10,980 16,369 Cost of services 7,592 4,526 5,193 8,842 Total cost of revenues 30,321 18,604 16,173 25,211 Gross profit 9,546 7,368 4,647 12,158 Selling and administrative expenses: Selling 2,261 1,781 1,656 2,080 Administrative 5,466 4,387 4,312 4,700 Total selling and administrative expenses 7,727 6,168 5,968 6,780 Loss on disposal of assets - - (33 ) (69 ) Income (loss) from operations 1,819 1,200 (1,354 ) 5,309 Other income (expense): Interest income - - - - Interest expense (134 ) (107 ) (112 ) (139 ) Fair value adjustment to notes receivable - - - (2,857 ) Foreign transaction income (loss) 528 (65 ) (292 ) (288 ) Other income, net 22 153 3,129 1,732 Total other income (expense) 416 (19 ) 2,725 (1,552 ) Income before income taxes 2,235 1,181 1,371 3,757 Income tax (expense) benefit (535 ) (360 ) 74 (1,864 ) Net income $ 1,700 $ 821 $ 1,445 $ 1,893 December 31, 2022 Actual Pro Forma As Adjusted(1) Balance Sheet Data: Assets: Cash and cash equivalents $ 3,615 $ 5,889 Accounts receivable, net 6,148 6,148 Inventories, net 3,389 3,389 Property, plant and equipment, net 4,607 1,471 Liabilities and equity: Accounts payable, accrued expenses and other current liabilities $ 12,222 $ 10,622 Short and long-term debt 2,672 383 Lease obligations 905 5,481 Total equity 9,204 10,311 (1) The pro forma as adjusted balance sheet data in the table above reflects (i) the Separation and (ii) the sale and issuance by us of our Common Shares in this offering, based upon the receipt of an estimated of $2.3 million of net proceeds therefrom, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. This assumes no exercise of the underwriters over-allotment option to purchase additional Common Shares. -14- Years Ended December 31, 2022 2021 2020 2019 Statement of Cash Flow Data: Net cash provided by operating activities $157 $4,831 $4,023 $4,185 Net cash used in investing activities (712) (394) (467) (1,597) Net cash used in financing activities (394) (3,334) (3,353) (2,561) Other Supplemental Metrics: Gross margin 23.9% 28.4% 22.3% 32.5% EBITDA(1) $3,066 $2,194 $2,353 $4,792 Adjusted EBITDA 2,661 725 (119) 6,984 (1) Use of Non-GAAP Measures We have prepared our combined financial statements in accordance with United States GAAP. In addition to disclosing financial results prepared in accordance with GAAP, we disclose information regarding Adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income to exclude income taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes, share-based compensation, fair value adjustments, severance, foreign currency transaction gains (losses), gains on insurance recoveries and other cash and non-cash charges and gains. EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating our operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of our operations that, when coupled with the GAAP results, provides a more complete understanding of our financial results. EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or to net cash from operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating our performance. -15- EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are (i) they do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) they do not reflect changes in, or cash requirements for, our working capital needs, (iii) EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements, (v) they do not adjust for all non-cash income or expense items that are reflected in our statements of cash flows, (vi) they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations, and (vii) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. We believe EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). We also present EBITDA and Adjusted EBITDA because (i) we believe these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use EBITDA and Adjusted EBITDA internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors. The following table presents a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA: EBITDA and Adjusted EBITDA Data (unaudited): Years Ended December 31, 2022 2021 2020 2019 Net income $1,700 $821 $1,445 $1,893 Interest expense, net 134 107 112 139 Income tax expense (benefit) 535 360 (74) 1,864 Depreciation and amortization 697 906 870 896 EBITDA 3,066 2,194 2,353 4,792 Stock-based compensation 123 175 232 213 Loss on disposal of assets and impairment charges - - 33 69 Foreign currency transaction (gain) loss (528) 65 292 288 Gain on property and casualty and business interruption insurance recoveries - (148) (3,107) (1,235) Employee retention credit - (1,576) - - Fair value adjustment to notes receivable - - - 2,857 Severance and other - 15 78 - Adjusted EBITDA $2,661 $725 $(119) $6,984 -16- RISK FACTORS An investment in our Common Shares involves a high degree of risk. You should consider carefully the risks described below, together with the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus, for information regarding the risks associated with our business and ownership of our Common Shares. If any of the following risks actually occur, our business, financial condition, results of operations, and cash flows could suffer significantly. In any of these cases, the market price of our Common Shares could decline. The risks described below that relate to the prior operations, business activities, and history of the Entertainment Business relate to those operations as part of FG Group Holdings, and not to our operations as an independent business. However, following the Separation, our management believes that the risks described below will continue to apply to us as an independent business. Risks Related to Our Business We have no assurance of future business from any of our customers. We estimate future revenue associated with customers and customer prospects for purposes of financial planning and measurement of our sales pipeline, but we have limited contractual assurance of future business from our customers. While we do have arrangements with some of our customers, customers are not required to purchase any minimum amounts, and could stop doing business with us. Some customers maintain simultaneous relationships with our competitors, and could shift more of their business away from us if they choose to do so in the future. Geopolitical conditions, military conflicts, acts or threats of terrorism, natural disasters, pandemics, and other conditions or events beyond our control could adversely affect us. Geopolitical conditions, military conflicts (including Russia s invasion of Ukraine), acts or threats of terrorism, natural disasters, pandemics (including the COVID-19 pandemic), and other conditions or events beyond our control may adversely affect our business, results of operations, financial condition, or prospects. For example, military conflicts, acts or threats of terrorism, and political, financial, or military actions taken in response could adversely affect general economic, business, or market conditions and, in turn, us, especially as an intermediary within the financial system. In addition, nation states engaged in warfare or other hostile actions may directly or indirectly use cyberattacks against financial systems and financial-services companies like us to exert pressure on one another or other countries with influence or interests at stake. We also could be negatively impacted if our key personnel, a significant number of our employees, or our systems or infrastructure were to become unavailable or damaged due to a pandemic, natural disaster, war, act of terrorism, accident, or similar cause. These same risks and uncertainties arise too for the service providers and counterparties on whom we depend as well as their own third-party service providers and counterparties. The most notable impact of COVID-19 on our results of operations was the significant impact to our customers, specifically those in the entertainment and advertising industries, and their ability and willingness to purchase our products and services. A significant number of our customers temporarily ceased operations during the pandemic. For instance, many movie theaters and other entertainment centers were forced to close or curtail their hours and, correspondingly, terminated or deferred their non-essential capital expenditures. The COVID-19 pandemic also adversely affected film production and the pipeline of feature films available in the short- and long-term. We were also required to temporarily close our screen manufacturing facility in Canada due to the governmental response to COVID-19, experienced lower revenues from field services, and saw a reduction in non-recurring time and materials-based services. The impact of any future outbreak of contagious disease, or a worsening or resurgence of COVID-19, is not readily ascertainable, is uncertain and cannot be predicted, but could have an adverse impact on the Company s business, financial condition and results of operations. In the case of Russia s invasion of Ukraine, security risks as well as increases in fuel and other commodity costs, supply-chain disruptions, and associated inflationary pressures have impacted our business the most. We may also experience one or more of the following conditions that could have a material adverse impact on our business operations and financial condition: adverse effects on our strategic partners businesses or on the businesses of companies in which we hold equity stakes; impairment charges; extreme currency exchange-rate fluctuations; inability to recover costs from insurance carriers; and business continuity concerns for us, our customers and our third-party vendors. These conditions and events and others like them are highly complex and inherently uncertain, and their effect on our business, results of operations, financial condition, and prospects in the future cannot be reliably predicted. -17- There is no guarantee that we will be able to service and retain or renew existing agreements, maintain relationships with any of our customers or business partners on acceptable terms or at all, or collect amounts owed to us from insolvent customers or business partners. The loss of any of our large customers could have a material adverse impact on our business. Our operating results could be materially harmed if we are unable to accurately forecast demand for our products and services and adequately manage our inventory. To ensure adequate inventory supply, we forecast inventory needs, place orders and plan personnel levels based on estimates of future demand. Our ability to accurately forecast demand for our products and services is limited and could be affected by many factors, including an increase or decrease in customer demand for our products and services or for products and services of our competitors, product and service introductions by competitors, unanticipated changes in general market conditions, effects of the COVID-19 pandemic and the weakening of economic conditions or consumer confidence in future economic conditions. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale. Conversely, if we underestimate customer demand for our products and services, we may not be able to deliver products to meet requirements, and this could result in damage to our brand and customer relationships and adversely affect our revenue and operating results. Interruptions of, or higher prices of, components from our suppliers may affect our results of operations and financial performance. A portion of our revenues is dependent on the distribution of products supplied by various key suppliers. If we fail to maintain satisfactory relationships with our suppliers, or if our suppliers experience significant financial difficulties, we could experience difficulty in obtaining needed goods and services. Some suppliers could also decide to reduce inventories or raise prices to increase cash flow. The loss of any one or more of our suppliers could have an adverse effect on our business, and we may be unable to secure alternative manufacturing arrangements. Even if we are able to obtain alternative manufacturing arrangements, such arrangements may not be on terms similar to our current arrangements, or we may be forced to accept less favorable terms in order to secure a supplier as quickly as possible so as to minimize the impact on our business operations. In addition, any required changes in our suppliers could cause delays in our operations and increase our production costs and new suppliers may not be able to meet our production demands as to volume, quality, or timeliness. -18- The markets for our products and services are highly competitive and if market share is lost, we may be unable to lower our cost structure quickly enough to offset the loss of revenue. The domestic and international markets for our product lines are highly competitive, evolving and subject to rapid technological and other changes. We expect the intensity of competition in each of these areas to continue in the future for a number of reasons including: Certain of the competitors for our digital equipment have longer operating histories and greater financial, technical, marketing and other resources than we do, which, among other things, may permit them to adopt aggressive pricing policies. As a result, we may suffer from pricing pressures that could adversely affect our ability to generate revenues and our results of operations. Some of our competitors also have greater name and brand recognition and a larger customer base than us. Some of our competitors are manufacturing their own digital equipment while we employ a distribution business model through our distribution agreements with NEC Display Solutions of America, Inc. ("NEC"), Barco, Inc. ("Barco") and certain other suppliers. As a result, we may suffer from pricing pressures that could adversely affect our ability to generate revenues. Suppliers could decide to utilize their current sales force to supply their products directly to customers rather than utilizing channels. In addition, we face competition for consumer attention from other forms of entertainment, including streaming services and other forms of entertainment that may impact the cinema industry. Other forms of entertainment may be more attractive to consumers than those utilizing our technologies, which could harm our business, prospects and operating results. For these and other reasons, we must continue to enhance our technologies and our existing products and services and introduce new, high-quality technologies, products and services to meet the wide variety of competitive pressures that we face. If we are unable to compete successfully, our business, prospects and results of operations will be materially adversely impacted. -19- We depend in part on distributors, dealers and resellers to sell and market our products and services, and our failure to maintain and further develop our sales channels could harm our business. In addition to our in-house sales force, we sell some of our products and services through distributors, dealers and resellers. As we do not have long-term contracts and these agreements may be cancelled at any time, any changes to our current mix of distributors could adversely affect our gross margin and could negatively affect both our brand image and our reputation. If our distributors, dealers and resellers are not successful in selling our products, our revenue would decrease. Specifically, the shutdowns of local and state economies as a result of the COVID-19 pandemic have and may continue in the future to adversely affect the operations of our dealers and resellers. In addition, our success in expanding and entering into new markets internationally will depend on our ability to establish relationships with new distributors. If we do not maintain our relationship with existing distributors or develop relationships with new distributors, dealers and resellers, our ability to grow our business and sell our products and services could be adversely affected and our business may be harmed. Certain of our officers and directors are engaged in other activities and may not devote sufficient time to our affairs, which may affect our ability to conduct operations and generate revenues. Certain of our officers and directors have existing responsibilities to provide management and services to other entities including FG Group Holdings. For example, Mark D. Roberson, our Chief Executive Officer and director, Todd R. Major, our Chief Financial Officer, Secretary and Treasurer, and D. Kyle Cerminara, our Chairman, also have responsibilities as FG Group Holdings Chief Executive Officer, Chief Financial Officer and Chairman, respectively. While post-Separation, the majority of FG Group Holdings operating business will have moved to the Company, Messrs. Roberson and Major will continue to act as officers of FG Group Holdings, with corresponding responsibilities, and will therefore still spend some of their time on the business of FG Group Holdings. However, post-Separation, we expect Messrs. Roberson and Major to each spend a majority, but not all, of their time on the business of our Company. As a result, demands for the time and resources from our Company and other entities, including FG Group Holdings, may conflict from time to time. Because we rely primarily on each of our officers and directors to manage our company, our officers and directors limited devotion of time and resources to our business may negatively impact the operation of our business. If we are unable to maintain our brand and reputation, our business, results of operations and prospects could be materially harmed. Our business, results of operations and prospects depend, in part, on maintaining and strengthening our brand and reputation for providing high quality products and services. Reputational value is based in large part on perceptions. Although reputations may take decades to build, any negative incidents can quickly erode trust and confidence, particularly if they result in adverse publicity, governmental investigations or litigation. If problems with our products cause operational disruption or other difficulties, or there are delays or other issues with the delivery of our products or services, our brand and reputation could be diminished. Damage to our reputation could also arise from actual or perceived legal violations, product safety issues, data security breaches, actual or perceived poor employee relations, actual or perceived poor service, actual or perceived poor privacy practices, operational or sustainability issues, actual or perceived ethical issues or other events within or outside of our control that generate negative publicity with respect to us. Any event that has the potential to negatively impact our reputation could lead to lost sales, loss of new opportunities and retention and recruiting difficulties. Further, we are a newly formed company, and we have no history of operating as an independent company, and our brand and reputation may be aligned with that of FG Group Holdings, which means that any harm to FG Group Holdings brand may harm our brand, and similarly, it may take time to promote our brand and reputation as a separate independent company. If we fail to promote and maintain our brand and reputation successfully, our business, results of operations and prospects could be materially harmed. -20- Our operating margins may decline as a result of increasing product costs. Our business is subject to pressure on pricing and costs caused by many factors, including supply chain disruption, intense competition, the cost of components used in our products, labor costs, constrained sourcing capacity, inflationary pressure, pressure from customers to reduce the prices we charge for our products and services, and changes in consumer demand. While inflation has been relatively low in recent years, it began to increase in the second half of 2021. Factors including global supply chain disruptions have resulted in shortages in labor, materials and services. Such shortages have resulted in cost increases, particularly for labor, and could continue to increase. Costs for the raw materials used in the manufacture of our products are affected by, among other things, energy prices, demand, fluctuations in commodity prices and currency, shipping costs and other factors that are generally unpredictable and beyond our control such as the escalating military conflict between Russia and Ukraine. Increases in the cost of raw materials used to manufacture our products or in the cost of labor and other costs of doing business internationally could have an adverse effect on, among other things, the cost of our products, gross margins, operating results, financial condition, and cash flows. Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business and operating results. Our operations and performance may depend on global, regional, economic and geopolitical conditions. Russia s invasion and military attacks on Ukraine have triggered significant sanctions from North American and European leaders. These events continue to develop and escalate, creating increasingly volatile global economic conditions. Resulting changes in North American trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a "trade war." A trade war could result in increased costs for raw materials that we use in our manufacturing and could otherwise limit our ability to sell our products abroad. These increased costs would have a negative effect on our financial condition and profitability. Furthermore, events like the military conflict between Russia and Ukraine may increase the likelihood of supply interruptions and further hinder our ability to find the materials we need to make our products. If the conflict between Russia and Ukraine continues for a long period of time, or if other countries become further involved in the conflict, we could face significant adverse effects to our business and financial condition. Our sales cycle can be long and timing of orders and shipments unpredictable, particularly with respect to large enterprises, which could harm our business and operating results. The timing of our sales is difficult to predict, and customers typically order screen and other distribution products with limited advance notice which impacts our ability to forecast revenue and manage operations. For our managed service offerings, the sales cycle can be long and involve educating and achieving buy-in from multiple parts of a customer organization. As a result the length and variable nature of customer ordering patterns and timing could materially adversely impact our business and results of operations. We are substantially dependent upon significant customers who could cease purchasing our products at any time. Our top ten customers accounted for approximately 51% and 39% of combined net revenues during the years ended December 31, 2022 and December 31, 2021, respectively. Trade accounts receivable from these customers represented 69% and 29% of net receivables at December 31, 2022 and December 31, 2021, respectively. None of our customers accounted for more than 10% of our combined net revenues during the year ended December 31, 2022, and two of our customers accounted for more than 10% of our net combined receivables as of December 31, 2022. None of our customers accounted for more than 10% of both our combined net revenues during 2021 and our net combined receivables as of December 31, 2021. While we believe our relationships with such customers are stable, most arrangements with these customers are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from our significant customers could have a material adverse effect on our business, financial condition and results of operations. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products. Several larger operators in the cinema industry carry high levels of balance sheet leverage arising from pre-COVID acquisitions. Cineworld Group Plc, the parent company of Regal Cinemas and one of the largest cinema operators, filed for Chapter 11 bankruptcy on September 7, 2022 to restructure their balance sheet and alleviate their debt burden. As a result of the bankruptcy, we collected $0.2 million of the $0.3 million we had in accounts receivable at the time of the bankruptcy filing related to products and services sold to Regal Cinemas. The bankruptcy filing negatively impacted the collectability of our accounts receivable and could also negatively impact our revenue in future periods. Financial instruments that potentially expose us to a concentration of credit risk principally consist of accounts receivable. We sell products to a large number of customers in many different geographic regions. To minimize credit concentration risk, we perform ongoing credit evaluations of our customers financial condition or use letters of credit. -21- Our business is subject to the economic and political risks of selling products in foreign countries. Sales outside the United States accounted for approximately 13% of combined sales in the fiscal year ended December 31, 2022. We expect that international sales will continue to be important to our business for the foreseeable future. Foreign sales are subject to general political and economic risks, including the adverse impact of changes to international trade and tariff policies, including in the U.S. and China, which have created uncertainty regarding international trade, unanticipated or unfavorable circumstances arising from host country laws or regulations, unfavorable changes in U.S. policies on international trade and investment, the imposition of governmental economic sanctions on countries in which we do business, quotas, capital controls or other trade barriers, whether adopted by individual governments or addressed by regional trade blocks, threats of war, terrorism or governmental instability, currency controls, fluctuating exchange rates with respect to sales not denominated in U.S. dollars, changes in import/export regulations, tariffs and freight rates, potential negative consequences from changes to taxation policies, restrictions on the transfer of funds into or out of a country and the disruption of operations from labor, political and other disturbances, such as the impact of the coronavirus and other public health epidemics or pandemics. Government policies on international trade and investment can affect the demand for our products, impact the competitive position of our products or prevent us from being able to sell or manufacture products in certain countries. The implementation of more restrictive trade policies, such as higher tariffs or new barriers to entry, in countries in which we sell large quantities of products and services could negatively impact our business, financial condition and results of operations. For example, a government s adoption of "buy national" policies or retaliation by another government against such policies could have a negative impact on our results of operations. If we were unable to navigate the foreign regulatory environment, or if we were unable to enforce our contract rights in foreign countries, our business could be adversely impacted. Any of these events could reduce our sales, limit the prices at which we can sell our products, interrupt our supply chain or otherwise have an adverse effect on our operating performance. In addition, a portion of our foreign sales are denominated in foreign currencies and amounted to approximately $1.4 million in 2022. To the extent that orders are denominated in foreign currencies, our reported sales and earnings are subject to foreign exchange fluctuations. In addition, there can be no assurance that our remaining international customers will continue to accept orders denominated in U.S. dollars. For those sales which are denominated in U.S. dollars, a weakening in the value of foreign currencies relative to the U.S. dollar could have a material adverse impact on us by increasing the effective price of our products in international markets. Certain areas of the world are also more cost conscious than the U.S. market and there are instances where our products are priced higher than local manufacturers. We are also exposed to foreign currency fluctuations between the Canadian and U.S. dollar due to our screen manufacturing facility in Canada where a majority of its sales are denominated in the U.S. dollar while its expenses are denominated in Canadian currency. We cannot predict the effects of exchange rate fluctuations upon our future operating results because of the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates. Any of these factors could adversely affect our foreign activities and our business, financial condition and results of operations. The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our financial condition, results of operations and strategic objectives. Our global operations subject us to regulation by U.S. federal and state laws and multiple foreign laws, regulations and policies, which could result in conflicting legal requirements. These laws and regulations are complex, change frequently, have tended to become more stringent over time and increase our cost of doing business. These laws and regulations include import and export control, environmental, health and safety regulations, data privacy requirements, international labor laws and work councils and anti-corruption and bribery laws such as the U.S. Foreign Corrupt Practices Act, the U.N. Convention Against Bribery and local laws prohibiting corrupt payments to government officials. We are subject to the risk that we, our employees, our affiliated entities, contractors, agents or their respective officers, directors, employees and agents may take action determined to be in violation of any of these laws. An actual or alleged violation could result in substantial fines, sanctions, civil or criminal penalties, debarment from government contracts, curtailment of operations in certain jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect our financial condition, results of operations and strategic objectives. -22- In addition, we are subject to Canadian and foreign anti-corruption laws and regulations such as the Canadian Corruption of Foreign Public Officials Act. In general, these laws prohibit a company and its employees and intermediaries from bribing or making other prohibited payments to foreign officials or other persons to obtain or retain business or gain some other business advantage. We cannot predict the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in which existing laws might be administered or interpreted. Failure by us or our predecessors to comply with the applicable legislation and other similar foreign laws could expose us and our senior management to civil and/or criminal penalties, other sanctions and remedial measures, legal expenses and reputational damage, all of which could materially and adversely affect our business, financial condition and results of operations. Likewise, any investigation of any alleged violations of the applicable anti-corruption legislation by Canadian or foreign authorities could also have an adverse impact on our business, financial condition and results of operations. A reversal of the U.S. economic recovery and a return to volatile or recessionary conditions in the United States or abroad could adversely affect our business or our access to capital markets in a material manner. Worsening economic and market conditions, downside shocks, or a return to recessionary economic conditions could serve to reduce demand for our products and adversely affect our operating results. These economic conditions may also impact the financial condition of one or more of our key suppliers, which could affect our ability to secure products to meet our customers demand. In addition, a downturn in the cinema market could impact the valuation and collectability of certain receivables held by us. Our results of operations and the implementation of our business strategy could be adversely affected by general conditions in the global economy, including conditions that are outside of our control, such as the impact of health and safety concerns from the current outbreak of COVID-19 and variants thereof. The most recent global financial crisis caused by the coronavirus resulted in extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business and could have a material adverse effect on us. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products. We rely extensively on our information technology systems and are vulnerable to damage and interruption. We rely on our information technology systems and infrastructure to process transactions, summarize results and manage our business, including maintaining client and supplier information. Additionally, we utilize third parties, including cloud providers, to store, transfer and process data. From time to time, we experience cyber-attacks on our information technology systems. Our information technology systems, as well as the systems of our customers, suppliers and other partners, whose systems we do not control, are vulnerable to outages and an increasing risk of continually evolving deliberate intrusions to gain access to company sensitive information. Likewise, data security incidents and breaches by employees and others with or without permitted access to our systems pose a risk that sensitive data may be exposed to unauthorized persons or to the public. A cyber-attack or other significant disruption involving our information technology systems, or those of our customers, suppliers and other partners, could also result in disruptions in critical systems, corruption or loss of data and theft of data, funds or intellectual property. We may be unable to prevent outages or security breaches in our systems. We remain potentially vulnerable to additional known or yet unknown threats as, in some instances, we, our suppliers and our other partners may be unaware of an incident or its magnitude and effects. We also face the risk that we expose our customers or partners to cybersecurity attacks. Any or all of the foregoing could adversely affect our results of operations and cash flows, as well as our business reputation. Any failure to maintain the security of information relating to our customers, employees and suppliers, whether as a result of cybersecurity attacks or otherwise, could expose us to litigation, government enforcement actions and costly response measures, and could disrupt our operations and adversely affect our business and reputation. In connection with the sales and marketing of our products and services, we may from time to time transmit confidential information. We also have access to, collect or maintain private or confidential information regarding our customers, employees, and suppliers, as well as our business. We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our information technology networks and related systems. These risks include operational interruption, private data exposure and damage to our relationship with our customers, among others. Cyber-attacks are rapidly evolving and becoming increasingly sophisticated. It is possible that computer hackers and others might compromise our security measures, or the security measures of those parties that we do business with now or in the future, and obtain the personal information of our customers, employees and suppliers or our business information. A security breach of any kind, including physical or electronic break-ins, computer viruses and attacks by hackers, employees or others, could expose us to risks of data loss, litigation, government enforcement actions, regulatory penalties and costly response measures, and could seriously disrupt our operations. Any resulting negative publicity could significantly harm our reputation, which could cause us to lose market share and have an adverse effect on our results of operations. -23- If we fail to retain key members of management, or successfully integrate new executives, our business may be materially harmed. Our future success depends, in substantial part, on the efforts and abilities of our current management team. If certain of these individuals were to leave unexpectedly, we could experience substantial loss of institutional knowledge, face difficulty in hiring qualified successors and could experience a loss in productivity while any successor obtains the necessary training and experience. Our loss of services of any of our senior executives, or any failure to effectively integrate new management into our business processes, controls, systems and culture, could have a material adverse effect on us. Any potential future acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or joint ventures may subject us to significant risks, any of which could harm our business. Our long-term strategy may include identifying and acquiring, investing in or merging with suitable candidates on acceptable terms, entry into new lines of business and markets or divesting of certain business lines or activities. In particular, over time, we may acquire, make investments in or merge with providers of product offerings that complement our business or may terminate such activities. Mergers, acquisitions, divestitures and entries into new lines of business include a number of risks and present financial, managerial and operational challenges, including but not limited to: diversion of management attention from running our existing business; possible material weaknesses in internal control over financial reporting; increased expenses including legal, administrative and compensation expenses related to newly hired or terminated employees; increased costs to integrate, develop or, in the case of a divestiture, separate the technology, personnel, customer base and business practices of the acquired, new or divested business or assets; potential exposure to material liabilities not discovered in the due diligence process; potential adverse effects on reported results of operations due to possible write-down of goodwill and other intangible assets associated with acquisitions; potential damage to customer relationships or loss of synergies in the case of divestitures; and unavailability of acquisition financing or inability to obtain such financing on reasonable terms. Any acquired business, technology, service or product or entry into a new line of business could significantly under-perform relative to our expectations, and may not achieve the benefits we expect. For all these reasons, our pursuit of an acquisition, investment, new line of business, divestiture, merger or joint venture could cause our actual results to differ materially from those anticipated. Failure to effectively utilize or successfully assert intellectual property rights could negatively impact us. We own or otherwise have rights to various trademarks and trade names used in conjunction with the sale of our products, the most significant of which is Strong . We rely on trademark laws to protect these intellectual property rights. We cannot assure that these intellectual property rights will be effectively utilized or, if necessary, successfully asserted. There is a risk that we will not be able to obtain and perfect our own intellectual property rights, or, where appropriate, license from others, intellectual property rights necessary to support new product introductions. Our intellectual property rights, and any additional rights we may obtain in the future, may be invalidated, circumvented or challenged in the future. Our failure to perfect or successfully assert intellectual property rights could harm our competitive position and could negatively impact us. -24- Natural disasters and other catastrophic events beyond our control could adversely affect our business operations and financial performance. The occurrence of one or more natural disasters, such as fires, hurricanes, tornados, tsunamis, floods and earthquakes; geo-political events, such as civil unrest in a country in which our suppliers are located or terrorist or military activities disrupting transportation, communication or utility systems; or other highly disruptive events, such as nuclear accidents, public health epidemics or pandemics, such as the ongoing COVID-19 pandemic, the impact of which is uncertain and which, if it persists for an extended period of time, could disrupt our global supply chain and result in significant expenses or delays outside of our control, unusual weather conditions or cyber-attacks, could adversely affect our operations and financial performance. For example, the COVID-19 pandemic has impacted and could further impact our operations, customers and suppliers as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the coronavirus outbreak. In addition, temporary cinema closures in domestic and foreign markets and delays to movie release schedules may potentially negatively impact our customers operations and timing of orders. Further, adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business. In the event of a major disruption caused by the outbreak of epidemics or pandemic diseases such as coronavirus, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Such events could result, among other things, in operational disruptions, physical damage to or destruction or disruption of one or more of our properties or properties used by third parties in connection with the supply of products or services to us, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions. We cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. These factors could also cause consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy. Such occurrences could have a material adverse effect on us and could also have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage. The insurance that we maintain may not fully cover all potential exposures. We maintain property, business interruption and casualty insurance but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We are potentially at risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain. We are a holding company with no operations of our own. We are a holding company, and our ability to operate is dependent upon the earnings from the business conducted by our subsidiaries that operate the centers. The effect of this structure is that we depend on the earnings of our subsidiaries, and the distribution or payment to us of a portion of these earnings to meet our obligations, including those under any of our debt obligations. The distributions of those earnings or advances or other distributions of funds by these entities to us, all of which are contingent upon our subsidiaries earnings, are subject to various business considerations. In addition, distributions by our subsidiaries could be subject to statutory restrictions, including state laws requiring that such subsidiaries be solvent, or contractual restrictions. Some of our subsidiaries may become subject to agreements that restrict the sale of assets and significantly restrict or prohibit the payment of dividends or the making of distributions, loans or other payments to shareholders, partners or members. We are entering a new line of business which could require additional capital. The production, acquisition and distribution of feature films and series content requires substantial capital. We intend to mitigate risks by pre-selling rights to content and utilizing tax credit incentives in most cases to offset production costs. However, a significant amount of time may elapse between our expenditure of funds and the receipt of revenues after release or distribution of such content. Although we intend to reduce the risks of production exposure through pre-sale of rights, tax credit programs, government and industry programs, co-financiers and other sources, we cannot assure you that we will successfully implement these arrangements or that we will not be subject to substantial financial risks relating to the production, acquisition and distribution of content. Additionally, the production, completion and distribution of motion picture and television content can be subject to a number of uncertainties, including delays and increased expenditures due to disruptions or events beyond our control. As a result, if production incurs substantial budget overruns, we may have to seek additional financing or fund the overrun ourselves. We cannot make assurances regarding the availability of such additional financing on terms acceptable to us, or that we will recoup these costs. For instance, increased costs or budget overruns incurred with respect to a particular film may prevent a picture from being completed or released or may result in a delayed release and the postponement to a potentially less favorable date, all of which could cause a decline in performance, and, thus, the overall financial success of such film. Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. -25- We may incur significant write-offs if our projects do not perform well enough to recoup costs. We will be required to amortize content capitalized production costs over the expected revenue streams as we recognize revenue from films or other projects. The amount of production costs that will be amortized each quarter depends on, among other things, how much future revenue we expect to receive from each project. Unamortized production costs will be evaluated for impairment each reporting period on a project-by-project basis. If estimated remaining revenue is not sufficient to recover the unamortized production costs, including because of delayed theatrical distribution of films as a result of the COVID-19 global pandemic and its effects, those costs would be written down to fair value. In any given quarter, if we lower our previous forecast with respect to total anticipated revenue from any film or other project, we may be required to accelerate amortization or record impairment charges with respect to the unamortized costs, even if we previously recorded impairment charges for such film or other project. Such impairment charges could adversely impact our business, operating results and financial condition. Our revenues and results of operations may fluctuate significantly from period to period. Our revenues and results of operations can vary based on the timing of shipments of our cinema products particularly with regard to the timing of cinema screen shipments and timing of customer orders and shipments of projection equipment. With the launch of Strong Studios, those fluctuations could increase on a quarter-to-quarter basis as timing of revenue and amortization of production costs will depend on timing delivery of content, among other factors. The degree of commercial success of content that we sell, license or distribute, which cannot be predicted with certainty may cause our revenue and earnings results to fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future periods. Risks Related to the Separation We may not realize the anticipated benefits from the Separation, and the Separation could harm our business. We have historically operated as a business segment of FG Group Holdings. We may not be able to achieve the full strategic and financial benefits expected to result from the Separation, or such benefits may be delayed or not occur at all. The Separation is expected to enhance strategic and management focus, provide a distinct investment identity and allow us to efficiently allocate resources and deploy capital. We may not achieve these and other anticipated benefits for a variety of reasons, including, among others: the Separation will require significant amounts of management s time and effort, which may divert management s attention from operating and growing our business; following the Separation, we may be more susceptible to economic downturns and other adverse events than if we were still a part of FG Group Holdings; following the Separation, our business will be less diversified than FG Group Holdings business prior to the Separation; and the other actions required to separate the respective businesses could disrupt our operations. -26- If we fail to achieve some or all of the benefits expected to result from the Separation, or if such benefits are delayed, our business could be harmed. The services that FG Group Holdings will provide to us post-Separation, pursuant to the Management Services Agreement, may not be sufficient to meet our needs, which may result in increased costs and otherwise adversely affect our business. Pursuant to the Management Services Agreement, we and FG Group Holdings expect to continue to provide certain services to each other, which could include information technology, legal, finance and accounting, human resources, tax, treasury, and other services in exchange for the fees specified in the Management Services Agreement between us and FG Group Holdings (calculated on the basis of cost and expenses, with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). FG Group Holdings is not obligated to provide these services in a manner that differs from the nature of the services provided to the Strong Entertainment operating segment during the period prior to the Separation, and thus we may not be able to modify these services in a manner desirable to us as a stand-alone public company. Further, if we no longer receive these services from FG Group Holdings due to the termination of the Management Services Agreement or otherwise, we may not be able to perform these services ourselves and/or find appropriate third party arrangements at a reasonable cost (and any such costs may be higher than those charged by FG Group Holdings). See the section titled "Certain Relationships and Related Party Transactions-Relationship with FG Group Holdings." We have no history of operating as an independent company, and our historical and unaudited pro forma financial information is not necessarily representative of the results that we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results. Our historical and unaudited pro forma financial information included in this prospectus is not necessarily indicative of our future financial condition, results of operations or cash flows, nor does it reflect what our financial condition, results of operations or cash flows would have been as an independent public company during the periods presented. In particular, the historical financial information included in this prospectus is not necessarily indicative of our future results of operations, financial condition or cash flows primarily because of the following factors: Prior to the Separation, our business has been operated by FG Group Holdings as part of its broader corporate organization, rather than as an independent company; FG Group Holdings or one of its affiliates provide support for various corporate functions for us, such as information technology, compensation and benefits, human resources, engineering, finance and internal audit. Our historical financial results reflect the direct, indirect and allocated costs for such services historically provided by FG Group Holdings. Our historical financial information does not reflect our obligations under the Management Services Agreement we will enter into with FG Group Holdings in connection with the Separation. At the termination of the Management Services Agreement, we will need to perform these functions ourselves or hire third parties to perform these functions on our behalf, and these costs may differ significantly from the comparable expenses we have incurred in the past. Our working capital requirements and capital expenditures historically have been satisfied as part of FG Group Holdings corporate-wide cash management and centralized funding programs, and our cost of debt and other capital may significantly differ from the historical amounts reflected in our historical financial statements. Currently, our business is integrated with that of FG Group Holdings and we benefit from FG Group Holdings size and scale in costs, employees and vendor and customer relationships. Thus, costs we will incur as an independent company may significantly exceed comparable costs we would have incurred as part of FG Group Holdings. We based the pro forma adjustments included in this prospectus on available information and assumptions that we believe are reasonable; actual results, however, may vary. In addition, our unaudited pro forma financial information included in this prospectus may not give effect to various ongoing additional costs we may incur in connection with being an independent public company. Accordingly, our unaudited pro forma financial statements do not reflect what business, financial condition, results of operations, and cash flows would have been as an independent public company and are not necessarily indicative of our future financial condition or future results of operations. Please refer to "Unaudited Pro Forma Condensed Combined Financial Statements," "Management s Discussion and Analysis of Financial Condition and Results of Operations" and our audited historical financial statements and the notes to those statements included elsewhere in this prospectus. -27- FG Group Holdings may fail to perform under various transaction agreements that will be executed as part of the Separation or it may fail to have necessary systems and services in place when certain of the transaction agreements expire. In connection with the Separation, we, through Strong Entertainment Subco or STS, will enter into a Master Asset Purchase Agreement, Confirmatory of Ownership Assignment of Intellectual Property between Strong/MDI Screen Systems, Inc., a company existing under the laws of Quebec and Strong/MDI Screen Systems Inc., a company incorporated under the laws of British Columbia (the "IP Assignment Agreement"), the FG Group Holdings Asset Transfer Agreement, Patent Assignment between FG Group Holdings, and Strong Technical Services, Inc. (the "FG Group Holdings IP Assignment Agreement"), the Joliette Plant Lease and the Share Transfer Agreements with FG Group Holdings and/or Strong/MDI. The Master Asset Purchase Agreement, the FG Group Holdings Asset Transfer Agreement and the Joliette Plant Lease will determine the allocation of assets and liabilities (including by means of licensing) between the companies following the Separation and will include any necessary indemnifications related to liabilities and obligations. If Strong/MDI and/or FG Group Holdings are unable to satisfy their respective obligations under these agreements, we could incur operational difficulties or losses, which may not be adequately indemnified under those agreements. If we do not have in place our own systems and services, or if we do not have agreements with other providers of these services once these transaction agreements expire or terminate, we may not be able to operate our business effectively and our profitability may decline. Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Separation. Our financial results previously were included within the consolidated results of FG Group Holdings, and its reporting and control systems were appropriate for subsidiaries of a public company. We may need to upgrade our systems, including duplicating computer hardware infrastructure, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting, finance and information technology staff. If we are unable to do this in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired and our business could be harmed. Until completion of the Separation, FG Group Holdings will control the direction of our business, and post-Separation, FG Group Holdings will continue to indirectly control the direction of our business, as their concentrated ownership of our Common Shares and Class B Shares will prevent you and other shareholders from influencing significant decisions. Immediately following the completion of this offering, FG Group Holdings will control 85.7% of our outstanding Common Shares (or 83.9% if the underwriters exercise their option to purchase additional Common Shares in full) and 100% of the outstanding Class B Shares, which will entitle FG Group Holdings, or an entity controlled by FG Group Holdings, to nominate and elect at least 50% of our board, until such Class B Shares are redeemed. As long as FG Group Holdings beneficially controls a majority of the voting power of our outstanding Common Shares with respect to a particular matter, or FG Group Holdings directly or indirectly holds any number of Class B Shares, it will generally be able to determine the outcome of all corporate actions requiring shareholder approval, including by the election and removal of at least 50% of our directors. Even if FG Group Holdings were to control less than a majority of the voting power of our outstanding Common Shares and ceased to hold any Class B Shares, it may be able to influence the outcome of such corporate actions so long as it owns a significant portion of our Common Shares. If FG Group Holdings does not complete the Separation or otherwise dispose of its Common Shares, it could remain our controlling shareholder for an extended period of time or indefinitely. FG Group Holdings interests may not be the same as, or may conflict with, the interests of our other shareholders. Investors in this offering will not be able to affect the outcome of any shareholder vote while FG Group Holdings controls the majority of the voting power of our outstanding Common Shares. As a result, FG Group Holdings may be able to control, directly or indirectly and subject to applicable law, all matters affecting us, including: any determination with respect to our business direction and policies, including the appointment and removal of directors; any determinations with respect to mergers, business combinations or dispositions of assets; our financing and dividend policy, and the payment of dividends on our Common Shares, if any; compensation and benefit programs and other human resources policy decisions; changes to any other agreements that may adversely affect us; and determinations with respect to our tax returns. -28- Because FG Group Holdings interests may differ from ours or from those of our other shareholders, actions that FG Group Holdings takes with respect to us, as our controlling shareholder, may not be favorable to us or our other shareholders. If FG Group Holdings sells a controlling interest in our company to a third party in a private transaction, you may not realize any change-of-control premium on our Common Shares and we may become subject to the control of a presently unknown third party. Following the completion of this offering, FG Group Holdings will continue to control a significant equity interest in our company. FG Group Holdings will have the ability, should it choose to do so, to sell some or all of our Common Shares it owns in a privately-negotiated transaction, which, if sufficient in size, could result in a change of control of our company. The ability of FG Group Holdings to privately sell the Common Shares it owns, with no requirement for a concurrent offer to be made to acquire all of the Common Shares that will be publicly traded hereafter, could prevent you from realizing any change-of-control premium on your Common Shares that may otherwise accrue to FG Group Holdings on its private sale of our Common Shares. Additionally, if FG Group Holdings privately sells its significant equity interests in our company, we may become subject to the control of a presently unknown third party. Such third party may have interests that conflict with those of other shareholders. Some of our directors and officers may have actual or potential conflicts of interest because of their equity ownership in FG Group Holdings, and some of our directors may have actual or potential conflicts of interest because they also serve as officers of FG Group Holdings. Because of their current or former positions with FG Group Holdings, some of our executive officers and directors may own FG Group Holdings Common Shares or have options to acquire FG Group Holdings Common Shares, and the individual holdings may be significant for some of these individuals compared to their total assets. In addition, following the Separation, certain of officers and directors will also continue to serve as officers and directors of FG Group Holdings. Although all transactions with related parties after this offering will be approved by a committee of non-FG Group Holdings-affiliated directors, this ownership or service may create the appearance of conflicts of interest when the FG Group Holdings-affiliated officers and/or directors are faced with decisions that could have different implications for FG Group Holdings or us. For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between FG Group Holdings and us regarding the terms of the agreements governing the Separation and the relationship thereafter between the companies, including the Management Services Agreement. The IRS may not agree with the position that we should be treated as a foreign corporation for U.S. federal income tax as a result of the Separation. Although we are incorporated under the laws of Canada, the IRS may assert that we should be treated as a U.S. corporation (and, therefore, a U.S. tax resident) for U.S. federal income tax purposes pursuant to section 7874 of the Code. For U.S. federal income tax purposes, a corporation is generally considered a tax resident in the jurisdiction of its organization or incorporation. Because we are incorporated under the laws of Canada, we would generally be classified as a foreign corporation (and, therefore, a non-U.S. tax resident) for U.S. federal income tax purposes. Section 7874 provides an exception pursuant to which a foreign incorporated entity may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes. These rules are complex and require analysis of all relevant facts and circumstances, and there is limited guidance and significant uncertainties as to their application. If it were determined that we should be taxed as a U.S. corporation for U.S. federal income tax purposes under section 7874, we would be liable for U.S. federal income tax on our income like any other U.S. corporation and certain distributions made by us to non-U.S. holders of our Common Shares would be subject to U.S. withholding tax. Taxation as a U.S. corporation could have a material adverse effect on our financial position and results from operations. Section 7874 is currently expected to apply to the Separation in a manner such that we should not be treated as a U.S. corporation for U.S. federal income tax purposes. However, holders are cautioned that the application of section 7874 to us is extremely complex and the applicable Treasury Regulations are subject to significant uncertainty and there is limited guidance regarding their application. Moreover, the application of section 7874 to the facts and circumstances of the Separation are uncertain. In addition, there could be a future change in law under section 7874 of the Code, the Treasury Regulations promulgated thereunder or otherwise that could have an effect on the application of section 7874 to us. No IRS ruling has been requested or will be obtained regarding the U.S. federal income tax consequences of the Separation or any other matter described in this prospectus/proxy statement. There can be no assurance that the IRS will not challenge the U.S. federal income tax treatment described above or that, if challenged, such treatment will be sustained by a court. -29- We potentially could have received better terms from unaffiliated third parties than the terms we received in our agreements with FG Group Holdings. The agreements we entered into with FG Group Holdings in connection with the Separation were negotiated while we were still part of FG Group Holdings business. See "Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings." Accordingly, during the period in which the terms of those agreements will have been negotiated, we did not have an independent board of directors (the "Board of Directors") or a management team independent of FG Group Holdings. The terms of the agreements negotiated in the context of the Separation relate to, among other things, the allocation of assets, intellectual property, liabilities, rights and other obligations between FG Group Holdings and us, and arm s-length negotiations between FG Group Holdings and an unaffiliated third party in another form of transaction, such as a buyer in a sale of a business, may have resulted in more favorable terms to the unaffiliated third party. Because we will lease, instead of own, the Joliette Plant where we manufacture all of our screens, it is possible that Strong/MDI as landlord may terminate the lease which would negatively impact our production. We manufacture our screens in the Joliette Plant, an approximately 80,000 square-foot facility near Montreal, Quebec, Canada. Strong/MDI, our major shareholder after this offering, will continue to own this facility. We plan to lease it through Strong Entertainment Subco, our subsidiary post-Separation. While we plan to enter into the Joliette Plant Lease, which will be a fifteen (15) year lease for the Joliette Plant (with the option of Strong Entertainment Subco to renew for five (5) consecutive periods of five years each, and a right of first refusal to purchase the Joliette Plant in the event that Strong/MDI wishes to sell the property to a third-party in the future) with Strong/MDI, it is possible that Strong/MDI may terminate the lease under certain limited circumstances, and therefore interrupt our screen production. In addition, we plan to use part of the proceeds from this offering to improve and expand the Joliette Plant, because it is our only manufacturing facility in North America. Compared to the ownership, the rental relationship may not provide us enough protection on our interests and investments in this facility. Government agencies in Canada have notified Strong/MDI that certain modifications are required to be made to the Joliette Plant in order to meet safety and emissions standards. Strong/MDI has been informed by certain government agencies in Canada, including but not limited to, the Joliette Fire Department and the Quebec Ministry of the Environment, that certain aspects of the Joliette Plant must be modified to fully comply with safety and emissions standards. Strong/MDI has implemented changes to address some, but not all, of the identified requirements. The required modifications include installing new air evaluator and exhaust chimneys as well as modifying the walls and doors in the paint and coatings area to achieve a 2-hour fire resistance standard. In addition, it was required that we modify certain mezzanine areas to reduce their size and upgrade construction to non-combustible materials, add an additional exterior access, and purchase spill resistant pallets. We estimate that if we were to proceed with implementing the remaining identified requirements, the cost would be approximately CAD$0.3 million to CAD$0.5 million (approximately US$0.2 million to US$0.4 million) if undertaken on their own and not as part of a broader plant improvement initiative. Our intention is to address the remaining requirements as one component of an expansion and reorganization of certain areas of the Joliette Plant. We believe the project would improve production flow in the plant, accommodate growth of the Eclipse product line in addition to addressing the requirements. We estimate that the cost of an expansion and reorganization of the Joliette Plant, which includes the estimated costs to remedy the remaining required modifications, would be approximately CAD$1.0 million to CAD$1.5 million (approximately US$0.8 million to US$1.2 million), depending on the final scope of the expansion as well as fluctuations in construction materials and other costs. If we fail to address the requirements, it could be possible that we could incur penalties or production could be interrupted. The expansion could cost more or take longer than our expectations and could result in production disruptions in the facility during the construction process. -30- We have agreed to indemnify FG Group Holdings for future losses, if any, related to current litigation related to the operation businesses being transferred to us in the Separation. Pursuant to the terms of the FG Group Holdings Asset Purchase Agreement, we have agreed to indemnify FG Group Holdings for future losses, if any, related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to us in the Separation, in an aggregate amount not to exceed $250,000 per year, as well as to indemnify FG Group Holdings for all expenses (including legal fees) related to the defense of such claims. There can be no assurance that we will have sufficient capital to pay the full amount of such aggregate liabilities or losses. Risks Related to this Offering and Ownership of Our Common Shares There may not be an active, liquid trading market for our Common Shares. Prior to this offering, there has been no public market for our Common Shares. We cannot predict the extent to which investor interest in our company will lead to the development of a trading market on the NYSE American or how liquid that market may become. If an active trading market does not develop, you may have difficulty selling any of our Common Shares that you purchase. The initial public offering price of our Common Shares is, or will be, determined by negotiation between us and the underwriters and may not be indicative of prices that will prevail following the completion of this offering. The market price of Common Shares may decline below the initial public offering price, and you may not be able to resell your Common Shares at or above the initial public offering price. Our share price may fluctuate significantly, and you may not be able to resell your Common Shares at or above the initial public offering price. The trading price of our Common Shares is likely to be volatile and subject to wide price fluctuations in response to various factors, including: market conditions in the broader stock market in general, or in our industry in particular; actual or anticipated fluctuations in our quarterly financial and results of operations; introduction of new products and services by us or our competitors; issuance of new or changed securities analysts reports or recommendations; sales of large blocks of our Common Shares; additions or departures of key personnel; regulatory developments; litigation and governmental investigations; economic and political conditions or events; and changes in investor perception of our market positions based on third-party information. -31- These and other factors may cause the market price and demand for our Common Shares to fluctuate substantially, which may limit or prevent investors from readily selling their Common Shares and may otherwise negatively affect the liquidity of our Common Shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the shares. If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business. The trading market for our Common Shares will also be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our share price could decline. We will be a "controlled company" within the meaning of the rules of the NYSE American and, as a result, will qualify for exemptions from certain corporate governance requirements. While we do not intend to avail ourselves of these exemptions, we may do so, and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to such requirements. Upon completion of this offering, FG Group Holdings will continue to control indirectly a majority of the voting power of our outstanding Common Shares and all of our Class B Shares, which will indirectly entitle FG Group Holdings to elect fifty percent (50%) of our board (or a majority, where our board is set at an odd number), until such Class B Shares are redeemed. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE American. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including: the requirement that a majority of the Board of Directors consist of independent directors; the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities; and the requirement that our compensation committee be composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities. While FG Group Holdings indirectly controls a majority of the voting power of our outstanding Common Shares and all of our Class B Shares, we may not have a majority of independent directors or our nominating and corporate governance and compensation committees may not consist entirely of independent directors. While we do not intend to avail ourselves of these exemptions, we may do so, and, accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE American. Future sales by FG Group Holdings or others of our Common Shares, or the perception that the Separation or such sales may occur, could depress the price of our Common Shares. Immediately following the completion of this offering, FG Group Holdings will own indirectly 85.7% of our outstanding Common Shares (or 83.9% if the underwriters exercise their option to purchase additional Common Shares in full), which percentage calculation does not take into account the RSUs to be issued to our directors and officers upon the completion of this offering (see "Executive and Director Compensation—Long-Term Incentives—Equity Grants"). Subject to the restrictions described in the paragraph below, future sales of these Common Shares in the public market will be subject to the volume and other restrictions of Rule 144 under the Securities Act, for so long as FG Group Holdings is deemed to be our affiliate, unless the Common Shares to be sold are registered with the Securities and Exchange Commission (the "SEC"). We are unable to predict with certainty whether or when FG Group Holdings will sell a substantial number of Common Shares to the extent it retains Common Shares following the Separation. The sale by FG Group Holdings of a substantial number of Common Shares after this offering, or a perception that such sales could occur, could significantly reduce the market price of our Common Shares. Pursuant to lock-up agreements, our directors and officers have agreed, for a period of twelve (12) months from the date of this offering, and any other holder of our outstanding Common Shares has agreed, for a period of twelve (12) months from the date of this offering, subject to limited exceptions, without the prior written consent of the representative of the underwriters, that they will not offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities. In addition, pursuant to the Underwriting Agreement (as defined below), we and any of our successors have agreed, for a period of twelve (12) months from the date of the Underwriting Agreement, that each will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering of our debt securities, other than entering into a line of credit with a traditional bank; or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise. The representative of the underwriters may, in its sole discretion and at any time without notice, release all or any portion of the Common Shares subject to the lock-up. See "Underwriting." -32- Immediately upon this offering, we intend to file a registration statement registering under the Securities Act the Common Shares reserved for issuance under our Plan. If equity securities granted under our Plan are sold or it is perceived that they will be sold in the public market, the trading price of our Common Shares could decline substantially. These sales also could impede our ability to raise future capital. We are governed by the corporate laws of British Columbia, Canada, which in some cases have a different effect on the rights of shareholders than the corporate laws of the United States. We are governed by the BCBCA, which may affect the rights of shareholders differently than those of a company governed by the laws of a U.S. jurisdiction, and may, together with our Articles, as amended, have the effect of delaying, deferring or discouraging another party from acquiring control of our company by means of a tender offer, a proxy contest or otherwise, or may affect the price an acquiring party would be willing to pay for our Common Shares. The material differences between the BCBCA and Delaware General Corporation Law that may have the greatest such effect include, but are not limited to, the following: (i) for certain corporate transactions (such as amalgamations, arrangements or amendments to our Articles) the BCBCA generally requires the voting threshold to be a special resolution approved by 66 2/3% of shareholders, or as set out in the Articles, as amended, as applicable, whereas Delaware General Corporation Law generally only requires a majority vote; and (ii) under the BCBCA holders of an aggregate of 5% or more of our Common Shares can requisition a special meeting of shareholders, whereas such right does not exist under the Delaware General Corporation Law. We cannot predict whether investors will find our company and our Common Shares less attractive because of these material differences or because we are governed by the BCBCA. If some investors find our Common Shares less attractive as a result, there may be a less active trading market for our Common Shares and our share price may be more volatile. Provisions in our Articles, as amended, Canadian law and certain restrictive covenants applicable to us could make an acquisition of us, which may be beneficial to our shareholders, more difficult and may prevent attempts by our shareholders to replace or remove our current management and/or limit the market price of our Common Shares. Provisions in our Articles, as amended, currently in effect, as well as certain provisions under the BCBCA and applicable Canadian laws may discourage, delay or prevent a merger, acquisition or other change in control of us that shareholders may consider favorable, including transactions in which they might otherwise receive a premium for their Common Shares. For instance, our Articles, as amended, contain provisions that establish certain advance notice procedures for nomination of candidates for election as directors at shareholders meetings. -33- Because we are a corporation incorporated under the laws of British Columbia, it may be difficult for investors in the United States to enforce civil liabilities against us based solely upon the federal securities laws of the United States. Similarly, it may be difficult for Canadian Investors to enforce civil liabilities against our directors and officers residing outside Canada. We are a corporation incorporated under the laws of British Columbia that maintains a principal executive office in the United States, and a substantial portion of our assets are located outside the United States. Consequently, it may be difficult for U.S. investors to effect service of process within the United States upon us, or to realize in the United States upon judgements of courts of the United States predicated upon civil liabilities under the Securities Act. Investors should not assume that Canadian courts: (i) would enforce judgements of U.S. courts obtained in actions against us predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or blue sky laws of any state within the United States or (ii) would enforce, in original actions, liabilities against us predicated upon the U.S. federal securities laws or any such state securities or blue sky laws. Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation. Prior to the Separation, we were a business segment of FG Group Holdings, and FG Group Holdings is subject to Section 404 of the Sarbanes-Oxley Act. However, upon completion of this offering, we will not be required to comply with all SEC rules that implement Section 404 of the Sarbanes-Oxley Act and therefore will not be required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose. Section 404(a) of the Sarbanes-Oxley Act, or Section 404(a), requires that beginning with our second annual report following our initial public offering, management assess and report annually on the effectiveness of our internal control over financial reporting and identify any material weaknesses in our internal control over financial reporting. Although Section 404(b) of the Sarbanes-Oxley Act, or Section 404(b), requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over financial reporting, we have opted to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply with SEC rules that implement Section 404(b) until such time as we are no longer an "emerging growth company." We expect our first Section 404(a) assessment will take place for our annual report for the fiscal year ending December 31, 2024, and we will not be required to comply with Section 404(b) rules until we cease to be an "emerging growth company" as defined in the JOBS Act. We will remain an "emerging growth company" until December 31, 2027, although if our total annual gross revenues are $1.235 billion or more, we would cease to be an "emerging growth company" as of December 31st of that year. -34- In order to comply with these rules, we expect to incur additional expenses and devote increased management effort toward ensuring compliance. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. In the future, if we fail to complete the annual Section 404 evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. When evaluating our internal controls over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting, and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. Our remediation efforts may not enable us to avoid a material weakness in our internal control over financial reporting in the future. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows. Any of the foregoing occurrences, should they come to pass, could negatively impact the public perception of our company, which could have a negative impact on our share price. -35- The obligations associated with being a public company will require significant resources and management attention. Currently, we are not directly subject to the reporting and other requirements of the Exchange Act. Following the closing of this offering of which this prospectus forms a part, we will be directly subject to such reporting and other obligations under the Exchange Act and the rules of the NYSE American. As an independent public company, we are required to, among other things: prepare and distribute periodic reports, proxy statements and other shareholder communications in compliance with the federal securities laws and NYSE American rules; have our own Board of Directors and committees thereof, which comply with federal securities laws and NYSE American rules; maintain an internal audit function; institute our own financial reporting and disclosure compliance functions; establish an investor relations function; establish internal policies, including those relating to trading in our securities and disclosure controls and procedures; and comply with the rules and regulations implemented by the SEC, the Sarbanes-Oxley Act, the Dodd-Frank Act, the Public Company Accounting Oversight Board and the NYSE American. These reporting and other obligations will place significant demands on our management and our administrative and operational resources, including accounting resources, and we expect to face increased legal, accounting, administrative and other costs and expenses relating to these demands that we had not incurred as a segment of FG Group Holdings. Certain of these functions will be provided by FG Group Holdings pursuant to the Management Services Agreement. See "Certain Relationships and Related Party Transactions—Relationship with FG Group Holdings—Management Services Agreement." Our investment in compliance with existing and evolving regulatory requirements will result in increased administrative expenses and a diversion of management s time and attention from revenue-generating activities to compliance activities, which could have an adverse effect on our business, financial condition, results of operations and cash flows. We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Shares less attractive to investors. We are an "emerging growth company," as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our Common Shares less attractive if we rely on these exemptions. If some investors find our Common Shares less attractive as a result, there may be a less active trading market for our Common Shares and our share price may be more volatile. Risks
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001895144_golden_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001895144_golden_prospectus_summary.txt
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+Prospectus Summary — Transfer of Cash to and from Our Post-Combination Organization if We Acquire a Company Based in China (Post-Business Combination)" (page 14) and "Risk Factors — Risks Related to Acquiring or Operating Businesses in the PRC — PRC governmental control of currency conversion may limit the ability of our operating companies in China to utilize their revenues effectively and affect the value of your investment" (page 78). Prior to this offering, there has been no public market for our units, ordinary shares or rights. We have applied to list our units on the Nasdaq Global Market, or NASDAQ, under the symbol "GODNU" on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on the NASDAQ. The ordinary shares and rights comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Ladenburg Thalmann, the representative of the underwriters of this offering, informs us of its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission, or the SEC, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities comprising the units begin separate trading, we expect that the ordinary shares and rights will be listed on NASDAQ under the symbols "GODN" and "GODNR," respectively. Table of Contents We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. We are an "emerging growth company" under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves risks. See "Risk Factors" on page 39. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. Price to Public Underwriting Discounts and Commissions(1) Proceeds, before expenses, to us Per Unit $ 10.00 $ 0.45 $ 9.55 Total $ 60,000,000 $ 2,700,000 $ 57,300,000 (1) Includes $0.25 per unit, or $1,500,000 (or up to $1,725,000 if the underwriters over-allotment option is exercised in full) in the aggregate payable to the underwriters for deferred underwriting commissions which will be placed in a trust account located in the United States as described herein. The deferred commissions that will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.25 multiplied by the number of public shares sold as part of the units in this offering, subject to adjustment as described in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also "Underwriting" for a description of compensation and other items of value payable to the underwriters. Of the proceeds we receive from this offering and the sale of the private placement units described in this prospectus, $60,600,000 or $69,690,000 if the underwriters over-allotment option is exercised in full ($10.10 per public share), subject to increase of up to an additional $0.033 per public share per month in the event that our sponsor elects to extend the period of time of up to 12 months to consummate a business combination, as described in more detail in this prospectus, will be deposited into a United States-based account established by VStock Transfer LLC, our transfer agent and maintained by Wilmington Trust, National Association acting as trustee. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders. The underwriters are offering the units for sale on a firm commitment basis. Delivery of the units will be made on or about _______, 2023. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. No offer or invitation to subscribe for units may be made to the public in the Cayman Islands. Ladenburg Thalmann The date of this prospectus is ___________, 2023 Table of Contents TABLE OF CONTENTS SUMMARY 1
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+PROSPECTUS SUMMARY 1
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+This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus, references to: amended and restated memorandum and articles of association are to our memorandum and articles of association to be in effect upon completion of this offering; Companies Act are to the Companies Act (As Revised) of the Cayman Islands; founder shares are to the ordinary shares initially purchased by our sponsor in a private placement prior to this offering; initial shareholders are to the holders of our founder shares prior to this offering; letter agreement refers to the letter agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part; management or our management team are to our officers and directors; ordinary shares are to our ordinary shares, par value $0.0001 per share, which include the public shares as well as the private placement shares; PRC or China refers to the People s Republic of China, excluding, for the purpose of this prospectus, Taiwan, Hong Kong and Macau; private placement rights are to the rights underlying the private placement units; private placement shares are to the ordinary shares underlying the private placement units; private placement units are to the units issued to our sponsor in a private placement simultaneously with the closing of this offering and upon conversion of working capital loans and extension loans, if any; public rights are to the rights sold as part of the units in this offering (whether they are subscribed for in this offering or acquired in the open market); public shareholders are to the holders of our public shares; public shares are to our ordinary shares offered as part of the units in this offering (whether they are subscribed for in this offering or acquired thereafter in the open market); sponsor refers to Carbon Neutral Holdings Inc., a Cayman Islands exempted company; rights are to our rights, which include the public rights as well as the private placement rights; we, us, company, or our company are to Global Lights Acquisition Corp, a Cayman Islands exempted company. All references in this prospectus to our founder shares being forfeited shall take effect as surrenders for no consideration of such shares as a matter of Cayman Islands law. All references in this prospectus to share dividends shall take effect as share capitalizations as a matter of Cayman Islands law. Registered trademarks referred to in this prospectus are the property of their respective owners. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. General We are a blank check company incorporated on August 23, 2021 as a Cayman Islands exempted company and incorporated for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses or entities, which we refer to throughout this prospectus as our initial business combination. We have not selected TABLE OF CONTENTS The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED NOVEMBER 6, 2023 Global Lights Acquisition Corp $60,000,000 6,000,000 Units Global Lights Acquisition Corp is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one ordinary share and one right. Each right entitles the holder thereof to receive one-sixth (1/6) of one ordinary share upon consummation of our initial business combination, so you must hold rights in multiples of six in order to receive shares for all of your rights upon closing of a business combination. We have also granted the underwriters a 45-day option to purchase up to an additional 900,000 units to cover over-allotments, if any. We will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net of taxes payable) divided by the number of then issued and outstanding ordinary shares that were sold as part of the units in this offering, which we refer to collectively as our public shares, subject to the limitations described herein. If we anticipate that we may not be able to consummate our initial business combination within the 12-month period, we may, but are not obligated to, extend the period of time to consummate a business combination twice by an additional three months each time (for a total of up to 18 months to complete a business combination). If we are unable to complete our initial business combination within 12 months from the closing of this offering (or 15 or 18 months, as applicable from the closing of this offering if we extend the period of time twice, each by an additional three months to consummate a business combination. Our public shareholders will not be afforded an opportunity to vote on our extension of time to consummate an initial business combination from 12 months to 18 months described above or redeem their shares in connection with such extensions), we will redeem 100% of the public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, subject to applicable law and certain conditions as described herein. Our sponsor, Carbon Neutral Holdings Inc., a Cayman Islands exempted company, has agreed to purchase an aggregate of 327,500 private placement units (or up to 350,000 units if the underwriters over-allotment option is exercised in full) at a price of $10.00 per unit for an aggregate purchase price of $3,275,000 (or up to $3,500,000 if the underwriters' over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering ( private placement units ). Each private placement unit shall consist of one ordinary share and one private placement right to receive one-sixth of an ordinary share upon the consummation of an initial business combination. There has been no public market for our units, ordinary shares or rights. We have applied to list our units on the Nasdaq Global Market, or NASDAQ, under the symbol GLACU. We expect that the ordinary shares and rights comprising the units will begin separate trading on the 90th day following the date of this prospectus unless underwriters of this offering inform us of their decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission, or the SEC, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities comprising the units begin separate trading, we expect that the ordinary shares and rights will be listed on NASDAQ under the symbols GLAC and GLACR, respectively. We conduct our operations through an office space in the People s Republic of China, or PRC, and our sponsor and all of our executive officers and directors are located in or have significant ties to the PRC. We are a blank check company incorporated for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, and although we do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction, our initial business combination target company may include a company located in the PRC with operations conducted by subsidiaries and through contractual arrangements with a variable interest entity, or VIE. Also, the location of our sponsor and executive officers and directors may make us a less attractive partner to a non-China- or non-Hong Kong-based target company, which may therefore make it more likely for us to consummate a business combination in the PRC. If our target company is a PRC company, or PRC Target Company , we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to limitation on foreign ownership of certain industries, and regulatory review of an overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the agreements with a VIE, if our PRC Target Company requires any of these legal requirements post business combination by us. To the extent that the combined company conducts its operations in China through its PRC subsidiaries and VIEs, such corporate structure involves unique risks to investors after the business combination, as investors in our ordinary shares following a business combination would not hold equity interests in operating companies domiciled in the PRC under our control and would hold equity interests in a Cayman Islands company. We would rely on the contractual arrangements with the VIE and its shareholders to operate the business and, we would not have equity interests in such PRC operating companies but the VIE s financial results would be consolidated into our consolidated financial statements in accordance with U.S. GAAP as we or our direct owned subsidiaries in PRC, i.e. the wholly foreign-owned enterprise, or WFOE, would be the primary beneficiary of, such entity, for the accounting purposes. As such, in the event that we complete a business combination with a company in the PRC through VIE contractual arrangements, you would not hold equity in PRC operating companies. If the PRC government deems that the combined company s contractual arrangements with its VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, the PRC subsidiaries and the VIEs of the combined company could be subject to material penalties or the combined company could be forced to relinquish its interests in those operations or otherwise significantly change its corporate structure. If we enter into a business combination with a China-based business utilizing a VIE structure, we and investors may face significant uncertainty about potential future actions by the PRC government that could affect the legality and enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the combined company as a whole. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. We may also be subject to sanctions imposed by Chinese regulatory agencies including the Chinese Securities Regulatory Commission, or CSRC, if our PRC Target Company fails to comply with their rules and regulations. If the Chinese regulatory authorities disallow the VIE structure in the future, it will likely result in a material change in our financial performance and our results of operations and/or the value of our ordinary shares post business combination. If our PRC Target Company requires a VIE structure, the decision could significantly limit or completely hinder our ability to offer or continue to offer securities to investors, which could cause the value of such securities to significantly decline or become worthless. Similarly, if Chinese regulatory authorities find that our PRC Target Company fails to comply with their rules and regulations, our financial performance, results of operations and/or the value of our ordinary shares will likely be materially changed, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. For a TABLE OF CONTENTS any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any acquisition target. The Business Imperative Climate change is a global problem facing the mankind. The increasing emission of Carbon Dioxide (CO2), along with various other greenhouse gases, have posed a global threat to the ecosystem on the Earth. The Paris Climate Accords have established a framework for international cooperation in tackling climate change after 2020, proposing to maintain the increase in global average temperature, compared to the pre-industrial level, within 2 degrees Celsius, and strive to limit the temperature rise to within 1.5 degrees Celsius. To achieve the 2 degrees Celsius target, the entire world will need to cut approximately 12-15 billion tons of CO2 emissions by 2030, and the 1.5 degrees Celsius target requires reduction of approximately 29-32 billion tons of CO2 emissions. Indeed, the Paris Climate Accords require a high level of global cooperation to achieve the goals. Initiatives to respond to climate changes, pursue carbon neutrality and achieve sustainable development are expected to have a long-term impact that will profoundly affect every aspect of our life. Carbon neutrality and sustainable development have caught the attention of investors around the globe. For instance, the Institutional Investors Group on Climate Change, being of one of those global initiatives, has attracted capital from more than 16 countries and over 275 institutional investors with US$3,500 billion of assets under its management. To achieve carbon neutrality, we believe both reduction of carbon emissions and increase of carbon capture are necessary. For this cause, we cast our attention onto several investment-worthy areas: (1) clean energy, (2) green financing, (3) circular economy, (4) energy technology, (5) low carbon consumption, and (6) carbon capture and storage, or CCS. 1. Clean Energy Clean energy includes two segments: renewable energy and non-renewable energy. Renewable energy, such as solar energy, wind energy, biological energy, water energy, geothermal energy, hydrogen energy, etc., can be regenerated after consumption, and leaves behind no or very little pollutants. Non-renewable energy creates minimum pollution to the ecological environment during production and consumption and includes the use of low-polluting fossil energy (such as natural gas, etc.) and fossil energy treated with clean energy technologies, such as clean coal and clean oil, etc. According to the data provided in BP s Statistical Review of World Energy 2020, the proportion of non-fossil energy in energy consumption gradually increased from 9% in 1980 to 16% in 2019. In terms of increment, the average growth of renewable energy consumption in the past decade has reached 13.7%, which is the only energy category in the world with double-digit growth. At the same time, the research of the International Renewable Energy Agency (Irena) predicts that renewable energy will provide nearly 36% of the global energy supply in 2030. However, to further promote renewable energy requires a significant decrease in its cost, which in turn requires tremendous investment that eventually leads to technology advancement in this segment. 2. Green Financing Green financing refers to economic activities that support environmental improvement in response to climate change, resource conservation and efficient use through investment and financing, concerning project operations, risk management, etc., for projects in the fields of environmental protection, energy conservation, clean energy, green transportation, and green construction services. Green financing can promote environmental protection and governance, and thus guide the flow of resources from high-polluting and high-energy-consuming industries to sectors with advanced concepts and technologies to reduce the high-polluting substances at lower consumption. Pursuant to its founding ideas in the banking industry in 1970s, green financing should leverage the governmental support and advocate for an effective utilization of resources as one of the standards to measure the effectiveness of certain economic activities the famous Equator Principle was proposed and addressed international project financing. More than 60 financial institutions around the world have announced the adoption of the equator principle, TABLE OF CONTENTS detailed description of such risks, see Risk Factors Risks Relating to Being Located in China on page 66. Additionally, we might be subject to certain legal and operational risks associated with the VIE s operations in the PRC if our PRC Target Company requires a VIE structure. PRC laws and regulations governing our PRC Target Company s business operations may be sometimes vague and uncertain, and therefore, these risks may result in a material change in the VIE s operations, significant depreciation of the value of our ordinary shares, or a complete hindrance of our ability to offer or continue to offer our securities to investors. Additionally, the agreements associated with the VIE structure have not been tested in court of law in any jurisdiction. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in the PRC with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on the PRC Target Company s daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange. Additionally, if we effect our initial business combination with a business located in the PRC, the laws applicable to such business will likely govern all of our material agreements. We may not be able to enforce our legal rights. There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations which may have a material adverse impact on the value of our securities. If we enter into a business combination with a target business operating in China, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to our PRC subsidiaries via capital contribution or shareholder loans, as the case may be. All these risks could result in a material change in our or the PRC Target Company s post-combination operations and/or the value of our ordinary shares or could significantly limit or completely hinder our ability to accept foreign investments, list on an U.S. or other foreign exchange, and offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. In addition, to the extent that a VIE structure is utilized due to restrictions of foreign investment in the target s industry and to provide investors with exposure to foreign investment in China-based companies where Chines law prohibits direct foreign investment in the operating companies, the PRC subsidiaries may subsequently provide funds to the VIE through extending loans subject to statutory limits and restrictions. Moreover, the Chinese regulatory authorities could disallow such structure, which could result in a material change in the post-combination operations, the value of the securities of the combined company could decline or become worthless, and our ability to offer or continue to offer securities to investors could be significantly limited or completely hindered. After the business combination, the combined company s ability to pay dividends, if any, to the shareholders and to service any debt it may incur will depend upon dividends paid by its PRC subsidiaries, the amount of which are derived from substantially all of the economic benefits of the VIE. Under PRC laws and regulations, PRC companies are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to offshore entities. In particular, under the current PRC laws and regulations, dividends may be paid only out of distributable profits. Distributable profits are the net profit as determined under Chinese accounting standards and regulations, less any recovery of accumulated losses and appropriations to statutory and other reserves required to be made. A PRC company is required to set aside at least 10% of its after-tax profits each year to fund certain statutory reserve funds (up to an aggregate amount equal to half of its registered capital). As a result, the combined company s PRC subsidiaries may not have sufficient distributable profits to pay dividends to the combined company. Furthermore, if certain procedural requirements are satisfied, the payment in foreign currencies on current account items, including profit distributions and trade and service related foreign exchange transactions, can be made without prior approval from State Administration of Foreign Exchange (the SAFE ) or its local branches. However, where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses, such as the repayment of loans denominated in foreign currencies, approval from or registration with competent government authorities or its authorized banks is required. The PRC government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions. If the foreign exchange control regulations prevent the PRC subsidiaries of the combined company from obtaining sufficient foreign currencies to satisfy their foreign currency demands, the PRC subsidiaries of the combined company may not be able to pay dividends or repay loans in foreign currencies to their offshore intermediary holding companies and ultimately to the combined company. We cannot assure you that new regulations or policies will not be promulgated in the future, which may further restrict the remittance of RMB into or out of the PRC. We cannot assure you, in light of the restrictions in place, or any amendment to be made from time to time, that the PRC subsidiaries of the combined company will be able to satisfy their respective payment obligations that are denominated in foreign currencies, including the remittance of dividends outside of the PRC. To the extent that a VIE structure is utilized, cash is transferred through our organization in the manner as follows: (1) the holding company may transfer funds to its subsidiaries, or intermediate holding companies, via additional capital contributions or shareholder loans, as the case may be; (2) the intermediate holding companies may provide loans to the VIE, subject to statutory limits and restrictions; (3) funds from the VIE to the intermediate holding companies are remitted as services fees; and (4) the intermediate holding companies may make dividends or other distributions to the holding company. To the extent that a VIE structure is not utilized, cash is transferred through our organization in the manner as follows: (1) the holding company may transfer funds to its subsidiaries, or intermediate holding companies, via additional capital contributions or shareholder loans, as the case may be; (2) if the holding company intends to distribute dividends, PRC subsidiaries will transfer the dividends to intermediate holding companies in accordance with the laws and regulations of the PRC, and then intermediate holding companies will transfer the dividends all the way up to the holding company, and the dividends will be distributed from the holding company to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions, nor have any transfer been made between our company, its subsidiaries and investors. As of the date of this prospectus, we have not made any dividends or distributions to our shareholders. We currently do not intend to distribute earnings or settle amounts owed under any VIE Agreements. Furthermore, pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting Oversight Board, or the PCAOB, is unable to inspect an issuer s auditors for three consecutive years, the issuer s securities are prohibited to trade on a U.S. stock exchange. The PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. Furthermore, the PCAOB s report identified the specific registered public accounting firms which are subject to these determinations. On December 29, 2022, the Consolidated Appropriations Act, 2023, or the CAA, was signed into law by President Biden. The CAA, among other things, reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA as it was originally passed from the original three years to two, and thus, reduced the time before a Commission-identified Issuer s securities may be prohibited from trading or delisted. Our auditor, Marcum Asia CPAs LLP, is headquartered in New York, New York, and, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor was not identified in this report as a firm subject to the PCAOB s determination announced on December 16, 2021. As a result, we do not believe that the Holding Foreign Companies Accountable Act and related regulations will affect us. On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the SOP ) with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together with two protocol agreements governing inspections and investigations (together, the SOP Agreement ), establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. The SOP Agreement remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the SOP Agreement disclosed by the SEC, the PCAOB shall have sole discretion to select any audit firms for inspection or investigation and the PCAOB inspectors and investigators shall have a right to see all audit documentation without redaction. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our auditor s control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. Any of these actions, or uncertainties in the market about the possibility of such actions, could adversely affect our prospects to successfully complete a business combination with a PRC Target Company, our access to the U.S. capital markets and the price of our securities. TABLE OF CONTENTS and its project financing accounts for about 85% of the total global project financing. The banks that adopt the Equator Principle are also called Equator Bank . We estimate an increase in the banks shouldering Equator Bank responsibilities. 3. Circular Economy Born in the United States in the 1960s, the term circular economy made its first appearance in China in the mid-1990s. There are three paths commonly recognized to implement this concept from a technical perspective of resource utilization: (a) efficient use of resources, (b) recycling of resources, and (3) innocuous discharge of waste. Efficient use of resources relies on scientific and technological progress and institutional innovation to improve the level of resource utilization and the output rate of unit factors. Recycling of resources requires a resource recycling industry chain that creates a recycling channel for renewable resources to reduce the demand for natural resources and promote economic and social development in a harmonious cycle with nature. Innocuous discharge of waste minimizes the direct threat to human life, production, ecosystem through an innocuous process of discharging waste. The Circular Economy Organization released the 2021 Circular Gap Report that shows only 8.6% of the global economy currently has circular characteristics. With reasonable coverage of the circular economy in most developed countries, by reducing the use of raw materials, the world can reduce 39% of global greenhouse gases emissions and 28% of the original resource consumption. As the total population of China stabilizes and begins to decline, and the process of urbanization is slowly coming to an end, hence the drop in total demand for primary steel and cement production supplying the construction industry. According to estimates by the Energy Transition Foundation, the proportion of steel produced from recycled steel scrap in total production will rise from less than 10% now to 60% in 2050. In terms of cement, the potential for recycling is relatively limited, but improved building design and material quality can reduce the total demand by nearly 50% based on the usual development scenario. With the extensive development of physical and chemical recycling technologies, 52% of China s plastic consumption may come from recycled plastics. The economical use and recycling of raw materials is of great significance to carbon emission reduction. 4. Energy Technology The process of achieving carbon neutrality is itself a technology revolution, and the role of science and technology and technological progress in moving toward emission reduction and low carbon cannot be overemphasized as the human beings are always in want of new ways of energy consumption that are safer, cleaner and more stable. Take the photovoltaic industry as an example: in the past decade, the annual global installed photovoltaic capacity has increased from 16GW in 2010 to 105GW in 2019, which is underpinned by the rapid development and innovations in silicon wafers, cells and other photovoltaic modules that have led to increase in energy efficiency and decrease in cost. Also, progress in construction technologies such as solar photovoltaic system, ground source heat pump heating, water reuse and rainwater recovery treatment is expected to tremendously lower the carbon emissions from construction related industries, which took up 21.9% of China s national carbon emissions in 2018. Following areas of energy technology development have come to our attention: (1) use of high-efficiency solar energy utilization technology to prepare massive amount of thermochemical clean fuel; (2) large-scale wind power technology in the high seas; (3) the development of hydrogen fuel cell technology, which requires breakthroughs in large-scale hydrogen production, distributed hydrogen production, hydrogen storage and transportation materials, and hydrogen refueling station construction; and (4) energy storage technology, which includes both heat storage and cold storage. 5. Low Carbon Consumption Green and low-carbon consumption is a key to reducing carbon emissions as it strives to solve the ecological crisis the human race is facing by advocating a way of harmonious co-existence between generations. Currently, the scale of China s consumption continues to expand rapidly, and consumption has surpassed investment in contribution to China s economic growth. Therefore, the transition period of consumption upgrade creates a window of opportunity for cultivating green consumption and lifestyle. Following the steps of developed countries referencing the history of emissions, with the increase in per capita GDP and the peak of industrial emissions, household consumption emissions have shown an upward TABLE OF CONTENTS We conduct our operations through an office space in the People s Republic of China, or PRC, and our sponsor and all of our executive officers and directors are located in or have significant ties to the PRC. The location of our sponsor and executive officers and directors may make us a less attractive partner to a non-China- or non-Hong Kong-based target company, which may therefore make it more likely for us to consummate a business combination in the PRC. To the extent the VIE structure is used in our or the target company s post-combination operation, investors may never hold equity interests in the Chinese operating company. For China-related risks, see Risk Factors Risks Relating to Being Located in China on page 66. We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. We are an emerging growth company and smaller reporting company under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves risks. See Risk Factors on page 40. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. Per Unit Total Initial public offering price $ 10.00 $ 60,000,000 Underwriting discounts and commissions(1) $ 0.55 $ 3,300,000 Proceeds, before expenses to us $ 9.45 $ 56,700,000 (1) Such amount includes $1,200,000, or $0.20 per unit, equal to 2% of the gross proceeds of this offering (or $1,380,000 if the underwriters over-allotment option is exercised in full) payable to the underwriters at the completion of this offering and $2,100,000, or $0.35 per unit, (or $2,415,000 if the underwriters over-allotment option is exercised in full) payable to the underwriters for deferred underwriting commissions upon completion of a business combination. Of the proceeds we receive from this offering and the sale of the private placement units described in this prospectus, $60.3 million, or $69.3 million, if the underwriters over-allotment option is exercised in full ($10.05 per unit in either case), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee. The underwriters are offering the units for sale on a firm commitment basis. Delivery of the units will be made on or about , 2023. No offer or invitation to subscribe for securities may be made to the public in the Cayman Islands. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Sole Book-Running Manager Chardan The date of this prospectus is , 2023 TABLE OF CONTENTS trend. Without falling back to the massive production, massive consumption, massive dumping pattern, the developed economies such as Germany and Sweden have always identified food, housing and transportation as key areas for sustainable consumption anchored at their carbon dioxide emissions standards. 6. Carbon Capture and Storage (CCS) CCS refers to the collection and fixation of CO2 produced by large power plants by various methods, which is considered to be the most economic and feasible way to reduce greenhouse gas emissions on a large scale and can have an immediate and effective impact on the slow-down of global warming as CO2 has a wide range of industrial uses. For example, in the machine foundry industry, CO2 is an additive; in the metal smelting industry, especially high-quality steel, stainless steel, and non-ferrous metal smelting, CO2 is a quality stabilizer; in the ceramic enamel industry, CO2 is a solidifier. The United Nations Climate Change Agency decided that CCS projects are eligible for carbon offset projects under the Clean Development Mechanism, thereby encouraging developing countries to adopt this technology to earn carbon credits. In summary, as the trends becoming clearer towards carbon reduction and carbon neutrality through the routes presented from economic and technological perspectives, we look forward to playing a pivotal role in scaling opportunities arising out of these industries. Our Management and Directors Management Team Zhizhuang Miao has been our chairman of the board of directors and our chief executive officer since our inception. Since July 2018, Mr. Miao has been the founder of Guizhou Zhonghuanjiancheng Circular Economy Industry Co., Ltd , a company that focuses on the development and promotion of comprehensive environmental protection solutions and resource recycling technologies as well as investment in renewable resource industrial parks. He also currently serves as director for Dalian Bomei Technology Co., Ltd. and Dalian Yishun Green Tech Co., Ltd since August 2018. During this period, Mr. Miao was engaged in international trade of bulk commodities, recycling of renewable resources and harmless and reduced disposal of solid hazardous wastes, and was committed to reducing resource waste and secondary pollution in the city. Based on the rapid development trend of global environmental protection industry, his work focuses on developing and promoting resource recycling technology and comprehensive environmental protection solutions, and uses renewable resources industrial parks to solve the problem of renewable resources recycling. Mr. Miao received his master s degree in civil engineering from Pierre and Marie Curie University, and his bachelor s degree in civil engineering from Dalian University. Bin Yang has been our Chief Financial Officer since our inception. He has rich financial experience in finance since 1994. Mr. Yang has been the chief financial officer of Shenzhen Zhongheng Huafa Co., Ltd. (SZSE: 000020) from 2015 to February 2022. Prior to that, he worked as an accountant and vice president in the Industrial and Commercial Bank of China and China Minsheng Bank, and then served as vice president and secretary of Shenzhen GuoHua Network Security Technology Co Ltd (SZSE: 000004) from January 2011 to August 2015. He also currently serves as deputy general manager and board secretary for Shenzhen Wongtee International Enterprise Co. Ltd. (000056. SZ) since February 2022. In recent years, Mr. Yang was involved in several significant financing projects including the private placement of Shandong Huatai pharmaceutical factory, the listing of Shenzhen Putian Yitong Technologies Co., Ltd. (NEEQ: 836985) and LIYUANJI Jewelry (ShenZhen) Co., Ltd. (NEEQ: 838908) on the NEEQ. Mr. Yang was honored the 2nd Board Secretary Award of China s top 100 listed companies in 2017. He has acted as secretary for the board of directors, chief financial officer and independent director for several public companies. Mr. Yang graduated from Nanjing Agricultural University with a bachelor s degree in finance in 1994 and Xi an Jiaotong University with a master s degree in management in 2003. William Liu has been our Chief Strategy Officer since our inception. A 20-year veteran of Wall Street, Mr. William Liu is currently a partner at Global Business Strategy Corporation. Prior to that, Mr. William Liu held positions with various financial institutions such as Credit Suisse First Boston from 2000 to 2002, Bank of New York Mellon from 2002 to 2004, Lyra Capital LLC from 2004 to 2005, Ivy Asset Management from 2005 to 2006, and Provident Group Asset Management from 2007 to 2011. Mr. Liu provides a full range TABLE OF CONTENTS of market research and financial investment consulting services to his investor clients and has managed multi-billion dollar investment platforms. His areas of expertise involve global multi-asset fund investment, business risk control system setting, development of customized investment and financing solutions, digital application of financial technology asset allocation, alternative investments, firm wide risk management, strategic and tactical asset allocation, investment project due diligence of M&A and public listings, development of FoF/MoM products, securitization and structuring of CDOs, quantitative investment and trading strategies, fundraising and management of alternative funds, and CIO outsourcing implementation. Prior to joining Wall Street firms, he was a visiting scholar and post-doctoral research scientist at Columbia University in New York, where he led a team to research new processes for industrial groups metal recycling and industrial waste recycling projects. Mr. Liu received his Ph.D. degree from the University of Science and Technology Beijing. Guomei Han has been our Chief Research & Development Officer since our inception. Mr. Han has been a director and general manager at Dalian Jiarui Environmental Protection Technology Co., Ltd. since July 2008 and Dalian Bomei Technology Co., Ltd since August 2017. Mr. Han has extensive experience in the design and development of water treatment technologies and owns nearly 20 patents relating to water treatment technologies and devices. Mr. Han received his bachelor s degree in environment monitoring from East China University of Science and Technology in 1990 and is a certified Senior Engineer and Associate Constructor. Yizhi Guo has been our Chief Technology Officer since our inception. Mr. Guo founded Dalian Yishun Green Tech Co., Ltd. and has been its chairman since May 2017. He was an executive director for Dalian Shengteng Green Energy Technology Co., Ltd from 2021 to 2022, focusing on the application of plasma technology to hazard-free treatment of ash and residue after incineration and high temperature treatment to vitrify and convert such waste into construction material. Mr. Guo is also an entrepreneur and winner of multiple business plan competitions and has received funding from local governments for his venture projects. Mr. Guo received his master s degree in mechanical and material engineering from Oregon State University in 2016 and his bachelor s degree in energy and power engineering from Shandong University in 2011. Directors Xuan Liu has been our director since our inception. Mr. Xuan Liu currently has been serving as chief engineer at China Ocean High Energy Technology Research Institute since July 2018 and is responsible for research involving experiment on uranium and lithium extraction from the seawater and projects on warm and concentrated seawater recycling in nuclear power plants. He has also been a director at the research and development center at China Science Tsing Research (Beijing) Institute of Science and Technology since 2019. Early in his career, Mr. Xuan Liu was involved in various projects involving rare mineral extraction and special alloy smelting. Jincheng Ma will serve as our independent director immediately upon the effectiveness of our registration statement on Form S-1, of which this prospectus forms a part. Mr. Ma has been an independent director at Dalian Demaishi Precision Technology Co., Ltd (SZSE:301007), since August 2017. Mr. Ma is a professor at Dongbei University of Finance & Economics, where he has been working since March 1990. Primarily focusing on corporate governance, merger, acquisition and restructuring, Mr. Ma is an accomplished researcher and has published various academic papers on top journals. Mr. Ma received his Ph.D. degree in international economics and trades from Dongbei University of Finance & Economics. Chengzhong Li will serve as our independent director immediately upon the effectiveness of our registration statement on Form S-1, of which this prospectus forms a part. Mr. Li is experienced in finance and accounting. Mr. Li served multiple positions including chief accountant and first deputy general manager at Liaoning Property Group Corporation from 1965 to 2000, during which he concurrently served as the director of finance at Department of Materials of Liaoning Province from May 1965 to June 1993 and the chief accountant and first vice president at Liaoning Material Group Corporation from 1991 to 1993. Mr. Li also served as the vice president at Liaoning Baoye Accounting Firm Co., Ltd. from 2003 to 2014 and the independent director at Dalian Tianbao Green Food Co., Ltd from July 2007 to July 2010. Mr. Li was a certified public accountant in China from 1997 to 2015. Mr. Li has retired since 2014 and does not have any employment experience during the past five years. TABLE OF CONTENTS Rongyu Chi will serve as our independent director immediately upon the effectiveness of our registration statement on Form S-1, of which this prospectus forms a part. Mr. Chi was a general secretary at the higher education department of the Chinese Abacus Association from 1988 to 2004 and associate professor at Dongbei University of Finance & Economics from 1969 to 2004. Mr. Chi has retired since 2004 and does not have any employment experience during the past five years. Mr. Chi received his bachelor s degree in economics from Shandong Economics University. Our Competitive Advantages We expect the companies we choose to target for our initial business combination will benefit greatly from the tenured experience, expertise, operating skills and entrepreneurship of our management team. Our experience in industries relating to sustainable development spans across environmental protection solutions, resource recycling technologies, water treatment technologies and devices and hazard-free treatment of ash and residue, and we are acutely aware of the industry development and pain points of the sustainable development economy. We are well positioned to identify and execute a business combination as a preferred partner to a target. We believe our company has competitive advantages in the following aspects: Our management team. Our management team has extensive experience in founding and operating companies in the industries of environmental protection and sustainable development. Our Chief Executive Officer, Mr. Miao, is an experienced leader and entrepreneur across multiple industries with a successful track record, and he is supported by an experienced transaction team led by our Chief Financial Officer and Chief Strategy Officer to identity business combination targets. Market intelligence and industry experience. We believe our sponsor, directors and officers have a deep understanding of the rapidly evolving industries that promote sustainable development, capitalizing on the team s extensive experience in industries relating to sustainable development spans across environmental protection solutions, resource recycling technologies, water treatment technologies and devices and hazard-free treatment of ash and residue. Extensive network to source quality targets. Our management team has both accumulated a significant amount of industry expertise and extensive connections with companies in the environment industry and also deep insights into the public and private capital markets. We believe we are well positioned to evaluate a business combination. Business Strategy While we may pursue an acquisition or a business combination target in any business, industry or geography, we intend to focus our search on a target that provides solutions promoting sustainable development and focuses on environmentally sound infrastructure and industrial applications that eliminate or mitigate greenhouse gas emissions, and/or enhance resilience to climate change. Our efforts in identifying prospective target businesses will not be limited to a particular geographic region. We believe that we will add value to these businesses primarily by providing them with access to the U.S. capital markets. Examples of the industries where we see potential opportunity include, but are not limited to: Clean fuel transportation, electrification and energy efficiency: Development in transportation, self-directed and autonomous mobility and fuel efficiency, battery and energy storage, distributed energy, energy efficiency and smart grid technology is continually evolving as companies aim to improve electricity reliability for those they service while reducing overall emissions. Environmental infrastructure: Global population growth and GDP trends have bolstered demand growth for the efficient management of waste, water and agriculture, as well as highlighted the need for greater air emissions controls. The reuse, recycling and transformation of these products and byproducts into energy and other useful applications and products are important for the elimination or mitigation of greenhouse gas emissions and/or climate change. Carbon capture, utilization and storage: Opportunities in carbon capture, storage and utilization applications, including in the reduction, removal and recycling of carbon emissions into industrial, chemical and consumer end uses are becoming increasingly vital as more stringent emissions regulations and policies are put in place by governmental agencies and corporate entities. TABLE OF CONTENTS The foregoing opportunities are not intended to be exhaustive. We may pursue an initial business combination with a target business in any industry, sector or geographic location. Our founder, Carbon Neutral Holdings Inc., has formed a team of management and board members, who each have decades of experience in one or several of the key areas that we believe are essential to successfully identifying and partnering with the right company for a business combination. Our team includes experienced entrepreneurs, business executives, professional investors and scholars from academia with a wide range of relevant experience founding, growing and leading companies. Our team has an extensive track record and broad relationships in industry, governmental and non-governmental organizations and the investment community. We believe we will benefit from their accomplishments, and specifically their current and recent activities with companies that have a connection to the Asian market, in identifying attractive acquisition opportunities. Investment Criteria Our management team intends to focus on creating shareholder value by leveraging its experience in the management, operation and financing of businesses to improve the efficiency of operations while implementing strategies to scale revenue organically and/or through acquisitions. We have identified the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses. While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we see justification to do so. Leading market position. We intend to seek one or more targets that have a leading presence across an industry or segment or have leading technology or product capabilities. Experienced management team. We intend to seek one or more targets that have experienced management team with a proven record of business growth success. Large addressable markets. We intend to seek one or more targets that address a large market that creates the opportunity for attractive long-term growth prospects. Scalability. We seek to seek one or more targets that will be able to significantly scale their operations to take advantage of their opportunities. We intend to leverage our experience in scaling businesses in order to help accelerate growth. Ability to deliver revenue growth. We intend to seek one or more targets that enjoy a proven record of success and exhibit strong potential to deliver future revenue growth. Appropriate valuation. We intend to be a disciplined and valuation-centric investor that will invest on terms that we believe are attractive relative to market comparables and intrinsic value that provide significant upside potential. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our sponsor and management team may deem relevant. In the event that we decide to enter into an initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender offer materials, as applicable, that we would file with the United States Securities and Exchange Commission, or the SEC. In evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent ownership, management and employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will be made available to us. Our Business Combination Process In evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document TABLE OF CONTENTS reviews, interviews of customers and suppliers, inspection of facilities, as well as reviewing financial and other information that will be made available to us. We will also utilize our operational and capital allocation experience. Our acquisition criteria, due diligence processes and value creation methods are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC. Sourcing of Potential Business Combination Targets Our management team has developed a broad network of contacts and corporate relationships. We believe that the network of contacts and relationships of our management team and our sponsor will provide us with an important source of business combination opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment banking firms, private equity firms, consultants, accounting firms and business enterprises. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. As more fully discussed in Management Conflicts of Interest, if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties under Cayman Islands law. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. Unless we complete our initial business combination with an affiliated entity, or our Board of Directors cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our shareholders will be relying on the business judgment of our Board of Directors, which will have significant discretion in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination. Other Acquisition Considerations In addition to our sponsor, members of our management team may directly or indirectly own our ordinary shares and/or private placement units following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Members of our management team and our independent directors will directly or indirectly own founder shares and/or private placement units following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any TABLE OF CONTENTS such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Each of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association will provide that, subject to his or her fiduciary duties under Cayman Islands law, no director or officer shall be disqualified or prevented from contracting with the company nor shall any contract or transaction entered into by or on behalf of the company in which any director shall have an interest be liable to be avoided. A director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of such interest shall be disclosed at or prior to its consideration or any vote thereon by the board of directors. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially undermine our ability to complete our business combination. Our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act even before we enter a definitive agreement regarding our initial business combination. Initial Business Combination We will have until 12 months from the closing of this offering to consummate our initial business combination. In addition, if we anticipate that we may not be able to consummate our initial business combination within 12 months, our sponsor (or its affiliates or designees) may, but is not obligated to, extend the period of time to consummate a business combination twice by an additional three months each time (for a total of up to 18 months to complete a business combination), provided that, pursuant to the terms of our amended and restated memorandum and articles of association and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend the time available for us to consummate our initial business combination in the absence of a definitive agreement is for our sponsor and/or its designee, upon 10 days advance notice prior to the applicable deadline, to deposit into the trust account $600,000, or $690,000 if the over-allotment option is exercised in full ($0.10 per share in either case), on or prior to the date of the applicable deadline. In the event that our sponsor elected to extend the time to complete a business combination and deposited the applicable amount of money into trust, it would receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the relevant insider s discretion, converted upon consummation of our business combination into additional private placement units at a price of $10.00 per unit. Our shareholders have approved the issuance of the private placement units upon conversion of such notes, to the extent the holder wishes to so convert such notes at the time of the consummation of our initial business combination. In the event that we receive notice from our sponsor 10 days prior to the applicable deadline of its intent to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor is not obligated to fund the trust account to extend the time for us to complete our initial business combination. If we are unable to consummate our initial business combination within the extended time period, we will, as promptly as possible but not more than 10 business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the private units will expire and will be worthless. The public shareholders will not be able to vote on or redeem their public shares in connection with any such extensions. TABLE OF CONTENTS The NASDAQ rules require that our initial business combination must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting firm. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the Board is less familiar or experienced with the target company s business, there is a significant amount of uncertainty as to the value of the company s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Additionally, pursuant to NASDAQ rules, any initial business combination must be approved by a majority of our independent directors. We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interest of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination. Permission Required from the PRC Authorities for this Offering and Potential Business Combination with a Business in China We are a Cayman Islands exempted company. As of the date of this prospectus, we are solely held by our sponsor Carbon Neutral Holdings Inc., a Cayman Islands company, indirectly owned by Zhizhuang TABLE OF CONTENTS Miao, Xuan Liu, Zhao Yu, Guomei Han and Yizhi Guo, all of whom are Chinese citizens. Upon the consummation of this offering, our sponsor will collectively own approximately 20% of equity interest and public shareholders including U.S. investors and foreign investors will collectively own 80.0% of equity interest of us (assuming it does not purchase units in this offering and not taking into account ownership of the private placement units). As the date of this prospectus, there are no PRC laws and regulations (including the China Securities Regulatory Commission, or the CSRC, Cyberspace Administration of China, or the CAC, or any other government entity) in force explicitly requiring that we obtain permission from PRC authorities for this offering or to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction or any regulatory objection to this offering from any relevant PRC authorities. We are not limited to a particular industry or geographic region for purposes of consummating an initial business combination. Because our management team, primarily based China, has network in China and our principal office and sponsor are located in China, we may pursue a business combination with a company doing business in China, which may have legal and operational risks associated with it. Specifically, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, (the M&A Rules ), adopted by six PRC regulatory agencies in 2006 and amended in 2009, among other things, purport to require that if an overseas company established or controlled by PRC companies or individuals, or PRC citizens, intends to acquire equity interests or assets of any other PRC domestic company affiliated with such entities or persons, such acquisition must be submitted to the MOFCOM for approval. The M&A Rules also require an offshore special purpose vehicle controlled directly or indirectly by PRC companies or individuals, and formed for purposes of an overseas listing through acquisition of PRC domestic interests held by such PRC companies or individuals, to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval mechanism for overseas listings by special purpose vehicles. However, to date, the CSRC has not issued any definitive rules or interpretations concerning whether offerings such as the indirect listing of a PRC entity as part of the Business Combination are subject to the CSRC approval procedures under the M&A Rules. At this time, a prior approval from the CSRC is not practicable in practice for the Business Combination because the CSRC currently has not issued any definitive rule or interpretation on this point and our company is a blank check company newly incorporated in Cayman Islands rather than China and our company does not own or control any equity interest in any PRC company or operate any business in China. However, uncertainties still exist as to how the M&A Rules could be interpreted or implemented in the future, and the opinion stated above is subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities According to Law (the Opinions ), which call for strengthened regulation over illegal securities activities and supervision on overseas listings by China-based companies and propose to take effective measures, such as promoting the development of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. On February 17, 2023, the CSRC published the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, with five supporting guidelines, which came into effect on March 31, 2023 (the Trial Measures ), which, among other provisions, states that if the assets of a PRC domestic enterprise are directly or indirectly listed overseas through one or more acquisitions, share exchanges, transfers and other trading arrangements, the domestic enterprise shall perform the filing procedures to CSRC. As of the date of the prospectus, we are not required to submit an application to the CSRC because we are a blank check company newly incorporated in Cayman Islands rather than China and we do not own or control any equity interest or assets in any PRC company or operate any business in China. Nevertheless, our combination transaction may be required to be filed with the CSRC if we decide to consummate the business combination with a target business based in and primarily operating in China prior to the consummation, depends on how the provisions are interpreted or implemented by CSRC in the context of an overseas offering. While the application of the M&A Rules remains unclear, no official guidance and related implementation rules have been issued in relation to the Opinions, and the interpretation and implementation of the Opinions TABLE OF CONTENTS also remain unclear at this stage, as advised by our PRC counsel, based on its understanding of the current PRC laws and regulations, no prior permission is required under the M&A Rules or the Opinions, or the Trial Measures from any PRC governmental authorities (including the CSRC) for consummating this offering by our company, and we will not be required to submit an application to the CSRC for the approval under the M&A Rules for this offering and the trading of our units, or other underlying securities, on Nasdaq because (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject to this regulation; (ii) we did not acquire any equity interests or assets of a PRC domestic company as such terms are defined under the M&A Rules. and (iii) our company is a blank check company newly incorporated in Cayman Islands rather than China and our company does not own or control any equity interest or assets in any PRC company or operate any business in China. Therefore, the M&A Rules and other current regulations of CSRC do not apply to this Offering. Nevertheless, our combination transaction may be required to be filed with the CSRC prior to the consummation, if the Trial Measures or the M&A Rules applies, each depends on the structure of the target company. However, there can be no assurance that the relevant PRC governmental authorities, including the CSRC, would reach the same conclusion as us, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or new interpretation of current rules to require us to obtain CSRC or other PRC governmental approvals for this offering or for the business combination if we decide to consummate the business combination with a target business based in and primarily operating in China. See Risk Factors Risks Relating to Being Located in China Although we are currently not required to obtain approval from any of the PRC central or local government to obtain any approval in connection with this offering or our search for a target business or related activities, our operations may be adversely affected in the future, directly or indirectly, by existing or future relevant laws and regulations if the PRC government takes the view that its approval is required on page 68 of this prospectus. Additionally, the Measures for Cybersecurity Reviews issued by the CAC on December 28, 2021, effective as of February 15, 2022, further restates and expands the applicable scope of relevant cybersecurity review procedures in China. According to the Cybersecurity Reviews, the purchase of network products and services by critical information infrastructure operator and the data processing activities carries out by online platform operators, which affects or may affect national security, shall be subject to cybersecurity review; and any operator who applies to list its securities overseas must apply to the Cybersecurity Review Office for a cybersecurity review if it is in possession of the personal information of more than 1,000,000 users. If our PRC-based target business is in possession of the personal information of more than 1,000,000 users, our PRC-based target business would be required to conduct the cybersecurity review. If our PRC-based target business is determined by PRC regulatory authorities to have data security risks, the relevant regulatory authority may have the right to stop the indirect listing of our PRC-based target business s securities through the consummation of the Business Combination, or (should the consummation of the Business Combination already have occurred) even request for withdrawal our Nasdaq listing application or delisting of our securities. In accordance with the Measures for Cybersecurity Reviews, the exact manner of intervention is not specified. Per the PRC Data Security Law issued by Standing Committee of the National People s Congress in June 2021, effective as of September 1, 2021, the cybersecurity review decision would be final and we would not have the ability to appeal. Our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations, we are not covered by permissions requirements from the CAC because (i) we are a blank check company and we do not operate any business in China and (ii) we are not an operator of critical information infrastructure or Internet platform operator as prescribed under the Measures for Cybersecurity Reviews. or any other governmental agency that is required to approve our operations. Moreover, we are not considering any PRC target Company that may be deemed as an operator of critical information infrastructure or Internet platform operator by the CAC. However, the proposed rules might still impact the timetable of our initial business combination and the certainty of our initial business combination. If, for example, our potential initial business combination is with a target business operating in the PRC and if the CAC makes other specific actions to be completed by the target business, we may face uncertainties as to whether such clearance can be timely obtained, or at all, and incur additional time delays to complete any such acquisition. Cybersecurity review could also result in negative publicity with respect to our initial business combination and diversion of our managerial and financial resources. There is no guarantee that we can receive such approval in a timely manner, and we may also be prevented from pursuing certain investment opportunities if the PRC government considers that the potential investments will result in a significant national security issue. Since our business combination period is TABLE OF CONTENTS 12 months from the closing of this offering (or 15 or 18 months, as applicable), and the approval process may take a period longer than we expect before we enter into a definitive agreement with a target company, we may be unable to complete a business combination within 12 months from the closing of this offering (or 15 or 18 months, as applicable). For these reasons we are not considering any PRC Target Company that may reasonably be deemed as an operator of critical information infrastructure or Internet platform operator by the Cybersecurity Administration of China, or any PRC Target Company that possesses personal information of more than one million users that may involve their data. Therefore, we may conduct analysis before we enter into a definitive agreement with a target company to evaluate the risks associated with the review by the CAC so as to attempt to avoid searching for a company with one million personal information in China or a company operating critical information infrastructure in China. If it is determined in the future that CSRC or CAC approval or other procedural requirements are required to be met for and prior to this offering or a business combination, it is uncertain whether we can or how long it will take us to obtain such approval or complete such procedures and any such approval could be rescinded. Any failure to obtain or delay in obtaining such approval or completing such procedures for our initial business combination with companies in China, or a rescission of any such approval, could subject us to sanctions by the relevant PRC governmental authorities. In addition, if the PRC governmental authorities later promulgate new rules or explanations requiring that we obtain their approvals for filings, registrations or other kinds of authorizations for our initial business combination, we cannot assure you that we can obtain the approval, authorizations, or complete required procedures or other requirements in a timely manner, or at all, or obtain a waiver of the requisite requirements if and when procedures are established to obtain such a waiver. Any of these failures may cause delay or termination of this offering or a potential business combination, imposition of fines and penalties, limitation on our operation in China and materially and adversely affect our ability to complete a business combination in the prescribed time period or otherwise affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our securities. Any such action, once taken by the PRC government, could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC, cause the value of the combined company s securities to significantly decline, or in extreme cases, become worthless or completely hinder the combined company s ability to offer or continue to offer securities to investors. Contractual Arrangements and Corporate Structure for a PRC-based Target Business If we decide to consummate our initial business combination with a target business based in and primarily operating in China utilizing a VIE structure due to restrictions imposed by PRC laws and regulations on foreign investment in certain industries, the combined company may be a company incorporated in jurisdictions other than the PRC, such as the Cayman Islands, and may conduct substantially all of its business operations in the PRC through its PRC subsidiaries and VIEs, while the combined company will not hold any direct equity interests in the VIEs. The combined company s PRC subsidiaries will control the VIEs through a series of contractual arrangements with the VIEs, as well as their founders and owners. Under such structure, the VIEs may hold key operating licenses, provide services to customers, and enter into contracts with suppliers and employ workforce. These contractual arrangements with the VIEs are put into place as a mechanism for the combined company s PRC subsidiaries to (1) exercise control over its VIEs, (2) receive substantially all of the economic benefits of the VIEs, and (3) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC law. These contractual arrangements often include exclusive technology and consulting service agreements, equity interest pledge agreements, exclusive option agreements and powers of attorney. As a result of these contractual arrangements, the combined company will exert control over, and will be considered the primary beneficiary of its VIEs and is able to consolidate such VIEs operating results in its financial statements under the U.S. GAAP. Under such corporate structure, the combined company whose securities will be listed on a U.S. stock exchange after the business combination will not hold any direct equity interests in its VIEs. If such VIE structure is utilized by the combined company, the investors of the combined company will not be holding equity interest of the operating business in China. As a result, the control through these contractual arrangements may be less effective than direct ownership, and the combined company could face heightened risks and may incur substantial costs in enforcing these contractual arrangements, because there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the legality and enforceability of these TABLE OF CONTENTS contractual arrangements. Under the contractual arrangements, as a legal matter, if the VIE or any of its shareholders executing the VIE agreements fails to perform its, his or her respective obligations under the contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you will be effective. For example, if shareholders of a variable interest entity were to refuse to transfer their equity interests in such variable interest entity to us or our designated persons when we exercise the purchase option pursuant to the contractual arrangements we may have to take legal action to compel them to fulfill their contractual obligations. The remedies of enforcing contractual arrangements may not always be effective, particularly in light of uncertainties regarding the interpretation and enforcement of the relevant laws and regulations. All of these contractual arrangements may be governed by and interpreted in accordance with PRC law, and disputes arising from these contractual arrangements may be resolved in court or through arbitration in China. Accordingly, these contracts will be interpreted in accordance with PRC laws and any disputes will be resolved in accordance with PRC legal procedures. As a result, uncertainties in the PRC legal system could limit our ability to enforce the contractual arrangements. Moreover, the contractual arrangements have not been widely tested in a court of law in the PRC and there remain significant uncertainties regarding the ultimate outcome of arbitration should legal action become necessary. In connection with litigation, arbitration or other judicial or dispute resolution proceedings, assets under the name of any of record holder of equity interest in the VIE, including such equity interest of such record holder, may be put under court custody. As a consequence, it cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or that the ownership by the record holder of such equity interest will be unchallenged. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us. There are very few precedents and little formal guidance as to how contractual arrangements in the context of a consolidated variable interest entity should be interpreted or enforced under PRC laws. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. Under PRC laws, rulings by arbitrators are final and parties cannot appeal arbitration results in court unless such rulings are revoked or determined unenforceable by a competent court. If the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay. If the PRC government finds such agreements to be illegal, the PRC subsidiaries and the VIEs of the combined company could be subject to severe penalties or the combined company could be forced to relinquish its interests in the VIEs. Under such circumstances, the value of the combined company s securities may significantly decline, or in extreme cases, become worthless. Additionally, the agreements associated with the VIE structure have not been tested in court of law in any jurisdiction. See Risk Factors Risks Relating to Being Located in China We may acquire control of a target business through contractual arrangements with a VIE with one or more operating businesses due to the restrictions imposed by PRC laws and regulations on foreign ownership of companies engaged in certain business operations on page 69. As we conduct our operations through an office space in the People s Republic of China, or PRC, and our sponsor and all of our executive officers and directors are located in or have significant ties to the PRC, the location of our sponsor and executive officers and directors may make us a less attractive partner to a non-China- or non-Hong Kong-based target company, which may therefore make it more likely for us to consummate a business combination in the PRC. Moreover, the legal and regulatory risks associated with being based in China may make us a less attractive partner in an initial business combination than a SPAC without any ties to China or Hong Kong. Implication of the Holding Foreign Companies Accountable Act Our securities may be prohibited to trade on a national exchange or over-the-counter markets under the Holding Foreign Companies Accountable Act (the HFCAA ) if Public Company Accounting Oversight Board ( PCAOB ) is unable to inspect our auditors for two consecutive years beginning in 2021. Our auditor, Marcum Asia CPAs LLP, is currently subject to PCAOB inspections and PCAOB is able to inspect our auditor. The HFCAA was enacted on December 18, 2020, pursuant to which, if the PCAOB is unable to inspect an issuer s auditors for three consecutive years, the issuer s securities are prohibited to trade on a TABLE OF CONTENTS U.S. stock exchange. On December 29, 2022, the Consolidated Appropriations Act, 2023 (the CAA ) was signed into law by President Biden. The CAA, among other things, reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA as it was originally passed from the original three years to two, and thus, reduced the time before a Commission-identified Issuer s securities may be prohibited from trading or delisted. Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the PRC, and (2) Hong Kong. In addition, the PCAOB s report identified the specific registered public accounting firms which are subject to these determinations. Our auditor, Marcum Asia CPAs LLP, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is not headquartered in mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB s determination announced on December 16, 2021. As a result, we do not believe that the Holding Foreign Companies Accountable Act and related regulations will affect us. On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the SOP ) with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together with two protocol agreements governing inspections and investigations (together, the SOP Agreement ), establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. The SOP Agreement remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the SOP Agreement disclosed by the SEC, the PCAOB shall have sole discretion to select any audit firms for inspection or investigation and the PCAOB inspectors and investigators shall have a right to see all audit documentation without redaction. Under the PCAOB s rules, a reassessment of a determination under the HFCAA may result in the PCAOB reaffirming, modifying or vacating the determination. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our auditor s control. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. Under the PCAOB s rules, a reassessment of a determination under the HFCAA may result in the PCAOB reaffirming, modifying or vacating the determination. However, if in the future the PCAOB is prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, the PCAOB is likely to determine that positions taken by authorities in the PRC obstructed its ability to inspect and investigate registered public accounting firms in mainland China and Hong Kong completely, then the companies audited by those registered public accounting firms would be subject to a trading prohibition on U.S. markets pursuant to the HFCAA. Other developments in U.S. laws and regulatory environment, including but not limited to executive orders such as Executive Order (E.O.) 13959, Addressing the Threat from Securities Investments That Finance Communist Chinese Military Companies, may further restrict our ability to complete a business combination with certain China-based businesses. For more detailed information, see Risk Factors Risks Relating to Being Located in China U.S. laws and regulations, including the Holding Foreign Companies Accountable Act, may restrict or eliminate our ability to complete a business combination with certain companies on page 66. TABLE OF CONTENTS The governing PRC laws and regulations are sometimes vague and uncertain, and therefore, the vagueness and uncertainties may result in a material change in the post-business combination company s operations, cause the value of our shares after we complete our business combination to significantly decline or be worthless, or substantially limit or completely hinder the post-combined company s ability to offer or continue to offer securities to investors. For instance, the PRC government recently initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. However, since these statements and regulatory actions are new, it is highly uncertain how soon Chinese legislative or administrative regulation making bodies will respond and what existing or new laws, regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our capability to acquire or merge with a company with major operations in China, as well as the post-business combination company s ability to conduct its business, accept foreign investments, or list on a U.S. stock exchange, and therefore, it could result in a material change in the target company s post-combinations operations, significant depreciation of the value of our ordinary shares, or a complete hindrance of our ability to offer or continue to offer our securities to investors. Transfer of Cash to and from Our Post-Combination Organization If We Acquire a Company Based in China (Post-Business Combination) Global Lights Acquisition Corp is a blank check company with no operations of its own and no subsidiaries except searching for a suitable target to consummate an initial business combination. Although we do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction, our initial business combination target company may include a PRC based company and to the extent that Chinese law prohibits direct foreign investment in the operating company, such business combination may require a VIE structure. As such, we may be required to conduct our operations in China primarily through our subsidiary or the VIE in China. As a result, although other means are available for us to obtain financing at the holding company level, the post-combination entity s ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends paid by our subsidiaries or the VIE. If any of our subsidiaries or the VIE incurs debt on its own in the future, the instruments governing such debt may restrict its ability to pay dividends to Global Lights Acquisition Corp. Under the VIE structure, the post-combination entity will highly rely on the VIE Agreements between it and the VIE to distribute earnings and settle amounts owed under the VIE agreements. Under the VIE agreements, in addition to funds to be generated by the VIE s operations in China, the VIE s operations can be financed by loans from the WFOE. Funds from the VIE to our public holding entity will be made as service fees to the WFOE pursuant to the VIE agreements, and the subsidiaries in turn makes distributions or pay dividends to our post-combination entity. Under the VIE structure, we must rely on the shareholders of the VIE to comply with its contractual obligations under the VIE agreements to pay the funds to the WFOE and then the WFOE, as a wholly owned subsidiary of the public holding entity, distribute funds to us. We cannot guarantee the PRC governments will allow such arrangement either. In addition, our post-combination organization s subsidiaries and the VIE are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. Investment in Chinese companies, which are governed by the Foreign Investment Law, and the dividends and distributions from a China-based operating company as well as the execution of shareholder redemption rights are subject to regulations and restrictions on dividends and payment to parties outside of China are subject to restrictions. The PRC government may impose controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our subsidiaries or the VIE s profits, if any, and we may also experience difficulties in completing the administrative procedures necessary to the application of shareholder redemption rights because of the uncertainties of foreign exchange control regulations of PRC government. Failure or inability to comply with foreign exchange regulations such as the SAFE procedures may also restrict our cross-border investment activities, limit the ability of the target business entity in China to TABLE OF CONTENTS distribute dividends, share transfer or liquidation to us, and we may also be prohibited from injecting additional capital into such subsidiary. If the foreign exchange control in PRC prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands or restricts on remittance of currencies out of PRC, we may be unable to pay dividends or consideration for redemption of shares in foreign currencies to our investors. PRC regulatory authorities could impose further restrictions on the convertibility of the Renminbi or overseas payment on current account items and capital account items by foreign currencies, and any future restrictions on currency exchanges and the remittance of currencies out of the PRC may limit our ability to use the proceeds of this offering in an initial business combination with a PRC target company and the use our cash flow for the distribution of dividends to our shareholders or to fund operations we may have outside of the PRC or to execution of shareholders redemption rights. Under the VIE structure, current PRC regulations permit a VIE to pay dividends to its holding company only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. For example, current PRC regulations permit VIE s PRC subsidiaries to pay dividends to an overseas subsidiary of our post-combination entity, only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. If we or the post-combination entity are unable to receive all of the revenues from their operations through the VIE agreements, we may be unable to pay dividends on our ordinary shares. In addition, each of the VIE s subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. Furthermore, if we complete a business combination with a company in China through VIE agreements and we are unable to receive all of the revenues from our operations through the current VIE agreements, we may be unable to pay dividends on our ordinary shares. Cash dividends, if any, on our ordinary shares will be paid in U.S. dollars. As a result, although other means are available for us to obtain financing at the holding company level, our ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and license and service fees paid by our PRC consolidated affiliated entities. If any of our subsidiaries incurs debt on its own in the future, the instruments governing such debt may restrict its ability to pay dividends to us. Current PRC regulations permit a VIE to pay dividends to its holding company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, our post-combination entity s subsidiaries in China may be required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. In order for us to pay dividends to our shareholders, we will rely on payments made from our post-combination subsidiaries, either directly controlled by us or indirectly controlled by us through VIE agreements. To the extent that a VIE structure is utilized, cash is transferred through our organization in the manner as follows: (1) the holding company may transfer funds to its subsidiaries, or intermediate holding companies, via additional capital contributions or shareholder loans, as the case may be; (2) the intermediate holding companies may provide loans to the VIE, subject to statutory limits and restrictions; (3) funds from the VIE to the intermediate holding companies are remitted as services fees; and (4) the intermediate holding companies may make dividends or other distributions to the holding company. To the extent that a VIE structure is not utilized, cash is transferred through our organization in the manner as follows: (1) the holding company may transfer funds to its subsidiaries, or intermediate holding companies, via additional capital contributions or shareholder loans, as the case may be; (2) if the holding company intends to distribute dividends, PRC subsidiaries will transfer the dividends to intermediate holding companies in accordance with the laws and regulations of the PRC, and then intermediate holding companies will transfer the dividends all the way up to the holding company, and the dividends will be distributed from the holding company to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions. As of the date of this prospectus, we have not made any dividends or distributions to our shareholders, nor have any transfer been made between our company, its subsidiaries and investors. We currently do not intend to distribute earnings or settle amounts owed under any VIE Agreements. TABLE OF CONTENTS Regardless of whether we have a VIE structure or direct ownership structure post-business combination, we may depend on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements. Such dividends and other distributions may be subject to the PRC government's regulations relating to the conversion of Renminbi into foreign currencies and the remittance of such currencies out of the PRC, which may limit our PRC subsidiaries ability to distribute earnings to us or may otherwise adversely affect us. Furthermore, even though we may wish to transfer cash proceeds raised from overseas financing activities, including proceeds from this offering, to our PRC subsidiaries via capital contribution or shareholder loans, the PRC governments regulations relating to foreign exchange may limit our ability to make loans to or inject capital into our PRC subsidiaries or the ability of our PRC subsidiaries to pay back such loans to us. As we have obtained necessary filings regarding PRC foreign exchange regulations prior to this offering, and the proceeds we receive from this offering and the sale of the private placement units will be deposited into a trust account in the United States with Continental Stock Transfer & Trust Company acting as trustee, for so long as we continuously comply with PRC foreign exchange regulations, we believe we will not be materially or adversely impacted by any PRC law or regulation on the cash flows associated with the business combination, including shareholder redemption rights. Corporate Information We are an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company shall have the meaning associated with it in the JOBS Act. Additionally, we are a smaller reporting company as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceed $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. Exempted companies are Cayman Islands companies wishing to conduct business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we are not subject to tax on income or capital gains arising in Cayman Islands. In addition, dividend payments are not subject to withholding tax in the Cayman Islands. TABLE OF CONTENTS Our executive offices are located at Room 902, Unit 1, 8th Floor, Building 5, No. 201, Tangli Road, Chaoyang District, Beijing, People s Republic of China, and our telephone number is +86 10-5948-0786. TABLE OF CONTENTS
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+PROSPECTUS SUMMARY 1 RISK FACTORS 11 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 41 USE OF PROCEEDS 42 DIVIDEND POLICY 43 CAPITALIZATION 44 DILUTION 45 SELECTED CONSOLIDATED FINANCIAL DATA 46 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 48 BUSINESS 54 MANAGEMENT 72 CORPORATE GOVERNANCE 75 EXECUTIVE COMPENSATION 79 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 85 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS 86 SELLING SHAREHOLDERS 87 DESCRIPTION OF SHARE CAPITAL 93 SHARES ELIGIBLE FOR FUTURE SALE 99 MATERIAL DIFFERENCES BETWEEN THE ALBERTA BUSINESS CORPORATIONS ACT AND THE DELAWARE GENERAL CORPORATION LAW 100 MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS 111 MATERIAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS 117 UNDERWRITING 119 LEGAL MATTERS 124 EXPERTS 124 WHERE YOU CAN FIND ADDITIONAL INFORMATION 124 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F-1 ii Neither we nor the selling shareholders nor the underwriter have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor the selling shareholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the selling shareholders are offering to sell, and seeking offers to buy, Common Shares only under circumstances and in jurisdictions where it is lawful to do so. Neither we, the selling shareholders nor the underwriter are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is current only as of its date. You should also read this prospectus together with the additional information described under Where You Can Find Additional Information on page 124 of this prospectus. The distribution of this prospectus and the issuance of the Common Shares in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the issuance of the Common Shares and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, the Common Shares offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation. In this prospectus, currency amounts are stated in U.S. dollars ( $ ), unless specified otherwise. All references to CAD$ are to Canadian dollars. Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market share, is based on information from our own management estimates and research, as well as from industry and general publications and research, surveys, and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry, and assumptions based on such information and knowledge, which we believe to be reasonable. Assumptions and estimates of our and our industry s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Risk Factors beginning on page 11 of this prospectus. These and other factors could cause our future performance to differ materially from our assumptions and estimates. See Cautionary Note Regarding Forward-Looking Statements on page 41 of this prospectus. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. iii PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in the Common Shares offered by this prospectus. You should read the entirety of this prospectus carefully, especially Risk Factors beginning on page 11 of this prospectus and Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 48 of this prospectus and the financial statements and related notes appearing at the end of this prospectus before making an investment decision. Unless the context provides otherwise, all references in this prospectus to First Person, we, us, our, our company, the Company, or similar terms, refer to First Person Ltd., a company incorporated in Alberta, Canada. References to the selling shareholders refer to the selling shareholders named in this prospectus. Overview First Person Ltd., a company incorporated in Alberta, Canada, is a holding company. The Company conducts its business and operations through its wholly-owned operating subsidiaries: First Person, Inc., a Delaware corporation ( FP, Inc. ), and TruMed Limited, a Jamaican company limited by shares ( TruMed ). We compete, or intend to compete, in the following three markets: Functional Mushrooms. Functional mushrooms are mushrooms believed to have additional health benefits beyond their basic nutritional value. We intend to produce and distribute for sale 100 percent grain-free, organic functional mushrooms at scale. Nutraceutical Products. Nutraceuticals are products derived from food sources believed to have additional health benefits beyond their basic nutritional value. We launched our direct-to-consumer line of highly curated cognitive supplements in March 2022. Psychedelic Mushrooms. Psychedelic mushrooms are mushrooms that contain psilocybin. We are building a robust culture library of psychedelic mushrooms and we intend to conduct research and development involving psychedelic mushrooms in Jamaica through TruMed. If there is rescheduling of psylocibin under the U.S. Controlled Substances Act of 1970 (the CSA ) from Schedule I to a lower Schedule (II-V) and we obtain the requisite approvals from all applicable state and federal governmental authorities, including U.S. Drug Enforcement Administration ( DEA ) manufacturing and research registration, then we intend to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States. Psilocybin, the naturally occurring drug found in psychedelic mushrooms, is currently a Schedule I controlled substance under the CSA and is currently an illegal substance in the State of Washington and all other U.S. states. Therefore, production and research of psilocybin requires approvals from federal and state authorities, which may be granted in the sole discretion of such authorities. Even with the necessary approvals, production and research of psilocybin may be subject to quotas or other restrictions set by federal or state authorities. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we obtain the requisite approvals from all applicable state and federal governmental authorities, including the Washington State Department of Health ( WDOH ) and the DEA, then we intend to build out our naturally-derived psychedelic mushroom supply chain in the United States in full compliance with state and federal laws. Unless there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we are able to obtain all of the requisite approvals, including approvals to produce, or conduct research involving, psychedelic mushrooms in the United States, then all of our activities involving psychedelic mushrooms and psilocybin will occur in Jamaica through TruMed, or through agreements with independent research labs in accordance with applicable laws. See Business Overview beginning on page 54 of this prospectus. Psilocybin is not an illegal drug under Jamaica s Dangerous Drugs Act, 1948 (the Jamaica Drug Act ). Unlike mushrooms that contain psilocybin, functional mushrooms and nutraceuticals are fully legal in the United States. We do not intend to market any of our products for medical use. Our goal is to activate the full potential of human cognition through mushroom innovation. We believe that First Person, despite its early stage of development, is building a resilient foundation for long-term growth, and we believe we have positioned ourselves for success in the brain health and wellness markets through our innovative product formulations and production processes. 1 First Person, Inc. Since its inception in January 2021, FP, Inc. has devoted substantially all of its efforts to business and product development relating to the operations of a functional mushroom farm in Olympia, Washington, and to the development of its own proprietary formulations of cognitive nutraceutical performance products containing functional mushrooms. FP, Inc. has developed grow and production capacity to become a U.S. domestic producer of 100 percent grain-free, organic functional mushrooms at scale; brought to market a legal nutraceutical brand of proprietary nootropics (substances believed to have a positive impact on mental performance); and constructed an initial 15,000 sq. ft. production and laboratory facility for the propagation and cultivation its proprietary functional mushrooms, with the intention of acquiring or leasing additional space to expand its growing space. The facility currently contains three fully constructed functional mushroom greenhouses, totaling 12,000 sq. ft. We intend to use a portion of the net proceeds of this offering for the expansion of FP, Inc. s production capabilities in the ingredients division in Olympia, Washington, focusing on expanding FP, Inc. s processing capabilities for fresh and dried functional mushrooms. See Use of Proceeds on page 42 of this prospectus. FP, Inc. is also actively building a robust fungi culture library of both functional and psychedelic mushrooms. TruMed Limited TruMed was formed on April 30, 2019, and is focused on research and development of psilocybin mushrooms. On February 15, 2022, we acquired all of the issued and outstanding shares of common stock of TruMed in exchange for an aggregate purchase price of up to $750,000, pursuant to the terms of a share purchase agreement (the Share Purchase Agreement ) entered into with TruMed and TruMed s former shareholders, Pratik Ruparell and Gaston Flagstaff (the TruMed Sellers ). $130,000 of the purchase price was paid by wire transfer upon the closing of the acquisition, while $70,000 of the purchase price was to be paid pursuant to the terms of a promissory note delivered to the TruMed Sellers. On April, 28, 2023, the Company paid to the TruMed Sellers the remaining amount outstanding under the promissory note and the promissory note was cancelled. The remaining $550,000 of the purchase price will only be paid if TruMed achieves certain milestones within the first twenty-four months following the closing of the acquisition (the Milestone Payments ). See Business Overview beginning on page 54 of this prospectus for additional information. TruMed is a pre-revenue company in the development stage with substantially no operations. TruMed intends to conduct research and development involving psychedelic mushrooms in Jamaica. Psilocybin is not an illegal drug under the Jamaica Drug Act. Therefore, research involving psychedelic mushrooms is not in contravention of the laws of Jamaica and does not require any permit or authorization from the regulatory authorities in Jamaica. TruMed intends to cultivate and study psychedelic mushrooms in Jamaica, and we plan to use a portion of the proceeds of this offering to establish TruMed s operations in Jamaica. See Use of Proceeds on page 42 of this prospectus. On June 26, 2023, the TruMed Sellers filed a statement of claim against First Person Ltd. and TruMed Limited in the Court of King s Bench of Alberta. See Business Legal Proceedings on page 71 of this prospectus for additional information. The statement of claim has not had any material impact on TruMed s business, including TruMed s research and development operations in Jamaica. TruMed does not have any employees or currently active business operations. Our Strategy and Competitive Strengths Building a Vertically Integrated Supply Chain for Functional Mushrooms to Be Used as Supplied Ingredients for Consumer Brands. We intend to become a functional mushroom supplier, leveraging our expertise and innovation to build a supply chain from the ground up, using our proprietary First Person process and techniques. We intend to sell functional mushroom powders and extracts, as well as the unprocessed fruiting bodies of functional mushrooms, as supplied ingredients for consumer brands by entering into supply agreements with other companies. We also use our functional mushroom products in our own nutraceutical brand. The global appetite for functional mushrooms is rapidly expanding. However, a nascent marketplace and fractured supply chain leave businesses and consumers wanting. Demand has currently overwhelmed the industry s existing supply chain for functional mushrooms and large companies are buying out entire mushroom harvests in advance. In response, functional mushrooms are being grown and imported from overseas to meet demand in North America. Imported mushrooms have, in some instances, been found to contain heavy contaminants, grains, and other substrates, compromising the quality and purity of final consumer products. We intend to set the standard for purity, potency, and transparency while innovating finished mushroom ingredient formats to expand potential end-use product applications. 2 While we are an early stage company with a history of net losses, we believe our planned vertically-integrated structure will allow us to disrupt and potentially dominate this fractured supply chain, secure growth, and generate revenue streams in the developing markets for functional mushrooms. Using FP, Inc. s proprietary First Person production process, which FP, Inc. protects as a trade secret, our innovation team, together with our Head of Mycology & Psychedelics, Robert C. Kaelin, has developed a protectable, proprietary, and scalable end product that is 100 percent pure mushrooms, with no fillers or grain residue. Mr. Kaelin has over twenty years of experience in propagation, cultivation, and processing, and has extensive knowledge in the handling of good-manufacturing-practice certified mushrooms and mycelium products for use in the nutraceutical and whole-foods industries. We are building in-house processing capabilities to meet demand for our premium grain-free, pure fruiting body extract powders. Our functional mushrooms are cultivated on wild harvest alder saw dust, then harvested, dried, and shipped to a processing partner for milling, extraction, and spray drying. Our proprietary extraction method uses hot water and ethanol in an ultrasonic assisted extraction ( UAE ) process that utilizes high frequency sound waves to extract compounds from the mushroom fiber. We own all of the UAE equipment, which is housed at our processing partner s facility, and it is operated by our processing partner s staff in accordance with our specifications. We do not have a formal agreement with our processing partner, and instead function on an order-by-order basis with pricing established for each order. Once fully operational, we believe our proprietary automated processes to grow and process systems will maximize yields and minimize lead times and processing steps. Our production capacity is growing, and currently consists of 15,000 sq. ft., including three fully constructed functional mushroom greenhouses, totaling 12,000 sq. ft., with plans to acquire or lease additional growing space. The three First Person fungi varieties that we are currently growing and intend to harvest are: (i) First Person Lions Mane (Hericium erinaceus); (ii) First Person Reishi (Ganoderma lingzhi); and (iii) First Person Cordyceps (Cordyceps militaris). We have harvested initial batches of each of these three fungi varieties for testing purposes, and we have harvested additional batches of First Person Lions Mane for use in our direct-to-consumer cognitive supplements. We do not use ethanol during the UAE process when processing First Person Lions Mane, but instead use only water. On June 23, 2022, our First PersonTM functional mushrooms were certified as organic by CCOF Certification Services, LLC, an organic certifying agency accredited by the U.S. Department of Agriculture ( USDA ). We believe that owning our supply chain will allow us to participate in the high-growth mushroom business-to-business ingredient market by eventually becoming the primary supplier and product innovation partner of functional and wellness brands. We anticipate that these relationships could eventually expand to include psychedelic mushrooms if the legal path is cleared to do so and we obtain the requisite approvals from all applicable state and federal governmental authorities, including DEA manufacturing and research registration, to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States. Building Consumer Relationships Through a Direct-to-Consumer Brand. We plan to further develop, build, and market a successful direct-to-consumer brand of targeted nutraceuticals containing functional mushrooms and adaptogenic botanicals (plants or plant parts believed to help the body adjust to physical, chemical, or biological stress). We believe that building an early, direct, and trusted brand relationship with the consumer enables seamless product and category expansion. On March 1, 2022, we launched a cognitive supplement system formulated to target specific neurotransmitters, which we believe will help establish our brand in the functional mushroom and the brain health and wellness markets. These are curated and fully legal cognitive supplements. The supplements feature functional mushrooms and a curated blend of nutraceuticals that activate specific neurotransmitters affecting energy, mood, and sleep. Nutraceuticals are dietary supplements and are regulated by the U.S. Food and Drug Administration ( FDA ). These consumer products do not require FDA approval prior to marketing and distribution, but are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. At launch, all functional mushrooms in our nutraceuticals were purchased from third parties. We have since started to include our First Person Lions Mane in our nutraceuticals; however, we still purchase functional mushrooms from third parties, which are included in our nutraceuticals along with our First Person Lions Mane. All of the ingredients used in our nutraceuticals come from three sources FP, Inc., Nutricode (an FM World brand), and North American Reishi Ltd. d/b/a NAMMEX. We do not have any formal agreements with third-party suppliers of functional mushrooms, and instead operate on an order-by-order basis with prices determined for each order. All of the ingredients used in our nutraceuticals meet the definition of a dietary ingredient as used in the Federal Food, Drug, and Cosmetic Act of 1938 (the FDCA ). We do not intend to market any of our products for medical use. 3 We are branding and marketing these cognitive supplements with a brand agency that has experience in creating and launching successful direct-to-consumer brands. Our brand and product ecosystems are strategically positioned to resonate with forward-thinking consumers who seek to optimize their mental health and cognitive performance. We intend to build and sustain community engagement through high-impact marketing and branding activities, executive communications, and industry recognition. Our team brings a depth of invaluable experience across a diverse range of direct-to-consumer e-commerce businesses, and are experts in areas involving consumer acquisition costs, order frequency, and retention. We anticipate this will lead to detailed and realistic expectations for lifetime value that can inform and drive our decisions around reasonable marketing spend for customer acquisition. We expect future product-line expansion to include innovations in the functional beverage category (a category that includes nutritional and energy drinks). Product Research and Development and Innovation Capabilities in Psychedelic Mushrooms. We plan to conduct psychedelic mushroom product research and development in Jamaica through TruMed. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we obtain the requisite approvals from all applicable state and federal governmental authorities, including the WDOH and the DEA, then we intend to build out our naturally-derived psychedelic mushroom supply chain in the United States in full compliance with state and federal laws. We believe our multi-faceted approach, involving supplying functional mushrooms, marketing a nutraceutical brand, and psychedelic mushroom product research and development, will maximize our potential in an emerging and transformative category of mental health products and solutions. Psilocybin, the naturally occurring drug found in psychedelic mushrooms, is currently a Schedule I controlled substance under the CSA and is currently an illegal substance in the State of Washington and all other U.S. states. Therefore, in order to produce and research psilocybin in the United States, we will need to obtain the necessary approvals from federal and state authorities, which may be granted in the sole discretion of such authorities. Even if we receive the necessary approvals, we may be subject to quotas or other restrictions on our production and research set by federal or state authorities. Research involving controlled substances in the State of Washington requires participating individuals to register with both the DEA and the WDOH. Under Section 69.50.508(e) of the Revised Code of Washington ( RCW ), the State of Washington gives the WDOH the authority to authorize certain persons to possess and distribute controlled substances for research purposes. The first step in obtaining the necessary authorizations is to receive state approval from the WDOH. Applicants must obtain controlled substance researcher registration from the WDOH prior to registering with the DEA. Chris L. Claussen, our Chief Innovation Officer, submitted a controlled substance researcher application with the WDOH in order for FP, Inc. to conduct psilocybin research, with such application listing FP, Inc. s Olympia, Washington facility as the research lab location. The application was submitted on July 12, 2021, and remains under review. If the WDOH registration is granted, then FP, Inc. intends to utilize such registration to apply for licensure with the DEA to make our facility in Olympia, Washington a licensed psilocybin facility. Due to the unpredictable nature of the WDOH review process, the timeline for receiving WDOH s determination with respect to the application is currently uncertain. If we receive the WDOH license, then the approval process with the DEA is expected to take two to three months from when we initially submit an application with the DEA. If these licenses are obtained, and there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V), then we expect our facility to include a WDOH- and DEA-compliant culture laboratory and controlled production and research facility for psychedelic mushrooms, built in compliance with all security protocols. We do not intend to use any of the proceeds we receive from this offering for the construction of the WDOH- and DEA-compliant culture laboratory and controlled production and research facility. Unless there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we are able to obtain all of the requisite approvals, including approvals to produce, or conduct research involving, psychedelic mushrooms in the United States, then all of our activities involving psychedelic mushrooms and psilocybin will occur in Jamaica through TruMed, or through agreements with independent research labs in accordance with applicable laws. Psilocybin is not an illegal drug under the Jamaica Drug Act. Therefore, the cultivation of, and research involving, psychedelic mushrooms is not in contravention of the laws of Jamaica and does not require any permit or authorization from the regulatory authorities in Jamaica. TruMed intends to cultivate and study psychedelic mushrooms in Jamaica. TruMed s research and development efforts are intended to focus on analyzing certain psychedelic mushroom species and extraction and production methods that standardize the potency of naturally-occurring psilocybin in mushrooms for use in approved clinical trials by drug development companies. While TruMed intends to supply psilocybin to drug development companies, TruMed does not intend to develop pharmaceutical products or market any of its products for medical use, nor does TruMed intend to develop recreational products involving psilocybin or psychedelic mushrooms. We plan to use a portion of the proceeds of this offering to establish TruMed s operations in Jamaica. See Use of Proceeds on page 42 of this prospectus. TruMed is a pre-revenue company in the development stage with substantially no operations, and has not yet conducted any research involving psilocybin. In addition, we have entered into a statement of work with Charles River Laboratories Montreal ULC ( Charles River Labs ), an independent research lab in Canada, to conduct two studies involving psilocybin. Charles River Labs obtained the necessary import permits from Health Canada a department of the Government of Canada responsible for national health policy and the Company does not need to acquire any approvals in connection with such research. After Charles River Labs obtains the necessary components for the tests, then Charles River Labs will commence two studies pursuant to the terms of the statement of work, with research and development efforts focused on isolating and studying the individual psychoactive components of mushrooms. Through the exploration of genetic strains and compounds, we hope to discover novel combinations and applications of these analogs for brain health and performance. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States, then we intend to expand domestic U.S. production to include psychedelic mushrooms and conduct research and development. Our intended research and development activities in the United States would be parallel to TruMed s intended activities in Jamaica (i.e., analyzing certain psychedelic mushroom species and extraction and production methods that standardize the potency of naturally-occurring psilocybin in mushrooms for use in approved clinical trials by drug development companies), but we believe carrying out such activities in the United States would improve our ability to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States. While we intend to supply psilocybin to drug development companies if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA, we do not intend to develop pharmaceutical products or market any of our products for medical use, nor do we intend to develop recreational products involving psilocybin or psychedelic mushrooms. We may not commence psilocybin propagation operations until we receive the requisite approvals from such authorities, and there is no guarantee that we will receive such approvals. 4 We have filed two provisional patent applications that could provide us with a protected advantage in legal psychedelic mushroom markets. Both provisional patents were initially filed in 2021 and refiled in 2022, and one of the provisional patents was refiled again in 2023. We have not yet filed a formal patent application for either innovation. The provisional patent applications will expire in 2023. We do not intend to file a utility patent application for either innovation until after the commencement of the studies pursuant to the statement of work entered into with Charles River Labs. In the event the studies do not commence prior to the expiration of the provisional patent applications, then we intend to refile the provisional patent applications. Our goal is to combine these patented innovations, and we believe that doing so will give us product performance and market advantages over other competitors preparing for the possibility of a legal market for sales of psychedelic mushrooms to drug development companies for their research and clinical trials. We have only filed provisional patent applications, which help protect inventions for a twelve-month period while a formal patent application is being filed. The patent process can take up to twenty-four months or longer to complete and can be challenged during the process. At this time, we cannot state whether the patent applications will be approved, refused, and/or ultimately registered. See Business Intellectual Property beginning on page 60 of this prospectus for more information regarding our intellectual property. We believe our three-part holistic strategy and approach to the developing markets for both functional mushrooms and, when legal pathways allow, psychedelic mushrooms strategically positions us for both near and long-term growth. Risks Associated with Our Business Our business is subject to numerous risks and uncertainties that you should be aware of before making an investment decision, including those highlighted under Risk Factors beginning on page 11 of this prospectus. These risks include, but are not limited to, the following: we might have material contingent liability arising out of a possible violation of Section 5 of the Securities Act in connection with certain statements and disclosures made in an online article appearing on Bloomberg on July 21, 2022; a television interview broadcast by NewsNation on October 17, 2022; and fifteen podcasts released between July 13, 2021 and February 2, 2023, nine of which were temporarily linked to the Company website. The podcasts were conducted by The Story of a Brand ; That Gives Me Anxiety ; JJ Flizanes (published on Ms. Flizane s podcasts: Nutrition & Alternative Medicine , Fit 2 Love , and Spirit Purpose & Energy ); Mycopreneur ; Koncrete ; Justin Caviar ; Humble and Hungry ; Elevate Your Brand ; Bliss Project ; Ashley On ; Riderflex ; Let s Talk Plant Medicine ; Spiritual Boss Babe ; Vital Science ; and Finding Genius ; we might have material contingent liability arising out of a possible violation of Section 5 of the Securities Act in connection with certain statements and disclosures made in an article published online on September 20, 2022; the functional-mushroom and psilocybin industries are new in the United States, and the industries and markets may not continue to exist or develop as anticipated or we may ultimately be unable to succeed as anticipated in these industries and markets; our ability to cultivate and/or acquire mushrooms for our products is subject to risks inherent in agricultural operations; we may encounter disruptions or delays in the expansion and construction of our facilities, which may impair our ability to grow and produce our own mushroom products for distribution; we rely on a third-party co-packer for certain product components and other third parties for the packaging material for our products, and there is no guarantee that the relationships with the co-packers or packaging companies will continue or that the co-packer or packaging companies will deliver goods on a timely basis; if we are unable to protect the confidentiality of our trade secrets, the value of our proprietary processes could be materially adversely affected and our business would be harmed; a denial of, or significant delay in obtaining, or any interruption of required government authorizations to produce psilocybin for federally sanctioned purposes would likely have a significant negative impact on the Company s business plans; 5 the dynamic nature of the laws and regulations affecting the psilocybin market, including the federal authorization of psilocybin, or the state-regulated psilocybin industry, could adversely affect our proposed operations in the United States, and we cannot predict the impact that future regulations may have on us; the laws, regulations, and guidelines generally applicable to our business or products, or to research involving psilocybin, in the United States may change in ways that impact our ability to continue our business as currently conducted or proposed to be conducted; because psilocybin is a controlled substance, our products, equipment, and revenues could be subject to civil or criminal asset forfeiture if we fail to comply with the laws and regulations applicable to psilocybin; adverse U.S. or international economic conditions, including periods of inflation, could negatively affect our business, financial condition, and results of operations; the recent COVID-19 pandemic or future pandemics could have a material adverse impact on our business, results of operations, and financial condition; we may be vulnerable to rising energy costs; environmental risks may adversely affect our business; and you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under Canadian law and certain of our executive officers and directors reside outside the United States. If we are unable to adequately address these and other risks we face, our business, financial condition, results of operations, and prospects may be adversely affected. Implications of Being an Emerging Growth Company As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include that: we are only required to provide reduced disclosure in Management s Discussion and Analysis of Financial Condition and Results of Operations ; we are not required to engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act ); we are not required to submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay, say-on-frequency, and say-on-golden parachutes ; and we are not required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer s compensation to our median employee compensation. We may take advantage of these provisions until the last day of the fiscal year during which the fifth anniversary of this listing occurs or such earlier time that we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of: (i) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (ii) the last day of the fiscal year during which the fifth anniversary of this listing occurs; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. Under the JOBS Act, emerging growth companies also can delay adopting new or revised accounting standards until such time as those standards would otherwise apply to private companies. We currently intend to take advantage of this exemption. For risks related to our status as an emerging growth company, see Risk Factors We are a smaller reporting company and emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies and emerging growth companies will make our Common Shares less attractive to investors on page 28 of this prospectus. Corporate Information LEIIO Wellness Ltd. ( Wellness ), our predecessor by name change, was incorporated on January 21, 2021 (date of inception), under the laws of the province of Alberta, Canada. On December 15, 2021, we changed our name to First Person Ltd. Our principal executive offices are located at 1840, 444 5th Ave., SW, Calgary, AB, T2P 2T8, and our telephone number at such address is (587) 577-9261. Our principal offices in the United States are located at 611 N. Brand Blvd., Suite 1300, Glendale, CA 91203. Our website address is https://www.firstpersongroup.com. The reference to our website in this prospectus is an inactive textual reference only and is not a hyperlink. You should not consider information contained on our website to be part of this prospectus in deciding whether to purchase the Common Shares offered by this prospectus. 6 THE OFFERING Common Shares Offered in Primary Offering: 2,900,000 Common Shares Over-allotment Option: We have granted an option to the underwriter, exercisable one or more times in whole or in part for a period of forty-five days from the date of this prospectus, to purchase up to an additional 435,000 Common Shares (15 percent of the Common Shares sold in the Primary Offering) solely to cover over-allotments, if any, at the Primary Offering price per Common Share, less the underwriting discount. Common Shares to be outstanding immediately after this offering: 10,152,033 Common Shares. If the underwriter s over-allotment option to purchase additional Common Shares is exercised in full, the total number of Common Shares outstanding immediately after this offering would be 10,587,033 Common Shares. Use of proceeds: We estimate that the net proceeds to us from this offering will be approximately $10.54 million, or approximately $12.33 million if the underwriter exercises the over-allotment option in full, assuming an offering price of $4.50 per Common Share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of selling shareholder shares. However, upon any exercise, other than a net exercise, of warrants or stock options held by the selling shareholders, we will receive cash proceeds per share equal to the exercise price of such warrants or stock options. We intend to use the net proceeds of this offering primarily for general working capital, launching and growing an initial line of consumer products, research and development, establishment of operations in Jamaica, and expansion of growing and production capabilities in Olympia, Washington. As of December 31, 2022, Cory J. Rosenberg, our Chairman, Chief Executive Officer, and President, was due $643,407 for digital advertising expenditures incurred on our behalf, of which $340,640 remained outstanding and due to Mr. Rosenberg as of October 19, 2023. See Certain Relationships and Related Party Transactions on page 85 of this prospectus for more information regarding the amounts due to Mr. Rosenberg. We will pay such amounts out of the net proceeds from this offering. As of October 19, 2023, we have convertible secured promissory notes in the aggregate principal amount of approximately $3.34 million outstanding, including a convertible secured promissory note in the principal amount of $271,739 issued to Cory J. Rosenberg, our Chairman, Chief Executive Officer, and President, on January 3, 2023, a convertible secured promissory note in the principal amount of $108,696 issued to Mr. Rosenberg on September 7, 2023, and a convertible secured promissory note in the principal amount of $100,000 issued to Darcy A. Campbell, our Chief Financial Officer on January 9, 2023. See Certain Relationships and Related Party Transactions on page 85 of this prospectus for more information regarding the convertible secured promissory notes issued to Mr. Rosenberg and Mr. Campbell. Interest on the principal amount outstanding and remaining from time to time on each convertible secured promissory note accrues at the rate of 8 percent per annum. Each convertible secured promissory note, including the outstanding principal amount together with all applicable accrued and unpaid interest thereunder, is convertible, in whole or in part, into Common Shares at the option of the holder of such convertible secured promissory note (subject to certain limitations set forth in the convertible secured promissory note) at a conversion price equal to $6.00 per Common Share (subject to certain adjustments set forth in the convertible secured promissory note). Each convertible secured promissory note is payable in accordance with the following schedule: (i) if a Qualifying Transaction occurs 30 days or more before the date that is one year after the date of such convertible secured promissory note, then (a) 50 percent of the principal amount is payable on the thirtieth calendar day after the date of the first Qualifying Transaction occurring after the date of such convertible secured promissory note; and (b) the remaining 50 percent of the principal amount is payable on the earlier to occur of (1) the ninetieth calendar day after the date of the first Qualifying Transaction occurring after the date of such convertible secured promissory note, or (2) the date that is one year after the date of such convertible secured promissory note, and (ii) if a Qualifying Transaction does not occur, or occurs less than 30 days, before the date that is one year after the date of such convertible secured promissory note, then 100 percent of the principal amount is payable on the date that is one year after the date of such convertible secured promissory note. All of the convertible secured promissory notes were issued between January 3, 2023, and September 7, 2023. The Primary Offering is expected to qualify as a Qualifying Transaction under the terms of the convertible secured promissory notes. Therefore, to the extent the holders of the convertible secured promissory notes, including the convertible secured promissory notes held by Mr. Rosenberg and Mr. Campbell, do not elect to convert the outstanding principal and accrued and unpaid interest into Common Shares such amounts will become payable in accordance with the schedule set forth above and we will pay such amounts out of the net proceeds from this offering. Existing Selling Shareholder Shares being registered for resale: Up to 2,330,364 Common Shares Risk Factors: Investing in our Common Shares is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in this prospectus and, in particular, the specific factors set forth in Risk Factors beginning on page 11 of this prospectus, before deciding whether or not to invest in the Common Shares offered by this prospectus. Proposed Nasdaq Capital Market Listing: We have applied to list our Common Shares on The Nasdaq Capital Market under the symbol FP . The number of Common Shares that will be outstanding after this offering is based on 7,252,033 Common Shares outstanding as of June 30, 2023, assuming all outstanding Preferred Shares, Series 1 ( Series 1 Shares ) are converted into 900,679 Common Shares immediately prior to the closing of the Primary Offering, and excludes the following: up to 482,500 Common Shares issuable upon the exercise of outstanding options under the First Person Ltd. Long Term Incentive Plan (as amended, the Incentive Plan ) as of the date hereof, of which 290,000 have an exercise price of CAD$2.00 per Common Share, 72,500 have an exercise price of CAD$3.50 per Common Share, and 120,000 have an exercise price of $5.00 per Common Share; up to 500,620 Common Shares at a price per Common Share of CAD$5.00 issuable upon exercise of outstanding warrants as of the date hereof; 152,635 Common Shares reserved for future issuance under the Incentive Plan as of the date hereof; and any Common Shares issuable upon exercise of the underwriter s over-allotment option. Any holder of Series 1 Shares may, at any time, elect to convert all or any portion of the outstanding Series 1 Shares held by such holder into Common Shares. The Series 1 Shares will automatically convert into Common Shares on the date that is 12 months after the closing of the Primary Offering. The number of Common Shares issuable upon conversion of the Series 1 Shares is calculated as of the date of this prospectus as follows: (i) with respect to the 3,098,971 Series 1 Shares issued on January 3, 2023, January 9, 2023, February 6, 2023, and March 31, 2023, (a) the aggregate number of Series 1 Shares outstanding, divided by (b) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus; and (ii) with respect to the 239,129 Series 1 Shares issued on September 7, 2023, (a) the aggregate number of Series 1 Shares outstanding, multiplied by (b) 0.6, divided by (c) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus. The actual number of Common Shares issuable upon conversion of the outstanding Series 1 Shares may increase or decrease on a future date based on when the closing of the Primary Offering occurs and the actual offering price per Common Share. See Description of Share Capital Preferred Shares on page 93 of this prospectus for more information regarding the conversion of the Series 1 Shares. Consolidation On April 21, 2022, First Person amended its articles of incorporation to effect a consolidation of the outstanding Common Shares (the Consolidation ) on the basis of a consolidation ratio of one post-Consolidation Common Share for every ten pre-Consolidation Common Shares outstanding prior to the effective date of the Consolidation. All references to Common Shares, options and warrants to purchase Common Shares, share data, per share data, and related information have been retroactively adjusted, where applicable, in this prospectus to reflect the Consolidation as if it had occurred at the beginning of the earliest period presented. Interview Statements Information about the Company and statements made by Chris L. Claussen, one of our directors and our Chief Innovation Officer, Joseph Claussen, our Director of Business Development (collectively, the Claussens ), Cory J. Rosenberg, our Chairman, Chief Executive Officer, and President, and Dom D Agostino, our scientific advisor, during fifteen podcast interviews (the Podcasts ) were uploaded to YouTube and links to nine of such Podcasts were temporarily posted to our new Company website. The Podcasts that were temporarily linked to the Company website were created between March 29, 2022 and February 2, 2023. In addition, information about the Company and statements made by the Claussens were published in an online article appearing on Bloomberg on July 21, 2022 and a television interview broadcast by NewsNation on October 17, 2022 (together with the Podcasts, the Interviews ), neither of which were linked to our website. The statements made by the Claussens, Cory J. Rosenberg, and Dom D Agostino in the Interviews were predominately focused on their personal experiences and how they were inspired to become involved in the Company s business. The Company was not involved in any way in the preparation of the statements made by the Claussens, Cory J. Rosenberg, or Dom D Agostino, and all links to the Podcasts have since been deleted from the Company website and all of the Podcasts have been removed from YouTube. The Podcasts were conducted by The Story of a Brand ; That Gives Me Anxiety ; JJ Flizanes (published on Ms. Flizane s podcasts: Nutrition & Alternative Medicine , Fit 2 Love , and Spirit Purpose & Energy ); Mycopreneur ; Koncrete ; Justin Caviar ; Humble and Hungry ; Elevate Your Brand ; Bliss Project ; Ashley On ; Riderflex ; Let s Talk Plant Medicine ; Spiritual Boss Babe ; Vital Science ; and Finding Genius . None of the entities or persons who conducted or published the Interviews are affiliated with the Company or any other offering participant. No payment was made nor was any consideration given to the hosts or anyone else involved in the production of the Interviews by or on behalf of the Company or any other offering participant in connection with the Interviews. You should not consider the statements in the Interviews, as set forth in Exhibit 99.1 to the registration statement of which this prospectus forms a part, in making your investment decision. You should make an investment decision only after carefully evaluating all of the information contained in this prospectus, including the Company s responses to the statements in the Interviews, as set forth in Exhibit 99.1 to the registration statement of which this prospectus forms a part. Certain claims regarding our products and business made by the Claussens, Cory J. Rosenberg, or Dom D Agostino in the Interviews are inaccurate, unsubstantiated, and contradict the claims made in the registration statement of which this prospectus is a part. As a result of the foregoing, the Interviews could be determined not to be in compliance for a registered securities offering under Section 5 of the Securities Act. If the statements or disclosures in the Interviews are determined by a court to be a violation by us of Section 5 of the Securities Act, we could have a material contingent liability. Any liability would depend upon the number of Common Shares purchased in this offering. If a claim were brought by any investors in this offering and a court were to conclude that we violated Section 5 of the Securities Act, then those investors might have rescission rights and we (and the selling shareholders) could be required to repurchase the shares sold to them, at the original purchase price, plus statutory interest from the date of purchase, for claims brought during a period of one year from the date of their purchase of our Common Shares. We could also incur considerable expense in contesting any such claims. Further, if the Interviews are deemed to be in violation of Section 5 of the Securities Act, then the SEC and/or relevant state regulators could impose monetary fines or other sanctions under relevant federal and state securities laws. Free Writing Prospectus On September 26, 2022, First Person filed an issuer free writing prospectus with the SEC pursuant to Rule 433(f) under the Securities Act (the Free Writing Prospectus ). The Free Writing Prospectus includes the full text of an article that was published in a September 20, 2022, online publication by reMind Media (the Article ). As of September 22, 2022, the Article was no longer available on reMind Media s website or any of its other publications. The Article contained information about the Company and statements made by Chris L. Claussen, one of our directors and our Chief Innovation Officer, and Joseph Claussen, our Director of Business Development, during an interview with reMind Media. The Free Writing Prospectus contains corrective statements regarding certain of the statements made by the Claussens in the Article. The Company was not involved in any way in the interview or the preparation of the statements made by the Claussens. The Article was prepared by reMind Media, which is not affiliated with the Company. No payment was made nor was any consideration given to reMind Media by or on behalf of the Company or any other offering participant in connection with the publication of the Article. The Article contained the following inaccurate or unsubstantiated statements: The Article stated that we have two pending patents related to a natural psilocybin extract and a novel combination of psilocin and ketones, which [the Company] developed at their lab in Jamaica. We filed two provisional patent applications, which help protect inventions for a twelve-month period while a formal patent application is being filed. The patent process can take up to twenty-four months or longer to complete and can be challenged during the process. At this time, we cannot state whether the patent applications will be approved, refused, and/or ultimately registered. The innovations were developed by the Claussens, rather than the Company, and were not developed in our lab in Jamaica. Both provisional patent applications were filed in 2021, after the Claussens assigned to us their interests in the innovations. We did not acquire TruMed or have Jamaican operations until 2022, which was after the provisional patent applications were filed. Investors should review the information regarding our intellectual property in Business Intellectual Property beginning on page 60 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. 7 When discussing his family s personal experiences with psilocybin, Joseph Claussen stated in the Article that there s no toxicity . Additionally, Chris L. Claussen stated that psilocybin had the ability to create some new neural networks, our brains are functioning at the highest levels that they ever have, and that [w]e know that once you get Alzheimer s there no cure for it. But we also know that you can prevent it by keeping your brain healthy, to always be creating new neural connections, and maintain neuroplasticity as you age and avoid going into cognitive decline. We do not intend to market any of our functional mushroom or nutraceutical products for medical use. Our consumer products are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. We have not conducted clinical studies with respect to the claims made by the Claussens. We cannot confirm that psilocybin will create new neural networks or can prevent the onset of Alzheimer s disease or cognitive decline. We cannot provide any assurance that any persons will have the same outcomes as Chris L. Claussen, Joseph Claussen, or their father, or that psilocybin was a cause of such outcomes. Investors should review the information regarding our products in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. When referring to our products, Joseph Claussen stated in the Article that our products contain curated amounts of Lion s Mane and cordyceps the cordyceps is important because it has an MAO inhibitor, so it provides a longer duration. Additionally, Chris L. Claussen stated in the Article that We think our functional mushroom products work wonderfully on their own. But they were definitely designed for a microdosing regime. We deliberately engineered them to stay away from the serotonin receptors. A lot of other nootropics contain everything and the kitchen sink, which will flood your serotonin receptors and interfere with your microdosing. We didn t want to do that. We targeted our functionals to the dopamine, oxytocin, and GABA receptors. We left serotonin alone, so the psilocybin could do its work. Our direct-to-consumer brand of supplements contain functional mushrooms and a curated blend of nutraceuticals. Not all of our supplements contains Lions Mane and/or Cordyceps. Nutraceuticals are dietary supplements and are regulated by the FDA. These consumer products do not require FDA approval prior to marketing and distribution, but are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. We have not conducted clinical studies with respect to the claims made by the Claussens. We cannot confirm that cordyceps provides longer duration or has an MAO inhibitor, that there are any characteristics of different mushrooms that may be beneficial, or that targeting dopamine, oxytocin, and GABA receptors may be possible or beneficial. Investors should review the information regarding the Company s direct-to-consumer brand of supplements in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. When referring to studies that are anticipated to be performed by Charles River Labs, Chris L. Claussen stated in the Article that [w]e re really excited about this. We believe there s a real potential to improve the efficacy of psilocin. Our scientific advisor Dom D Agostino, a pioneer in the science of the health benefits of the ketogenic diet, is working with us to prove our hypothesis. Additionally, Joseph Claussen stated in the Article that [w]hen proven, the improvements in neurogenesis and synaptogenesis could be very powerful. Charles River Labs is an independent research lab in Canada, with which we have entered into a statement of work to conduct two studies involving psilocybin. Charles River Labs obtained the necessary import permits from Health Canada a department of the Government of Canada responsible for national health policy and the Company does not need to acquire any approvals in connection with such research. After Charles River Labs obtains the necessary components for the tests, then Charles River Labs will commence two studies pursuant to the terms of the statement of work, with research and development efforts focused on isolating and studying the individual psychoactive components of mushrooms. Investors should review the information regarding our statement of work with Charles River Labs in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. We have not established objectively that there is a potential to improve the efficacy of psilocybin. When referring to the state of our business, Joseph Claussen stated in the Article that [i]t s been amazing. We launched in March, and we sold out within three months. We thought we had enough product to last the year, but we ran out. And it s mostly been organic word of mouth. We ve done some marketing, but it s really amazing how rapidly people have found us. Of course, we re riding a very nice wave of interest in mushrooms right now, so that s been fortunate. We launched our direct-to-consumer brand of supplements in March 2022, but the Company was formed in January 2021. In July 2022, we began taking pre-orders only for new purchases, in order to ensure that we maintained sufficient inventory to fulfill existing subscription orders. We operate our business in a new industry and market. There is no assurance that the industry and market will continue to exist and grow as currently estimated or function and evolve in the manner consistent with management s expectations and assumptions. The mushroom market may decline or mushrooms may fail to achieve substantially greater market acceptance than they currently enjoy. As a result of changing customer preferences, products may attain financial success for a limited period of time. There is no assurance that we will be able to achieve brand awareness in any of our target regions. Investors should review the information regarding our industry and market in the section titled Business beginning on page 54 of this prospectus, the section titled Risk Factors beginning on page 11 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. When referring to our business and mission, Chris L. Claussen stated in the Article that [w]e see ourselves as a brain health company. Our mission is to improve people s brains. This makes us more than a functional mushroom company, and more than a psychedelics company. We don t want people to ever fall off the cliff as they get older. We want people to just get better and better. Everything we do is in support of that. We do not intend to market any of our products for medical use. Our consumer products are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. Investors should review the information regarding our products in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. Certain claims regarding our products and business made by the Claussens in the Article are inaccurate, unsubstantiated, and contradict the claims made in the registration statement of which this prospectus is a part. Any statements or disclosures in the Article that did not comply with, or that exceeded the scope permissible under, Rule 134 under the Securities Act, may not be entitled to the safe-harbor provided by Rule 134. As a result, the Article could be determined not to be in compliance for a registered securities offering under Section 5 of the Securities Act. If the statements or disclosures in the Article are determined by a court to be a violation by us of Section 5 of the Securities Act, then we could have a material contingent liability. Any liability would depend upon the number of Common Shares purchased in this offering. If a claim were brought by any investors in this offering and a court were to conclude that we violated Section 5 of the Securities Act, then those investors might have rescission rights and we (and the selling shareholders) could be required to repurchase the shares sold to them, at the original purchase price, plus statutory interest from the date of purchase, for claims brought during a period of one year from the date of their purchase of our Common Shares. We could also incur considerable expense in contesting any such claims. Further, if the Article is deemed to be a violation of Section 5 of the Securities Act, the SEC and/or relevant state regulators could impose monetary fines or other sanctions under relevant federal and state securities laws. 8 SUMMARY CONSOLIDATED FINANCIAL DATA The summary consolidated statements of operations data for the year ended December 31, 2021 and 2022, have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statements of operations data for the six months ended June 30, 2022 and 2023, have been derived from the unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited consolidated financial statements have been prepared on a basis consistent with our audited financial statements and, in our opinion, contain all adjustments, consisting of only normal recurring adjustments, necessary for fair presentation of such financial data. Our historical results are not necessarily indicative of the results that should be expected for any future period. You should read the consolidated financial data set forth below in conjunction with our consolidated financial statements and the accompanying notes and the information in Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 48 of this prospectus. First Person Ltd. Consolidated Statement of Operations and Comprehensive Loss Year ended December 31, Six months ended June 30, 2021(1) 2022 2022 2023 (Unaudited) (Unaudited) (in thousands, except per share amounts) Revenues, net $- $4,334 $1,080 $3,895 Cost of Goods Sold - 1,406 365 1,128 Gross Profit - 2,928 715 2,766 Operating expenses: Selling, general and administrative 2,948 8,081 3,631 4,254 Depreciation and amortization 1 52 17 86 Foreign currency transaction loss (gain) (28) 101 (6) - Total operating expenses 2,921 8,233 3,642 4,341 Loss from operations (2,921) (5,305) (2,927) (1,575) Other income (expense): Net interest (expense) 0 (88) - (569) Net interest income 0 0 0 1 Total other income (expense) 0 (88) 0 (567) Loss before provision for income taxes (2,921) (5,393) (2,927) (2,142) Provision for income taxes - - - - Net loss (2,921) (5,393) (2,927) (2,142) Other comprehensive loss, net of provision for income taxes: Foreign currency translation gain (loss) (36) 64 (11) (8) Comprehensive loss $(2,957) $(5,329) $(2,938) $(2,150) Net Loss per Common Share Basic and diluted (0.59) (0.86) (0.50) (0.34) Weighted Average Number of Common Shares Outstanding Basic and diluted 4,918 6,252 5,838 6,351 (1) For the period from January 21, 2021 (inception) through December 31, 2021. 9 First Person Ltd. Consolidated Balance Sheet December 31, June 30, Pro Forma 2021 2022 2023 as Adjusted(1) (Unaudited) (Unaudited) (in thousands, except share amounts) ASSETS Current assets: Cash 559 $65 $200 $11,947 Accounts Receivable, net - 55 47 47 Inventory 98 1,013 1,285 1,285 Prepaid expenses and other current assets 540 238 214 214 Deferred offering cost 297 889 1,371 121 Total current assets 1,494 2,260 3,116 13,613 Property and equipment, net 10 988 948 948 Construction-in-progress 452 - - - Deposits 3 17 17 17 Intangible Assets, net 190 132 102 102 Operating lease right-of-use asset 158 197 169 169 Total assets 2,307 $3,594 $4,353 $14,849 LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT) Current liabilities: Accounts payable (includes related party balances of $0 as of December 31, 2021; $686 as of December 31, 2022; $409 as of June 30, 2023) 436 $2,533 $2,314 $1,064 Accrued expenses and other current liabilities 117 278 473 473 Lease liability, current portion 36 79 71 71 Convertible debentures - - 2,099 2,249 Loans and note payable - 1,098 780 1,766 Total current liabilities 589 3,987 5,737 5,622 Lease liability, net of current portion 122 118 99 99 Total liabilities 711 4,105 5,836 5,721 Commitments and contingencies(2) - - - - Shareholders equity (deficit) Preferred Shares, no par value unlimited authorized, 0 shares issued and outstanding, actual, as of December 31, 2021 and 2022; 3,098,971 shares issued and outstanding, actual, as of June 30, 2023; 0 shares issued and outstanding, pro forma as adjusted - - 969 - Common shares, no par value - unlimited authorized, 5,804,254 shares issued and outstanding, actual, as of December 31, 2021; 6,351,354 shares issued and outstanding, actual, as of December 31, 2022, and June 30, 2023; 10,152,033 shares issued and outstanding, pro forma as adjusted 4,358 7,081 7,081 18,662 Additional paid-in capital 196 694 903 903 Accumulated deficit (2,921) (8,314) (10,456) (10,456) Accumulated other comprehensive loss (36) 28 20 20 Total shareholders equity (deficit) 1,596 (511) (1,483) 9,128 Total liabilities and shareholders equity (deficit) 2,307 $3,594 $4,353 $14,849 (1) The pro forma as adjusted column reflects (i) the receipt of cash proceeds in the amount of $199,774 on July 19, 2023, pursuant to a merchant loan agreement entered into with Cloudfund LLC; (ii) the receipt of cash proceeds in the amount of $260,000 on July 21, 2023, pursuant to a merchant loan agreement entered into with WebBank, on behalf of Shopify Inc.; (iii) the receipt of cash proceeds in the amount of $225,000 on August 31, 2023, pursuant to a merchant loan agreement entered into with Curve Capital LLC; (iv) the issuance of convertible secured promissory notes in the aggregate principal amount of $239,130 and 239,129 Series 1 Shares to accredited investors for gross proceeds of approximately $220,000 on September 7, 2023; (v) the receipt of cash proceeds of $150,550 on September 19, 2023, pursuant to a refinancing of a cash advance agreement with Click Capital Group LLC, (vi) the receipt of cash proceeds of $150,550 on September 19, 2023, pursuant to a refinancing of a future receivables sale and purchase agreement with Fundonatic, (vii) the conversion of all outstanding Series 1 Shares into 900,679 Common Shares; and (viii) the issuance and sale of Common Shares by us in this offering at the Primary Offering price of $4.50 per Common Share, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us. Any holder of Series 1 Shares may, at any time, elect to convert all or any portion of the outstanding Series 1 Shares held by such holder into Common Shares. The Series 1 Shares will automatically convert into Common Shares on the date that is 12 months after the closing of the Primary Offering. The number of Common Shares issuable upon conversion of the Series 1 Shares is calculated as of the date of this prospectus as follows: (i) with respect to the 3,098,971 Series 1 Shares issued on January 3, 2023, January 9, 2023, February 6, 2023, and March 31, 2023, (a) the aggregate number of Series 1 Shares outstanding, divided by (b) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus; and (ii) with respect to the 239,129 Series 1 Shares issued on September 7, 2023, (a) the aggregate number of Series 1 Shares outstanding, multiplied by (b) 0.6, divided by (c) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus. The actual number of Common Shares issuable upon conversion of the outstanding Series 1 Shares may increase or decrease on a future date based on when the closing of the Primary Offering occurs and the actual offering price per Common Share. See Description of Share Capital Preferred Shares on page 93 of this prospectus for more information regarding the conversion of the Series 1 Shares. The pro forma as adjusted information discussed above is illustrative only and will depend on the actual Primary Offering price and other terms of this offering determined at pricing. Each $0.50 increase (decrease) in the assumed Primary Offering price of $4.50 per Common Share, which is the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash, total assets, and total stockholders equity by approximately $1.33 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 100,000 Common Shares offered by us would increase (decrease) the pro forma as adjusted amount of each of cash, total assets, and total stockholders equity by approximately $0.41 million, assuming the assumed Primary Offering price remains the same, and after deducting estimated underwriting discounts and commissions. (2) See Note 10 to the unaudited consolidated financial statements included elsewhere in this prospectus. 10 RISK FACTORS Investing in our Common Shares involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this prospectus, including our consolidated financial statements, the notes thereto, and Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 48 of this prospectus, before deciding to invest in the Common Shares offered by this prospectus. The occurrence of any of the following risks could have a material and adverse effect on our business, reputation, financial condition, results of operations, and future growth prospects, as well as our ability to accomplish our strategic objectives. As a result, the trading price of our Common Shares could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and the trading price of our Common Shares. Certain statements contained in this section constitute forward-looking statements. See Cautionary Note Regarding Forward-Looking Statements on page 41 of this prospectus. We might have material contingent liability arising out of a possible violation of Section 5 of the Securities Act in connection with certain statements and disclosures made in an online article appearing on Bloomberg on July 21, 2022; a television interview broadcast by NewsNation on October 17, 2022; and fifteen podcasts released between July 13, 2021 and February 2, 2023, nine of which were temporarily linked to the Company website. The podcasts were conducted by The Story of a Brand ; That Gives Me Anxiety ; JJ Flizanes (published on Ms. Flizane s podcasts: Nutrition & Alternative Medicine , Fit 2 Love , and Spirit Purpose & Energy ); Mycopreneur ; Koncrete ; Justin Caviar ; Humble and Hungry ; Elevate Your Brand ; Bliss Project ; Ashley On ; Riderflex ; Let s Talk Plant Medicine ; Spiritual Boss Babe ; Vital Science ; and Finding Genius . Information about the Company and statements made by Chris L. Claussen, one of our directors and our Chief Innovation Officer, Joseph Claussen, our Director of Business Development, Cory J. Rosenberg, our Chairman, Chief Executive Officer, and President, and Dom D Agostino, our scientific advisor, during fifteen podcast interviews were uploaded to YouTube and links to nine of such Podcasts were temporarily posted to our new Company website. The Podcasts that were temporarily linked to the Company website were created between March 29, 2022 and February 2, 2023. In addition, information about the Company and statements made by the Claussens were published in an online article appearing on Bloomberg on July 21, 2022 and a television interview broadcast by NewsNation on October 17, 2022, neither of which were linked to our website. The statements made by the Claussens, Cory J. Rosenberg, and Dom D Agostino in the Interviews were predominately focused on their personal experiences and how they were inspired to become involved in the Company s business. The Company was not involved in any way in the preparation of the statements made by the Claussens, Cory J. Rosenberg, or Dom D Agostino, and all links to the Podcasts have since been deleted from the Company website and all of the Podcasts have been removed from YouTube. The Podcasts were conducted by The Story of a Brand ; That Gives Me Anxiety ; JJ Flizanes (published on Ms. Flizane s podcasts: Nutrition & Alternative Medicine , Fit 2 Love , and Spirit Purpose & Energy ); Mycopreneur ; Koncrete ; Justin Caviar ; Humble and Hungry ; Elevate Your Brand ; Bliss Project ; Ashley On ; Riderflex ; Let s Talk Plant Medicine ; Spiritual Boss Babe ; Vital Science ; and Finding Genius . None of the entities or persons who conducted or published the Interviews are affiliated with the Company or any other offering participant. No payment was made nor was any consideration given to the hosts or anyone else involved in the production of the Interviews by or on behalf of the Company or any other offering participant in connection with the Interviews. You should not consider the statements in the Interviews, as set forth in Exhibit 99.1 to the registration statement of which this prospectus forms a part, in making your investment decision. You should make an investment decision only after carefully evaluating all of the information contained in this prospectus, including the Company s responses to the statements in the Interviews, as set forth in Exhibit 99.1 to the registration statement of which this prospectus forms a part. Certain claims regarding our products and business made by the Claussens, Cory J. Rosenberg, or Dom D Agostino in the Interviews are inaccurate, unsubstantiated, and contradict the claims made in the registration statement of which this prospectus is a part. As a result of the foregoing, the Interviews could be determined not to be in compliance for a registered securities offering under Section 5 of the Securities Act. If the statements or disclosures in the Interviews are determined by a court to be a violation by us of Section 5 of the Securities Act, we could have a material contingent liability. Any liability would depend upon the number of Common Shares purchased in this offering. If a claim were brought by any investors in this offering and a court were to conclude that we violated Section 5 of the Securities Act, then those investors might have rescission rights and we (and the selling shareholders) could be required to repurchase the shares sold to them, at the original purchase price, plus statutory interest from the date of purchase, for claims brought during a period of one year from the date of their purchase of our Common Shares. We could also incur considerable expense in contesting any such claims. Further, if the Interviews are deemed to be a violation of Section 5 of the Securities Act, the SEC and/or relevant state regulators could impose monetary fines or other sanctions under relevant federal and state securities laws. Such payments, expenses, and fines, if required, could significantly reduce the amount of working capital we have available for our operations and business plan, delay or prevent us from completing our plan of operations, or force us to raise additional funding sooner than expected, which funding may not be available on favorable terms, if at all. Additionally, the trading price of our Common Shares might decline in value in the event we are deemed to have liability, are required to make payments, or face sanctions in connection with the potential claim described above. 11 We might have material contingent liability arising out of a possible violation of Section 5 of the Securities Act in connection with certain statements and disclosures made in an article published online on September 20, 2022. Information about the Company and statements made by Chris L. Claussen, one of our directors and our Chief Innovation Officer, and Joseph Claussen, our Director of Business Development, were published in an online publication by reMind Media on September 20, 2022. The statements attributed to Chris L. Claussen and Joseph Claussen in the Article were made during an interview by reMind Media focused on how Chris L. Claussen s and Joseph Claussen s personal experiences inspired them to become involved in our business. The Company was not involved in any way in the interview or the preparation of the statements made by Chris L. Claussen or Joseph Claussen. The Article was prepared by reMind Media, which is not affiliated with the Company. No payment was made nor was any consideration given to reMind Media by or on behalf of the Company or any other offering participant in connection with the publication of the Article. Upon becoming aware of the Article and the inclusion of certain statements relating to the Company and the Offering, we requested the Article be deleted from reMind Media s website. As of September 22, 2022, the Article was no longer available on reMind Media s website or any of its other publications. On September 26, 2022, we filed an issuer free writing prospectus with the SEC pursuant to Rule 433(f) under the Securities Act. The Free Writing Prospectus includes the full text of the Article. The Article contained the following inaccurate or unsubstantiated statements: The Article stated that we have two pending patents related to a natural psilocybin extract and a novel combination of psilocin and ketones, which [the Company] developed at their lab in Jamaica. We filed two provisional patent applications, which help protect inventions for a twelve-month period while a formal patent application is being filed. The patent process can take up to twenty-four months or longer to complete and can be challenged during the process. At this time, we cannot state whether the patent applications will be approved, refused, and/or ultimately registered. The innovations were developed by Chris L. Claussen and Joseph Claussen, rather than the Company, and were not developed in our lab in Jamaica. Both provisional patent applications were filed in 2021, after Chris L. Claussen and Joseph Claussen assigned to us their interests in the innovations. We did not acquire TruMed or have Jamaican operations until 2022, which was after the provisional patent applications were filed. Investors should review the information regarding our intellectual property in Business Intellectual Property beginning on page 60 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. When discussing his family s personal experiences with psilocybin, Joseph Claussen stated in the Article that there s no toxicity . Additionally, Chris L. Claussen stated that psilocybin had the ability to create some new neural networks, our brains are functioning at the highest levels that they ever have, and that [w]e know that once you get Alzheimer s there no cure for it. But we also know that you can prevent it by keeping your brain healthy, to always be creating new neural connections, and maintain neuroplasticity as you age and avoid going into cognitive decline. We do not intend to market any of our products for medical use. Our consumer products are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. We have not conducted clinical studies with respect to the claims made by Chris L. Claussen and Joseph Claussen. We cannot confirm that psilocybin will create new neural networks or can prevent the onset of Alzheimer s disease or cognitive decline. We cannot provide any assurance that any persons will have the same outcomes as Chris L. Claussen, Joseph Claussen, or their father, or that psilocybin was a cause of such outcomes. Investors should review the information regarding our products in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. When referring to our products, Joseph Claussen stated in the Article that our products contain curated amounts of Lion s Mane and cordyceps the cordyceps is important because it has an MAO inhibitor, so it provides a longer duration. Additionally, Chris L. Claussen stated in the Article that We think our functional mushroom products work wonderfully on their own. But they were definitely designed for a microdosing regime. We deliberately engineered them to stay away from the serotonin receptors. A lot of other nootropics contain everything and the kitchen sink, which will flood your serotonin receptors and interfere with your microdosing. We didn t want to do that. We targeted our functionals to the dopamine, oxytocin, and GABA receptors. We left serotonin alone, so the psilocybin could do its work. Our direct-to-consumer brand of supplements contain functional mushrooms and a curated blend of nutraceuticals. Not all of our supplements contains Lions Mane and/or Cordyceps. Nutraceuticals are dietary supplements and are regulated by the FDA. These consumer products do not require FDA approval prior to marketing and distribution, but are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. We have not conducted clinical studies with respect to the claims made by Chris L. Claussen and Joseph Claussen. We cannot confirm that cordyceps provides longer duration or has an MAO inhibitor, that there are any characteristics of different mushrooms that may be beneficial, or that targeting dopamine, oxytocin, and GABA receptors may be possible or beneficial. Investors should review the information regarding the Company s direct-to-consumer brand of supplements in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. 12 When referring to studies that are anticipated to be performed by Charles River Labs, Chris L. Claussen stated in the Article that [w]e re really excited about this. We believe there s a real potential to improve the efficacy of psilocin. Our scientific advisor Dom D Agostino, a pioneer in the science of the health benefits of the ketogenic diet, is working with us to prove our hypothesis. Additionally, Joseph Claussen stated in the Article that [w]hen proven, the improvements in neurogenesis and synaptogenesis could be very powerful. Charles River Labs is an independent research lab in Canada, with which we have entered into a statement of work to conduct two studies involving psilocybin. Charles River Labs obtained the necessary import permits from Health Canada a department of the Government of Canada responsible for national health policy and the Company does not need to acquire any approvals in connection with such research. After Charles River Labs obtains the necessary components for the tests, then Charles River Labs will commence two studies pursuant to the terms of the statement of work, with research and development efforts focused on isolating and studying the individual psychoactive components of mushrooms. Investors should review the information regarding our statement of work with Charles River Labs in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. We have not established objectively that there is a potential to improve the efficacy of psilocybin. When referring to the state of our business, Joseph Claussen stated in the Article that [i]t s been amazing. We launched in March, and we sold out within three months. We thought we had enough product to last the year, but we ran out. And it s mostly been organic word of mouth. We ve done some marketing, but it s really amazing how rapidly people have found us. Of course, we re riding a very nice wave of interest in mushrooms right now, so that s been fortunate. We launched our direct-to-consumer brand of supplements in March 2022, but the Company was formed in January 2021. In July 2022, we began taking pre-orders only for new purchases, in order to ensure that we maintained sufficient inventory to fulfill existing subscription orders. We operate our business in a new industry and market. There is no assurance that the industry and market will continue to exist and grow as currently estimated or function and evolve in the manner consistent with management s expectations and assumptions. The mushroom market may decline or mushrooms may fail to achieve substantially greater market acceptance than they currently enjoy. As a result of changing customer preferences, products may attain financial success for a limited period of time. There is no assurance that we will be able to achieve brand awareness in any of our target regions. Investors should review the information regarding our industry and market in the section titled Business beginning on page 54 of this prospectus, the section titled Risk Factors beginning on page 11 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. When referring to our business and mission, Chris L. Claussen stated in the Article that [w]e see ourselves as a brain health company. Our mission is to improve people s brains. This makes us more than a functional mushroom company, and more than a psychedelics company. We don t want people to ever fall off the cliff as they get older. We want people to just get better and better. Everything we do is in support of that. We do not intend to market any of our products for medical use. Our consumer products are required to include a disclaimer that they have not been evaluated by the FDA and are not intended to diagnose, treat, cure, or prevent any disease. Investors should review the information regarding our products in the section titled Business beginning on page 54 of this prospectus, and elsewhere in this prospectus, and not the statements made in the Article. 13 Any statements or disclosures in the Article that did not comply with, or that exceeded the scope permissible under, Rule 134 under the Securities Act, may not be entitled to the safe-harbor provided by Rule 134. As a result, the Article could be determined not to be in compliance for a registered securities offering under Section 5 of the Securities Act. If the statements or disclosures in the Article are determined by a court to be a violation by us of Section 5 of the Securities Act, we could have a material contingent liability. Any liability would depend upon the number of Common Shares purchased in this offering. If a claim were brought by any investors and a court were to conclude that we violated Section 5 of the Securities Act, then those investors might have rescission rights and we (and the selling shareholders) could be required to repurchase the shares sold to them, at the original purchase price, plus statutory interest from the date of purchase, for claims brought during a period of one year from the date of their purchase of our Common Shares. We could also incur considerable expense in contesting any such claims. Further, if the Article is deemed to be a violation of Section 5 of the Securities Act, the SEC and/or relevant state regulators could impose monetary fines or other sanctions under relevant federal and state securities laws. Such payments, expenses, and fines, if required, could significantly reduce the amount of working capital we have available for our operations and business plan, delay or prevent us from completing our plan of operations, or force us to raise additional funding sooner than expected, which funding may not be available on favorable terms, if at all. Additionally, the trading price of our Common Shares might decline in value in the event we are deemed to have liability, are required to make payments, or face sanctions in connection with the potential claim described above. Risks Related to Our Limited Operating History, Financial Position and Capital Needs We have a limited operating history and a history of net losses, and we may not achieve or maintain profitability in the future. We have a very limited history of operations and are considered an early stage company. We were formed in January 2021. Although this prospectus includes audited financial statements for the period from January 21, 2021 (inception) through December 31, 2021, and for the year ended December 31, 2022, and unaudited financial statements for the six months ended June 30, 2023, we commenced our commercial operations in March 2022. As such, there is very limited financial information about us and such information has been supplemented with other relevant information disclosed in this prospectus so as to enable an investor to make an informed investment decision. We are subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources, and lack of revenues, as well as significant competition from existing and emerging competitors, many of which are established and have access to capital. In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown factors. We will need to transition from an early stage company to a company capable of supporting larger scale commercial activities. If we are not successful in such a transition, our business, results, and financial condition will be harmed. Although we expect to become profitable, there is no guarantee that will happen, and we may never become profitable. We currently have a negative operating cash flow and may continue to have that for the foreseeable future. To the extent that we have negative operating cash flow in future periods, we will need to allocate a portion of our cash (including proceeds from this offering) to fund such negative cash flow. For the period from January 21, 2021 (inception) through June 30, 2023, our net loss was $10,456,225. Our net losses may worsen and our ability to generate increased revenues and potential to become profitable will depend largely on our ability to manufacture and market our products. There can be no assurance that any such events will occur or that we will ever become profitable. Even if we do achieve profitability, we cannot predict the level of such profitability. If we sustain losses over an extended period of time, we may be unable to continue our business. We will need additional financing to continue to sustain operations at this time. Our operating cash flow is insufficient to fund all of our operational needs and we will require additional financing to continue our operations. There can be no assurance that such financing will be available on favorable terms or at all. Failure to obtain additional financing could result in delay or indefinite postponement of the deployment of our products. Additional financing may dilute the ownership interest of our shareholders at the time of the financing, and may dilute the value of their investment in our Common Shares. After taking into account the proceeds of this offering, we anticipate that our current cash reserves will last in excess of twelve months under our present operating expectations. 14 We may face difficulties obtaining additional financing, and additional financing may result in further dilution. We anticipate expending substantial funds to carry out the development, introduction, distribution, and manufacture of our products. We may require additional funds for these purposes through one or more public or private financing transactions. No assurance can be given that such additional funds will be available on acceptable terms or at all. Additionally, U.S. banks often refuse to provide banking services to businesses involved in the psilocybin industry because of the present state of the laws and regulations governing financial institutions in the United States, which discourage the provision of banking services to companies involved in the research or production of controlled substances. Consequently, in comparison to companies in other industries, we may face increased difficulties in obtaining financing from U.S. banks due to the nature of our business. If such funds are unavailable or are only available at a prohibitive cost, we may have to significantly curtail our product development program or seek funds through financing alternatives, including equity financing. Any additional equity financing may result in dilution to existing shareholders. There is substantial doubt about our ability to continue as a going concern. We have a history of net losses and are primarily dependent upon financing transactions to obtain additional funds for product development and operating expenses. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2022, included an explanatory paragraph expressing management s assessment and conclusion that there is substantial doubt about our ability to continue as a going concern, citing our significant working capital deficiency and our significant losses. Our ability to continue as a going concern will be determined by our ability to generate sufficient cash flow to sustain our operations and/or raise additional capital in the form of debt or equity financing. Delays in obtaining the capital, onerous terms for the capital, or a failure to raise additional capital could have a material negative impact on our business or plans of operations. We believe that the inclusion of a going concern explanatory paragraph in the report of our registered public accounting firm may make it more difficult for us to secure additional financing or enter into strategic relationships with distributors on terms acceptable to us, if at all, and likely will materially and adversely affect the terms of any financing that we might obtain. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We face general risks common to early stage companies, including ongoing requirements for additional capital. Our Common Shares must be considered highly speculative due to the nature of our business, the early stage of our deployment, current financial position, and ongoing capital. An investment in our Common Shares should only be considered by those persons who can afford a total loss of investment, and is not suited to those investors who may need to dispose of their investment in a timely fashion. Investors should consult with their own professional advisors to assess the legal, financial, and other aspects of an investment in our Common Shares. We may be exposed to financial risk related to the fluctuation of foreign exchange rates and the degrees of volatility of those rates. We may be adversely affected by foreign currency fluctuations. Our functional currency is the Canadian dollar, but the functional currency of our operating company in the United States is the U.S. dollar. To date, we have been primarily funded through issuances of equity that have been denominated in Canadian dollars. However, a significant portion of our expenditures are paid in U.S. dollars, and we are, therefore, subject to foreign currency fluctuations that may, from time to time, impact our financial position and results of operations. We will incur significant costs during the transition to a public company, and face ongoing costs of maintaining a public listing. We expect this offering will have a significant transformative effect on us. We expect to incur significant additional legal, accounting, reporting, and other expenses as a result of being a public company. We will also incur new costs related to being a public company that we have not incurred previously, including, but not limited to, costs and expenses for managing directors and supervisory directors fees, increased directors and officers insurance, investor relations, and various other costs of a public company. 15 We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, laws, regulations, and requirements relating to becoming a reporting issuer in Alberta, Canada, as well as rules implemented by the SEC and the Nasdaq Stock Market, LLC ( Nasdaq ). We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more time consuming and costly. These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have an adverse impact on our ability to retain, recruit, and bring on a qualified independent supervisory board. We expect that the additional costs we will incur as a public company, including costs associated with corporate governance requirements, will be considerable relative to our costs as a private company. The transition to a public company may disrupt and have a negative effect on our regular operations. The additional demands associated with being a public company may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses. Any of these effects could harm our business, financial condition, and results. Our management team s financial projections are based on assumptions and estimates that may be inaccurate. Our actual financial position and results of operations may differ materially from management s expectations. We may experience changes in our operating plans and certain delays with respect to our operating plans. As a result, our revenue, net income, and cash flow may differ materially from our projected revenue, net income, and cash flow. The process for estimating our revenue, net income, and cash flow requires the use of judgment in determining the appropriate assumptions and estimates. These estimates and assumptions may be revised as additional information becomes available and as additional analyses are performed. In addition, the assumptions used in planning may not prove to be accurate, and other factors may affect our financial condition or results of operations. Risk Related to Our Products and Business We face significant ongoing costs and obligations related to developing our business and products, and these costs may increase in the future, which may result in significant losses. We expect to incur significant ongoing costs and obligations related to developing our business and products, which could have a material adverse impact on our results of operations, financial condition, and cash flows. In addition, future changes in regulations, more vigorous enforcement thereof, or other unanticipated events could require extensive changes to our operations, increased compliance costs, or give rise to material liabilities, which could have a material adverse effect on our business, results of operations and financial condition. Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenue enough to offset our higher operating expenses. We may incur significant losses in the future for a number of reasons, including the other risks described in this prospectus, and unforeseen expenses, difficulties, complications and delays, and other unknown events. If we are unable to achieve and sustain profitability, the market price of our Common Shares may significantly decrease. We have incurred substantial expenses related to the development and initial operations of our business and we may never become profitable, earn revenues, or pay dividends. There is no assurance that we will be profitable or pay dividends. We have incurred, and anticipate that we will continue to incur, substantial expenses relating to the development and initial operations of our business. The payment and amount of any future dividends will depend upon, among other things, our results of operations, cash flow, financial condition, and operating and capital requirements. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividends. 16 As our operating expenses increase, we may not be able to generate revenue growth or sustain any revenue growth that we achieve. There can be no assurance that we can generate revenue growth, or that any revenue growth that is achieved can be sustained. Revenue growth that we may achieve may not be indicative of future operating results. In addition, we may further increase operating expenses in order to fund higher levels of research and development, increase sales and marketing efforts and increase administrative resources in anticipation of future growth. To the extent that increases in such expenses precede or are not subsequently followed by increased revenues, our business, operating results, and financial condition will be materially adversely affected. The functional-mushroom and psilocybin industries are new in the United States, and the industries and markets may not continue to exist or develop as anticipated or we may ultimately be unable to succeed as anticipated in these industries and markets. We operate our business in a new industry and market. There is no assurance we will be able to derive meaningful revenue from our investment in functional or psychedelic mushrooms, or that we will pursue that business to the extent currently proposed or at all. In addition to being subject to general business risks, we must continue to build brand awareness in this industry and market through significant investments in our strategy, production capacity, quality assurance, and compliance with regulations. In addition, there is no assurance that the industry and market will continue to exist and grow as currently estimated or function and evolve in the manner consistent with management s expectations and assumptions. Any event or circumstance that adversely affects our industry and market could have a material adverse effect on our business, financial conditions, and results of operations. Psilocybin is highly regulated at the federal and state level, and authorizations for the production of psilocybin are still in the early stages and we may not receive the required approvals. Psilocybin is a Schedule I controlled substance under the CSA. Even in U.S. states or territories that have decriminalized psilocybin to some extent, unless specific authority is obtained from the DEA, the propagation, possession, and sale of psilocybin all remain violations of U.S. federal law punishable by imprisonment, substantial fines, and forfeiture. To obtain federal authority to grow or manufacture psilocybin for federally sanctioned research and other limited purposes, one must receive a permit from the DEA and meet certain requirements imposed by the DEA. The registration process to manufacture controlled substances is codified under 21 U.S.C. 823. It requires that the U.S. Attorney General determine whether registrations are in the public interest; to do so, the U.S. Attorney General is directed to consider multiple factors, including compliance with applicable State and local law. Research involving controlled substances in the State of Washington requires participating individuals to register with both the DEA and the WDOH. Applicants must obtain a controlled substance researcher registration from the WDOH prior to registering with the DEA. Chris L. Claussen, our Chief Innovation Officer, submitted a controlled substance researcher application with the WDOH in order for FP, Inc. to conduct psilocybin research, with such application listing FP, Inc. s Olympia, Washington facility as the research lab location. The application was submitted on July 12, 2021, and remains under review. If the WDOH registration is granted, then FP, Inc. intends to utilize such registration to apply for licensure with the DEA to make our facility in Olympia, Washington a licensed psilocybin facility. Unless there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we are able to obtain all of the requisite approvals, including approvals to produce, or conduct research involving, psychedelic mushrooms in the United States, then all of our activities involving psychedelic mushrooms and psilocybin will occur in Jamaica through TruMed, or through agreements with independent research labs in accordance with applicable laws. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States, then we intend to expand domestic U.S. production to include psychedelic mushrooms and conduct research and development, focusing on analyzing certain psychedelic mushroom species and extraction and production methods that standardize the potency of naturally-occurring psilocybin in mushrooms for use in approved clinical trials by drug development companies. Our intended research and development activities in the United States would be parallel to TruMed s intended activities in Jamaica, but we believe carrying out such activities in the United States would improve our ability to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States. We may not commence psilocybin propagation operations in the United States until we receive the requisite approvals from the WDOH and the DEA, and there is no guarantee that we will receive such approvals. If we are successful in obtaining such approvals, we will be subject to strict regulations from both the State of Washington and the DEA relating to security, recordkeeping, reporting, and inventory controls to prevent drug loss and diversion. The licenses from the WDOH and the DEA, if successfully obtained, will only be provided on an annual basis and we may not be successful in renewing such licenses each subsequent year. The failure to obtain the necessary approvals to conduct psilocybin research at our Olympia, Washington facility (or the renewal of such approvals if obtained) would prevent us from expanding domestic U.S. production to include psychedelic mushrooms (or would require us to cease such production), which could limit our ability to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V). 17 The dynamic nature of the laws and regulations affecting the psilocybin market, including the federal authorization of psilocybin, or the state-regulated psilocybin industry, could adversely affect our proposed operations in the United States, and we cannot predict the impact that future regulations may have on us. Local, state, and federal psilocybin laws and regulations have been evolving rapidly and are subject to varied interpretations, which could require us to incur substantial costs associated with compliance or negatively impact, and accordingly cause us to alter, our business plan, which could require further costs and negatively impact our business and future results of operations. We can know neither the nature of any future laws, regulations, interpretations, or applications nor how additional governmental regulations or administrative policies and procedures, when and if promulgated, could impact our business. For example, if psilocybin is no longer illegal under federal law, and depending on future laws or guidance on psilocybin for research, we may experience a significant increase in competition. Accordingly, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations or any failure by us to comply with these laws or regulations could require changes to certain of our business practices, negatively impact our operations, cash flow, or financial condition, impose additional costs on us, or otherwise adversely affect our business. A denial of, or significant delay in obtaining, or any interruption of required government authorizations to produce psilocybin for federally sanctioned purposes would likely have a significant negative impact on the Company s business plans. While psilocybin is not an illegal drug under the Jamaica Drug Act and we intend to conduct research and development involving psychedelic mushrooms in Jamaica through TruMed, a portion of our business plan in the United States depends on rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and us receiving the necessary state and federal authorizations to research and produce psilocybin for federally sanctioned purposes. There is no guaranty that there will be rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) or, in the event there is rescheduling, what types of activities will be permitted under the new legal regime. Our Company may not commence psilocybin propagation operations in the United States until both the WDOH and the U.S. federal government, in particular the DEA, have signed off that the Company has met its obligations under state law and is compliance with all applicable DEA regulations. There is no guarantee that we will receive the necessary approvals from either the WDOH or the DEA. For drugs manufactured in the United States, the DEA establishes annually an aggregate quota for the amount of substances within Schedules I and II that may be manufactured or produced in the United States based on the DEA s estimate of the quantity needed to meet legitimate medical, scientific, research, and industrial needs. The DEA also issues individual production quotas for Schedule I Controlled Substance registrants. These quotas may only be adjusted once per year, at the DEA s sole discretion. The DEA s quotas may limit our ability to achieve revenue goals, even if we are able to obtain DEA Controlled Substance Research and/or Manufacturing registrations. The failure to obtain the necessary approvals to conduct psilocybin research at our Olympia, Washington facility (or the renewal of such approvals if obtained) would prevent us from expanding domestic U.S. production to include psychedelic mushrooms (or would require us to cease such production), which could limit our ability to enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V), and could have a significant negative impact on our business plans in the United States. Operating in a highly regulated business requires significant resources. We intend to operate a highly regulated, vertically integrated business involving psilocybin. Research involving controlled substances in the State of Washington requires participating individuals to register with both the DEA and the WDOH. Applicants must obtain a controlled substance researcher registration from the WDOH prior to registering with the DEA. Chris L. Claussen, our Chief Innovation Officer, submitted a controlled substance researcher application with the WDOH in order for FP, Inc. to conduct psilocybin research, with such application listing FP, Inc. s Olympia, Washington facility as the research lab location. The application was submitted on July 12, 2021, and remains under review. If the WDOH registration is granted, then FP, Inc. intends to utilize such registration to apply for licensure with the DEA to make our facility in Olympia, Washington a licensed psilocybin facility. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States, then we intend to expand domestic U.S. production to include psychedelic mushrooms and conduct research and development, focusing on analyzing certain psychedelic mushroom species and extraction and production methods that standardize the potency of naturally-occurring psilocybin in mushrooms for use in approved clinical trials by drug development companies. We expect that pursuing the necessary approvals and ensuring compliance with the laws, regulations, and guidelines, and changes thereto, that impact our intended business plans involving psilocybin will require a significant amount of our management s time and external resources. Additionally, even if psilocybin were to become legal under U.S. federal law, companies operating in the psilocybin industry would have to comply with all applicable state and local laws, which may vary greatly between jurisdictions, increasing costs for companies that operate in multiple jurisdictions. Therefore, in the event we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States and enter the psychedelic mushroom supply chain for the psychedelics research and development market in the United States, we may still be subject to a variety of laws, regulations, and guidelines related to such activities. Complying with multiple regulatory regimes will require additional resources and may negatively impact our ability to expand into certain U.S. jurisdictions. We compete for market share with other companies, some of which have longer operating histories and may have more financial resources and manufacturing and marketing experience than we have. We face competition in the markets in which we operate. Some of our competitors have longer operating histories and may have more financial resources and manufacturing and marketing experience than we have. Some of our competitors may also be better positioned to develop superior product features and technological innovations and may be able to better adapt to market trends. Our ability to compete depends on, among other things, high product quality, short lead-time, timely delivery, competitive pricing, range of product offerings, and superior customer service and support. Increased competition may require us to reduce prices or increase costs and may have a material adverse effect on our financial condition and results of operations. Any decrease in the quality of our products or level of service to customers or any occurrence of a price war among our competitors and us may adversely affect the business and results of operations. 18 We may expend substantial time and financial resources on potential acquisitions of other companies and such acquisitions may not be completed or successful. Our success will depend, in part, on our ability to grow our business in response to the demands of consumers and other constituents within the functional mushroom industry as well as competitive pressures. In some circumstances, we may decide to grow our business through the acquisition of complementary businesses rather than through internal development. The identification of suitable acquisition candidates can be difficult, time-consuming, and costly and we may not be able to successfully complete identified acquisitions. In addition, we may not realize the expected benefits from completed acquisitions. Our failure to address risks encountered in connection with any future acquisitions or investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities and harm our business generally. Future acquisitions could also result in the incurrence of debt, contingent liabilities, amortization expenses, or the impairment of goodwill, any of which could harm our financial condition. The psychedelics industry is in a nascent stage so there is a lack of information about the business models of comparable companies and the potential market size. We plan to conduct psychedelic mushroom product research and development in Jamaica through TruMed. Psilocybin is not an illegal drug under the Jamaica Drug Act. Therefore, the cultivation of, and research involving, psychedelic mushrooms is not in contravention of the laws of Jamaica and does not require any permit or authorization from the regulatory authorities in Jamaica. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we obtain the requisite approvals from all applicable state and federal governmental authorities, including the WDOH and the DEA, then we intend to build out our naturally-derived psychedelic mushroom supply chain in the United States in full compliance with state and federal laws. Because the legal psychedelics industry is in a nascent stage, there is a lack of information about comparable companies available for potential investors to review in deciding about whether to invest in our Common Shares, and few, if any, established companies whose business model we can follow or upon whose success we can build. Accordingly, investors will have to rely on their own estimates in deciding about whether to invest in our Common Shares. There can be no assurance that our estimates are accurate or that the market size is sufficiently large for our business to grow as projected, which may negatively impact our financial results. Our ability to cultivate and/or acquire mushrooms for our products is subject to risks inherent in agricultural operations. Our products are derived from mushrooms. Accordingly, we must grow or acquire enough mushrooms so that our products can be produced to meet the demand of our customers. Even with the procedures and protections we have put in place, a poor harvest could result in loss of sales and damage our business and results of operations. Agricultural products are vulnerable to climate change, crop disease, natural disaster, and pests, which may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied, and climatic conditions. Unfavorable growing conditions caused by these factors can reduce both crop size and crop quality and, in extreme cases, entire harvests may be lost, which would negatively impact our business and results of operations. Additionally, there could be difficulties with the first crop or harvest in any new facility. There are many factors that could impact our ability to attract and retain customers, including that we may not be able to develop as many nutraceutical products or functional mushrooms of the consistency or quality that we expect, which could have a negative adverse effect on our business plan and profitability. Our success depends on our ability to attract and retain customers, but we face, or will face, competition in obtaining customers for our nutraceutical products or functional mushrooms. There are many factors that could impact our ability to attract and retain customers, including our ability to compete based on price, produce high quality or consistent crops, continually produce desirable and effective products that are superior to others in the market, and implement our customer acquisition plan, as well as maintain continued growth in the aggregate number of potential customers. Competition for customers may result in increasing our costs while also lowering the market prices for our products and reducing our profitability. If we are not successful in attracting and retaining customers, we may fail to be competitive or achieve profitability or sustain profitability over time. 19 As a result of changing customer preferences, products may attain financial success for a limited period of time, or none at all. Even if we are successful in introducing new products, a failure to gain consumer acceptance or to update products with compelling attributes could cause a decline in our products popularity that could reduce revenues and harm our business, operating results, and financial condition. Failure to introduce new products or product types and to achieve and sustain market acceptance could result in our being unable to meet consumer preferences and generate revenue, which would have a material adverse effect on our profitability and financial results from operations. We currently have a limited number of contemplated products, and have limited financial and management resources, and, as a result, we may forego or delay our development of planned or other products. Our resource allocation decisions may cause us to fail to capitalize on profitable market opportunities. If we are unsuccessful in developing the contemplated or additional products, our business may be harmed. Our business relies on the production and distribution of mushroom-related products, and such products may not maintain or grow their market acceptance. Our business is focused on the production and distribution of mushrooms and related products. If such products do not maintain or grow their market acceptance, it will be difficult for us to achieve profitability. Our revenues are expected to derive almost exclusively from sales of mushroom-based products, and we expect that our mushroom-based products will account for substantially all of our revenue for the foreseeable future. If the mushroom market declines or mushrooms fail to achieve substantially greater market acceptance than they currently enjoy, we may not be able to grow our revenues sufficiently for us to achieve consistent profitability. Even if our products conform to international safety and quality standards, sales could be adversely affected if consumers in target markets lose confidence in the safety, efficacy, and quality of mushrooms. Adverse publicity about mushroom-based products that we sell may discourage consumers from buying products distributed by us. We may not be successful in developing and commercializing our products, or may not be able to do so at acceptable costs. If we cannot successfully develop, manufacture, sell, and distribute our products, or if we experience difficulties in the development process, such as capacity constraints, quality control problems, or other disruptions, we may not be able to develop market-ready commercial products at acceptable costs, which would adversely affect our ability to effectively enter the market. A failure by us to achieve a low-cost structure through economies of scale or improvements in cultivation and manufacturing processes would have a material adverse effect on our commercialization plans and our business, prospects, results of operations, and financial condition. If there is a shift in consumer demand, we must meet such demand through new and innovative products or else our business may fail. A significant failure or deterioration in our quality control systems could have a material adverse effect on our business and operating results. The quality and safety of our products are critical to the success of our business and operations. As such, it is imperative that our (and our service providers ) quality control systems operate effectively and successfully. Quality control systems can be negatively impacted by the design of the quality control systems, the quality training programs and adherence by employees to quality control guidelines. Although we strive to ensure that all of our service providers have implemented and adhere to high-quality control systems, any significant failure or deterioration of such quality control systems could have a material adverse effect on our business and operating results. We may experience breaches of security at our facilities or loss as a result of the theft of our products. If there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we obtain the requisite approvals from all applicable state and federal governmental authorities, including the WDOH and the DEA, then we intend to build out our naturally-derived psychedelic mushroom supply chain in the United States in full compliance with state and federal laws. Given the nature of psilocybin and its lack of legal availability outside of government approved channels, and despite the fact that we would be required to meet or exceed applicable security requirements if we build out our naturally-derived psychedelic mushroom supply chain in the United States, there remains a risk of security breach as well as theft. A security breach at one of our facilities could result in a significant loss of available products, expose us to additional liability under applicable regulations, and to potentially costly litigation or increased expenses relating to the resolution and future prevention of these breaches and may deter potential customers from choosing our products, any of which could have a material adverse effect on our business, financial condition, and results of operations. 20 We are subject to liability arising from any fraudulent or illegal activity by our employees, contractors, and consultants. We are exposed to the risk that our employees, independent contractors, and consultants may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless, or negligent conduct or disclosure of unauthorized activities to us that violate (i) government regulations, (ii) manufacturing standards, (iii) federal, state, or local healthcare fraud and abuse laws and regulations, or (iv) laws that require the true, complete, and accurate reporting of financial information or data. It is not always possible for us to identify and deter misconduct by our employees and other third parties, and the precautions taken by us to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any actions are brought against us, including by former employees, independent contractors, and consultants, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal, and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and the curtailment of our operations, any of which would have an adverse effect on our business, financial condition, and results from operations. Our products are produced by third parties at their own manufacturing facilities; a significant disruption at such facilities or to any key production equipment could adversely affect our ability to meet consumer and wholesale demand. While we grow and harvest functional mushrooms at our facility in Olympia, Washington, all of our products are produced by third parties at their own manufacturing facilities. A significant disruption at such facilities or to any key production equipment, even on a short-term basis, could impair the productions and shipment of products, which could have a material adverse effect on our business, financial position, and results of operations. The manufacturing operations of these third parties are vulnerable to interruption and damage from natural and other types of disasters, including earthquake, fire, floods, volcanic events, draughts, environmental accidents, winter storms, power loss, disease outbreaks or pandemics such as the recent COVID-19 pandemic, communications failures, and similar events. If any disaster were to occur at the facilities of these third parties, our ability to operate our business would be seriously impaired. Regulations and evolving legislation governing issues involving climate change and sustainability could result in increased operating costs, which could have a material adverse effect on our business, and the potential physical impacts of climate change on our operations are highly uncertain. A number of international, federal, state, or local governments or governmental bodies have introduced or are contemplating regulatory changes in response to the potential impact of climate change. For example, the U.S. Environmental Protection Agency ( EPA ) issued a notice of finding and determination that emissions of carbon dioxide, methane, and other greenhouse gases ( GHGs ) present an endangerment to human health and the environment, which allowed the EPA to begin regulating emissions of GHGs under existing provisions of the Clean Air Act. Legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring, permitting, reporting, and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas and countries not subject to such limitations. Given the political significance, regulatory or compliance obligations, and uncertainty around the impact of climate change and how it should be addressed, we cannot predict how legislation and regulation will affect our financial condition, operating performance, and ability to compete. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These impacts may adversely impact the cost, production, and financial performance of our operations. 21 We may encounter disruptions or delays in the expansion and construction of our facilities, which may impair our ability to grow and produce our own mushroom products for distribution. Our production capacity is growing, and currently consists of 15,000 sq. ft., including three fully constructed functional mushroom greenhouses, totaling 12,000 sq. ft., with plans to acquire or lease additional growing space. Chris L. Claussen, our Chief Innovation Officer, submitted a controlled substance researcher application with the WDOH in order for FP, Inc. to conduct psilocybin research legally under state and federal law, with such application listing FP, Inc. s Olympia, Washington facility as the research lab location. The application was submitted on July 12, 2021, and remains under review. If the WDOH registration is approved, then we intend to apply for a DEA license to make our facility in Olympia, Washington a licensed psilocybin facility. In addition, we intend to expand operations into a larger facility to increase our functional mushroom production capacity in the future. Commercial construction and expansion of operations involves a number of risks and uncertainties, certain of which are outside our control. Any disruption or delay in the construction of facilities, expansion of operations, or in obtaining either a WDOH or DEA license to legally grow psilocybin mushrooms in the United States may impair or impede our ability to grow functional or psychedelic mushrooms and manufacture products for distribution. We are subject to several risks in connection with the construction of our facilities, including the availability and performance of engineers and contractors, suppliers, and consultants, the availability of funding, and the receipt of required governmental approvals, licenses, and permits, and the projected timeline for construction, which could change due to delays. Any delay in the performance of any one or more of the contractors, suppliers, consultants, or other persons on whom we are dependent in connection with our construction activities, a delay in or failure to receive the required governmental approvals, licenses, and permits in a timely manner or on reasonable terms, or a delay in or failure in connection with the completion and successful operation of the operational elements in connection with construction could delay or prevent the construction of the additional phases of the facilities as planned. There can be no assurance that current or future construction plans implemented by us will be successfully completed on time, within budget and without design defect, that the necessary personnel and equipment will be available in a timely manner or on reasonable terms to complete construction projects successfully, that we will be able to obtain all necessary governmental approvals, licenses, and permits, or that the completion of the construction, the start-up costs, and the ongoing operating costs will not be significantly higher than anticipated by us. Any of the foregoing factors could adversely impact our operations and financial condition. We are subject to risks associated with leasing and occupying real property and the inability to extend, renew, or continue to lease real property in key locations could harm our business, profitability, and results of operations. The lease for our facility in Olympia, Washington is set to expire in 2025, subject to a two-year renewal option (see Properties on page 69 of this prospectus). Accordingly, we are subject to the risks associated with leasing, occupying, and making tenant improvements to real property, including, among others, changes in availability of, and contractual terms for, leasable manufacturing space, as well as potential liability for environmental conditions or various other claims. If demand increases, we may also need to expand into other facilities in order to increase our production capabilities. When our lease expires or when we need to expand into other facilities, we may be unable to negotiate leases or renewals, either on commercially acceptable terms or at all, which could impact our ability to manufacture our products or deliver them to the market, which in turn could harm our business, profitability, and results of operations. We may be vulnerable to rising energy costs. Psilocybin and functional mushroom growing operations consume considerable energy, which makes us vulnerable to rising energy costs and/or the availability of stable energy sources. Accordingly, rising or volatile energy costs or the inability to access stable energy sources may have a material adverse effect on our business, financial condition, and results of operations. Environmental risks may adversely affect our business. Cultivation and production activities may be subject to licensing requirements relating to environment regulation. Environmental legislation is evolving in such a manner that may result in stricter standards and enforcement, larger fines and liability, and potentially increased capital expenditures and operating costs. The application of environmental laws to our business may cause us to increase the costs of our cultivation, production, or scientific activities. Unanticipated licensing delays can result in significant delays and cost overruns in our business and could affect our financial condition and results of operations. There can be no assurance that these delays will not occur. 22 We rely on a third-party co-packer for certain product components and other third parties for the packaging material for our products, and there is no guarantee that the relationships with the co-packers or packaging companies will continue or that the co-packer or packaging companies will deliver goods on a timely basis. We rely on a third-party co-packer to provide microbeads utilized in our products, and other third-party companies for the packaging materials for our products. While we have identified other potential suppliers who can supply similar microbeads, we do not currently own and do not plan to develop in-house manufacturing capabilities for these microbeads, and will be reliant on third-party suppliers for microbeads now and going forward. We also do not manufacture our packaging materials for our products and are reliant on third-party packaging companies for these materials. While other packaging companies exist which could provide these packaging materials for our products, locating and changing suppliers could result in product delivery delays to potential customers, which could materially harm our business and results of operations. This co-packer and these packaging companies are third parties over which we have little or no control, and with which we do not have any long-term agreements. The failure of the co-packer to continue to provide the microbeads or to deliver products on a timely basis, or the failure of the third-party packaging companies to provide packaging materials, or the termination of our relationship with any of these parties could have a material adverse effect on our business, financial condition, and operating results. We are dependent on third parties to supply materials used in our products and packaging, and any interruption or failure by these suppliers or other disruptions to our supply chain may have a material adverse effect on our business, financial condition, results of operations, and cash flows. Our ability to make, move, and sell our products is critical to our success. Damage or disruption to our supply chain, including third-party manufacturing, assembly, or transportation capabilities, due to weather, including any potential effects of climate change, natural disaster, fire or explosion, terrorism, pandemics (such as the recent COVID-19 pandemic), strikes, government action, or other reasons beyond our control or the control of our suppliers and business partners, could impair our ability to manufacture or sell our products. Further, we rely on third parties to supply materials used in our products and packaging. Any interruption or failure by our suppliers or other partners to meet their obligations on schedule or in accordance with our expectations, which, in each case, could be the result of one or many factors outside of our control, could delay or prevent the manufacture or commercialization of our products, disrupt our operations, or cause reputational harm to our company, any or all of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. The global supply chain issues caused by the recent COVID-19 pandemic impacted our ability to obtain packaging materials for our products, and we were forced to delay the launch of our consumer packaged goods because of a delay in our initial orders for packaging samples from suppliers in China. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events when they occur, could adversely affect our business or financial results. The ongoing labor shortage, or an increase in its severity, may result in delays in receiving materials from our third-party suppliers or an increase in the cost of sourcing materials and producing products. We rely on third-party suppliers for materials used in our products and packaging. Our third-party suppliers may face difficulties in meeting their obligations on schedule or in accordance with our expectations if they are unable to find sufficient workers as a result of the ongoing labor shortage, caused in part by the recent COVID-19 pandemic, or an increase in the severity of such labor shortage, which could adversely affect our business or financial results. In addition, we rely in part on our ability to find, hire, and retain capable personnel who can successfully operate our facility in Olympia, Washington, and who can understand, explain, market, and sell our products. The ongoing labor shortage, or an increase in its severity, could result in increased costs related to finding, hiring, and retaining capable personnel, which could adversely affect our business or financial results. 23 Our financial success will depend on our ability to successfully predict changes in consumer preferences and develop successful new products and marketing strategies in response. Our ability to earn revenues is substantially dependent on the success of our products, which depends upon, among other matters, pronounced and rapidly changing public tastes, and other factors which are difficult to predict and over which we have little, if any, control. Consumer trends change based on many factors, including but not limited to, nutritional values, consumer preferences, and general economic conditions. Additionally, there is a growing movement among some consumers to buy local products in an attempt to reduce the carbon footprint associated with transporting products from longer distances, and this could result in a decrease in the demand for our nutraceuticals or future mushroom-based products. A shift in consumer demand away from our nutraceuticals or proposed products or our failure to expand our current market position will harm our business and results of operations. We will be dependent on the popularity and consumer acceptance of our brand. There is no assurance that we will be able to achieve brand awareness in any of our target regions. In addition, we must develop successful marketing, promotional, and sales programs in order to sell our products. If we are not able to develop successful marketing, promotional, and sales programs, then such failure will have a material adverse effect on our business, financial condition, and operating results. We may face unfavorable publicity or consumer perception. We may depend significantly on consumer perception regarding the safety and quality of our products. Consumer perception of products can be significantly influenced by adverse publicity in the form of published scientific research, media attention, social media, or other publicity, whether or not accurate, that associates consumption of our products or any other similar products with illness or other adverse effects, or questions the benefits of our or similar products or that claims that any such products are ineffective. A new product may initially be received favorably, resulting in high sales of that product, but that sales level may not be sustainable as consumer preferences change. Future scientific research or publicity could be unfavorable to our industry or any of our particular products and may not be consistent with earlier favorable research or publicity. Unfavorable research or publicity could have a material adverse effect on our ability to generate sales. We are highly dependent upon consumer perception of mushrooms and mushroom-based products. The public may associate our fully legal functional mushroom and nutraceutical products with illegal psychedelic mushrooms, which are prohibited substances in the United States, except under research and related exceptions pursuant to DEA and state registrations in place. Our revenues may be negatively impacted due to the fact the market does not fully accept mushrooms as a food or nutritional product. If the reputation of our brand erodes significantly, it could have a material impact on our results of operations. In certain circumstances, our reputation could be damaged as a result of the actual or perceived occurrence of any number of events, including negative publicity, whether true or not. Widespread adoption of social media and other web-based tools to generate, publish, and discuss user-generated content and to connect with other users has made it increasingly easy for individuals and groups to communicate and share opinions and views regarding us, our products and our activities, whether true or not. Although we believe that we operate in a manner that is respectful to all stakeholders and take care in protecting our image and reputation, we do not ultimately have direct control over how we are perceived by others. Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations, and impede our ability to advance our projects, thereby having a material adverse impact on financial performance, financial condition, cash flows, and growth prospects. We may not be successful in developing a marketing and sales force for the commercialization of our products, or we may incur substantial expenses to do so. In order to commercialize and market our products, we must either acquire or develop an internal marketing and sales force with technical expertise and with supporting distribution capabilities, or arrange for third parties to perform these services. The acquisition or development of a sales and distribution infrastructure would require substantial resources, which may divert the attention of our management and key personnel, and defer our product development and deployment efforts. To the extent that we enter into marketing and sales arrangements with other companies, our revenues will depend on the efforts of others. These efforts may not be successful. If we fail to develop substantial sales, marketing, and distribution channels, or to enter into arrangements with third parties for those purposes, we will experience delays in product sales and incur increased costs. 24 We may be unable to adequately protect our brand and our other intellectual property rights. Our ability to compete effectively will depend, in part, on our ability to maintain the proprietary nature of our brand and product, and processes and methodologies used to create our products. We have adopted procedures to protect our intellectual property and maintain the secrecy of our confidential business information and trade secrets. However, there can be no assurance that such procedures will afford complete protection of such intellectual property, confidential business information, and trade secrets. There can be no assurance that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology. We have trademark applications for our key names and phrases, and two pending patents for innovations related to our products. We have only filed provisional patent applications, which help protect inventions for a twelve-month period while a formal patent application is being filed. The patent process can take up to twenty-four months or longer to complete and can be challenged during the process. At this time, we cannot state whether the patent applications will be approved, refused, and/or ultimately registered. In addition, our trademark, patent, and other intellectual property rights and related registrations may be challenged in the future and could be cancelled or narrowed. Failure to protect our trademark rights could prevent us in the future from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers perception of our brand and products. Our patent applications may not contain claims sufficiently broad to protect us against third parties with similar technologies or products or provide us with any competitive advantage. In addition, if we do not keep our trade secrets confidential, others may produce products with our recipes or formulations. Intellectual property disputes and proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liabilities, force us to cease use of certain trademarks or other intellectual property, or force us to enter into licenses with others. Any one of these occurrences may have a material adverse effect on our business, results of operations, and financial condition. If we are unable to protect the confidentiality of our trade secrets, the value of our proprietary processes could be materially adversely affected and our business would be harmed. We consider proprietary trade secrets, confidential know-how, and unpatented know-how to be important to our business. We may rely on trade secrets and confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. However, trade secrets and confidential know-how are difficult to protect. We seek to protect our confidential proprietary information, in part, by entering into confidentiality agreements with parties who have access to them, including our employees. However, we cannot be certain that such agreements have been entered into with all relevant parties that may have or have had access to our trade secrets. We may not be able to enforce our intellectual property rights throughout the world. The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. This could make it difficult for us to stop the infringement or misappropriation of our intellectual property rights. The loss of the First Person brand or logo or other registered or common law trade names or a diminution in the perceived quality of products or services associated with our Company would harm our business. Our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of our intellectual property rights. 25 Third parties may assert that we, our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information or misappropriated trade secrets. Although we try to ensure that our employees, consultants, and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Our internal computer systems may fail or suffer security breaches, which could result in a significant disruption of our product development programs and our ability to operate our business effectively. Our internal computer systems may fail or suffer damage due to computer viruses, unauthorized access, natural disasters, terrorism, war, or telecommunication and electrical failures. Cyber-attacks are increasing in their frequency, sophistication, and intensity, and have become increasingly difficult to detect. Cyber-attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering, and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information. Cyber-attacks also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an unintended recipient. While we have not experienced any significant system failure, accident, or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. Additionally, any such event that leads to unauthorized access, use, or disclosure of personal information, including personal information regarding our employees, could harm our reputation, cause us not to comply with federal and/or state breach notification laws and foreign law equivalents, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information. Security breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. All such events could have a material adverse effect on our business, financial condition, and results of operations. Our ability to produce and sell our products is dependent on compliance with regulatory and other requirements. The processing, manufacturing, packaging, labeling, advertising, and distribution of our planned products is subject to regulation by one or more governmental authorities, and various agencies of the federal, state, and localities in which our products are sold. These governmental authorities may attempt to regulate any of our products that fall within their jurisdiction. Our functional mushrooms that we supply to other businesses will be subject to regulation by the USDA and the FDA. Our nutraceutical products will be subject to regulation by the USDA, the FDA, and the FTC. Our intended production of, and research and development involving, psilocybin in the United States will require prior approval from the WDOH and the DEA. We are also required to comply with the regulations and policies promulgated by the EPA and corresponding state agencies. Such governmental authorities may determine that a particular product or product ingredient presents an unacceptable health risk and may determine that a particular statement of nutritional support that we want to use is an unacceptable claim. Such a determination would prevent us from marketing particular products or using certain statements of nutritional support on our products. We also may be unable to disseminate third-party literature that supports our products if the third-party literature fails to satisfy certain requirements. In addition, governmental authorities could require us to remove a particular product from the market. Any recall or removal would result in additional costs to us, including lost revenues from any products that we are required to remove from the market, any of which could be material. Any such product recalls or removals could lead to liability, substantial costs, and reduced growth prospects, all of which could be material. 26 If we are not able to comply with all environmental, health, and safety regulations applicable to our operations and industry, we may be held liable for any breaches of those regulations. Our operations are subject to a variety of environmental, health, and safety laws and regulations in each of the jurisdictions in which we operate. These laws and regulations govern, among other things, air emissions, wastewater discharges, the handling and disposal of hazardous substances and wastes, soil and groundwater contamination, and employee health and safety. We are also subject to laws and regulations governing the handling and disposal of noncompliant products and waste, the handling of regulated material that is included in our products and the disposal of products at the end of their useful life. These laws and regulations have increasingly become more stringent, and we may incur additional expenses to ensure compliance with existing or new requirements in the future. Any failure by us to comply with environmental, health, and safety requirements could result in the limitation or suspension of our operations. We also could incur monetary fines, civil or criminal sanctions, third-party claims or cleanup, or other costs as a result of violations of or liabilities under such requirements. In addition, compliance with environmental, health, and safety requirements could restrict our ability to expand our facilities or require us to acquire costly pollution control equipment or incur other significant expenses. Our reputation could suffer from real or perceived issues involving the labeling or marketing of our products. Products that we sell carry claims as to their origin, ingredients or health benefits, including, by way of example, the use of the term natural , functional , or healthy , or similar synonyms or implied statements relating to such benefits. Although each of the FDA and the USDA has issued statements regarding the appropriate use of the word natural, there is no single, U.S.-government-regulated definition of the term natural for use in the food industry, which is true for many other adjectives common in the better-for-you and functionally-focused food industry. The resulting uncertainty has led to consumer confusion, distrust, and legal challenges. Plaintiffs have commenced legal actions against several food companies that market natural products, asserting false, misleading and deceptive advertising and labeling claims, including claims related to genetically modified ingredients. In limited circumstances, the FDA has taken regulatory action against products labeled natural but that nonetheless contain synthetic ingredients or components. Should we become subject to similar claims, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is unfounded. Adverse publicity about these matters may discourage consumers from buying our products. The cost of defending against any such claims could be significant. Any loss of confidence on the part of consumers in the truthfulness of our labeling or ingredient claims would be difficult and costly to overcome and may significantly reduce our brand value. Any of these events could adversely affect our reputation and brand and decrease our sales, which would have a material adverse effect on our business, financial condition, and results of operations. The laws, regulations, and guidelines generally applicable to our business or products, or to research involving psilocybin, in the United States may change in ways that impact our ability to continue our business as currently conducted or proposed to be conducted. From time to time, U.S. federal, state, or local legislative and governmental authorities may impose additional or more stringent laws or regulations that could apply to us, our business, and products, repeal laws or regulations that we consider favorable to us, or impose more stringent interpretations of current laws or regulations. We are not able to predict the nature of such future laws, regulations, repeals, or interpretations or to predict the effect that additional governmental regulation, when and if it occurs, would have on our business in the future. Those developments could prohibit the sale and marketing of ingredients and products or require reformulation of products to meet new standards, recalls, or discontinuance of products (including products that we sell). Further, we may be subject to requirements for reformulation, labeling, additional record-keeping requirements, increased documentation of the properties of certain products, additional or different labeling, additional scientific substantiation, quality control requirements, adverse event reporting, or other requirements. Any developments of this nature could increase our costs significantly and could have a material adverse effect on our business, financial condition, and results of operations. Psilocybin is currently classified as a Schedule I controlled substance under the CSA. If psilocybin and/or psilocin, other than the FDA-approved formulation, is rescheduled under the CSA as a Schedule II or lower controlled substance (i.e., Schedule III, IV, or V), the ability to conduct research involving psilocybin and psilocin would most likely be improved. However, rescheduling psilocybin and psilocin may materially alter enforcement policies across many federal agencies, primarily the FDA and DEA. The FDA is responsible for ensuring public health and safety through regulation of food, drugs, supplements, and cosmetics, among other products, through its enforcement authority pursuant to the FDCA. The FDA s responsibilities include regulating the ingredients as well as the marketing and labeling of drugs sold in interstate commerce. Because it is currently illegal under federal law to produce and sell psilocybin and psilocin, and because there are no federally recognized medical uses, the FDA has historically deferred enforcement related to psilocybin and psilocin to the DEA. If psilocybin and psilocin were to be rescheduled to a federally controlled, yet legal, substance, the FDA would likely play a more active regulatory role. The DEA would continue to be active in regulating manufacturing, distribution, and dispensing of such substances. There is no guarantee that our future intended psilocybin cultivation and research would be able to meet any new FDA regulations or interpretations of the law, which could inhibit our business prospects even in the case that the federal government were to legalize psilocybin. The potential for multi-agency enforcement post-rescheduling could threaten or have a materially adverse effect on our business. 27 The failure to comply with any of the above applicable regulations, regulatory authorities, or other requirements may result in civil or criminal penalties, recall or seizure of products, injunctive relief including partial or total suspension of production, or withdrawal of a product from the market. We may encounter difficulties in accessing banking and other financial services due to our involvement in the psilocybin industry. We plan to conduct psychedelic mushroom product research and development in Jamaica through TruMed. In addition, if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA in order to legally produce and research psilocybin in the State of Washington in the United States, then we intend to expand domestic U.S. production to include psychedelic mushrooms and conduct research and development. Due to the present state of the laws and regulations governing financial institutions in the United States, banks often refuse to provide banking services to businesses involved in the psilocybin industry. Consequently, businesses involved in the psilocybin industry often have difficulty accessing the U.S. banking system and traditional financing sources. While we currently have a bank account with a U.S. bank, the inability to open bank accounts with certain institutions may make it difficult to operate our business and could make our cash holdings more vulnerable. In addition to the foregoing, banks may refuse to process debit card payments and credit card companies may refuse to process credit card payments due to our planned involvement in the psilocybin industry through TruMed and, if there is rescheduling of psylocibin under the CSA from Schedule I to a lower Schedule (II-V) and we receive the necessary approvals from the WDOH and the DEA, in the United States. If we are unable or limited in our ability to open or maintain bank accounts, obtain other banking services, or accept credit card and debit card payments, it may be difficult for us to operate and conduct our business as planned. A health or safety issue resulting in litigation against us could harm our business. Health and safety issues related to our products may arise that could lead to litigation or other action against us or to regulation of certain of our product components. We may be required to modify our recipes or packaging and may not be able to do so. In extreme circumstances, we could be required to pay damages that may reduce our profitability and adversely affect our financial condition. Even if these concerns prove to be baseless, the resulting negative publicity could affect our ability to market certain of our products and, in turn, could harm our business and results from operations. Contamination of our products intended for human consumption could result in a product recall or harm our reputation. The sale of products for human consumption involves inherent risks. We could decide to, or be required to, recall products due to suspected or confirmed contamination or product tampering. A product recall could lead to litigation and adversely affect our product sales, financial condition, and results of operation as well as our general reputation in the industry. Our products may be subject to product recalls, withdrawals, or seizures. Manufacturers, producers, and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety, and inadequate or inaccurate labelling disclosure. If any of our products are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable level or at all. In addition, a product recall may require significant management attention. 28 Although we have detailed procedures in place for testing our products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if we are subject to recall, our public image could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for our products and could have a material adverse effect on our results of operations and financial condition. Additionally, product recalls may lead to increased scrutiny of our operations by regulatory agencies, requiring further management attention, potential loss of applicable permits or licenses, and potential legal fees and other expenses, which could materially and adversely affect our business, financial condition and results of operations. Because psilocybin is a controlled substance, our products, equipment, and revenues could be subject to civil or criminal asset forfeiture if we fail to comply with the laws and regulations applicable to psilocybin. Any assets owned by participants in the psilocybin industry used in the course of conducting such business, or that are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture because of the illegality of the psilocybin industry under U.S. federal law. Even if the owner of the property is never charged with a crime, the property in question could still be seized and subjected to an administrative proceeding by which, with minimal due process, it could be forfeited. We face inherent and significant risks related to product liability and similar claims. We may be subject to various product liability claims, including, among others, that our products caused injury or illness, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances. A product liability claim or regulatory action against us could result in increased costs, could adversely affect our reputation with our clients and consumers generally, and could have a material adverse effect on our business, financial condition and results of operations. There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our potential products. We may be required to pay for losses or injuries purportedly or actually caused by our products. Although we have not yet been subject to any product liability claims, we may be subject to such claims in the future, and that liability may exceed the funds available to us. We are currently involved in, and may be in the future be involved in, litigation which could result in substantial costs and be a distraction to management and other employees. We are currently involved in, and may in the future be involved in, litigation relating to claims arising out of our operations in the normal course of business. On June 26, 2023, the TruMed Sellers (Pratik Ruparell and Gaston Wagstaff) filed a statement of claim against First Person Ltd. and TruMed Limited in the Court of King s Bench of Alberta. See Business Legal Proceedings on page 71 of this prospectus for additional information. TruMed does not have any employees or currently active business operations and the statement of claim has not had any material impact on TruMed s business, including TruMed s research and development operations in Jamaica. Based on our initial internal review, we believe the claims lack merit and we intend to vigorously defend same. However, the outcomes of legal proceedings and claims are inherently unpredictable and subject to significant judgment to determine the likelihood and amount of loss related to such matters. In the event we are not successful in defending against or settling the statement of claim filed by the TruMed Sellers, or other disputes or litigation that we may be involved in from time to time, then we may be required to pay damages, or other fees as a court may order, which could have a material adverse effect on the results of our operations or financial position. Even if we are successful in defending against or settling the statement of claim filed by the TruMed Sellers, and other disputes or litigation that we may be involved in from time to time, litigation could result in substantial costs and be a distraction to management and other employees. We are highly dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner, or at all. Our success is largely dependent on the performance of our directors and officers. There is no assurance we can maintain the services of our directors, officers, or other qualified personnel required to operate our business. In addition, our ability to retain key personnel may be challenged as a result of potential COVID-19 outbreaks or quarantines. The loss of one more of these persons could seriously harm our business and may prevent us from implementing our business plan in a timely manner, or at all. Conflicts of interest may arise between us and our directors and officers as a result of other business activities undertaken by such individuals. Except as otherwise restricted in an applicable noncompetition agreement, certain of our directors and officers may become associated with other companies in the same or related industries, which may give rise to conflicts of interest. Directors who have a material interest in any person who is a party to a material contract or a proposed material contract with us or our related parties are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, our directors and officers are required to act honestly and in good faith with a view toward our best interests. 29 We must attract and maintain key personnel or our business could suffer material harm. The loss of certain key non-executive employees could have a material adverse effect on our business and results of operations. In addition, an inability to hire, or the increased costs of new personnel, including members of executive management, could have a material adverse effect on our business and operating results. The expansion of marketing and sales of our products will require us to find, hire, and retain additional capable personnel who can understand, explain, market and sell our products. There is intense competition for capable personnel in all of these areas and we may not be successful in attracting, training, integrating, motivating, or retaining new personnel, vendors, or subcontractors for these required functions. New employees often require significant training and, in many cases, take significant time before they achieve full productivity. As a result, we may incur significant costs to attract and retain contractors, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards, and may lose new employees to our competitors or other companies before we realize the benefit of the resources we expend in recruiting and training them. We may be unable to manage our growth effectively, which could make it difficult to execute our business strategy. In order to manage growth and change in strategy effectively, we must: (i) maintain adequate systems to meet future customer demands; (ii) expand sales and marketing, distribution capabilities, and administrative functions; (iii) expand the skills and capabilities of our current management team; and (iv) attract and retain qualified employees. While we intend to focus on managing costs and expenses over the long term, we expect to expend substantial resources to support our growth and may have additional unexpected costs. We may not be able to expand quickly enough to exploit potential market opportunities. If we are unable to manage our growth effectively, we may be unable to execute our business plan, which could have a material adverse effect on our business results of operations. Adverse U.S. or international economic conditions, including periods of inflation, could negatively affect our business, financial condition, and results of operations. Consumer spending on nutraceutical products is influenced by general economic conditions and the availability of discretionary income. Adverse U.S. or international economic conditions or periods of inflation or high energy prices may contribute to higher unemployment levels, decreased consumer spending, reduced credit availability, and declining consumer confidence and demand, each of which poses a risk to our business. A decrease in consumer spending or in retailer and consumer confidence and demand for our products could have a significant negative impact on our net sales and profitability, including our operating margins. These economic conditions could cause potential customers or suppliers to experience cash flow or credit problems and impair their financial condition, which could disrupt our business and adversely affect product orders, payment patterns, and default rates and increase our bad debt expense. The recent COVID-19 pandemic or future pandemics could have a material adverse impact on our business, results of operations, and financial condition. The recent outbreak of COVID-19, and the subsequent emergence of variant strains of the virus, resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which included the implementation of travel bans, self-imposed quarantine periods, and social distancing, caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets experienced significant volatility and weakness. Governments and central banks reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The efficacy of the government and central bank interventions is unknown at this time. It is not possible to reliably estimate the length and severity of these developments and the impact on our financial results and condition in future periods. However, the lasting effects of the recent COVID-19 pandemic, or government responses to future pandemics, could: interrupt our operations; increase operating expenses; cause delayed performance of contractual obligations; cause packaging restrictions on shipping; impair our ability to raise funds, depending on the recent COVID-19 pandemic s effect on capital markets; adversely affect our supply partners, contractors, customers, and/or transportation carriers; and cause changes in our regulatory framework, which may increase competition for the mushrooms and packaging we use or affect our ability to deliver our products to customers each of which could materially and adversely affect our business and financial condition. 30 The measures taken by the governments of countries to contain the spread of COVID-19, or measures that governments may take in responses to future pandemics, could disrupt our plan of distribution and use of available funds and the timelines, business objectives, or disclosed milestones related thereto, and thus, adversely impact our business, financial condition, results of operations, and prospects. In addition, there can be no assurance that we will not lose members of our workforce or consultants or see our workforce person-hours reduced, or incur increased medical costs as a result of these health risks. It is difficult to predict the impact that any pandemic, including any extension of the COVID-19 pandemic, may have on our business in the future, or the price of and demand for our products. It is possible that the measures taken in response to the recent COVID-19 pandemic, or any future pandemic, could have a material adverse effect on our business, financial condition, results of operations, and prospects, as well as the market for our Common Shares and/or our ability to obtain financing. Current uncertainty in global economic conditions, including, the Russia-Ukraine conflict and inflation, could adversely affect our revenue and business. Global inflation increased during 2022, and inflationary pressures have been exacerbated by the Russia-Ukraine conflict and other geopolitical tensions, as well as the related international response. The pressures include increases in the price for goods and services and increased global supply chain disruptions, which have resulted in, and may continue to result in, shortages in materials and services and related uncertainties. Such shortages have resulted in, and may continue to result in, cost increases for labor, fuel, materials, and services, and could continue to cause costs to increase, and also result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors or associated increases in our operating costs and how that may impact our business. To the extent we are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected. Interest rate increases may raise our cost of goods sold and negatively impact our ability to obtain debt financing, which in turn may negatively impact our ability to acquire new machinery and equipment. To date, increased borrowing costs have not impacted our ability to make timely payments on existing debt obligations, but interest rate increases may ultimately have such impact. Supply chain disruptions could represent a challenge for us, which may have a material adverse effect on our operations. Risks Related to Our Common Shares Additional issuances of Common Shares or issuances of securities convertible into or exercisable for Common Shares may result in further dilution. In order to finance future operations, we may raise additional funds through the issuance of Common Shares or other securities convertible into or exercisable for Common Shares. We cannot predict the size of future issuances of Common Shares or other securities convertible into or exercisable for Common Shares or the effect, if any, that future issuances will have on the market price of the Common Shares. Any transaction involving the issue of previously unissued Common Shares, or securities convertible into or exercisable for Common Shares, would result in dilution, which may be substantial, to existing holders of Common Shares. The market price for our Common Shares may be volatile, which may affect the price at which you could sell our Common Shares. Securities of small-cap companies have experienced substantial volatility in the past, often based on factors unrelated to the companies financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. Factors unrelated to our performance that may affect the price of our Common Shares include, but are not limited to: the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not cover our Common Shares; lessening in trading volume and general market interest in our Common Shares may affect an investor s ability to trade significant numbers of our Common Shares; the size of our public float may limit the ability of some institutions to invest in our Common Shares; and a substantial decline in the price of our Common Shares that persists for a significant period of time could cause our Common Shares to be delisted from The Nasdaq Capital Market, further reducing market liquidity. The market price of our Common Shares at any given time may not accurately reflect our long-term value due to the impacts of events involving one or more of these risks. In addition, securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management s attention and resources. The market price of our Common Shares is affected by many other variables that are not directly related to our success and are, therefore, not within our control. These include other developments that affect the breadth of the public market for our Common Shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of our Common Shares is expected to make our Common Share price volatile in the future, which may result in losses to investors. The offering price of the Primary Offering and the resale offering could differ. The offering price of our Common Shares in the Primary Offering has been determined by negotiations between us and the underwriter. The selling shareholders may sell the selling shareholder shares at prevailing market prices or privately negotiated prices after close of the Primary Offering and listing of the Common Shares on The Nasdaq Capital Market. Therefore, the offering prices of the Primary Offering and resale offering could differ. As a result, purchasers in the resale offering could pay more or less than the offering price in the Primary Offering. Sales of substantial amounts of our Common Shares by our existing shareholders in the public market place may have an adverse effect on the market price of our Common Shares. Sales of a large number of our Common Shares in the public markets, or the potential for such sales, could decrease the trading price of our Common Shares and could impair our ability to raise capital through future sales of our Common Shares. Upon completion of this offering, we will have 10,152,033 Common Shares outstanding, based on 7,252,033 Common Shares outstanding as of June 30, 2023, assuming all outstanding Series 1 Shares are converted into 900,679 Common Shares immediately prior to the closing of the Primary Offering. Any holder of Series 1 Shares may, at any time, elect to convert all or any portion of the outstanding Series 1 Shares held by such holder into Common Shares. The Series 1 Shares will automatically convert into Common Shares on the date that is 12 months after the closing of the Primary Offering. The number of Common Shares issuable upon conversion of the Series 1 Shares is calculated as of the date of this prospectus as follows: (i) with respect to the 3,098,971 Series 1 Shares issued on January 3, 2023, January 9, 2023, February 6, 2023, and March 31, 2023, (a) the aggregate number of Series 1 Shares outstanding, divided by (b) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus; and (ii) with respect to the 239,129 Series 1 Shares issued on September 7, 2023, (a) the aggregate number of Series 1 Shares outstanding, multiplied by (b) 0.6, divided by (c) $3.60, which is 80 percent of the midpoint of the price range set forth on the cover of this prospectus. The actual number of Common Shares issuable upon conversion of the outstanding Series 1 Shares may increase or decrease on a future date based on when the closing of the Primary Offering occurs and the actual offering price per Common Share. See Description of Share Capital Preferred Shares on page 93 of this prospectus for more information regarding the conversion of the Series 1 Shares. Of the 10,152,033 Common Shares that will be outstanding upon completion of this offering, all the Common Shares sold in this offering by us, plus any Common Shares sold upon exercise of the underwriter s over-allotment option to purchase additional Common Shares, and the selling shareholder shares that are being registered in the registration statement of which this prospectus is a part, will be freely tradable without restriction in the public market immediately following this offering. Based on the number of Common Shares outstanding as of the date of this prospectus, an additional 3,871,400 Common Shares will be eligible for sale in the public market after the expiration of the lock-up agreements pertaining to this offering or the restrictions on the resale of certain restricted securities held by our existing shareholders, as the case may be. If our existing shareholders sell substantial amounts of our Common Shares in the public market, or if the public perceives that such sales could occur, this could have an adverse impact on the market price of our Common Shares, even if there is no relationship between such sales and the performance of our business. 31 The resale of Common Shares by the selling shareholders may cause the market price of our Common Shares to decline. An aggregate of 2,330,364 Common Shares are being registered for resale by the selling shareholders in the resale offering pursuant to this prospectus. The resale of Common Shares by the selling shareholders in the resale offering could result in resales of Common Shares by our current shareholders concerned about the potential dilution of their holdings. In addition, the resale of a large number of Common Shares by the selling shareholders could have the effect of depressing the market price for our Common Shares. We do not intend to pay dividends on our Common Shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our Common Shares. We intend to retain earnings, if any, to finance the growth and development of our business and do not intend to pay cash dividends on our Common Shares in the foreseeable future, if ever. The payment of future cash dividends, if any, will be reviewed periodically by the Board of Directors and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions, and other factors. If persons engage in short sales of our Common Shares, including sales of Common Shares to be issued upon exercise of outstanding securities, the price of our Common Shares may decline. Selling short is a technique used by a shareholder to take advantage of an anticipated decline in the price of a security. In addition, holders of options, warrants, and other convertible securities will sometimes sell short knowing they can, in effect, cover through the exercise or conversion of options, warrants, and other convertible securities, thus locking in a profit. A significant number of short sales or a large volume of other sales within a relatively short period of time can create downward pressure on the market price of a security. Further sales of Common Shares issued upon exercise or conversion of options, warrants, and other convertible securities could cause even greater declines in the price of our Common Shares due to the number of additional shares available in the market upon such exercise/conversion, which could encourage short sales that could further undermine the value of our Common Shares. You could, therefore, experience a decline in the value of your investment as a result of short sales of our Common Shares. A short squeeze due to a sudden increase in demand for our Common Shares could lead to extreme price volatility in our Common Shares. Investors may purchase our Common Shares to hedge existing exposure or to speculate on the price of our Common Shares. Speculation of the price of our Common Shares may lead to long and short exposures. To the extent aggregate short exposure exceeds the number of our Common Shares available for purchase on the open market, investors with short exposure may have to pay a premium to repurchase Common Shares for delivery to lenders of our Common Shares. Those repurchases may in turn, dramatically increase the price of our Common Shares until additional Common Shares are available for trading or borrowing. This is often referred to as a short squeeze. In the future, a proportion of our Common Shares may be traded by short sellers which may increase the likelihood that our Common Shares will be the target of a short squeeze. A short squeeze could lead to volatile price movements in shares of our Common Shares that are unrelated or disproportionate to our operating performance and, once investors purchase the Common Shares necessary to cover their short positions, the price of our Common Shares may rapidly decline. Investors that purchase Common Shares during a short squeeze may lose a significant portion of their investment. Our Common Shares, once listed on The Nasdaq Capital Market, may be subject to potential delisting if we do not continue to comply with the listing requirements of The Nasdaq Capital Market. We have applied to list our Common Shares on The Nasdaq Capital Market, under the symbol FP . An approval of our listing application by The Nasdaq Capital Market will be subject to, among other things, our fulfilling of all of the initial listing requirements of The Nasdaq Capital Market. There is no guarantee that our Common Shares will be approved for listing on The Nasdaq Capital Market or any other securities exchange. In addition, The Nasdaq Capital Market maintains rules and standards for continued listing, including, without limitation, minimum market capitalization requirements. Failure to maintain our listing (i.e., being de-listed from Nasdaq Capital Market), would make it more difficult for shareholders to sell our Common Shares and more difficult to obtain accurate price quotations for our Common Shares. Any potential or actual de-listing may have significant adverse effects on the price of our Common Shares, our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing. There is a limited trading market for our Common Shares and shareholders may find it difficult to sell our Common Shares. Currently, our Common Shares are not listed on any exchange or quoted on any of the over the counter markets. As a result, investors may find it difficult to sell, or to obtain accurate quotations as to the price of, our Common Shares prior to successful listing with The Nasdaq Capital Market. Even if our Common Shares are listed on The Nasdaq Capital Market, our Common Shares being offered pursuant to this prospectus may be subject to the penny stock rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors. The SEC regulations generally define a penny stock to be an equity security that has a market price of less than $5.00 per share, subject to certain exceptions. If we do not obtain or retain a listing on The Nasdaq Capital Market and if the price of our Common Shares is less than $5.00, our Common Shares will be deemed a penny stock. Unless an exception is available, those regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions and high net worth individuals). In addition, the broker-dealer must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer s account. Moreover, broker-dealers who recommend such securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser s written agreement to transactions prior to sale. Regulations on penny stocks could limit the ability of broker-dealers to sell our Common Shares and thus the ability of purchasers of our Common Shares to sell their securities in the secondary market. We cannot predict the extent to which investor interest in us and our Common Shares will lead to the development or continuance of an active trading market or how liquid that trading market for our Common Shares might become. If an active trading market for our Common Shares does not develop or is not sustained, it may be difficult for investors to sell our Common Shares, particularly large quantities thereof, at a price that is attractive or at all. As a result, an investment in our Common Shares may be illiquid and investors may not be able to liquidate their investment readily or at all when they desire to sell. 32 There is limited liquidity in our Common Shares, which may adversely affect your ability to sell your Common Shares. The market price of our Common Shares may fluctuate significantly in response to a number of factors, some of which are beyond our control. These factors include, but are not limited to: developments concerning intellectual property rights and regulatory approvals relating to us; quarterly variations in our business and financial results or the business and financial results of our competitors; our ability or inability to generate increases in revenue and profit; our ability or inability to raise capital, and the terms and conditions associated with any such raising of capital; developments in our industry and target markets; the number of market makers who are willing to continue to make a market in our stock and the market or exchange on which they decide to make a market in our stock; our ability to have our Common Shares listed on The Nasdaq Capital Market; and general market conditions and other factors, including factors unrelated to our own operating performance. In recent years, the stock market in general has experienced extreme price and volume fluctuations. Continued market fluctuations could result in extreme volatility in the price of our Common Shares, which could cause a decline in the value of our Common Shares. Price volatility may be accentuated if trading volume of our Common Shares is low. Any or all of these above factors could adversely affect your ability to sell your Common Shares or to sell at a price that you determine to be fair or favorable. We are a smaller reporting company and emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies and emerging growth companies will make our Common Shares less attractive to investors. We are a smaller reporting company, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the Exchange Act ), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including emerging growth companies such as, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Our status as a smaller reporting company is determined on an annual basis. We cannot predict if investors will find our Common Shares less attractive or our Company less comparable to certain other public companies because we will rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future financial results may not be as comparable to the financial results of certain other companies in our industry that adopted such standards. Additionally, in connection with this offering, we are concurrently filing a long form prospectus in Alberta, Canada, in order to become a reporting issuer under applicable securities laws in Alberta, Canada. As a result, we will, thereafter, be required to follow Canadian laws and regulations that are applicable to public Canadian companies, including proxy rules. If some investors find our Common Shares less attractive as a result of the reduced disclosure requirements or the applicable Canadian laws and regulations, there may be a less active trading market for our Common Shares and our stock price may be more volatile. If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud. Under Section 404 of the Sarbanes-Oxley Act, a newly public company is not required to comply with either the management or the auditor reporting requirements related to internal control over financial reporting until its second annual report, if applicable. 33 Further, we intend to qualify as an emerging growth company as defined in the JOBS Act. An emerging growth company may take advantage of reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include: an extended transition period to comply with new or revised accounting standards applicable to public companies; and an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act. We may take advantage of these provisions until the last day of the fiscal year ending during which fifth anniversary of this listing occurs, or such earlier time that we are no longer an emerging growth company and, if we do, the information that we provide shareholders may be different than you might receive from other public companies in which you hold equity. We would cease to be an emerging growth company upon the earliest of: (i) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (ii) the last day of the fiscal year during which the fifth anniversary of this listing occurs; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. In addition, if we no longer qualify as an emerging growth company, as an accelerated filer, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation. During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our stock. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods. In connection with the preparation of our consolidated financial statements for the period from January 21, 2021 (inception) through December 31, 2021, we identified the following material weaknesses in our internal controls: Due to limited accounting and financial reporting resources, we lack formal processes to identify, update, and assess risks to our financial reporting. Due to limited accounting and financial reporting resources, certain authorization, approval, and review controls over our financial statements and accounting records have not been implemented or have not been applied consistently. This includes controls over the identification, approval, and disclosure of related party transactions. In certain cases, formal documentation does not exist regarding the design of controls or evidence of implementation of controls, or evidence of occurrence. In addition, our processes lack segregation of duties in certain audit areas. 34 In order to mitigate these material weaknesses, we have expanded our Board of Directors to include three independent directors (see Management beginning on page 72 of this prospectus) and have established an independent Audit Committee (see Corporate Governance beginning on page 75 of this prospectus). You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under Canadian law and certain of our executive officers and directors reside outside the United States. We are incorporated under the laws of Alberta, Canada, and our principal executive office is located in Canada. In addition, certain of the directors and officers of the Company are residents of Canada or other jurisdictions outside of the United States, and all or a substantial portion of the assets of those directors and officers are or may be located outside the United States. As a result, it may be difficult or not possible for investors in the United States to effect service of process within the United States upon us, our officers, or our directors, or to enforce against us, our officers, or our directors judgments of U.S. courts based upon civil liability under the U.S. federal securities laws or the securities laws of any state within the United States. There is doubt as to the enforceability in Canada against us, our officers, or our directors in original actions or in actions for enforcement of judgments of U.S. courts of liabilities based solely upon the U.S. federal securities laws or the securities laws of any state within the United States. 35 Our amended and restated articles of incorporation and amended and restated bylaws contain provisions that could delay, discourage, or prevent a takeover attempt even if a takeover attempt might be beneficial to our shareholders, and such provisions may adversely affect the market price of our Common Shares. Provisions contained in our amended and restated articles of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire us. Our amended and restated articles of incorporation and amended and restated bylaws also impose various procedural and other requirements, which could make it more difficult for shareholders to effect certain corporate actions. For example, our amended and restated articles of incorporation authorizes our Board of Directors to determine the rights, preferences, privileges, and restrictions of unissued series of preferred shares without any vote or action by our shareholders. Thus, our Board of Directors can authorize and issue preferred shares with voting or conversion rights that could adversely affect the voting or other rights of holders of our Common Shares. These rights may have the effect of delaying or deterring a change of control of our company. Additionally, for example, our amended and restated bylaws include advance notice requirements for nominations for election to our Board of Directors and for proposing matters that can be acted upon at shareholder meetings. In addition, our company is subject to the laws of Alberta, Canada, which laws contain certain provisions that could make it more difficult for a third party to acquire us, including that (i) our Board of Directors is expressly authorized to adopt, or to alter or repeal, our amended and restated bylaws, subject to a shareholder ratification requirement by ordinary resolution at the next meeting of shareholders, and (ii) the ability to remove our directors and the ability of our shareholders to call special meetings of shareholders are subject to certain limitations. See Description of Share Capital Anti-Takeover Effects of Provisions of Our Amended and Restated Articles of Incorporation, Our Amended and Restated Bylaws, and Alberta Law beginning on page 94 of this prospectus. These provisions could limit the price that certain investors might be willing to pay in the future for our Common Shares. Our amended and restated bylaws provide that any derivative actions, actions relating to breach of fiduciary duties, and other matters relating to our internal affairs will be required to be litigated in Alberta, Canada, which could limit investors ability to obtain a favorable judicial forum for disputes with us. Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of King s Bench of the Province of Alberta, Canada, and appellate Courts therefrom (or, failing such Court, any other court having jurisdiction, and the appellate Courts therefrom), will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a breach of fiduciary duty owed by any of our directors, officers, or other employees to us, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the Business Corporations Act (Alberta) (the ABCA ) or our amended and restated articles of incorporation or our amended and restated bylaws, or (iv) any action or proceeding asserting a claim otherwise related to our affairs (as defined in the ABCA). Our forum selection bylaw also provides that our securityholders are deemed to have consented to personal jurisdiction in the Province of Alberta and to service of process on their counsel in any foreign action initiated in violation of our bylaw relating to the foregoing matters. Therefore, it may not be possible for securityholders to litigate any action relating to the foregoing matters outside of the Province of Alberta. This may result in increased costs to investors to bring a claim against us, and may discourage claims or limit investors ability to bring a claim in a judicial forum that they find favorable. However, our amended and restated bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, and that the exclusive forum provision shall not apply to actions brought to enforce any liability or duty created by the Exchange Act. Our forum selection bylaw seeks to reduce litigation costs and increase outcome predictability by requiring derivative actions and other matters relating to our affairs to be litigated in a designated forum. While forum selection clauses in corporate charters and bylaws are becoming more commonplace for public companies in the United States and have been upheld by courts in certain states, they are untested in Canada. It is possible that the validity of our forum selection bylaw could be challenged and that a court could rule that such bylaw is inapplicable or unenforceable. 36 If a court were to find our forum selection bylaw inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions and we may not obtain the benefits of limiting jurisdiction to the courts selected. General economic conditions may negatively impact our operations. Economic downturns may negatively affect our operations. These conditions may be widespread or isolated to one or more geographic regions in which we operate. Higher wages, related labor costs, printing costs, leasing costs, energy, insurance, and fuel costs, and the increasing cost trends in those markets may decrease our margins. In addition, decreases in discretionary spending during economic downturns could impact our businesses, and thereby negatively impact our operations. We could be subject to taxation in both Canada and the United States, which could have a material adverse effect on our financial condition and results of operations. We are a Canadian corporation, and as a result generally would be classified as a non-U.S. corporation under the general rules of U.S. federal income taxation. Section 7874 of the Internal Revenue Code of 1986, as amended (the Code ), however, contains rules that can cause a non-U.S. corporation to be taxed as a U.S. corporation for U.S. federal income tax purposes. Under Section 7874 of the Code, a corporation created or organized outside of the United States will nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes, which is referred to as an inversion, if certain conditions are met. If, pursuant to Section 7874 of the Code, we are classified as a U.S. corporation for U.S. federal income tax purposes, then we would be subject to U.S. federal income tax on our worldwide income. Regardless of any application of Section 7874 of the Code, however, we expect to be treated as a Canadian resident company for purposes of the Income Tax Act (Canada), as amended. If, as a result of the application of Section 7874 of the Code, we are subject to taxation both in Canada and the United States, then such treatment could have a material adverse effect on our financial condition and results of operations. If we are a passive foreign investment company following this offering, there could be adverse U.S. federal income tax consequences to U.S. Holders. Based on the Company s current and projected income, assets, activities and market capitalization, we do not expect that the Company will be classified as a passive foreign investment company ( PFIC ) for our taxable year ending December 31, 2023, and we do not expect to become one in the future. However, if we are a PFIC for our taxable year ending December 31, 2023, or any subsequent taxable years, we intend to annually furnish U.S. holders, upon request, a PFIC Annual Information Statement, with the information required to allow U.S. holders to make a qualified electing fund election, or QEF Election for U.S. federal income tax purposes. No assurances regarding our PFIC status can be provided for any past, current, or future taxable years. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change. In addition, for our current and future taxable years, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of our securities from time to time, which may fluctuate considerably. Under the income test, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into in the future and our corporate structure. The composition of our income and assets is also affected by how, and how quickly, we spend the cash we raise in any offering, including this offering. If we are a PFIC, U.S. holders of our securities will be subject to adverse U.S. federal income tax consequences, such as ineligibility for any preferential tax rates for individuals on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws and regulations. For further discussion of the PFIC rules and the adverse U.S. federal income tax consequences in the event we are classified as a PFIC, see Material U.S. Federal Income Tax Considerations Passive Foreign Investment Company Rules beginning on page 112 of this prospectus. If we or any of our non-U.S. subsidiaries are classified as a controlled foreign corporation, there could be materially adverse U.S. federal income tax consequences to certain U.S. Holders of our securities. Each Ten Percent Shareholder (as defined below) in a non-U.S. corporation that is classified as a controlled foreign corporation ( CFC ) for U.S. federal income tax purposes generally is required to include in income for U.S. federal tax purposes such Ten Percent Shareholder s pro rata share of the CFC s Subpart F income, global intangible low taxed income, and investment of earnings in U.S. property, even if the CFC has made no distributions to its shareholders. Subpart F income generally includes dividends, interest, rents, royalties, gains from the sale of securities and income from certain transactions with related parties. In addition, a Ten Percent Shareholder that realizes gain from the sale or exchange of shares in a CFC may be required to classify a portion of such gain as dividend income rather than capital gain. An individual that is a Ten Percent Shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a Ten Percent Shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject a Ten Percent Shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such Ten Percent Shareholder s U.S. federal income tax return for the year for which reporting was due from starting. 37 A non-U.S. corporation generally will be classified as a CFC for U.S. federal income tax purposes if Ten Percent Shareholders own, directly or indirectly, more than 50 percent of either the total combined voting power of all classes of stock of such corporation entitled to vote or of the total value of the stock of such corporation. A Ten Percent Shareholder is a U.S. person (as defined by the Code) who owns or is considered to own 10 percent or more of the total combined voting power of all classes of stock entitled to vote or 10 percent or more of the total value of all classes of stock of such corporation. We believe that we were not a CFC in the 2022 taxable year, and we do not expect to become a CFC in the 2023 taxable year or in a subsequent taxable year. However, the determination of CFC status is complex and includes attribution rules, the application of which is not entirely certain. In addition, recent changes to the attribution rules relating to the determination of CFC status may make it difficult to determine our CFC status for any taxable year. In addition, those changes to the attribution rules may result in ownership of the stock of our non-U.S. subsidiary being attributed to our U.S. subsidiary, which could result in our non-U.S. subsidiary being treated as a CFC and certain U.S. holders of our securities being treated as Ten Percent Shareholders of such non-U.S. subsidiary CFC. In addition, it is possible that, following this offering, a shareholder treated as a U.S. person for U.S. federal income tax purposes will acquire, directly or indirectly, enough of our securities to be treated as a Ten Percent Shareholder. We cannot provide any assurances that we will assist holders of our securities in determining whether we or any of our non-U.S. subsidiaries are treated as a CFC or whether any holder of our securities is treated as a Ten Percent Shareholder with respect to any such CFC or furnish to any Ten Percent Shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. U.S. holders should consult their tax advisors with respect to the potential adverse U.S. tax consequences of becoming a Ten Percent Shareholder in a CFC, including the possibility and consequences of becoming a Ten Percent Shareholder in our non-U.S. subsidiary that may be treated as a CFC due to the changes to the attribution rules. If we are classified as both a CFC and a PFIC, we generally will not be treated as a PFIC with respect to those U.S. holders that meet the definition of a Ten Percent Shareholder during the period in which we are a CFC. Risks Related to this Offering The requirements of being a reporting public company may strain our resources, divert management s attention, and affect our ability to attract and retain additional executive management and qualified board members. As a reporting public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, laws, regulations, and requirements relating to becoming a reporting issuer in Alberta, Canada, and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, making some activities more difficult, time-consuming or costly. This will put increased demand on our systems and resources, particularly after we are no longer a smaller reporting company. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a smaller reporting company and emerging growth company, as stated above, we receive certain reporting exemptions under the Sarbanes-Oxley Act. Changing laws, regulations, and standards relating to corporate governance and public disclosure create uncertainty for public companies, which increases legal and financial compliance costs and time expenditures for internal personnel. These laws, regulations, and standards are subject to interpretation, which in many cases due to their lack of specificity, their application in practice may evolve over time as regulators and governing bodies provide new guidance. These changes may result in continued uncertainty regarding compliance matters and may necessitate higher costs due to ongoing revisions to filings, disclosures, and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate regulatory or legal proceedings against us and our business may be adversely affected. As a public company under these rules and regulations, we expect that it may make it more expensive for us to hire external auditors to perform requisite outside audited financial statements, as well as obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our Audit Committee and Compensation Committee, and could also make it more difficult to attract qualified executive officers. As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and results of operations. 38 Investors in this offering will experience immediate and substantial dilution in net tangible book value. The Primary Offering price per Common Share is substantially higher than the pro forma net tangible book value per share of our outstanding Common Shares. As a result, investors in this offering will incur immediate dilution of $3.62 per Common Share, based on the assumed Primary Offering price of $4.50 per Common Share, representing the difference between our pro forma as adjusted net tangible book value per Common Share after this offering and the Primary Offering price per Common Share. Investors in this offering will pay a price per Common Share that substantially exceeds the book value of our assets after subtracting our liabilities. See Dilution on page 45 of this prospectus for a more complete description of how the value of your investment will be diluted upon the completion of this offering. After this offering, we will also have outstanding options and warrants to purchase our Common Shares with exercise prices lower than the Primary Offering price. To the extent these outstanding options or warrants are exercised, there will be further dilution to investors in this offering. We will have broad discretion in the use of the net proceeds from this offering and may not use them effectively. Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in Use of Proceeds beginning on page 42 of this prospectus, and you will not have the opportunity as part of your investment decision to assess whether the net proceeds will be used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We currently intend to use the net proceeds of this offering primarily for general corporate purposes, growing our initial line of consumer products, expanding research and development, establishing operations in Jamaica, and expansion of growing and production capabilities in Olympia, Washington. See Use of Proceeds on page 42 of this prospectus for additional information. Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering, or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including the commercial success of our systems, as well as the amount of cash used in our operations. As a result, our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering. 39 The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our shareholders. If we do not invest or apply the net proceeds from this offering in ways that enhance shareholder value, we may fail to achieve expected financial results, which could cause our stock price to decline. Our principal stockholders and management own a significant percentage of our capital stock and will be able to exert significant control over matters subject to shareholder approval. Immediately following the completion of this offering, our executive officers, directors, and their affiliates will beneficially hold, in the aggregate, approximately 1.74 million of our outstanding Common Shares, or approximately 18.70 percent of our outstanding Common Shares. These stockholders would be able to significantly influence elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our Common Shares that you may feel are in your best interest as one of our shareholders. If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline. The trading market for our Common Shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our Common Shares would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our Common Shares or publishes inaccurate or unfavorable research about our business, our Common Share price may decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our Common Shares could decrease, which might cause our Common Share price and trading volume to decline. Future changes to tax laws could materially adversely affect us and reduce net returns to our shareholders. Our tax treatment is subject to changes in tax laws, regulations, and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, as well as tax policy initiatives and reforms related to the Organisation for Economic Co-Operation and Development s Base Erosion and Profit Shifting Project, and other initiatives. Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received, or (in the specific context of withholding tax) dividends paid. We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies, or practices, could affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce post-tax returns to our shareholders, and increase the complexity, burden, and cost of tax compliance. 40 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, timing and likelihood of success, plans and objectives of management for future operations, and future results of current and anticipated products are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as may, will, should, expect, plan, anticipate, could, intend, target, project, contemplates, believes, estimates, predicts, potential, or continue or the negative of these terms or other similar expressions. The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this prospectus and are subject to a number of risks, uncertainties, and assumptions described under Risk Factors beginning on page 11 of this prospectus and Management s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 48 of this prospectus, and elsewhere in this prospectus. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001905312_global_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001905312_global_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..327901cb11422c5c00c6d747d7d479e2d481bf96
--- /dev/null
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@@ -0,0 +1 @@
+II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Auckland, on the 24th day of July, 2023. GLOBAL ROBOTIC DRONE ACQUISITION CORP. By: /s/ Kenneth John Robinson Name: Kenneth John Robinson Title: Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Name Position Date /s/ Kenneth John Robinson Chief Executive Officer and Chairman of the Board of Directors July 24, 2023 Kenneth John Robinson (principal executive officer) /s/ Phan Nguyen Ngoc Xuan My Chief Financial Officer July 24, 2023 Phan Nguyen Ngoc Xuan My (principal financial and accounting officer) II-7
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001908233_mn8_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001908233_mn8_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001908233_mn8_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001909417_selina_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001909417_selina_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..175a1b27b59babf3bb6abbfd36fd4cb10d82b808
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@@ -0,0 +1 @@
+summary highlights selected information from this prospectus and does not contain all of the information that is important to you. You should carefully read this entire prospectus and the other documents referred to in this prospectus, including the information presented under the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward Looking Statements" herein and "Management s Discussion and Analysis of Financial Condition and Results of Operations," and the consolidated financial statements and the related notes thereto, which are incorporated by reference from our 2022 Annual Report, before making an investment decision. For additional information, see the section of this prospectus entitled "Where You Can Find More Information." Selina Hospitality PLC We are one of the largest operators of lifestyle and experiential Millennial- and Gen Z-focused hotels, with 118 destinations opened in 24 countries across 6 continents. Our mission is to create meaningful connections between people. We design and operate attractive, welcoming destination hotels, where travelers can stay indefinitely, work remotely, explore, and authentically immerse themselves in an environment that embraces and reflects local culture, and where local residents and travelers alike can engage and enjoy on-site food and beverage, wellness, and other social experiences. Founded in 2014, each of our properties is designed in partnership with local artists, creators, and tastemakers, breathing new life into existing buildings in interesting locations around the world – from urban cities to remote beaches and jungles. Our portfolio includes 118 destinations opened in 24 countries across 6 continents. The mailing address of our principal executive office is 27 Old Gloucester Street, London EC2Y 5AU England WC1N 3AX, United Kingdom. Our corporate website address is https://www.selina.com/. The information on, or that can be accessed through, our website is not part of this prospectus. The website address is included as an inactive textual reference only. On February 22, 2022, we converted our corporate form from a UK Societas (the post-Brexit form of European companies registered in England and Wales) to a public limited company (a standard form of English company), and in doing so we changed our name from Selina Holding Company, UK Societas to Selina Hospitality PLC. We have incurred net losses since our inception, including losses of $30.3 million, $198.1 million and $185.7 million for the three-month period ended March 31, 2023 and for the years ended December 31, 2022 and December 31, 2021, respectively, and had an accumulated deficit of $755.4 million, $725.2 million and $519.0 million as of March 31, 2023, December 31, 2022 and December 31, 2021, respectively. In addition, as of March 31, 2023, we had incurred an accumulated deficit of $755.4 million, total shareholders deficit amounted to $194.6 million, and cash and cash equivalents were $23.2 million. As of December 31, 2022, we had incurred an accumulated deficit of $725.2 million, total shareholders deficit amounted to $163.6 million, and cash and cash equivalents were $47.7 million. As of December 31, 2021, we had incurred an accumulated deficit of $519.0 million, total shareholders deficit amounted to $323.2 million, and cash and cash equivalents were $21.9 million. As of March 31, 2023, our current assets amounted to $58.8 million, and our current liabilities amounted to $190.6 million and our financial debt was $188.1 million of which $44.3 million was current financial debt. As of December 31, 2022, our current assets amounted to $79.7 million and our current liabilities amounted to $188.9 million and our financial debt was $182.8 million of which $45.6 million was current financial debt. As of December 31, 2021, our current assets amounted to $46.4 million and our current liabilities amounted to $214.1 million and our financial debt was $246.5 million of which $19.5 million was current financial debt. See "Risk Factors—We have a history of losses and may be unable to achieve profitability for the foreseeable future," which is incorporated by reference from our 2022 Annual Report. 1 Recent Developments Osprey Financings On June 26, 2023, Selina entered into a series of binding agreements related to strategic debt and equity investments in Selina as more particularly described below. The first tranche, which closed on June 27, 2023, comprises $10 million in funding under a secured convertible debt instrument issued in the principal amount of $11.1 million ("Osprey Convertible Note" and together with subsequent convertible notes that may be issued under the second and third tranche of funding, the "Osprey Convertible Notes") by a subsidiary of Selina to Osprey Investments Limited ("Osprey"), an affiliate of Global University Systems B.V. In connection with the funding of the initial tranche Convertible Note, Selina issued Osprey private warrants to acquire 7,407,408 Ordinary Shares (the "Osprey Warrants"). The Osprey Warrants have a term of five years and an exercise price of $1.50 per share, which price may be reset during the last three months of the term of the Osprey Warrants in accordance with the terms thereof. The second tranche will be comprised of (i) a conditional $10 million acquisition by Osprey of our Ordinary Shares, and (ii) (a) a further conditional $10 million acquisition by Osprey of Osprey Convertible Note (with the amount funded under the note representing a 10% original issue discount to the principal amount), (b) at Osprey s option, another acquisition by Osprey of our Ordinary Shares, or (c) the acquisition by Osprey of our Ordinary Shares and Osprey Convertible Notes (in any combination) in increments of $1 million. In connection with each acquisition of our Ordinary Shares in the second tranche, Osprey will receive that number of Osprey Warrants equal to 50% of the Ordinary Shares so acquired, and in connection with each acquisition of Osprey Convertible Notes in the second tranche, Osprey will receive that number of Osprey Warrants into which such Osprey Convertible Note may be converted. The second tranche investments are subject to satisfaction, or waiver by Osprey in its discretion, as applicable, of certain conditions precedent (the "Funding Conditions") summarized below: approval by Selina s board of directors (the "Board") to seek shareholder approval for the issuance of a sufficient number of shares to (i) complete an equity raise of $50 million (reduced by amounts raised via the equity issued pursuant to the subscriptions), and (i) convert Selina s outstanding $147.5 million in 6.00% senior Convertible Notes into Ordinary Shares at a price of $4.00 per share; the reasonable approval by Osprey or the Board (which approval of the Board must include the Osprey s nominee(s) to the Board once nominated, as discussed below) of an annual corporate overhead budget for Selina for each of the 2023 and 2024 financial years; 2 Selina securing commitments for an additional $20 million in funding in Selina (the "Additional Funding"), $1,842,500 of which has been secured to date and up to $10 million of which may be satisfied via a second PIPE investment from Osprey as part of the second tranche investment, and the rest to be raised from third parties unrelated to Osprey from the sale of equity and/or the sale of Selina s assets by June 26, 2024; Selina conducting a note exchange in respect of $14.7 million of the Convertible Notes held by Kibbutz Holding S.a.r.l. ("Kibbutz"), the investment vehicle of Rafael Museri and Daniel Rudasevski, the founders of Selina and its Chief Executive Officer and Chief Growth Officer, respectively, and a warrant exchange in respect of the Convertible Note Warrants, in order to reduce the conversion price under the 2022 Convertible Notes held by Kibbutz and the exercise price of the Convertible Note Warrants held by Kibbutz, as Osprey will have a conditional obligation to acquire such 2022 Convertible Notes and 2022 Convertible Note Warrants; and the implementation of an agreement between Selina RY Holding, Inc., a subsidiary of Selina which operates Selina s Remote Year business ("Remote Year"), and Selina relating to booking and cancellation fees. The third tranche will be comprised of up to $20 million in optional investment, at the election of Osprey, including $10 million acquisition by Osprey of our Ordinary Shares and/or an additional $10 million acquisition of additional Osprey Convertible Notes (with the amount funded under such notes representing a 10% original issue discount to the principal amount) or any combination of the two in increments of $1 million. Subsequently, on July 31, 2023, Osprey funded an additional $4.0 million under a secured convertible debt instrument issued in the principal amount of $4.4 million. In connection with such funding, Selina issued to Osprey private warrants to acquire an additional 2,962,963 Ordinary Shares. Such warrants are identical to the Osprey Warrants, having a five year term and an exercise price of $1.50 per share, which price may be reset during the last three months of the term of the warrants. In the context of the strategic investments, Selina has entered into an amended and restated investors rights agreement with Osprey and Kibbutz (the "2023 Investors Rights Agreement") which grants to Osprey the right to appoint two directors to the Board of Directors of the Company (the "Board"), the size of which will be limited to seven directors, one of whom must be considered "independent" in accordance with applicable Nasdaq governance rules. Further, Selina has granted Osprey with registration rights with respect to the Ordinary Shares acquired and the Ordinary Shares issuable upon conversion of the Osprey Convertible Notes and exercise of the warrants issued to Osprey. YAM at Selina Ops, L.P. Separation Agreement On June 23, 2023, YAM and Selina, PCN Operations, S.A. ("PCN"), Selina Operation One (1), S.A. ("Selina One"), and Selina Management Panam , S.A., entered into a second amendment ("Second Amendment") to its separation and amendment agreement (the "Separation Agreement"), dated June 3, 2022, as amended on December 23, 2022 (the "First Amendment"), relating to the buy-out of YAM s equity interest in a joint venture arrangement, entered into in September 2017 between Selina and YAM, and a shareholder agreement, entered into in December 2020 by Selina, Selina One and YAM (together, the "JV Arrangements"). 3 Pursuant to the Second Amendment and the equity subscription agreement (the "YAM Subscription Agreement"), dated June 23, 2023, between Selina and YAM, Selina issued to YAM in a private placement (i) 6,248,840 Ordinary Shares (the "YAM Shares"), at a price of $1.52064127 per share and for an aggregate purchase price of $9,502,244, and (ii) if applicable up to 240,000 additional Ordinary Shares at a price of $1.00 per share for an aggregate subscription price of up to $240,000. The YAM Shares have been periodically resold by YAM for the purpose of increasing YAM s internal rate of return on its investments in PCN under the JV Arrangements. The YAM Shares were in addition to 1,400,000 Ordinary Shares previously granted to YAM (the "Previous Shares") under the First Amendment, which proceeds were utilized by YAM for the recovery of YAM s capital contributions to PCN that remain unpaid under the existing arrangements, which as of the date of the First Amendment amounted to $2.7 million ("Remaining Capital"). In connection with the issuance of the YAM Shares to YAM, YAM has certain resale registration rights. Subject to certain volume limitations, YAM intends to sell, daily, 15% to 20% of the previous day s trading volume of the YAM Shares, which the net proceeds received from such sales will be applied against the liabilities owed to YAM. Further, an escrow fund shall be established by YAM and Selina shall maintain a monthly balance of $325,000 in such account until such time as YAM has recovered its Remaining Capital plus a 5% internal rate of return on its investments in PCN. If the net proceeds received during a month are less than $325,000 (the "Monthly Threshold"), then YAM will be entitled to draw down the difference between the Monthly Threshold and the net proceeds received, until such time that the Remaining Capital has been recovered by YAM, and thereafter the Monthly Threshold will be reduced to $200,000. Any excess in the net proceeds of the Monthly Threshold received by YAM in such month will be credited against future draws that may be made by YAM under the escrow arrangement. In addition, until YAM has recovered its Remaining Capital in full, in the event Selina raises gross proceeds of more than $25 million, through equity or debt issuances, YAM shall be entitled to receive 1% of the incremental amounts raised to be utilized towards amounts owed to YAM. Once YAM has recovered its Remaining Capital in full plus an 8% internal rate of return on its investments in PCN, then (i) certain trading and short sale restrictions applicable to YAM shall cease to apply and (ii) YAM shall release its pledges over certain subsidiaries of PCN, pursuant to the JV Arrangements, and transfer its equity interest in PCN to Selina One. Further, the Second Amendment contains certain covenants, information rights in favour of YAM, default provisions and YAM is entitled to the reimbursement of certain legal and accounting costs incurred by YAM. Lock-Up Waiver On August 10, 2023, the Board agreed to waive (the "Lock-Up Waiver") the lock-up restrictions set forth in the Investors Rights Agreement, dated October 27, 2022 (the "IRA"), with respect to an aggregate of 55,763,479 of the Company s Ordinary Shares beneficially owned by certain of the Company s major shareholders, or approximately 52% of the Company s issued and outstanding Ordinary Shares. The effectiveness of such waiver is expected to take place on August 18, 2023. As previously disclosed, in connection with the closing of the Company s business combination with BOA Acquisition Corp. ("BOA"), the Company and certain of its shareholders entered into the IRA, pursuant to which Bet on America LLC (the "Sponsor"), and certain other shareholders of the Company who held a 5% or greater beneficial interest in the Company at the closing of the business combination (collectively, the "Major Shareholders") became subject to, with limited exceptions, restrictions on transfers of the Company s securities held by them until October 27, 2023, the one-year anniversary of the closing of the business combination. The Company believes that the Lock-Up Waiver may further the Company s stated objective of simplifying its capital structure and may create more certainty in respect of, and provide greater liquidity for, the Company s Ordinary Shares. The Company believes that this certainty will help to accelerate the pace at which the Company may conduct, and the likelihood of completing, capital markets transactions. Additionally, as explained in the Circular and Notice of the General Meeting of Shareholders (the "Notice of Meeting") of the Company to be held on August 18, 2023, which Notice of Meeting was issued on July 25, 2023, the Company has obtained transaction support agreements from key shareholders in respect of certain resolutions set out in the Notice of Meeting and one such shareholder, the Sponsor, had the right to withdraw its support for those resolutions in the event the Lock-Up Waiver was not granted. The Company believes the securing of such support, by granting the Lock-Up Waiver, to be important to achieving the passing of the relevant resolutions, and consequently the Company s fundraising efforts, including the funding of future tranches of investment under the strategic investment of up to $50 million to be provided by Osprey Investments Limited as announced by the Company on June 27, 2023. See "—Osprey Financings." Two of the Major Shareholders affected by the Lock-Up Waiver are Dekel Development Holding, S.A. ("Dekel"), which is wholly owned by Kibbutz., the investment vehicle in which Rafael Museri and Daniel Rudasevski, co-founders of the Company and the Company s Chief Executive Officer and Chief Growth Officer, respectively, each hold a 31.4% beneficial interest, and Selina Growth Fund S.C.Sp., which is managed by a general partner, Kibbutz General Partner S.a.r.l., in which Rafael Museri and Daniel Rudasevski each hold 25% of the share capital and serve as directors. Accordingly, Messrs. Museri and Rudasevski recused themselves and did not participate in the decision of the Board to approve the Lock-Up Waiver. Following the effectiveness of the Lock-Up Waiver, none of the Company s Ordinary Shares are subject to contractual lock-up restrictions; however, the restrictions set forth in the Company s insider trading policies and procedures continue to apply to Messrs. Museri and Rudasevski and any entities controlled by them, including Dekel, irrespective of the Lock-Up Waiver. Any sales of the Company s Ordinary Shares held by the Major Shareholders could result in a significant decline in the public trading price of the Company s securities and, notwithstanding the intention of the Lock-Up Waiver, could impair the Company s ability to raise capital through the sale or issuance of additional equity securities. The Company expects that the effect that any such sales may have on the prevailing market price of its securities will be negative. Despite such a decline in the public trading price, certain of the Major Shareholders may still experience a positive rate of return on the sale of the Company s Ordinary Shares held by them due to the lower price that such Major Shareholders purchased those shares compared to other public investors. Accordingly, those Major Shareholders may be incentivized to sell the Ordinary Shares held by such Major Shareholders. See the section titled "Risk Factors" beginning on page 11 of this prospectus for further detail on risks and uncertainties associated with the Lock-Up Waiver. Emerging Growth Company We are an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act of 2002 (the "Sarbanes-Oxley Act"), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. 4 Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used. We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) in which we have total annual gross revenue of at least $1.07 billion, or (b) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary equity that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; and (ii) the date on which we issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to "emerging growth company" have the meaning associated with it in the JOBS Act. Foreign Private Issuer We are subject to the information reporting requirements of the Exchange Act, that are applicable to "foreign private issuers," and under those requirements we file reports with the SEC. As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports, proxy statements that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that is as detailed as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file our annual reports with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies. Furthermore, our officers, directors and principal shareholders are exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These exemptions and leniencies reduce the frequency and scope of information and protections available to you in comparison to those applicable to shareholders of U.S. domestic reporting companies. 5
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001911500_catthis_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001911500_catthis_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001911500_catthis_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001913715_prime_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001913715_prime_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..1898b04a4c0b5f2ae1b23b58b75f1aa54efe1327
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001913715_prime_prospectus_summary.txt
@@ -0,0 +1,804 @@
+Prospectus Summary," "Risk Factors," "Use
+of Proceeds," "Management s Discussion and Analysis of Financial Condition and Results of Operations," "Industry
+Overview" and "Business." These statements relate to events that involve known and unknown risks, uncertainties
+and other factors, including those listed under "Risk Factors," which may cause our actual results, performance or achievements
+to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
+
+ 
+
+In
+some cases, these forward-looking statements can be identified by words or phrases such as "believe," "plan,"
+"expect," "intend," "should," "seek," "estimate," "will,"
+"aim" and "anticipate," or other similar expressions, but these are not the exclusive means of identifying
+such statements. All statements other than statements of historical facts included in this document, including those regarding future
+financial position and results, business strategy, plans and objectives of management for future operations (including development plans
+and dividends) and statements on future industry growth are forward-looking statements. In addition, we and our representatives may,
+from time to time, make other oral or written statements which are forward-looking statements, including in our periodic reports
+that we will file with the SEC, other information sent to our shareholders and other written materials.
+
+ 
+
+These
+forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these
+forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual
+outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including,
+without limitation, regional, national or global political, economic, business, competitive, market and regulatory conditions, the risk
+factors set forth in "Risk Factors" and the following:
+
+ 
+
+ 
+ 
+ 
+ changes
+ in the laws, regulations, policies and guidelines
+ in the jurisdictions in which we operate;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ regulatory environment in the jurisdictions
+ in which we operate;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ competition
+ in the building envelope solutions industry
+ in the jurisdictions in which we operate;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ reliance
+ on certain clients for a significant portion
+ of our revenue;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ developments
+ related to the COVID-19 pandemic, including
+ with respect to the success of any vaccines and the ability of economies and our clients to recover from the economic effects of
+ the pandemic;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ political
+ instability in the jurisdictions in which we
+ operate;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ breaches
+ of laws or regulations in the operation and
+ management of our current and future businesses and assets;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ overall economic environment and general market
+ and economic conditions in the jurisdictions in which we operate;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ our
+ ability to execute our strategies;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ changes
+ in the need for capital and the availability
+ of financing and capital to fund these needs;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ our
+ ability to anticipate and respond to changes
+ in the building envelope solutions industry, the markets in which we operate, and in client demands, trends and preferences;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ man-made
+ or natural disasters, including war, acts of
+ international or domestic terrorism, civil disturbances, occurrences of catastrophic events and acts of God such as floods, earthquakes,
+ typhoons and other adverse weather and natural conditions that affect our business or assets;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ loss of key personnel and the inability to replace
+ such personnel on a timely basis or on terms acceptable to us;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ exchange
+ rate fluctuations, including fluctuations in
+ the exchange rates of currencies that are used in our business;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ changes
+ in interest rates or rates of inflation; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ legal,
+ regulatory and other proceedings arising out
+ of our operations.
+
+ 
+ 
+
+ 2
+
+ 
+
+ 
+
+ 
+
+The
+forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made
+in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements,
+whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the
+occurrence of unanticipated events. You should read this prospectus, and the documents that we reference in this prospectus and
+have filed as exhibits to the registration statement of which this prospectus is a part, completely and with the understanding
+that our actual future results or performance may be materially different from what we expect.
+
+ 
+
+This
+prospectus contains certain data and information that we obtained from various government and private publications. Statistical data
+in these publications also include projections based on a number of assumptions. The market for building envelope solutions may not grow
+at the rate projected by such market data, or at all. Failure of this industry to grow at the projected rate may have a material and
+adverse effect on our business and the market price of our Ordinary Shares. Furthermore, if any of the assumptions underlying the market
+data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place
+undue reliance on these forward-looking statements.
+
+ 
+
+DEFINITIONS
+
+ 
+
+Unless
+we indicate otherwise, all information in this prospectus reflects the following:
+
+ 
+
+"Amended
+and Restated Articles of Association," "Articles" or "Articles of Association" means the amended and restated
+articles of association of our Company adopted on March 4, 2022, as amended from time to time, a copy of which is filed as Exhibit 3.2
+to our Registration Statement filed with the SEC on September 2, 2022.
+
+ 
+
+"Amended and Restated Memorandum of
+Association," "Memorandum" or "Memorandum of Association" means the amended and restated
+memorandum of association of our Company adopted on October 5, 2021, and as supplemented, amended or otherwise modified from time to
+time, a copy of which is filed as Exhibit 3.1 to our Registration Statement filed with the SEC on September 2, 2022.
+
+ 
+
+"BCA"
+means the Building and Construction Authority of Singapore;
+
+ 
+
+"BCISP
+Act" means the Building and Construction Industry Security of Payment Act 2004 of Singapore;
+
+ 
+
+"BIM"
+means Building Information Modeling;
+
+ 
+
+"BOI"
+means the Board of Investment of Sri Lanka;
+
+ 
+
+"Building
+Control Act" means the Building Control Act 1989 of Singapore;
+
+ 
+
+"CAGR"
+means compound annual growth rate;
+
+ 
+
+"CBC"
+means the Commissioner of Building Control;
+
+ 
+
+"CEA"
+means the Sri Lanka Central Environmental Authority;
+
+ 
+
+"CIDA"
+means the Construction Industry Development Authority of Sri Lanka;
+
+ 
+
+"CID
+Act" means the Construction Industry Development Act No. 33 of 2014 of Sri Lanka;
+
+ 
+
+"CIT"
+means Vietnam s corporation income tax;
+
+ 
+
+"Companies
+Act" means the Companies Act (2022 Revision) of the Cayman Islands;
+
+ 
+
+"Controlling Shareholder" or "Principal Shareholder" means Focus Point Developments Limited;
+
+ 
+
+"COVID-19"
+means the Coronavirus Disease 2019.
+
+ 
+
+"China"
+or "PRC" means the People s Republic of China, excluding, for the purpose of this prospectus only, Taiwan, Hong
+Kong and Macau;
+
+ 
+
+"DICA"
+means direct investment capital accounts;
+
+ 
+
+"DTAA"
+means the Sri Lanka Double Taxation Avoidance Agreement;
+
+ 
+
+"EFMA"
+means the Employment of Foreign Manpower Act 1990 of Singapore;
+
+ 
+
+ 3
+
+ 
+
+ 
+
+ 
+
+"EFS"
+means Enterprise Financing Scheme;
+
+ 
+
+"EFS-WCL"
+means Enterprise Financing Scheme Working Capital Loan;
+
+ 
+
+"EPHA"
+means the Environmental Public Health Act 1987 of Singapore;
+
+ 
+
+"EPF"
+means the Employees Provident Fund of Sri Lanka;
+
+ 
+
+"EPF
+Act" means the Sri Lanka Employees Provident Fund Act No. 15 of 1958;
+
+ 
+
+"Employment
+Act" means the Employment Act 1968 of Singapore;
+
+ 
+
+"Enterprise
+Singapore" is a governmental agency in Singapore championing enterprise development that works with committee companies to build
+capabilities, innovate and internationalize;
+
+ 
+
+"ETF
+Act" means the Sri Lanka Employees Trust Fund Act No.46 of 1980;
+
+ 
+
+"ETF
+Board" means the Employee Trust Fund Board of Sri Lanka;
+
+ 
+
+"Exchange
+Act" means the U.S. Securities Exchange Act of 1934, as amended;
+
+ 
+
+"FDI"
+means foreign direct investment;
+
+ 
+
+"FEA"
+means the Sri Lanka Foreign Exchange Act No. 12 of 2017;
+
+ 
+
+"FEA
+Regulations" means the regulations published under the FEA;
+
+ 
+
+"FINRA"
+means the Financial Industry Regulatory Authority, Inc.;
+
+ 
+
+"FO"
+means the Sri Lanka Factories Ordinance No. 45 of 1942;
+
+ 
+
+"Focus
+Point" or "Selling Shareholder" means Focus Point Developments Limited, a company indirectly owned as to 96.62%
+by Mr. Sonny Bensily, 1.72% by Ms. Mui Lan Lim and 1.66% by Ms. Julia Bensily;
+
+ 
+
+"GGBA"
+means Green and Gracious Builder Award;
+
+ 
+
+"Group"
+means Prime Skyline Limited, its direct subsidiary, Skyscraper Developments Ltd., and its indirect subsidiaries, Prime Structures Engineering
+Pte Ltd, Prime Construction & Engineering Pte. Ltd., Prime Structures Engineering Lanka (Pvt) Limited, Philippine Prime Structures
+Corp., Prime Structures (Myanmar) Limited (in the process of being dissolved), Prime Structures Vietnam Company Limited and SB Fa ade
+Engineering Sdn. Bhd.; 
+
+ 
+
+"GST"
+means the Singapore goods and services tax;
+
+ 
+
+"IIA"
+means an Inward Investment Account;
+
+ 
+
+"ILR"
+means Vietnam s Internal Labor Regulations;
+
+ 
+
+"ISO
+9001" means the International Standard for Quality Management Systems;
+
+ 
+
+"ISO
+45001" means one of the International Standards for Occupational Health and Safety initially adopted by the British Standard
+Institution as OHSAS 18001 (see below);
+
+ 
+
+"IT"
+means information technology;
+
+ 
+
+"JOBS
+Act" means the U.S. Jumpstart Our Business Startups Act, enacted in April 2012;
+
+ 
+
+"KET"
+means key employment terms;
+
+ 
+
+ 4
+
+ 
+
+ 
+
+ 
+
+"Lockdown
+Measures" means measures taken by governmental authorities, businesses, other organizations and individuals in response to the
+COVID-19 pandemic, including travel bans and restrictions, quarantines, shelter in place, stay at home or total lock-down orders and
+business limitations and shutdowns;
+
+ 
+
+"MOH"
+means the Singapore Ministry of Health;
+
+ 
+
+"MOM"
+means the Singapore Ministry of Manpower;
+
+ 
+
+"MYE"
+means man-year entitlements in Singapore for the employment of foreign workers;
+
+ 
+
+"Nasdaq"
+means the Nasdaq Stock Market;
+
+ 
+
+"NEA"
+means the Sri Lanka National Environmental Act No. 47 of 1980;
+
+ 
+
+"NEA
+Regulations" means the Sri Lanka National Environmental (Protection & Quality) Regulations No. 1 of 2008;
+
+ 
+
+"NTS"
+means non-traditional sources;
+
+ 
+
+"Ordinary
+Shares" means our ordinary shares, par value US$0.001 per share;
+
+ 
+
+"OHSAS
+18001" means one of the International Standards for Occupational Health and Safety initially adopted by the British Standard
+Institution that was subsequently canceled to be adopted by the International Organization for Standardization as ISO 45001;
+
+ 
+
+"PC
+Act" means the Sri Lanka Public Contracts Act No. 3 of 1987;
+
+ 
+
+"PEZA"
+means the Philippine Economic Zone Authority;
+
+ 
+
+"PFIC"
+means a passive foreign investment company;
+
+ 
+
+"Philippine
+Codes" means the Corporation Code of the Philippines (1980) and the Revised Corporation Code of the Philippines (2019);
+
+ 
+
+"Prime
+Construction" means Prime Construction & Engineering Pte. Ltd.;
+
+ 
+
+"Prime
+Holdings" means Prime Structures Holdings Pte. Ltd.;
+
+ 
+
+"Prime
+Lanka" means Prime Structures Engineering Lanka (Pvt) Ltd.;
+
+ 
+
+"Prime
+Myanmar" means Prime Structures (Myanmar) Limited;
+
+ 
+
+"Prime
+Philippines" means Philippine Prime Structures Corp.;
+
+ 
+
+"Prime Skyline" means Prime Skyline Limited;
+
+ 
+
+ 5
+
+ 
+
+ 
+
+ 
+
+"Prime
+Structures" means Prime Structures Engineering Pte Ltd;
+
+ 
+
+"Prime
+Vietnam" means Prime Structures Vietnam Company Limited;
+
+ 
+
+"Public Offering Prospectus" means the prospectus to be
+used for the sale by the Company of 1,832,500 newly issued Ordinary Shares of the Company;
+
+ 
+
+"QA/QC"
+means quality assurance/quality control;
+
+ 
+
+"R1"
+workers means higher-skilled construction workers;
+
+ 
+
+"R2"
+workers means basic-skilled construction workers;
+
+ 
+
+"Registration
+Statement" means the registration statement we have filed with the SEC (as defined below) relating to this offering of which this
+Public Offering Prospectus and the Resale Prospectus each form a part;
+
+ 
+
+"Relevant Resale Shares" means
+the 400,000 Resale Shares, as defined below, that are subject to a leak-out agreement between Focus Point and the Company;
+
+ 
+
+"Resale Prospectus" means the
+prospectus to be used for the potential resale by Focus Point of 500,000 Ordinary Shares of the Company
+held by it;
+
+ 
+
+"Resale Shares" means the 500,000 currently outstanding
+Ordinary Shares owned of record by Focus Point that may be sold pursuant to the Resale Prospectus;
+
+ 
+
+"Sarbanes
+Oxley Act" means The Sarbanes-Oxley Act of 2002;
+
+ 
+
+"SB
+Fa ade" means SB Fa ade Engineering Sdn Bhd;
+
+ 
+
+"SEC"
+means the United States Securities and Exchange Commission;
+
+ 
+
+"Securities
+Act" means the U.S. Securities Act of 1933, as amended;
+
+ 
+
+"Selling
+Shareholder" means Focus Point;
+
+ 
+
+"Skyscraper"
+means Skyscraper Developments Ltd.;
+
+ 
+
+"SME" means small-to-medium enterprise;
+
+ 
+
+"S Pass" means a
+type of Singapore work visa / pass suitable for mid-level skilled foreign technicians with advanced expertise in certain key developing
+industries;
+
+ 
+
+"SQC" means Singapore Quality Class, a
+certification by Enterprise Singapore under the Business Excellence (BE) initiative, which was sunsetted in September 2020, in recognition
+of an organization s commendable performance in business excellence;
+
+ 
+
+"Sri
+Lanka Boards" means the Wages Boards for the Building Trade and the Engineering Trade;
+
+ 
+
+"U.S."
+and "United States" means the United States of America;
+
+ 
+
+"U.S.
+GAAP" means the generally accepted accounting principles in the United States;
+
+ 
+
+"VAT"
+means value added tax;
+
+ 
+
+"VAT
+Act" means the Sri Lanka Value Added Tax Act No. 14 of 2002;
+
+ 
+
+"WCO"
+means the Sri Lanka Workmen s Compensation Ordinance No. 19 of 1934;
+
+ 
+
+"We," the "Company" or "our company"
+means Prime Skyline and/or its consolidated subsidiaries;
+
+ 
+
+"WHT"
+means the Sri Lanka withholding tax;
+
+ 
+
+"WICA"
+means the Work Injury Compensation Act 2019 of Singapore;
+
+ 
+
+"WSHA"
+means the Workplace Safety and Health Act 2006 of Singapore;
+
+ 
+
+"WSHR"
+means the Workplace Safety and Health (General Provisions) Regulations of Singapore;
+
+ 
+
+"YCDC"
+means the Yangon City Development Committee.
+
+ 
+
+Other
+terms are defined in this prospectus.
+
+ 
+
+ 6
+
+ 
+
+ 
+
+ 
+
+PROSPECTUS
+SUMMARY
+
+ 
+
+This
+summary highlights information contained elsewhere in this prospectus. This summary may not contain all the information that may be important
+to you, and we urge you to read this entire prospectus carefully, including the "Risk Factors," "Business" and
+"Management s Discussion and Analysis of Financial Condition and Results of Operations" sections and our consolidated
+financial statements and notes to those statements, included elsewhere in this prospectus, before deciding to invest in our Ordinary
+Shares. This prospectus includes forward-looking statements that involve risks and uncertainties. See "
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CIK0001916902_biotech_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001916902_biotech_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..9b8ba6a2ce3d20e5945a144a715c078f052d3179
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001916902_biotech_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under the section of this prospectus entitled Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus, or the context otherwise requires, references to: common stock are to our Class A common stock and our Class B common stock, collectively, par value $0.0001 per share; company or our company we, us, are to Biotech Group Acquisition Corporation; DGCL is to the Delaware General Corporation Law; equity-linked securities are to any securities of our company which are convertible into or exchangeable or exercisable for, common stock of our company, including but not limited to a private placement of equity or debt; founder shares are to shares of our Class B common stock initially purchased by our founders in the aggregated price of $25,000 in a private placement prior to this offering, and the shares of our Class A common stock issued upon the conversion thereof as provided herein; founders are to holders of our founder shares prior to this offering and holders of our private units upon the consummation of this offering which include our sponsor, officers and directors; and/or their designees; initial stockholders are to our founders (and/or their designee) who hold founder shares; management or our management team are to our officers and directors; private shares are to the shares of our Class A common stock included in the private units to be issued to our sponsor in a private placement simultaneously with the closing of this offering and the exercise of over-allotment option by the underwriters as applicable; private warrants are to the warrants included in the private units to be issued to our sponsor in a private placement simultaneously with the closing of this offering and the exercise of over-allotment option by the underwriters as applicable; private units are to the units to be issued to our sponsor in a private placement simultaneously with the closing of this offering and the exercise of over-allotment option by the underwriters as applicable; public shares are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); public stockholders are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder s and member of our management team s status as a public stockholder shall only exist with respect to such public shares; public warrants are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); sponsor is to Biotech Group Acquisition Sponsor LLC, a Delaware limited liability company; and warrants are to our private warrants and public warrants, as applicable. Registered trademarks referred to in this prospectus are the property of their respective owners. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. 1 Table of Contents PROPOSED BUSINESS Our Company We are a newly organized blank check company incorporated as a Delaware corporation on January 19, 2022 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities and activities related to this offering. We have not selected any specific business combination target and we have not, nor has any person on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. Although we may pursue a business combination in any industry, sector, or geographical location, we intend to leverage the knowledge, expertise, capabilities and deep industry relationships of our management team and board of directors to focus on biotechnology companies with the potential to capitalize on the growing biotechnology sector in North America and the Asia-Pacific region (excluding China, Hong Kong and Macau). Notwithstanding the foregoing, will not undertake our initial business combination with any company being based in or having the majority of the company s operations in China (including Hong Kong and Macau). All of our management are located outside of China. We will prioritize targets with a particular focus on the biotechnology sector where our management team and board of directors have extensive experience. Our sponsor is Biotech Group Acquisition Sponsor LLC. Our Management Team We will be guided by a cross-functional team comprised of our management team and board of directors. Our management team consists of our Chief Executive Officer, Ms. Yiru (Melody) Shi and our Chief Financial Officer, Mr. Manu Ohri. Our board of directors will consist of our Chairwoman, Ms. Shi, our Director Nominee, Mr. Ohri, and our Independent Director Nominees, Mr. John Brugmann, Mr. Yi Wung, and [ ]. We believe the collective expertise, experience, and network of our cross-functional team gives us unique advantages in sourcing and evaluating compelling business combination targets. Ms. Yiru (Melody) Shi has been the Chairwoman of our board of directors and our Chief Executive Officer since inception of our Company. Ms. Shi has more than 10 years of experience in financial accounting and management. Ms. Shi is an independent director nominee of Fortune Joy International Acquisition Corp., a special purpose acquisition company to be listed on Nasdaq. Ms. Shi has been the Chief Executive Officer of YCM CPA Inc, a registered public accounting firm, since 2020. Ms. Shi is also a Partner at North America CPA Alliance Inc. d/b/a MZ Tax and/or MZ Accounting & Tax Service, a public accounting and tax service company, a position she has held since September 2020. Since June 2018, Ms. Shi has also served as the Chief Executive Officer of Shi & Company, an accounting and consulting service provider. Between 2011 and 2017, Ms. Shi served as Director of the Board of Directors and Chairman of the Audit Committee of China Green Agriculture Inc. (NYSE: CGA). Ms. Shi received a Bachelor of Science degree in Computer Science and a Bachelor of Arts degree in International Trade and Business from the Beijing Polytechnic University, in 1995 and 1997 respectively. Ms. Shi received a Master of Business Administration degree from the University of California at Irvine, in 2003. Mr. Manu Ohri has been our Chief Financial Officer since inception of our Company and will become a member of our board of directors upon the effectiveness of the registration statement of which this prospectus forms a part. Mr. Ohri has over 30 years of experience in financial management and reporting, investor relations and strategic planning. Mr. Ohri currently serves as the Chief Financial Officer of GT Biopharma Inc. (Nasdaq: GTBP), a clinical stage biopharmaceutical company since February 2022. Previously, Mr. Ohri served as Principal of Anarjay Concepts Inc., a management consulting and business advisory firm, from January 2020 to February 2022. Mr. Ohri also served as Chief Financial Officer and Director of ToughBuilt Industries (Nasdaq: TBLT), a manufacturer and distributor of professional construction tools and accessories, from January 2015 to December 2019. Mr. Ohri is a Certified Public Accountant and received a Master of Business Administration degree from the University of Detroit, in 1979. 2 Table of Contents Mr. John Brugmann is an Independent Director Nominee and will become a member of our board of directors upon the effectiveness of the registration statement of which this prospectus forms a part. Mr. Brugmann has 30 years of experience in the financial industry. Mr. Brugmann has been the co-owner of AVDX LLC since 2018. He also currently serves as a consultant for Costa Rico Trust Services, a trust management services company, since January 2017. Between 2018 and 2020, Mr. Brugmann was appointed as a director of Avant Diagnostics, Inc. where he assisted with the restructuring and transition of the company to Theralink Technologies, Inc. Mr. Brugmann also served as a Director of Vivacitas, a privately-held pharmaceutical company, from 2018 to 2019. Mr. Brugmann served as Vice President of UBS Wealth Management, an asset management services company, from 1986 to 2017. During his 27 years at UBS Financial, he focused on international and offshore clients and played key roles in large commercial real estate financing, public offerings and portfolio management for endowments, pension and Union funds. Mr. Brugmann also served as President of the Board of Trustees for New York Military Academy, a college preparatory, co-ed boarding school, from 1996 to 2000. He served as Chairman of the Finance Committee for Helen Hayes Theatre from 2001 to 2004. Mr. Yi Wung is an Independent Director Nominee and will become a member of our board of directors upon the effectiveness of the registration statement of which this prospectus forms a part. Mr. Wung has more than two decades of experience in the financial industry. Mr. Wung currently serves as Managing Director of GA Capital Group, a financial advisory firm, since May 2014. Before that, between January 2009 and December 2011, Mr. Wung served as the Chief Financial Officer for China Yida Holdings Inc., a Nasdaq listed media company that was privatized in 2016. Earlier in his career, Mr. Wung served as Managing Director of Etech Securities, Inc., a securities broker, between October 2005 and December 2008, and as Director of Property Financial Group, an investment company, between January 2004 and October 2005. He also served as Senior Vice President for Global American Investments Inc., a securities broker, between February 2002 and December 2003. Mr. Wung received a Bachelor s degree in Finance from the California State University at Fullerton, in 2000. We believe our management team s operating and transaction experience and relationships with companies will provide us with access to a large number of potential business combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships in the biotechnology sector. Notwithstanding the foregoing, the past performance of our management team is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical performance record of our management team as indicative of our future performance. Additionally, in the course of their respective careers, members of our management team have been involved in businesses and deals that were unsuccessful. Our officers and directors may have conflicts of interest with other entities to which they owe fiduciary or contractual obligations with respect to initial business combination opportunities. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they, in the exercise of their respective business judgement, deem necessary to our affairs until we have completed our initial business combination. The amount of time that any member of our management team will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process. We do not have an employment agreement with any member of our management team. Industry Opportunity Although we may pursue a business combination in any industry, sector, or geographical location, we intend to leverage the knowledge, expertise, capabilities and deep industry relationships of our management team and board of directors to focus on biotechnology companies with the potential to capitalize on the growing healthcare industry in North America and the Asia-Pacific region (excluding China, Hong Kong and Macau). We will prioritize targets with a particular focus on the biotechnology sector where our management team and board of directors have extensive experience. 3 Table of Contents We believe the healthcare industry, and particularly the biotechnology (biotech) sector, is attractive for a number of reasons: Favorable Growth Trends for Global Healthcare and Biotechnology Markets The growing demand for global healthcare products and services is driven by many factors, including the continued aging of the population, rising awareness for health and wellbeing, and clinical and technological advances. For example, according to United Nations Population Fund, by 2050, one in four people in the Asia-Pacific region ( APAC region ) will be over 60 years old. More than 70% of people over 65 suffer from two or more chronic conditions. According to APACMed, driven by higher healthcare cost, an aging demographic, a rise in chronic disease and a growing population of ever discerning healthcare consumers, the biotech market in Asia Pacific is on track to achieve unprecedented growth. Supported by increasing demand for new therapies and drugs, the rise of precision medicine and advances in technologies, biotech businesses in the APAC region are projected to deliver significant growth, with a projected compound annual growth rate (CAGR) of 10.9% between 2020 to 2025, according to a Deloitte report. The market size is expected to reach $318.8 billion by 2025. In North America, the healthcare sector has already experienced continuous growth for the past few decades and is expected to continue this trend. In the United States, according to the Center for Medicare and Medicaid Services, a federal regulatory, the total healthcare spending increased from $1.4 trillion in 2000 to $3.8 trillion in 2019 and would reach $6.20 trillion by 2028 with annual growth rate of 5.4%. According to a report by Precedence Research, supported by continued high healthcare expenses, strong R&D initiatives and steady pipelines of drug approvals, the North America biotech market is expected to grow from $462.35 billion in 2022 to $1,219.75 billion in 2030, with an CAGR of 12.9%. While the global economy continues to experience turbulence as it recovers from the COVID-19 pandemic, and biotech companies face broader fundraising challenges due to interest rate increases and downturns in the technology industry, we believe that the fundamentals supporting the growth of the industry remain sound, affording ample opportunities for companies to succeed. Untapped Opportunities for Quality Biotech and MedTech Companies in the Public Market The biotech sector has long been an attractive market for private dealmaking. VC activity in the biotech sector grew by 45 percent in a year, taking the 2020 global total to $36.6 billion, according to McKinsey insights. In 2020, the VC investment in US life sciences companies amounted to approximately $26.1 billion, according to Statista, and $28.5 billion in 2021, according to Fierce Biotech. However, after two record-setting years in 2020 and 2021, the total funds raised and numbers of financing deals in the private market dropped by 24% and 25%, respectively, in 2022. Merger and acquisitions in the industry also fell 30% from 2021 to 2022, according to IQVIA Pharma Deals Review, which attributed valuation drops and investor pullbacks as primary reasons for the downturn. Similarly, while going public would be the natural next steps for many biotech companies as they continue to grow and look for opportunities to realize shareholder values for early investors in the public markets, the market turbulence in 2022 also led to a significant decline in biotech IPOs in the public markets. Challenging macroeconomic conditions, disappointing clinical data for many pre-clinical companies that went public in 2021, and a dearth of merger and acquisitions in the industry all led to lower valuations and damped investor interests in 2022. According to the BioCentury BCIQ Database, after a historical year in 2021 with 195 biotech IPOs with $24.6 billion raised in the U.S., the IPO market significantly declined, with 50 biotech deals with $4 billion raised in 2022. In 2023, according to a Reuters analysis, many analysts expect that the market downturns have bottomed out and a rebound in the public market will occur, based on a number of factors. First, macroeconomic pressures are expected to alleviate, as the Federal Reserve is expected to dial back its rate hikes. Second, the struggle for private market fundraising is expected to continue well into the year, as the deal size and valuation for pre-IPO fundraisings has continued to remain flat, if not shrink, according to a recent analysis by Fierce Biotech. Third, a recent Bain & Company report indicates that a depressed public market with conservative valuation may attract more investors on the lookout for quality investment and exit opportunities, such as from private equity investors. Lastly, as the boom-and-bust cycle dissipates from the 2021 dealmaking frenzy, it is anticipated that investors will look more carefully for more predictable IPOs targets with credible clinical data, commercial validation or reliable valuations. 4 Table of Contents Global Complexity Provides a Significant Barrier to Entry for Investors We believe the complexity of the global biotechnology sector acts as a significant barrier to entry and may deter entry by many generalist investors. Investing in the global biotechnology space requires investors to possess significant sector-specific knowledge and expertise to identify and appropriately analyze investment opportunities. Such specific expertise includes technical and scientific knowledge, an understanding of the regulatory landscape, and an understanding of complex valuation methodologies. Acquisition Strategy We believe that the experience of our management team and board of directors in investing and company building will enable us to source and evaluate the highest quality targets that have the potential to capitalize on the growing global healthcare industry generally and the biotechnology sector particularly. We will leverage the access provided by our management team and board of directors to identify a wide range of opportunities across the biotechnology sector, due to their extensive network of relationships with public and private healthcare companies, private equity sponsors, public investors and intermediaries including investment bankers, lenders, attorneys, accountants, and other advisors. Given our profile and industry expertise, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investors in other private and public companies in our networks. Upon completion of this offering, members of our management team will immediately begin the active search for a target business by communicating with our network of relationships and other interested parties to articulate our initial business combination criteria, including the parameters of our search for a target business, and will begin the process of pursuing and reviewing potential opportunities. We believe that the track record of our management team in deal sourcing, investing and extensive capital markets experience, augmented by the expertise of our Independent Director Nominees, positions us well to appropriately evaluate potential business combinations and select one that will be well received by public markets. Acquisition Criteria We are not limited to a particular geographic region for purposes of consummating an initial business combination except that we will not undertake our initial business combination with any company being based in or having the majority of the company s operations in China (including Hong Kong and Macau). In accordance with our acquisition strategy and objectives, we have identified the following criteria that we believe are important in evaluating prospective target businesses. We may, however, decide to enter into our initial business combination with a target business that does not meet these criteria. We currently intend to acquire a company that we believe: is developing products or services within the biotechnology sector that address unmet needs of the customers it serves or intends to serve; has a platform with potential for multiple long-term growth drivers; has significant potential across the North America and Asia-Pacific (excluding China, Hong Kong and Macau) commercial markets; is ready to go public, with a strong and experienced management team and with corporate governance and reporting policies in place; can benefit from being a public company with access to capital markets to support future growth; and provides the opportunity for attractive risk-adjusted financial returns for our stockholders. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC. 5 Table of Contents Permission Required from the PRC Authorities for this Offering and a Business Combination We are a Delaware corporation with no operations in China and all of our officers and directors/director nominees are located in the United States, we or any of our officers and directors/director nominees are not required to obtain permission from any Chinese authorities to operate or to issue the securities being issued in this offering to any investors, including Chinese investors, if any. Since we will not undertake our initial business combination with any company being based in or having the majority of the company s operations in China (including Hong Kong and Macau), we do not expect that any permission or approval that our officers and directors or us would be required from the Chinese authorities to search for a target company or to consummate our initial business combination. Holding Foreign Companies Accountable Act Our securities may be prohibited to trade on a national exchange or over-the-counter markets under the Holding Foreign Companies Accountable Act (the HFCA Act ) if Public Company Accounting Oversight Board ( PCAOB ) is unable to inspect our auditors for three consecutive years beginning in 2021. Our auditor, MaloneBailey LLP, is currently subject to PCAOB inspections and PCAOB is able to inspect our auditor. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act ( AHFCAA ), which, if signed into law, would amend the HFCA Act and require the SEC to prohibit an issuer s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. Pursuant to the HFCA Act, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the PRC, and (2) Hong Kong. In addition, the PCAOB s report identified the specific registered public accounting firms which are subject to these determinations. Our auditor, MaloneBailey LLP, is headquartered in Houston, Texas, and has been inspected by the PCAOB on a regular basis with the last inspection in December 2020. Our auditor is not headquartered in mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB s determination announced on December 16, 2021. As a result, we do not believe that Holding Foreign Companies Accountable Act and related regulations will affect us. Additionally, due to the exclusion of any target company being based in or having the majority of the company s operations in China (including Hong Kong and Macau), we do not believe that Holding Foreign Companies Accountable Act and related regulations will affect the post-combination entity. On August 26, 2022, the China Securities Regulatory Commission, the Ministry of Finance of the PRC, and the PCAOB signed a Statement of Protocol, or the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. Pursuant to the Protocol, the PCAOB has independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB has secured complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its December 2021 determinations to the contrary. Notwithstanding, the PCAOB has also identified numerous deficiencies at audit firms in mainland China and Hong Kong, as has been the case in other jurisdictions in the first year of PCAOB inspection. Future developments in respect of increased U.S. regulatory access to audit information are uncertain, as the legislative developments are subject to the legislative process and the regulatory developments are subject to the rule-making process and other administrative procedures. Initial Business Combination Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding deferred underwriting commissions payable to our underwriters and taxes payable) at the time of the agreement to enter into the initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority ( FINRA ), or an independent accounting firm with respect to the satisfaction of such criteria. Our stockholders may not be provided with a copy of such opinion, nor will they be able to rely on such opinion. We shall not undertake our initial business combination with any company being based in or having the majority of the company s operations in China (including Hong Kong and Macau). Our Amended and Restated Certificate of Incorporation to be 6 Table of Contents adopted upon the effectiveness of the registration statement of which this prospectus forms a part will prohibit us from undertaking our initial business combination with any company being based in or having the majority of the company s operations in China (including Hong Kong and Macau). The net proceeds of this offering and the sale of the private units released to us from the trust account upon the closing of our initial business combination may be used as consideration to pay the sellers of a target business with which we complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. In addition, we may be required to obtain additional financing in connection with the closing of our initial business combination to be used following the closing for general corporate purposes as described above. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise. None of our founders is required to provide any financing to us in connection with or after our initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. Our amended and restated certificate of incorporation will provide that, following this offering and prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 12 months from the closing of this offering (or up to 18 months, if we extend the time to complete a business combination as described in this prospectus) or (y) amend the foregoing provisions, unless (in connection with any such amendment to our certificate of incorporation) we offer our public stockholders the opportunity to redeem their public shares. Our Acquisition Process We will utilize the diligence, rigor, and expertise of our managements respective platforms to evaluate potential targets strengths, weaknesses, and opportunities to identify the relative risk and return profile of any potential target for our initial business combination. We currently do not have any specific business combination under consideration. Our officers and directors have not individually selected a target business. Our management team is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) had any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our management team is continuously made aware of potential investment opportunities, one or more of which we may desire to pursue for a business combination. We will have until 12 months from the consummation of this offering to consummate our initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 12 months from closing of this offering, we may, but are not obligated to, extend the period of time to consummate a business combination up to two time by an additional three-month period each time (for a total of up to 18 months to 7 Table of Contents complete a business combination). Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to extend the time available for us to consummate our initial business combination, our sponsor, upon at least five days advance notice prior to the applicable deadline, must deposit into the trust account for each three-month extension, $750,000, or $862,500 if the underwriters over-allotment option is exercised in full ($0.10 per unit in either case), up to an aggregate of $1,500,000 or $1,725,000 if the underwriters over-allotment option is exercised in full ($0.20 per unit in either case), on or prior to the date of the applicable deadline. Our public stockholders will not be afforded an opportunity to vote on our extension of time to consummate an initial business combination from 12 months to 18 months described above or redeem their shares in connection with such extensions. The sponsor will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the lender s discretion, converted upon consummation of our business combination into additional private units at a price of $10.00 per unit. Our officers may become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange Act, even before we enter into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 12 months after the closing of this offering (or up to 18 months, if we extend the time to complete a business combination as described in this prospectus). Our CEO and Chairwoman, Ms. Yiru (Melody) Shi, is a director nominee for Fortune Joy International Acquisition Corp. ( Fortune Joy ), a special purpose acquisition company to be listed on Nasdaq, and will have fiduciary and contractual duties to Fortune Joy upon becoming a director. If Fortune Joy and/or other special purpose acquisition companies that any member of our management is involved with decides to pursue any business combination opportunities, we may be precluded from pursuing such opportunities. For more details about such potential conflict of interests, see Management Conflicts of Interests on page 117 of this prospectus. Subject to his or her fiduciary duties under Delaware law, none of the members of our management team who are also employed by, or directors of, our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Delaware law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis. In the event we seek to complete our initial business combination with a company that is affiliated with, or which there is a fiduciary, contractual or other obligation by, our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent accounting firm that the consideration to be paid by us in the initial business combination is fair to our company from a financial point of view. Private Placement On February 18, 2022, our CEO, Ms. Shi, CFO, Mr. Ohri, and sponsor, Biotech Group Acquisition Sponsor LLC, acquired an aggregate of 2,875,000 shares of Class B common stock for an aggregate purchase price of $25,000, or the founder shares, from us, of which: (i) our CEO acquired 192,625 founder shares, for a purchase price of $1,675; (ii) our CFO acquired 115,000 founder shares, for a purchase price of $1,000; and (iii) our sponsor acquired 2,567,375 founder shares, for a purchase price of $22,325. On May 19, 2022, our CEO, CFO and sponsor surrendered 48,156, 28,750, and 641,844 founder shares, respectively, without any consideration. The surrender of the shares was effective retroactively. As a result, (i) our CEO owns 144,469 founder shares; (ii) our CFO owns 86,250 founder shares; and (iii) our sponsor owns 1,925,531 founder shares. Up to 281,250 founder shares are subject to forfeiture, including up to: (i) 18,844 shares of Class B common stock under CEO s ownership, (ii) 11,250 shares of Class B common stock under CFO s ownership, and (iii) 251,156 shares of Class B common stock under the sponsor s ownership, to the extent that the underwriters 8 Table of Contents over-allotment option is not exercised in full or in part, so that founder shares will represent 20% of our issued and outstanding shares after this offering (excluding the sale of the private units and assuming our founders do not purchase public shares in this offering). None of our founders has indicated any intention to purchase public shares in this offering. In addition, our sponsor has committed to purchase from us an aggregate of 496,802 units, or private units, (or up to 547,427 private units if our underwriters exercise the over-allotment option) at $10.00 per unit for a total purchase price of $4,968,020 (or up to $5,474,270 if our underwriters exercise the over-allotment option). Each private unit consisting of one share of Class A common stock, or private share, and one warrant, or private warrant. The founder shares and private shares are identical to the public shares, except as described in this prospectus. Our initial stockholders have agreed (A) to vote their founder shares and private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, prior to and unrelated to an initial business combination, an amendment to our certificate of incorporation that would affect the substance or timing of our redemption obligation to redeem all public shares if we cannot complete an initial business combination within 12 months of the closing of this offering (or up to 18 months, if we extend the time to complete a business combination as described in this prospectus), unless we provide public stockholders an opportunity to redeem their public shares in conjunction with any such amendment, (C) not to redeem any shares, including founder shares and private shares, into the right to receive cash from the trust account in connection with a stockholder vote to approve our proposed initial business combination or sell any shares to us in any tender offer in connection with our proposed initial business combination, and (D) that the founder shares and private shares shall not participate in any liquidating distribution from the trust account upon winding up if a business combination is not consummated. In addition, the founders, as the holders of Class B common stock, have the right to elect all of our directors prior to our initial business combination and shares of the Class B common stock will automatically convert into shares of Class A common stock at the closing of our initial business combination on a one-for-one basis, subject to adjustment as provided herein. Our initial stockholders have agreed, subject to certain exception, (i) in the case of founder shares, not to transfer, assign or sell 50% of their founder shares until the earlier to occur of: (A) six months after the date of the consummation of our initial business combination, or (B) the date on which the closing price of our Class A common stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and the remaining 50% of the founder shares may not be transferred, assigned or sold until six months after the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares for cash, securities or other property, and (ii) in the case of private units, and any units that may be issued upon the conversion of the working capital loans, or working capital units, that such private units and working capital units will not be transferable, assignable or salable until 30 days after the consummation our initial business combination (except as described herein under the section of this prospectus entitled Principal Stockholders Restrictions on Transfers of Founder Shares and Private Units ). We refer to such transfer restrictions throughout this prospectus as the lock-up. The proceeds from the private placement of the private units will be added to the proceeds of this offering and placed in a trust account in the United States maintained by Continental Stock Transfer & Trust Company, as trustee. If we do not complete our initial business combination within 12 months (or up to 18 months, if we extend the time to complete a business combination as described in this prospectus), the proceeds from the sale of the private units will be included in the liquidating distribution to the holders of our public shares. Corporate Information Our executive offices are located at 2400 Barranca Pkwy, Suite 300, Irvine, CA 92606 and our telephone number is (949) 468-7078. We are an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions 9 Table of Contents from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company shall have the meaning associated with it in the JOBS Act. Additionally, we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stocks held by non-affiliates exceeds $250 million as of the end of that year s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stocks held by non-affiliates exceeds $700 million as of the end of that year s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. 10 Table of Contents The Offering
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001917890_psi-group_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001917890_psi-group_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..729b01ce1c7c9fed6736f8c7d19bd80bf885951b
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus carefully before making an investment in our Ordinary Shares. You should carefully consider, among other things, our consolidated financial statements and the related notes and the sections entitled
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001922182_laminera_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001922182_laminera_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001922182_laminera_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001929589_mariadb_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001929589_mariadb_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..8d864e052daf244b9e0e4d9132a2ef6c38e4031d
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@@ -0,0 +1 @@
+SUMMARY OF THE PROSPECTUS 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001947756_merqueo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001947756_merqueo_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001949289_cxapp_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001949289_cxapp_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..41c10b2dde85dce24cf7d2f0107b14cd158839d4
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@@ -0,0 +1,628 @@
+Summary Unaudited Pro Forma Condensed Combined Balance Sheet Data
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ As of September 30, 2022
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total assets
+
+ 
+ 
+ 
+ $
+
+ 
+ 
+ 73,234
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ $
+
+ 
+ 
+ 69,218
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total liabilities
+
+ 
+ 
+ 
+ $
+
+ 
+ 
+ 8,775
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ $
+
+ 
+ 
+ 8,775
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+ Total stockholders equity
+
+ 
+ 
+ 
+ $
+
+ 
+ 
+ 64,459
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+ $
+
+ 
+ 
+ 60,443
+
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ Market Price and Dividend Information
+
+ KINS
+
+ The KINS Units, KINS Class A Common Stock and KINS Public Warrants are currently listed on Nasdaq under the symbols KINZU, KINZ and KINZW respectively.
+
+ The closing price of the KINS Units, KINS Class A Common Stock and KINS Public Warrants on September 23, 2022 the last trading day before announcement of the execution of the Merger Agreement, was $10.22, $9.99 and $0.05, respectively. As of the KINS Record Date, the most recent closing price of the KINS Units, KINS Class A Common Stock and KINS Public Warrants was $ , $ and $ , respectively.
+
+ Holders of the KINS Units, KINS Class A Common Stock and KINS Public Warrants should obtain current market quotations for their securities. The market price of KINS securities could vary at any time before the Merger.
+
+ Holders
+
+ As of , 2023, there were holders of record of the KINS Units, holders of record of the separately traded KINS Class A Common Stock and holders of record of the separately traded KINS Public Warrants.
+
+ Dividend Policy
+
+ KINS has not paid any cash dividends on KINS Common Stock to date and does not intend to pay cash dividends prior to the consummation of the Merger. The payment of cash dividends in the future will be dependent upon New CXApp s revenues and earnings, if any, capital requirements and general financial condition subsequent to consummation of the Merger as well as contractual restrictions in the instruments governing our indebtedness. The payment of any cash dividends subsequent to the Merger will be within the discretion of the New CXApp Board at such time.
+
+ CXApp
+
+ Historical market price information for CXApp Capital Stock is not provided because there is no public market for any CXApp Capital Stock. For information regarding CXApp s liquidity and capital resources, see Management s Discussion and Analysis of Financial Condition and Results of Operations of Design Reactor, Inc. and Subsidiaries Liquidity and Capital Resources .
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+ RISK FACTORS
+
+ In addition to the other information contained in this proxy statement/prospectus, the following risks have the potential to impact the business and operations of CXApp, KINS and New CXApp. These risk factors are not exhaustive and all investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of CXApp, KINS, New CXApp and the Merger. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe are immaterial could have a material adverse effect on our business, financial condition, results of operations and future growth prospects.
+
+ Risks Related to the Business of CXApp
+
+ You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this proxy statement/prospectus. The risks and uncertainties described below are those that we have identified as material but are not the only risks and uncertainties facing us. Our business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, economic conditions, geopolitical events, changes in laws, regulations or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected business conditions. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, liquidity and financial condition.
+
+ Unless the context otherwise requires, all references in this subsection to the Company, we, us or our refer to CXApp prior to the consummation of the Merger.
+
+ We have a history of operating losses and there is no assurance that we will ever be able to earn sufficient revenue to achieve profitability or raise additional financing to successfully operate our business plan.
+
+ We have a history of operating losses and may not earn sufficient revenue to support our operations. We have incurred recurring net losses of approximately $41.9 million and $12.9 million for the fiscal years ended 2021 and 2020, respectively, and net losses of approximately $23.6 million and $16.5 million for the six months ended September 30, 2022 and 2021, respectively. Our continuation is dependent upon attaining and maintaining profitable operations and raising additional capital as needed, but there can be no assurance that we will be able to raise any further financing.
+
+ Our ability to generate positive cash flow from operations is dependent upon sustaining certain cost reductions and generating sufficient revenues. Our operations have primarily been funded by our previous parent company with proceeds from public and private offerings of capital stock and secured and unsecured debt instruments. Based on our current business plan, we may need additional capital to support our operations, which may be satisfied with additional debt or equity financings. Future financings through equity offerings by us will be dilutive to existing stockholders. In addition, the terms of securities we may issue in future capital transactions may be more favorable to new investors than our current investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities. We may also issue incentive awards under our equity incentive plans, which may have additional dilutive effects. We may also be required to recognize non-cash expenses in connection with certain securities we may issue in the future such as convertible notes and warrants, which would adversely impact our financial condition and results of operations. Our ability to obtain needed financing may be impaired by factors, including the condition of the economy and capital markets, both generally and specifically in our industry, and the fact that we are not profitable, which could affect the availability or cost of future financing. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, we may need to reduce our operations by, for example, selling certain assets or business segments.
+
+ Failure to manage or protect growth may be detrimental to our business because our infrastructure may not be adequate for expansion.
+
+ Our corporate strategy contemplates potential future acquisitions and to the extent we acquire other businesses, we will also need to integrate and assimilate new operations, technologies and personnel. The integration of new personnel will continue to result in some disruption to ongoing operations. The ability to effectively manage growth in a rapidly evolving market requires effective planning and management processes. We will need to continue to improve operational, financial and managerial controls, reporting systems and procedures, and will need to continue 
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+ to expand, train and manage our work force. There can be no assurance that we would be able to accomplish such an expansion on a timely basis. If we are unable to effect any required expansion and is unable to perform its contracts on a timely and satisfactory basis, its reputation and eligibility to secure additional contracts in the future could be damaged. The failure to perform could also result in contract terminations and significant liability. Any such result would adversely affect our business and financial condition.
+
+ We will need to increase the size of our organization, and we may experience difficulties in managing growth, which could hurt our financial performance.
+
+ In order to manage our future growth, we will need to continue to improve our management, operational and financial controls and our reporting systems and procedures. All of these measures will require significant expenditures and will demand the attention of management. If we do not continue to enhance our management personnel and our operational and financial systems and controls in response to growth in our business, we could experience operating inefficiencies that could impair our competitive position and could increase our costs more than we had planned. If we are unable to manage growth effectively, our business, financial condition and operating results could be adversely affected.
+
+ Our business depends on experienced and skilled personnel, and if we are unable to attract and integrate skilled personnel, it will be more difficult for us to manage our business and complete contracts.
+
+ The success of our business depends on the skill of our personnel. Accordingly, it is critical that we maintain, and continue to build, a highly experienced management team and specialized workforce, including those who create software programs and sales professionals. Competition for personnel with skill sets specific to our industry is high, and identifying candidates with the appropriate qualifications can be costly and difficult. We may not be able to hire the necessary personnel to implement our business strategy given our anticipated hiring needs, or we may need to provide higher compensation or more training to our personnel than we currently anticipate.
+
+ Our business is labor intensive and our success depends on our ability to attract, retain, train and motivate highly skilled employees, including employees who may become part of our organization in connection with our acquisitions. The increase in demand for consulting, technology integration and managed services has further increased the need for employees with specialized skills or significant experience in these areas. Our ability to expand our operations will be highly dependent on our ability to attract a sufficient number of highly skilled employees and to retain our employees and the employees of companies that we have acquired. We may not be successful in attracting and retaining enough employees to achieve our desired expansion or staffing plans. Furthermore, the industry turnover rates for these types of employees are high and we may not be successful in retaining, training or motivating our employees. Any inability to attract, retain, train and motivate employees could impair our ability to adequately manage and complete existing projects and to accept new customer engagements. Such inability may also force us to increase our hiring of independent contractors, which may increase our costs and reduce our profitability on customer engagements. We must also devote substantial managerial and financial resources to monitoring and managing our workforce. Our future success will depend on our ability to manage the levels and related costs of our workforce.
+
+ In the event we are unable to attract, hire and retain the requisite personnel and subcontractors, we may experience delays in completing contracts in accordance with project schedules and budgets, which may have an adverse effect on our financial results, harm our reputation and cause us to curtail our pursuit of new contracts. Further, any increase in demand for personnel may result in higher costs, causing us to exceed the budget on a contract, which in turn may have an adverse effect on our business, financial condition and operating results and harm our relationships with our customers.
+
+ Any future acquisitions that we may make could disrupt our business, cause dilution to our stockholders and harm our business, financial condition or operating results.
+
+ If we are successful in consummating acquisitions, those acquisitions could subject us to a number of risks, including, but not limited to:
+
+ the purchase price we pay and/or unanticipated costs could significantly deplete our cash reserves or result in dilution to our existing stockholders;
+
+ we may find that the acquired company or technologies do not improve our market position as planned;
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+ we may have difficulty integrating the operations and personnel of the acquired company, as the combined operations will place significant demands on our management, technical, financial and other resources;
+
+ key personnel and customers of the acquired company may terminate their relationships with the acquired company as a result of the acquisition;
+
+ we may experience additional financial and accounting challenges and complexities in areas such as tax planning and financial reporting;
+
+ we may assume or be held liable for risks and liabilities (including environmental-related costs) as a result of our acquisitions, some of which we may not be able to discover during our due diligence investigation or adequately adjust for in our acquisition arrangements;
+
+ our ongoing business and management s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises;
+
+ we may incur one-time write-offs or restructuring charges in connection with the acquisition;
+
+ we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests, which could result in future charges to earnings; and
+
+ we may not be able to realize the cost savings or other financial benefits we anticipated.
+
+ We cannot assure you that, following any acquisition, our continued business will achieve sales levels, profitability, efficiencies or synergies that justify the acquisition or that the acquisition will result in increased earnings for us in any future period. These factors could have a material adverse effect on our business, financial condition and operating results.
+
+ Insurance and contractual protections may not always cover lost revenue, increased expenses or liquidated damages payments, which could adversely affect our financial results.
+
+ Although we maintain insurance and intend to obtain warranties from suppliers, obligate subcontractors to meet certain performance levels and attempt, where feasible, to pass risks we cannot control to our customers, the proceeds of such insurance or the warranties, performance guarantees or risk sharing arrangements may not be adequate to cover lost revenue, increased expenses or liquidated damages payments that may be required in the future.
+
+ We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
+
+ We may be subject to claims that we and our employees may have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of former employers or competitors. Litigation may be necessary to defend against these claims. We may be subject to unexpected claims of infringement of third party intellectual property rights, either for intellectual property rights of which we are not aware, or for which we believe are invalid or narrower in scope than the accusing party. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail in defending such claims, in addition to paying money claims, we may lose valuable intellectual property rights or personnel or be enjoined from selling certain products or providing certain services. A loss of key research personnel or their work product could hamper or prevent our ability to commercialize certain products, which could severely harm our business.
+
+ Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows.
+
+ We may be a party to claims that arise from time to time in the ordinary course of our business, which may include those related to, for example, contracts, sub-contracts, protection of confidential information or trade secrets, adversary proceedings arising from customer bankruptcies, employment of our workforce and immigration requirements or compliance with any of a wide array of state and federal statutes, rules and regulations that pertain to different aspects of our business. We may also be required to initiate expensive litigation or other proceedings 
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+ to protect our business interests. There is a risk that we will not be successful or otherwise be able to satisfactorily resolve any such claims or litigation. In addition, litigation and other legal claims are subject to inherent uncertainties. Those uncertainties include, but are not limited to, litigation costs and attorneys fees, unpredictable judicial or jury decisions and the differing laws and judicial proclivities regarding damage awards among the states in which we operate. Unexpected outcomes in such legal proceedings, or changes in management s evaluation or predictions of the likely outcomes of such proceedings (possibly resulting in changes in established reserves), could have a material adverse effect on our business, financial condition, results of operations and cash flows. Due to recurring losses and net capital deficiency, our current financial status may increase our default and litigation risks and may make us more financially vulnerable in the face of threatened litigation.
+
+ The loss of key personnel may adversely affect our operations.
+
+ Our success depends to a significant extent upon the operation, experience, and continued services of certain of our officers, and other key personnel. While our key personnel are employed under employment contracts, there is no assurance we will be able to retain their services. The loss of our key personnel could have an adverse effect on us. If certain of our executive officers were to leave we would face substantial difficulty in hiring a qualified successor and could experience a loss in productivity while any successor obtains the necessary training and experience. Furthermore, we do not maintain key person life insurance on the lives of any executive officer and their death or incapacity would have a material adverse effect on us. The competition for qualified personnel is intense, and the loss of services of certain key personnel could adversely affect our business.
+
+ Internal system or service failures could disrupt our business and impair our ability to effectively provide our services and products to our customers, which could damage our reputation and adversely affect our revenues and profitability.
+
+ Any system or service disruptions, on our hosted cloud infrastructure or those caused by ongoing projects to improve our information technology systems and the delivery of services, if not anticipated and appropriately mitigated, could have a material adverse effect on our business including, among other things, an adverse effect on our ability to bill our customers for work performed on our contracts, collect the amounts that have been billed and produce accurate financial statements in a timely manner. We are also subject to systems failures, including network, software or hardware failures, whether caused by us, third-party service providers, cyber security threats, natural disasters, power shortages, terrorist attacks or other events, which could cause loss of data and interruptions or delays in our business, cause us to incur remediation costs, subject us to claims and damage our reputation. In addition, the failure or disruption of our communications or utilities could cause us to interrupt or suspend our operations or otherwise adversely affect our business. Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, our future results could be adversely affected.
+
+ Systems failures could damage our reputation and adversely affect our revenues and profitability.
+
+ Many of the systems and networks that we develop, install and maintain for our customers on premise or host on our infrastructure involve managing and protecting confidential information and other sensitive corporate and government information. While we have programs designed to comply with relevant privacy and security laws and restrictions, if a system or network that we develop, install or maintain were to fail or experience a security breach or service interruption, whether caused by us, third-party service providers, cyber security threats or other events, we may experience loss of revenue, remediation costs or face claims for damages or contract termination. Any such event could cause serious harm to our reputation and prevent us from having access to or being eligible for further work on such systems and networks. Our errors and omissions liability insurance may be inadequate to compensate us for all of the damages that we may incur and, as a result, our future results could be adversely affected.
+
+ We may enter into joint venture, teaming and other arrangements, and these activities involve risks and uncertainties. A failure of any such relationship could have material adverse results on our business and results of operations.
+
+ We may enter into joint venture, teaming and other arrangements. These activities involve risks and uncertainties, including the risk of the joint venture or applicable entity failing to satisfy its obligations, which may result in certain liabilities to us for guarantees and other commitments, the challenges in achieving strategic 
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+ objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements. A failure of our business relationships could have a material adverse effect on our business and results of operations.
+
+ Our business and operations expose us to numerous legal and regulatory requirements and any violation of these requirements could harm our business.
+
+ We are subject to numerous federal, state and foreign legal requirements on matters as diverse as data privacy and protection, employment and labor relations, immigration, taxation, anticorruption, import/ export controls, trade restrictions, internal control and disclosure control obligations, securities regulation and anti-competition. Compliance with diverse and changing legal requirements is costly, time-consuming and requires significant resources. We are also focused on expanding our business in certain identified growth areas, such as health information technology, energy and environment, which are highly regulated and may expose us to increased compliance risk. Violations of one or more of these diverse legal requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation. Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.
+
+ If we do not adequately protect our intellectual property rights, we may experience a loss of revenue and our operations and growth prospects may be materially harmed.
+
+ We have not registered copyrights on any of the software we have developed, and while we may register copyrights in the software if needed before bringing suit for copyright infringement, such registration can introduce delays before suit of over three years and can constrain damages for infringement. We rely upon confidentiality agreements signed by our employees, consultants and third parties to protect our intellectual property. We cannot assure you that we can adequately protect our intellectual property or successfully prosecute actual or potential infringement of our intellectual property rights. In addition, we cannot assure you that others will not assert rights in, or ownership of, trademarks and other proprietary rights of ours or that we will be able to successfully resolve these types of conflicts to our satisfaction. Our failure to protect our intellectual property rights may result in a loss of revenue and could materially adversely affect our operations and financial condition.
+
+ In addition, any patents issued in the future may not provide us with any competitive advantages, and our patent applications may never be granted. The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Even if issued, there can be no assurance that these patents will adequately protect our intellectual property, as the legal standards relating to the validity, enforceability and scope of protection of patent and other intellectual property rights are complex and often uncertain and are subject to change that can affect validity of patents issued under previous legal standards, particularly with respect to the law of subject matter eligibility. Our inability to protect our property rights could adversely affect our financial condition, operating results and growth prospects.
+
+ Our proprietary software is protected by common law copyright laws, as opposed to registration under copyright statutes. We have not registered copyrights on any of the proprietary software we have developed. Our performance and ability to compete are dependent to a significant degree on our proprietary technology. Common law protection may be narrower than that which we could obtain under registered copyrights. As a result, we may experience difficulty in enforcing our copyrights against certain third party infringements. As part of our confidentiality-protection procedures, we generally enter into agreements with our employees and consultants and limit access to, and distribution of, our software, documentation and other proprietary information. There can be no assurance that the steps we have taken will prevent misappropriation of our technology or that agreements entered into for that purpose will be enforceable. 
+
+ The laws of other countries may afford us little or no protection of our intellectual property. We also rely on a variety of technology that we license from third parties. There can be no assurance that these third party technology licenses will continue to be available to us on commercially reasonable terms, if at all. The loss of or inability 
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+ to maintain or obtain upgrades to any of these technology licenses could result in delays in completing software enhancements and new development until equivalent technology could be identified, licensed or developed and integrated. Any such delays would materially and adversely affect our business.
+
+ The growth of our business is dependent on increasing sales to our existing customers and obtaining new customers, which, if unsuccessful, could limit our financial performance.
+
+ Our ability to increase revenues from existing customers by identifying additional opportunities to sell more of our products and services and our ability to obtain new customers depends on a number of factors, including our ability to offer high quality products and services at competitive prices, the strength of our competitors and the capabilities of our sales and marketing departments. If we are not able to continue to increase sales of our products and services to existing customers or to obtain new customers in the future, we may not be able to increase our revenues and could suffer a decrease in revenues as well.
+
+ Our competitiveness depends significantly on our ability to keep pace with the rapid changes in our industry. Failure by us to anticipate and meet our customers technological needs could adversely affect our competitiveness and growth prospects.
+
+ We operate and compete in an industry characterized by rapid technological innovation, changing customer needs, evolving industry standards and frequent introductions of new products, product enhancements, services and distribution methods. Our success depends on our ability to develop expertise with these new products, product enhancements, services and distribution methods and to implement solutions that anticipate and respond to rapid changes in technology, the industry, and customer needs. The introduction of new products, product enhancements and distribution methods could decrease demand for current products or render them obsolete. Sales of products and services can be dependent on demand for specific product categories, and any change in demand for or supply of such products could have a material adverse effect on our net sales if we fail to adapt to such changes in a timely manner.
+
+ There can be no assurances that consumer or commercial demand for our future products will meet, or even approach, our expectations. In addition, our pricing and marketing strategies may not be successful. 
+
+ Lack of customer demand, a change in marketing strategy and changes to our pricing models could dramatically alter our financial results. Unless we are able to release location based products that meet a significant market demand, we will not be able to improve our financial condition or the results of our future operations.
+
+ If we unable to sell additional products and services to our customers and increase our overall customer base, our future revenue and operating results may suffer.
+
+ Our future success depends, in part, on our ability to expand the deployment of technologies with existing customers and finding new customers to sell our products and services to. This may require increasingly sophisticated and costly sales efforts and may not result in additional sales. In addition, the rate at which our customers purchase additional products and services, and our ability to attract new customers, depends on a number of factors, including the perceived need for indoor mapping products and services, as well as general economic conditions. If our efforts to sell additional products and services are not successful, our business may suffer.
+
+ We operate in a highly competitive market and we may be required to reduce the prices for some of our products and services to remain competitive, which could adversely affect our results of operations.
+
+ Our industry is developing rapidly and related technology trends are constantly evolving. In this environment, we face, among other things, significant price competition from our competitors. As a result, we may be forced to reduce the prices of the products and services we sell in response to offerings made by our competitors and may not be able to maintain the level of bargaining power that we have enjoyed in the past when negotiating the prices of our products and services.
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+ Our profitability is dependent on the prices we are able to charge for our products and services. The prices we are able to charge for our products and services are affected by a number of factors, including:
+
+ our customers perceptions of our ability to add value through our products and services;
+
+ introduction of new products or services by us or our competitors;
+
+ our competitors pricing policies;
+
+ our ability to charge higher prices where market demand or the value of our products or services justifies it;
+
+ procurement practices of our customers; and
+
+ general economic and political conditions.
+
+ If we are not able to maintain favorable pricing for our products and services, our results of operations could be adversely affected.
+
+ A delay in the completion of our customers budget processes could delay purchases of our products and services and have an adverse effect on our business, operating results and financial condition.
+
+ We rely on our customers to purchase products and services from us to maintain and increase our earnings, and customer purchases are frequently subject to budget constraints, multiple approvals and unplanned administrative, processing and other delays. If sales expected from a specific customer are not realized when anticipated or at all, our results could fall short of public expectations and our business, operating results and financial condition could be materially adversely affected.
+
+ Digital threats such as cyber-attacks, data protection breaches, computer viruses or malware may disrupt our operations, harm our operating results and damage our reputation, and cyber-attacks or data protection breaches on our customers networks, or in cloud-based services provided by or enabled by us, could result in liability for us, damage our reputation or otherwise harm our business.
+
+ Despite our implementation of network security measures, the products and services we sell to customers, and our servers, data centers and the cloud based solutions on which our data, and data of our customers, suppliers and business partners are stored, are vulnerable to cyber-attacks, data protection breaches, computer viruses, and similar disruptions from unauthorized tampering or human error. Any such event could compromise our networks or those of our customers, and the information stored on our networks or those of our customers could be accessed, publicly disclosed, lost or stolen, which could subject us to liability to our customers, business partners and others, and could have a material adverse effect on our business, operating results, and financial condition and may cause damage to our reputation. Efforts to limit the ability of malicious third parties to disrupt the operations of the Internet or undermine our own security efforts may be costly to implement and meet with resistance, and may not be successful. Breaches of network security in our customers networks, or in cloud based services provided by or enabled by us, regardless of whether the breach is attributable to a vulnerability in our products or services, could result in liability for us, damage our reputation or otherwise harm our business.
+
+ Any failures or interruptions in our services or systems could damage our reputation and substantially harm our business and results of operations.
+
+ Our success depends in part on our ability to provide reliable remote services, technology integration and managed services to our customers. The operations of our cloud based applications and analytics are susceptible to damage or interruption from human error, fire, flood, power loss, telecommunications failure, terrorist attacks and similar events. We could also experience failures or interruptions of our systems and services, or other problems in connection with our operations, as a result of:
+
+ damage to or failure of our computer software or hardware or our connections;
+
+ errors in the processing of data by our systems;
+
+ computer viruses or software defects;
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+ physical or electronic break-ins, sabotage, intentional acts of vandalism and similar events;
+
+ increased capacity demands or changes in systems requirements of our customers; and
+
+ errors by our employees or third-party service providers.
+
+ Any production interruptions for any reason, such as a natural disaster, epidemic, capacity shortages, or quality problems, at one of our manufacturing partners would negatively affect sales of product lines manufactured by that manufacturing partner and adversely affect our business and operating results.
+
+ Any interruptions in our systems or services could damage our reputation and substantially harm our business and results of operations. While we maintain disaster recovery plans and insurance with coverage we believe to be adequate, claims may exceed insurance coverage limits, may not be covered by insurance or insurance may not continue to be available on commercially reasonable terms.
+
+ We rely on a limited number of key customers, the importance of which may vary dramatically from year to year, and a loss of one or more of these key customers may adversely affect our operating results.
+
+ Our top three customers accounted for approximately 27% and 32% of our gross revenue during the years ended December 31, 2021 and 2020, respectively. One customer accounted for 12% of our gross revenue in 2021, and a separate customer accounted for 15% of our gross revenue in 2020 with one other customer who accounted for 10% of gross revenue in the 2020 year; however, each of these customers may or may not continue to be a significant contributor to revenue in 2022. The loss of a significant amount of business from one of our major customers would materially and adversely affect our results of operations until such time, if ever, as we are able to replace the lost business. Significant customers or projects in any one period may not continue to be significant customers or projects in other periods. To the extent that we are dependent on any single customer, we are subject to the risks faced by that customer to the extent that such risks impede the customer s ability to stay in business and make timely payments to us.
+
+ We may need additional cash financing and any failure to obtain cash financing, could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.
+
+ While we believe that we have sufficient cash funds to satisfy our working capital needs for the next 12 months, we expect that we may need to raise funds in order to continue our operations and implement our plans to grow our business. However, if we decide to seek additional capital, we may be unable to obtain financing on terms that are acceptable to us or at all. If we are unable to raise the required cash, our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges could be limited.
+
+ If we cannot collect our receivables or if payment is delayed, our business may be adversely affected by our inability to generate cash flow, provide working capital or continue our business operations.
+
+ Our business depends on our ability to successfully obtain payment from our customers of the amounts they owe us for products received from us and any work performed by us. The timely collection of our receivables allows us to generate cash flow, provide working capital and continue our business operations. Our customers may fail to pay or delay the payment of invoices for a number of reasons, including financial difficulties resulting from macroeconomic conditions or lack of an approved budget. An extended delay or default in payment relating to a significant account will have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. If we are unable to timely collect our receivables from our customers for any reason, our business and financial condition could be adversely affected.
+
+ If our products fail to satisfy customer demands or to achieve increased market acceptance our results of operations, financial condition and growth prospects could be materially adversely affected.
+
+ The market acceptance of our products are critical to our continued success. Demand for our products is affected by a number of factors beyond our control, including continued market acceptance, the timing of development and release of new products by competitors, technological change, and growth or decline in the mobile device management market. We expect the proliferation of mobile devices to lead to an increase in the data security 
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+ demands of our customers, and our products may not be able to scale and perform to meet those demands. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of these products, our business operations, financial results and growth prospects will be materially and adversely affected.
+
+ Defects, errors, or vulnerabilities in our products or services or the failure of such products or services to prevent a security breach, could harm our reputation and adversely affect our results of operations.
+
+ Because our location based security products and services are complex, they have contained and may contain design or manufacturing defects or errors that are not detected until after their commercial release and deployment by customers. Defects may cause such products to be vulnerable to advanced persistent threats ( APTs ) or security attacks, cause them to fail to help secure information or temporarily interrupt customers networking traffic. Because the techniques used by hackers to access sensitive information change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques and provide a solution in time to protect customers data. In addition, defects or errors in our subscription updates or products could result in a failure to effectively update customers hardware products and thereby leave customers vulnerable to APTs or security attacks.
+
+ Any defects, errors or vulnerabilities in our products could result in:
+
+ expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate, or work-around errors or defects or to address and eliminate vulnerabilities;
+
+ delayed or lost revenue;
+
+ loss of existing or potential customers or partners;
+
+ increased warranty claims compared with historical experience, or increased cost of servicing warranty claims, either of which would adversely affect gross margins; and
+
+ litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
+
+ Our current research and development efforts may not produce successful products or features that result in significant revenue, cost savings or other benefits in the near future. If we do not realize significant revenue from our research and development efforts, our business and operating results could be adversely affected.
+
+ Developing products and related enhancements in our field is expensive. Investments in research and development may not result in significant design improvements, marketable products or features or may result in products that are more expensive than anticipated. We may not achieve the cost savings or the anticipated performance improvements expected, and we may take longer to generate revenue from products in development, or generate less revenue than expected.
+
+ Our future plans include significant investments in research and development and related product opportunities. Our management believes that we must continue to dedicate a significant amount of resources to research and development efforts to maintain a competitive position. However, we may not receive significant revenue from these investments in the near future, or these investments may not yield the expected benefits, either of which could adversely affect our business and operating results.
+
+ Global events such as the lasting impact of the COVID-19 pandemic and other general economic factors may impact our results of operations.
+
+ While the impact of the COVID-19 pandemic is generally subsiding, the lasting impact on our business and results of operations continues to remain uncertain. While we were able to continue operations remotely throughout the pandemic, we have and may continue to see a continued impact of the pandemic in the deployment and implementation of our products and services as return to office initiatives remain ongoing. In addition, other global events, such as the recent military conflict between Russian and Ukraine and other general economic factors that are beyond our control beyond our control may impact our results of operations. These factors can include interest rates; recession; inflation; unemployment trends; the threat or possibility of war, terrorism or other global or national unrest; political or financial instability; and other matters that influence our customers spending. Increasing volatility in financial markets and changes in the economic climate could adversely affect our results of operation. While we 
+
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+ have been able to realize growth in the six months ended September 30, 2022 as compared to the same periods in 2021, the impact that these global events will have on general economic conditions is continuously evolving and the ultimate impact that they will have on our results of operations continues to remain uncertain. There are no assurances that we will be able to continue to experience the same growth or not be materially adversely effected.
+
+ Our international business exposes us to geo-political and economic factors, legal and regulatory requirements, public health and other risks associated with doing business in foreign countries.
+
+ We provide our products and services to customers worldwide. These risks differ from and potentially may be greater than those associated with our domestic business.
+
+ Our international business is sensitive to changes in the priorities and budgets of international customers and geo-political uncertainties, which may be driven by changes in threat environments and potentially volatile worldwide economic conditions, various regional and local economic and political factors, risks and uncertainties, as well as U.S. foreign policy.
+
+ Our international sales are also subject to local government laws, regulations and procurement policies and practices, which may differ from U.S. Government regulations, including regulations relating to import- export control, investments, exchange controls and repatriation of earnings, as well as to varying currency, geo-political and economic risks. Our international contracts may include industrial cooperation agreements requiring specific in-country purchases, manufacturing agreements or financial support obligations, known as offset obligations, and provide for penalties if we fail to meet such requirements. Our international contracts may also be subject to termination at the customer s convenience or for default based on performance, and may be subject to funding risks. We also are exposed to risks associated with using foreign representatives and consultants for international sales and operations and teaming with international subcontractors, partners and suppliers in connection with international programs. As a result of these factors, we could experience award and funding delays on international programs and could incur losses on such programs, which could negatively affect our results of operations and financial condition.
+
+ We are also subject to a number of other risks including:
+
+ the absence in some jurisdictions of effective laws to protect our intellectual property rights;
+
+ multiple and possibly overlapping and conflicting tax laws;
+
+ restrictions on movement of cash;
+
+ the burdens of complying with a variety of national and local laws;
+
+ political instability;
+
+ currency fluctuations;
+
+ longer payment cycles;
+
+ restrictions on the import and export of certain technologies;
+
+ price controls or restrictions on exchange of foreign currencies; and
+
+ trade barriers.
+
+ In addition, our international operations (or those of our business partners) could be subject to natural disasters such as earthquakes, tsunamis, flooding, typhoons and volcanic eruptions that disrupt manufacturing or other operations. There may be conflict or uncertainty in the countries in which we operate, including public health issues (for example, an outbreak of a contagious disease such as 2019-Novel Coronavirus (2019-nCoV), avian influenza, measles or Ebola), safety issues, natural disasters, fire, disruptions of service from utilities, nuclear power plant accidents or general economic or political factors. With respect to political factors, the United Kingdom s 2016 referendum, commonly referred to as Brexit, has created economic and political uncertainty in the European Union. Also, the European Union s General Data Protection Regulation imposes significant new requirements on how we collect, process and transfer personal data, as well as significant fines for non-compliance. Any of the above risks, should they occur, could result in an increase in the cost of components, production delays, general business interruptions, delays from difficulties in obtaining export licenses for certain technology, tariffs and other barriers 
+
+ 
+
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+ and restrictions, longer payment cycles, increased taxes, restrictions on the repatriation of funds and the burdens of complying with a variety of foreign laws, any of which could ultimately have a material adverse effect on our business.
+
+ Difficult conditions in the global capital markets and the economy generally may materially adversely affect our business and results of operations, and we do not expect these conditions to improve in the near future.
+
+ Our results of operations are materially affected by conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere around the world. Weak economic conditions generally, sustained uncertainty about global economic conditions, or a prolonged or further tightening of credit markets could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows. Concerns over inflation, energy costs, geopolitical issues and the availability of credit, in the U.S. have contributed to increased volatility and diminished expectations for the economy and the markets going forward. These factors, combined with volatile oil prices and wavering business and consumer confidence, have precipitated an economic slowdown and uncertain global outlook. Domestic and international equity markets have been experiencing heightened volatility and turmoil. These events and the continuing market upheavals may have an adverse effect on our business. In the event of extreme prolonged market events, such as the global economic recovery, we could incur significant losses.
+
+ Changes in U.S. administrative policy, including changes to existing trade agreements and any resulting changes in international relations, could adversely affect our financial performance and supply chain economics.
+
+ As a result of changes to U.S. administrative policy, among other possible changes, there may (i) changes to existing trade agreements; (ii) greater restrictions on free trade generally; and (iii) significant increases in tariffs on goods imported into the United States, particularly those manufactured in China. China is currently a leading global source of hardware products, including the hardware products that we use. In January 2020, the U.S. and China entered into Phase One of the Economic and Trade Agreement Between the United States of America and the People s Republic of China (the Phase One Trade Agreement ). The Phase One Trade Agreement takes steps to ease certain trade tensions between the U.S. and China, including tensions involving intellectual property theft and forced intellectual property transfers by China. Although the Phase One Trade Agreement is an encouraging sign of progress in the trade negotiations between the U.S. and China, questions still remain as to the enforcement of its terms, the resolution of a number of other points of dispute between the parties, and the prevention of further tensions. If the U.S.-China trade dispute re-escalates or relations between the United States and China deteriorate, these conditions could adversely affect our ability to source our hardware products and therefore our ability to manufacture our products. Our ability to manufacture our products could also be affected by economic uncertainty, in China or by our failure to establish a positive reputation and relationships in China. The occurrence of any of these events could have an adverse effect on our ability to source the components necessary to manufacture our products, which, in turn, could cause our long-term business, financial condition and operating results to be materially adversely affected.
+
+ There is also a possibility of future tariffs, trade protection measures, import or export regulations or other restrictions imposed on our products or on our customers by the United States, China or other countries that could have a material adverse effect on our business. A significant trade disruption or the establishment or increase of any tariffs, trade protection measures or restrictions could result in lost sales adversely impacting our reputation and business. A trade war, other governmental action related to tariffs or international trade agreements, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently do business or any resulting negative sentiments towards the United States could adversely affect our supply chain economics, consolidated revenue, earnings and cash flow.
+
+ We intend to use and leverage open source technology in which may create risks of security weaknesses.
+
+ Some parts of our technology may be based on open-source technology. There is a risk that the development team or other third parties may intentionally or unintentionally introduce weaknesses or bugs into the core infrastructure elements of our technology solutions interfering with the use of such technology or causing loss to us.
+
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+ We may not be able to develop new products or enhance our product to keep pace with our industry s rapidly changing technology and customer requirements.
+
+ The industry in which we operate is characterized by rapid technological changes, new product introductions, enhancements, and evolving industry standards. Our business prospects depend on our ability to develop new products and applications for our technology in new markets that develop as a result of technological and scientific advances, while improving performance and cost-effectiveness. New technologies, techniques or products could emerge that might offer better combinations of price and performance than the blockchain technology solutions that are being developed by us. It is important that we anticipate changes in technology and market demand. If we do not successfully innovate and introduce new technology into our anticipated technology solutions or effectively manage the transitions of our technology to new product offerings, our business, financial condition and results of operations could be harmed.
+
+ Domestic and foreign government regulation and enforcement of data practices and data tracking technologies is expansive, broadly defined and rapidly evolving. Such regulation could directly restrict portions of our business or indirectly affect our business by constraining our customers use of our technology and services or limiting the growth of our markets.
+
+ Federal, state, municipal and/or foreign governments and agencies have adopted and could in the future adopt, modify, apply or enforce laws, policies, and regulations covering user privacy, data security, technologies that are used to collect, store and/or process data, and/or the collection, use, processing, transfer, storage and/or disclosure of data associated with individuals. The categories of data regulated under these laws vary widely, are often broadly defined, and subject to new applications or interpretation by regulators. The uncertainty and inconsistency among these laws, coupled with a lack of guidance as to how these laws will be applied to current and emerging indoor positioning analytics technologies, creates a risk that regulators, lawmakers or other third parties, such as potential plaintiffs, may assert claims, pursue investigations or audits, or engage in civil or criminal enforcement. These actions could limit the market for our services and technologies or impose burdensome requirements on our services and/or customers use of our services, thereby rendering our business unprofitable.
+
+ Some features of our services may trigger the data protection requirements of certain foreign jurisdictions, such as the EU General Data Protection Regulation (the GDPR ), and the EU ePrivacy Directive. In addition, our services may be subject to regulation under current or future laws or regulations. For instance, the EU ePrivacy Directive is soon to be replaced in its entirety by the ePrivacy Regulation, which will bring with it an updated set of rules relevant to many aspects of our business. If our treatment of data, privacy practices or data security measures fail to comply with these current or future laws and regulations in any of the jurisdictions in which we collect and/or process information, we may be subject to litigation, regulatory investigations, civil or criminal enforcement, financial penalties, audits or other liabilities in such jurisdictions, or our customers may terminate their relationships with us. In addition, data protection laws, such as the GDPR, foreign court judgments or regulatory actions could affect our ability to transfer, process and/or receive transnational data that is critical to our operations, including data relating to users, customers, or partners outside the United States. For instance, the GDPR restricts transfers of personal data outside of the European Economic Area, including to the United States, subject to certain requirements. Such data protection laws, judgments or actions could affect the manner in which we provide our services or adversely affect our financial results if foreign customers and partners are not able to lawfully transfer data to us.
+
+ This area of the law is currently under intense government scrutiny and many governments, including the U.S. government, are considering a variety of proposed regulations that would restrict or impact the conditions under which data obtained from individuals could be collected, processed, stored, transferred, sold or shared with third parties. In addition, regulators such as the Federal Trade Commission and the California Attorney General are continually proposing new regulations and interpreting and applying existing regulations in new ways. For example, in June 2018, California passed the California Consumer Privacy Act (the CCPA ), which provides new data privacy rights for consumers and new informational, disclosure and operational requirements for companies, effective January 2020. Fines for non-compliance may be up to $7,500 per violation. The burdens imposed by the GDPR and CCPA, and changes to existing laws or new laws regulating the solicitation, collection, processing, or sharing of personal and consumer information, and consumer protection could affect our customers utilization of our services and technology and could potentially reduce demand, or impose restrictions that make it more difficult or expensive for us to provide our services.
+
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+ In addition, ongoing legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the European Economic Area to the United States could result in further limitations on the ability to transfer data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S. and Swiss-U.S. Privacy Shield frameworks and the European Commission s Model Contractual Clauses, each of which are currently under particular scrutiny. Additionally, certain countries have passed or are considering passing laws requiring local data residency. The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our services, reduce overall demand for our services, make it more difficult to meet expectations from or commitments to customers, lead to significant fines, penalties or liabilities for noncompliance, impact our reputation, or slow the pace at which we close sales transactions, any of which could harm our business.
+
+ Furthermore, the uncertain and shifting regulatory environment and trust climate may cause concerns regarding data privacy and may cause our customers or our customers customers to resist providing the data necessary to allow our customers to use our services effectively. Even the perception that the privacy of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of our products or services and could limit adoption of our cloud-based solutions.
+
+ If our customers fail to abide by applicable privacy laws or to provide adequate notice and/or obtain any required consent from end users, we could be subject to litigation or enforcement action or reduced demand for our services.
+
+ Our customers utilize our services and technologies to track connected devices anonymously and we must rely on our customers to implement and administer notice and choice mechanisms required under applicable laws. If we or our customers fail to abide by these laws, it could result in litigation or regulatory or enforcement action against our customers or against us directly.
+
+ Any actual or perceived failure by us to comply with our privacy policy or legal or regulatory requirements in one or multiple jurisdictions could result in proceedings, actions or penalties against us.
+
+ Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, industry standards, contractual obligations or other legal obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personal data or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations or other legal obligations could result in additional cost and liability to us, damage our reputation, inhibit sales and adversely affect our business.
+
+ Evolving and changing definitions of what constitutes Personal Information and Personal Data within the EU, the United States and elsewhere, may limit or inhibit our ability to operate or expand our business, including limiting technology alliance partners that may involve the sharing of data.
+
+ If we are perceived to cause, or are otherwise unfavorably associated with, violations of privacy or data security requirements, it may subject us or our customers to public criticism, financial penalties and potential legal liability. Existing and potential privacy laws and regulations concerning privacy and data security and increasing sensitivity of consumers to unauthorized processing of personal data may create negative public reactions to technologies, products and services such as ours. Public concerns regarding personal data processing, privacy and security may cause some of our customers end users to be less likely to visit their venues or otherwise interact with them. If enough end users choose not to visit our customers venues or otherwise interact with them, our customers could stop using our platform. This, in turn, may reduce the value of our service, and slow or eliminate the growth of our business, or cause our business to contract.
+
+ Around the world, there are numerous lawsuits in process against various technology companies that process personal information and personal data. If those lawsuits are successful, it could increase the likelihood that our company may be exposed to liability for our own policies and practices concerning the processing of personal data and could hurt our business. Furthermore, the costs of compliance with, and other burdens imposed by laws, regulations and policies concerning privacy and data security that are applicable to the businesses of our customers may limit the use and adoption of our technologies and reduce overall demand for it. Privacy concerns, whether or 
+
+ 
+
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+ not valid, may inhibit market adoption of our technologies. Additionally, concerns about security or privacy may result in the adoption of new legislation that restricts the implementation of technologies like ours or require us to make modifications to our existing services and technology, which could significantly limit the adoption and deployment of our technologies or result in significant expense.
+
+ Risks Related to the Merger and KINS
+
+ Unless the context otherwise requires, all references in this subsection to the Company, we, us or our refer to KINS prior to the consummation of the Merger and New CXApp following the consummation of the Merger.
+
+ Because the market price of shares of KINS Class A Common Stock will fluctuate, the CXApp equityholders cannot be sure of the value of the Merger consideration they will receive.
+
+ Upon completion of the Merger, all outstanding shares of CXApp Capital Stock will be cancelled and converted into the right to receive the applicable portion of the Aggregate Merger Consideration (with any resulting fractional share rounded down to the nearest whole number and in the order of priority as set forth in the Merger Agreement). Other than the limited adjustments described herein, the Merger consideration that CXApp equityholders will receive is a fixed number of shares of New CXApp Common Stock; it is not a number of shares with a particular fixed market value. See Proposal No. 1 The Business Combination Proposal The Merger Agreement for more information. The market value of KINS Class A Common Stock and New CXApp Common Stock at or after the Effective Time may vary significantly from their respective values on the date the Merger Agreement was executed or at other dates, including the date of the CXApp Stockholder Approval. Stock price changes may result from a variety of factors, including changes in the business, operations or prospects of KINS or CXApp, regulatory considerations, and general business, market, industry or economic conditions. Many of these factors are outside of the control of KINS and CXApp.
+
+ If the Merger is consummated, KINS Stockholders will experience dilution.
+
+ It is anticipated that, immediately following the Merger and related transactions, (1) existing KINS Public Stockholders will own approximately 6.8% of outstanding New CXApp Common Stock (excluding 13,800,000 shares of New CXApp Common Stock issuable upon the exercise of New CXApp Warrants), (2) existing equityholders of CXApp will own approximately 50.0% of outstanding New CXApp Common Stock, and (3) the Sponsor, BlackRock and related parties will own 43.2% of outstanding New CXApp Common Stock (in each case, assuming that no additional shares of KINS Class A Common Stock are redeemed in connection with the Merger). If any of the shares of KINS Class A Common Stock are redeemed in connection with the Merger, the percentage of New CXApp Common Stock held by the KINS Public Stockholders will decrease relative to the percentage held if none of the shares of KINS Class A Common Stock are redeemed. Additionally, to the extent that, following the consummation of the Merger, any of the outstanding warrants or options are exercised for shares of New CXApp Common Stock, the KINS Public Stockholders may experience substantial dilution. In addition, CXApp employees and consultants hold, and after Merger, are expected to be granted, equity awards under the Incentive Plan. You will experience additional dilution when those equity awards and purchase rights become vested and settled or exercisable, as applicable, for shares of CXApp Common Stock.
+
+ The Sponsor, CXApp, directors, officers, advisors and their affiliates may elect to purchase KINS Class A Common Stock or the KINS Public Warrants from KINS Public Stockholders, which may influence a vote on a proposed initial business combination and reduce the public float of the KINS Class A Common Stock.
+
+ The Sponsor, CXApp, directors, officers, advisors or their affiliates may purchase shares of KINS Class A Common Stock or the KINS Public Warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of the Merger, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase shares of KINS Class A Common Stock or the KINS Public Warrants in such transactions.
+
+ Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, directors, officers, advisors or their affiliates purchase shares of KINS 
+
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+ 
+ Class A Common Stock in privately negotiated transactions from KINS Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, or to satisfy the Minimum Cash Condition. Any such purchases of the KINS Securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
+
+ In addition, if such purchases are made, the public float of KINS Class A Common Stock or the KINS Public Warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of the KINS Securities on a national securities exchange.
+
+ Consistent with SEC guidance, purchases of shares by the persons described above would not be permitted to be voted for the Business Combination at the KINS stockholder meeting and could decrease the chances that the Business Combination would be approved. KINS hereby represents that any KINS Securities purchased by the Sponsor, CXApp or our or their respective directors, officers, advisors or respective affiliates in situations in which the tender offer rules restrictions on purchases would apply would not be voted in favor of approving the business combination transaction.
+
+ The Sponsor, its investors and its and their affiliates (which include members of the KINS Board and management) may receive a positive return on the 6,150,000 KINS Founder Shares owned by the Sponsor and 750,000 shares owned by the BlackRock Investors even if the KINS Public Stockholders experience a negative return on their investment after consummation of the Merger.
+
+ If KINS is able to complete the Merger (or another business combination by the Liquidation Date), the initial stockholders may receive a positive return on the 6,900,000 founder shares, including the 6,150,000 KINS Founder Shares held by the Sponsor, which were acquired for an aggregate purchase price of $25,000 prior to the KINS Initial Public Offering, even if the KINS Public Stockholders experience a negative return on their investment in KINS Common Stock and KINS Public Warrants after the consummation of the Merger. If KINS is not able to complete the Merger, the KINS Private Placement Warrants, which were purchased by the Sponsor and the BlackRock Investors from KINS for an aggregate purchase price of $10,280,000 (or $1.00 per KINS Private Placement Warrant) concurrently with completion of the KINS Initial Public Offering, will become worthless.
+
+ KINS Stockholders who redeem their KINS Class A Common Stock may continue to hold any KINS Public Warrants that they own, which will result in additional dilution to non-redeeming KINS Stockholders upon exercise of such KINS Public Warrants.
+
+ KINS Stockholders who redeem their KINS Class A Common Stock may continue to hold any KINS Public Warrants that they own at such time, which will result in additional dilution to non-redeeming holders upon exercise of such warrants. Assuming (a) all redeeming KINS Stockholders that acquired KINS Units in the KINS Initial Public Offering and continue to hold the KINS Public Warrants that were included in such KINS Units, and (b) maximum redemption of KINS Class A Common Stock held by the redeeming KINS Stockholders, 13,800,000 KINS Public Warrants would be retained by redeeming KINS Stockholders. As a result, the redeeming KINS Stockholders would hold KINS Public Warrants with an aggregate market value of $496,800, as of October 11, 2022, while non-redeeming KINS Stockholders would suffer additional dilution in their percentage ownership and voting interest of New CXApp upon exercise of the KINS Public Warrants held by redeeming KINS Stockholders.
+
+ KINS or New CXApp, as applicable, may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to holders of such warrants, thereby making such warrants worthless. Additionally, the exercise price for the KINS Warrants and New CXApp Warrants is $11.50 per share and each of such warrants may expire worthless unless the KINS Class A Common Stock price or New CXApp Common Stock price, as applicable, is higher than the exercise price during the exercise period.
+
+ KINS prior to the consummation of the Merger and New CXApp following the consummation of the Merger will have the ability, subject to the limitations set forth in the applicable warrant agreement, to redeem outstanding KINS Warrants and New CXApp Warrants at any time after they become exercisable and prior to their expiration, 
+
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+
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+ 
+ at a price of $0.01 per such warrant, provided that the last sale price of the KINS Class A Common Stock or New CXApp Common Stock, as applicable, equals or exceeds $18.00 per share (subject to adjustment) on each of 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which notice of such redemption is given. Historical trading prices for the KINS Class A Common Stock price have not exceeded $11.31 and as such, the KINS Warrants have not become redeemable by KINS as described above.
+
+ In the event that KINS or New CXApp, as applicable, determine to redeem the KINS Warrants and New CXApp Warrants, KINS and New CXApp will fix a date for the redemption. Notice of redemption will be mailed by first class mail, postage prepaid, by KINS or New CXApp, as applicable, not less than 30 days prior to such date to the holders of the warrants to be redeemed at their last addresses as they appear on the registration books. Any notice of redemption mailed in the manner as provided will be conclusively presumed to have been duly given whether or not the holder received such notice. Redemption of the outstanding KINS Warrants or New CXApp Warrants as described above could force holders thereof to (i) exercise such warrants and pay the exercise price therefor at a time when it may be disadvantageous for such holder to do so, (ii) sell such warrants at the then-current market price when such holder might otherwise wish to hold warrants or (iii) accept the nominal redemption price which, at the time the outstanding KINS Warrants and New CXApp Warrants are called for redemption, is likely to be substantially less than the market value of such warrants.
+
+ In addition, KINS and New CXApp, as applicable, will have the ability to redeem outstanding KINS Warrants and New CXApp Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant, provided that the last sale price of the KINS Class A Common Stock or New CXApp Common Stock, as applicable, equals or exceeds $10.10 per share (subject to adjustment) on each of 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which notice of such redemption is given. In such a case, the holders will be able to exercise their KINS Warrants and New CXApp Warrants, as applicable, prior to redemption for a number of shares of KINS Class A Common Stock or New CXApp Common Stock, as applicable, determined based on the redemption date and the fair market value such KINS Class A Common Stock or New CXApp Common Stock. The value received upon exercise of the KINS Warrants or New CXApp Warrants (i) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (ii) may not compensate the holders for the value of the warrants, including because the number of shares received is capped at 0.361 shares of KINS Class A Common Stock or New CXApp Common Stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants are out-of-the-money, in which case holders thereof would lose any potential embedded value from a subsequent increase in the value of the New CXApp Common Stock had such warrants remained outstanding.
+
+ The market price of shares of New CXApp Common Stock after the Merger may be affected by factors different from those currently affecting the prices of shares of KINS Class A Common Stock.
+
+ Upon completion of the Merger, holders of shares of KINS Class A Common Stock will become holders of shares of New CXApp Common Stock. Prior to the Merger, KINS has had limited operations. Upon completion of the Merger, New CXApp s results of operations will depend upon the performance of New CXApp s businesses, which are affected by factors that are different from those currently affecting the results of operations of KINS.
+
+ Shares of post-business combination SPACs commonly decline in value for a variety of reasons. If the share price declines below the KINS Warrants and New CXApp Warrants exercise price of $11.50 per share, it is unlikely that the warrants will be exercised and New CXApp will be unable to raise further proceeds from the warrants.
+
+ Shares of post-business combination SPACs commonly decline in value for a variety of reasons. Because the Sponsor and Anchor Investors purchased shares at prices below the initial public offering price, they may be incentivized to sell their shares. Similarly, the CXApp Stockholders who acquired shares below market carrying cost prior to the merger may also be incentivized to sell their shares. Any resulting sales may lower the trading price of the KINS Class A Common Stock or New CXApp Common Stock, as applicable. Further, if the share price declines below the KINS Warrants and New CXApp Warrants exercise price of $11.50 per share, it is unlikely for the warrants to be exercised and New CXApp will be unable to raise further proceeds from the warrants.
+
+ 
+
+ 
+
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+
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+ 
+ A substantial number of KINS Public Stockholders have already redeemed their KINS Public Shares prior to the stockholder vote to extend the termination date of the SPAC. Given that many of the remaining stockholders will be subject to lock-up agreements and may not be able to sell their shares on the Nasdaq, the public float and trading volume may be very small. As a result, the trading price of the Class A common stock may be volatile.
+
+ A substantial number of KINS Public Stockholders have already redeemed their KINS Public Shares prior to the stockholder vote to extend the termination date of the SPAC. Given that many of the remaining stockholders will be subject to lock-up agreements, they may not be able to sell their shares on the Nasdaq. See Proposal No. 1 The Business Combination Proposal Related Agreements
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CIK0001951051_jaag_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001951051_jaag_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..69faac99bd69ccb0270e3c3eb4462422522f3d9c
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 5
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001959166_helon-srl_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001959166_helon-srl_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..87c480b17e2185041572e198dc35244f39df220c
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001959166_helon-srl_prospectus_summary.txt
@@ -0,0 +1,372 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+This
+summary highlights information contained elsewhere in this prospectus. This summary may not contain all the information that may be important
+to you, and we urge you to read this entire prospectus carefully, including the Risk Factors, Business and
+ Management s Discussion and Analysis of Financial Condition and Results of Operations sections and our consolidated
+financial statements and the notes thereto, included elsewhere in this prospectus, before deciding to invest in our ordinary shares.
+For purposes of this section, unless otherwise indicated or the context otherwise requires, all references to Helon, the
+ Company, we, our, ours, us or similar terms refer to Helon S.p.A.
+
+ 
+
+Our
+Business
+
+ 
+
+Our
+Mission
+
+ 
+
+ We
+take celebrities to fans, followers, and enthusiasts and let them get the most emotions and experiences out of it. 
+
+ 
+
+ 
+ Helon
+ SpA is a Milan-based company established with the aim of developing projects in the digital and social media field, including the
+ creation of new applications aimed at optimizing and enhancing digital assets.
+
+ The
+ project around which Helon was born is an online platform that allows the social audience: (i) to buy digital assets (tiles) that
+ make up the 3D image of Celebrities; (ii) to interact with those Celebrities, acquiring exclusive and growing benefits depending
+ on the number of tiles owned; (iii) to play with the purchased digital assets, reselling them through a dedicated marketplace, internal
+ to the platform.
+
+ 
+
+ 
+
+ 
+The
+idea behind the project is twofold: on the one hand, to realize an innovative opportunity for contact between the Celebrities and their
+fan base, creating vertical communities and offering new possibilities for interaction with those communities; and on the other hand,
+to back up the growing public interest in owning limited and unique digital assets, both for collecting purposes and also for reselling
+them.
+
+ 
+
+In
+this perspective, the Helon platform is aimed both at the Celebrities to whom it offers an unprecedented possibility of exploitation
+(and, therefore, monetization) of their image, as well as new channels of contact with their fan base; and at the public to whom it offers
+an innovative opportunity for aggregation based on common preferences and realized through digital assets that represent, at the same
+time, an opportunity for collecting, interaction with the Celebrities, gaming and earning.
+
+ 
+
+Our
+History
+
+ 
+
+Helon
+started operations in April 2021 setting up it headquarter in Milano, Italy. In May 2021 we began to develop a digital platform by which
+we fully carry out our business. In August 2021 we got the process to digitally reproduce 30,000 unique tiles from a 3D scanned character
+and in December 2021 we started to generate tiles. During 2022, we completed the first release of our platform improving some features
+as well to augment the overall users experience. We were furthermore able to start enrolling Celebrities acting in various fields
+and having followers in millions using a cash together with an equity-based settlement approach to adequately reward and share success
+with them, and to start procedures for having our shares registered with the SEC and traded on the OTC market. The launch of our offering
+is expected within the first half of 2023 in Europe and the United States.
+
+ 
+
+We
+did not generate revenue from selling our goods and services until end of 2022 nor did we generate any cost of selling goods or providing
+services because our commercial activities are expected to start in the first half of 2023. We incurred selling, general and administration
+expenses of TEUR 1,001.6 since inception, primarily related to corporate purposes (TEUR 406.2), products and services (TEUR 245.0), employee
+benefit expenses (TEUR 163.7) and depreciation and amortization (TEUR 116.5). The decision of Helon to discontinue certain non-strategic
+agreements by end of 2022 generated further minor losses for TEUR 6.3. We invested TEUR 1,264.6 in the development of a digital platform
+and TEUR 78.7 in equipment (mainly represented by scanning hardware and standard software). We raised net proceeds of EUR 1.35 million
+since inception, mainly in debt financing, and further EUR 0.6 million will be available until December 31, 2023 for drawdowns pursuant
+to a loan facility agreement entered with one of our principal shareholders, granting herewith the funds management considers necessary
+to launch our offering and start generating revenue and consistent cash flows to adequately support our operations.
+
+ 
+
+ -4-
+
+ 
+
+ 
+
+ 
+
+Our
+Financial Performance
+
+ 
+
+Since
+inception in April 2021 and until December 31, 2022:
+
+ 
+
+ We
+ did not generate revenue, nor did we generate any cost of selling goods or providing services
+ because our commercial activities are expected to start within the first half of 2023.
+
+ 
+
+ We
+ incurred selling, general and administration expenses of TEUR 1,001.6 mainly for corporate
+ purposes and thus having our shares publicly traded, acquired services, employee benefit
+ expenses and depreciation and amortization.
+
+ 
+
+ We
+ invested TEUR 1,343.3, of which TEUR 1,264.6 to develop our digital platform and TEUR 78.7
+ in equipment, mainly scanning hardware and software.
+
+ 
+
+ We
+ raised net proceeds of EUR 1.35 million, principally in debt financing, and EUR 0.6 million
+ are available until December 31, 2023 for drawdowns pursuant to a loan facility agreement,
+ having herewith granted the funds we consider necessary to launch our offering and start
+ generating revenue and consistent cash flows to adequately support our operation.
+
+ 
+
+Our
+Growth Strategy
+
+ 
+
+We
+believe that the following items are central for growing our business:
+
+ 
+
+ The
+ value circle. We believe that the most effective business grows if a circular value
+ effect exists. We onboarded top Celebrities with followers in the millions. Once showcased
+ on our platform, other Celebrities will want to join and being part of Helon s communities.
+ Further onboarded Celebrities will make our customers to increase, boosting both Celebrities 
+ rewards and gains as well as customers satisfaction and earning opportunities. This will
+ increase the awareness and consideration around Helon, allowing us to endorse further Celebrities
+ and make the value circle grow up and restart again.
+
+ 
+
+ Own,
+ scalable digital platform. Our business is carried out on our digital platform exclusively.
+ Once uploaded, tiles are no longer detachable from the platform. The uniqueness and exclusivity
+ of our offering is granted by our endorsed Celebrities and by our platform, created from
+ scratch and carefully avoiding all forms of restriction or limitation to its development
+ and growth.
+
+ 
+
+ Content
+ evolution and diversification. We offer unique, digitally reproduced body parts (tiles)
+ of Celebrities acting in various fields including but not limited to, music, movie, fashion,
+ lifestyle, art, gaming, and sport as well as in the media, community, and social networking
+ industry in general. We are able to systematically evolve and diversify in content and audience
+ and to further evolve and diversify together with the social media industry.
+
+ 
+
+ Industry
+ leading partners. Our massive scale and recurring operations are carried out using
+ reliable partners. We choose to host with major providers and we sale with major providers
+ of payment gateway services.
+
+ 
+
+Our
+Competitive Strengths
+
+ 
+
+We
+believe that the following strengthen are central to compete in our industry:
+
+ 
+
+ Global
+ communities. We expect to get and boost three main customers communities:
+ the Fandom, having a strong engagement with their favorite Celebrity and hence attracted
+ because We give them such emotions and experiences this audience looks for in and with the
+ Celebrity; the Gamers, always looking for something new and hence attracted by the
+ experiences driven by the gamified footprint of the platform; and the Collectors,
+ seeking for uniqueness and hence attracted by the uniqueness of the tiles in terms of exclusivity
+ and potential gain opportunities.
+
+ 
+
+ Social
+ aggregation. Humans are inclined to aggregate and Helon s platform aggregates
+ and make them interact. Inside the platform, customers will be part of a group, a clan, or
+ they will further create one, competing together in or between groups and contributing to
+ generate and boost the expected game mode.
+
+ 
+
+ -5-
+
+ 
+
+ 
+
+ 
+
+ Gamification.
+ Our digital platform includes features that strongly leverage on user experience.
+
+ 
+
+ Interaction
+ with Celebrities. Helon s environment is revolutionary for both Celebrities
+ and audience to interact.
+
+ 
+
+ Play-to-Earn.
+ Customers can trade on tiles. Regardless of whether or not they will earn money, an unconventional
+ trading environment where customers can move freely will generate excitement and enthusiasm.
+
+ 
+
+ Opportunities.
+ During the last few years, many different phenomena related to collectibles (among others
+ Pok mon and Yu-Gi-Oh!) have experienced overall value increases, reaching worth more
+ than millions of dollars. The collection mechanism as opportunity will start developing for
+ our Celebrities featured in our platform, boosted by the exclusivity, the user experience
+ and the trading environment.
+
+ 
+
+ Outsourcing
+ and control approach. Our approach in doing business is to partner with leading providers,
+ thus maintaining overview and control of operations through a lean but highly specialized
+ team of in-house experts able to fully interact.
+
+ 
+
+Summary
+of Risk Factors
+
+ 
+
+Our
+business faces significant risks and uncertainties. You should carefully consider all of the information set forth in this prospectus
+and in other documents we file with or furnish to the Securities and Exchange Commission, including the following risk factors, before
+deciding to invest in or to maintain an investment in our securities. Our business, as well as our reputation, financial condition, results
+of operations and share price, could be materially adversely affected by any of these risks, as well as other risks and uncertainties
+not currently known to us or not currently considered material. These risks include, among others, the following intellectual property
+risks, risks relating to the business model, risks relating to international business and taxation.
+
+ 
+
+Selling
+Securityholders and Securities being Registered
+
+ 
+
+The
+selling securityholders may from time to time offer and sell any or all of the ordinary shares as identified below pursuant to this prospectus.
+When we refer to the selling securityholders in this prospectus, we mean the persons listed in the tables, and their permitted
+transferees, lenders and others who later come to hold any of the selling securityholders interest in the securities other than
+through a public sale.
+
+ 
+
+The
+ordinary shares held by certain of the selling securityholders are subject to certain transfer restrictions, as described in Description
+of Securities. The selling security holders are also subject to lock-up agreements pursuant to which, among other things,
+they agree not to transfer, sell, assign or otherwise dispose of the ordinary shares held by such person for twelve
+(12) months following the Closing (with respect to the Selling securityholders ) and six months following the Closing for the
+other selling securityholders, in each case subject to certain exceptions and as more fully described in the lock-up agreements.
+
+ 
+
+Selling
+securityholder information for each additional selling securityholder, if any, will be set forth by prospectus supplement to the extent
+required prior to the time of any offer or sale of such selling securityholder s securities pursuant to this prospectus. Any prospectus
+supplement may add, update, substitute, or change the information contained in this prospectus, including the identity of each selling
+securityholder and the number of ordinary shares registered on its behalf. A selling security holder may sell all, some or none of such
+securities in this offering. See the section titled Plan of Distribution .
+
+ 
+
+Corporate
+Information
+
+ 
+
+The
+legal name of the Company is Helon S.p.A. The Company was incorporated under the laws of Italy as a company on 27 April 2021 and registered
+under number 11751940963 with the Camera di Commercio di Milano Monza Brianza Lodi on May 6, 2021. The Company s registered
+office in Italy is Via Borgogna 5, Milano (MI) CAP 20122. The address of the principal executive office of the Company is Helon S.p.A.,
+Via Borgogna 5, Milano (MI) CAP 20122, and the telephone number of the Company is +39 02 3673 5700.
+
+ 
+
+Investors
+should contact us for any inquiries at the address and telephone number of our principal executive office. Our principal website is https://helon.io.
+The information contained on, or accessible from, or hyperlinked to, our website is not a part of this prospectus, and you should not
+consider information on our website to be part of this prospectus.
+
+ 
+
+ -6-
+
+ 
+
+ 
+
+ 
+
+Implications
+of Being a Foreign Private Issuer
+
+ 
+
+We
+report under the Securities Exchange Act of 1934, as amended (the Exchange Act ), as a non-U.S. company with foreign private
+issuer status. As long as we qualify as a foreign private issuer under the Exchange Act we will be exempt from certain provisions of
+the Exchange Act that are applicable to U.S. domestic public companies, including, but not limited to:
+
+ 
+
+ the
+ rules under the Exchange Act requiring domestic filers to issue financial statements prepared
+ under U.S. GAAP;
+
+ the
+ sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations
+ in respect of a security registered under the Exchange Act;
+
+ the
+ sections of the Exchange Act requiring insiders to file public reports of their stock ownership
+ and trading activities and liability for insiders who profit from trades made in a short
+ period of time; and
+
+ the
+ rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form
+ 10-Q containing unaudited financial and other specific information, or current reports on
+ Form 8-K, upon the occurrence of specified significant events.
+
+ 
+
+We
+may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private
+issuer at such time as (i) more than 50% of our outstanding voting securities are held by U.S. residents and (ii) any of the following
+three circumstances applies: (A) the majority of our executive officers or directors are U.S. citizens or residents, (B) more than 50%
+of our assets are located in the United States or (C) our business is administered principally in the United States.
+
+ 
+
+Foreign
+private issuers are also exempt from certain more stringent executive compensation disclosure rules. Thus, we will continue to be exempt
+from the more stringent compensation disclosures required of companies that are not foreign private issuers and will continue to be permitted
+to follow our home country practice on such matters.
+
+ -7-
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CIK0001964114_golden_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001964114_golden_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..c29c61c0928852d856b139d9d18d1945a7c74344
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001964114_golden_prospectus_summary.txt
@@ -0,0 +1 @@
+S-1/A 1 golds_s1a.htm REGISTRATION STATEMENT Registration Statement As filed with the Securities and Exchange Commission on ________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1/A Amendment No. 1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Golden Sand Holdings Corporation (Name of registrant as specified in its charter) Wyoming 7812 32-0688249 (State or jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) 312 W. 2nd Street Casper, Wyoming 82801 (855) 338-47687 (Address and telephone number of registrant s principal executive offices) Law Offices of Byron Thomas 3275 S. Jones Blvd., Suite 104 Las Vegas, Nevada 89146 Telephone: (702) 747-3103 Email: byronthomaslaw@gmail.com (Name, address and telephone number of agent for service) Approximate date of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 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 post-effective amendment filed pursuant to Rule 462(d) 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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of large accelerated filer, accelerated filer , smaller reporting company , and emerging growth company , in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, 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. CALCULATION OF REGISTRATION FEE Proposed Proposed Title of Each Class Amount to Maximum Maximum Amount of of Securities to be be Offering Price Offering Price Registration Registered Registered per Share ($) ($)(1) Fee($)(2) Selling Shareholders - Common Stock 6,827,500 $0.02 $136,550 $15.05 1.Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a). 2.Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act. 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 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 selling shareholders will sell the common stock being registered in this offering at a fixed price of $0.02 per share. SUBJECT TO COMPLETION, DATED MAY 12, 2023. The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted. Prospectus Golden Sand Holdings Corporation 6,827,500 Shares of Common Stock This prospectus will allow 34 selling shareholders to sell 6,827,500 shares of common stock which proceeds will not be available for use by the company. Our common stock is not traded on any public market and, although we intend to apply to have the prices of our common stock quoted on the OTC Markets Group (OTC) as maintained by the Financial Industry Regulatory Authority ( FINRA ) concurrently with the filing of the registration statement of which this prospectus is a part, there can be no assurance that a market maker will agree to file the necessary documents with FINRA to enable us to participate on the OTC Pink, nor can there be any assurance that any application filed by any such market maker for quotation on the OTC Pink will be approved. Selling stockholders will sell at a fixed price of $0.02 per share. The selling shareholders in this offering are underwriters. The Company is an emerging growth company under the Jumpstart Our Business Startups Act. Our management has raised substantial doubts about our ability to continue as a going concern. The securities offered in this prospectus involve a high degree of risk. You should consider the risk factors beginning on page 3 before purchasing our common stock. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is May 12, 2023 Golden Sand Holdings Corporation Unless otherwise specified, the information in this prospectus is set forth as of May 12, 2023, and we anticipate that changes in our affairs will occur after such date. We have not authorized any person to give any information or to make any representations, other than as contained in this prospectus, in connection with the offer contained in this prospectus. If any person gives you any information or makes representations in connection with this offer, do not rely on it as information we have authorized. This prospectus is not an offer to sell our common stock in any state or other jurisdiction to any person to whom it is unlawful to make such offer. PROSPECTUS SUMMARY
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/CIK0001964246_zbj_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001964246_zbj_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..58631f11eb7e176e2f77c0109e21aab6368f8496
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/CIK0001964246_zbj_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our Ordinary Shares discussed under "Risk Factors" before deciding whether to buy our Ordinary Shares. Our Mission Helping Chinese companies enter the capital market to go public at home and abroad. Overview of Our Company Zibenjie is a professional capital operation platform jointly owned by Qianhai Guochuang and Qianhai Venture. It is a one-stop service platform to help Chinese enterprises from entering the capital market to listing at home and abroad, and a one-stop whole process to counsel and incubate enterprises to listing. Zibenjie has a team of well-known industry experts with an average of 10 years of experience, integrating high-quality resources in the financial industry, and has helped more than 3,000 enterprises to list and raise capital at home and abroad. The Industry There are more than 80 million SMEs in China, which solve 80% of urban employment, accomplish 70% of innovation, create 60% of GDP and contribute 50% of tax revenue. At present, Chinese SMEs have the problem of difficulty in financing. Among various corporate financing methods, there are high costs for private lending, high threshold requirements for bank financing, and high thresholds, high fees and long lead times in China's domestic capital markets. Our Solution We provide listing, full consultation and counseling, financing and investment, domestic and international listing, investment and M&A services for Chinese enterprises to solve the problems in their development. Our Services I. Domestic and international listing: domestic main board, small and medium-sized board, science and technology innovation board, gem board, North Exchange listing, Hong Kong listing, U.S. listing, U.K. listing, Australian listing, etc. II. Enterprise listing: New Third Board listing, U.S. OTC, New Fourth Board listing, Shanghai Stock Exchange listing, Hong Kong Stock Exchange listing, Qianhai New Fourth Board listing, various provincial equity trading centers listing, etc. III. Full consulting and counseling: business plan, enterprise valuation, strategic positioning, brand, business model, top-level design, equity structure, equity incentive, listing path planning, etc. IV. Financing and investment: equity financing, debt financing, industry chain financing, investment financing, venture capital docking, etc. 5 V. Investment and M&A: equity investment, M&A Our Core Competencies I. The original industry chain financing can help Chinese small and medium-sized enterprises to finance the advantages of the capital II. Professional team III. Core listing counseling team resources all over China IV. Our founder, Meng Li, has been engaged in capital operation industry for 10 years, and has unique experience in enterprise industry chain financing and listing. V. Always put the service for enterprises in the first place in life, always put the creation of value for enterprises in the first place in life. Our Competitive Strengths I. Market development and promotion advantages. II. Professional team and core listing counseling team resources advantage throughout China. III. The advantage of the original industry chain financing, which can help Chinese SMEs to finance. IV. The advantage of long time experience in coaching enterprises. Our Challenges I. The number of competitors has increased. II. Team personnel are constrained by funds, resulting in insufficient manpower. III. The industry price is becoming more and more transparent. Our Corporate Structure 6 Our Strategy I. Provide Chinese enterprises with listing, full consulting and combing counseling, financing and investment, domestic and foreign listing services, and solve the problems in the development of enterprises. We hope to really help small and medium-sized enterprises, can land, can see results, help enterprises to improve their core competitiveness, cultivate internal strength, enhance the value, long-term accompanying to domestic and foreign listings. II. M&A of China's high-quality assets, the combination of industry and finance, to do 8-10 listed companies Risk Factors Summary Risks Related to Our Business We have grown rapidly in recent years and have limited experience operating at our current scale of operations. If we are unable to manage our growth effectively, our brand, company culture and financial results may suffer. We have limited sources of working capital and will need substantial additional financing. We are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations. Our success depends on our ability to protect our intellectual property. The global coronavirus COVID-19 pandemic has caused significant disruptions in our business, which may continue to materially and adversely affect our results of operations and financial condition. A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition. Risks Related to Doing Business in China 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 our subsidiaries 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. 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. The PRC government may impose restrictions on our ability to transfer cash out of China and to U.S. investors. To the extent cash or assets of our business, or of our PRC or Hong Kong subsidiaries, is in the PRC or Hong Kong, such cash 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 by the PRC government to the transfer of cash or assets. PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably. 7 Substantial uncertainties exist with respect to the enactment timetable and final content of draft China Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. There are uncertainties under the PRC laws relating to the procedures for U.S. regulators to investigate and collect evidence from companies located in the PRC. We rely on dividends, loans and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our PRC subsidiaries to make loans or payments to us could have a material adverse effect on our ability to conduct our business. Fluctuations in exchange rates could have a material adverse effect on our results of operations and the price of our ordinary shares. PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from making loans or additional capital contributions to our PRC operating subsidiaries and thereby prevent us from funding our business. PRC regulations relating to the establishment of offshore special purpose vehicles by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to make capital contributions into our PRC subsidiaries, limit our PRC subsidiaries ability to distribute profits to us, or otherwise adversely affect our financial position. Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment. We must remit the offering proceeds to PRC before they may be used to benefit our business in the PRC, and this process may take several months. Some of our shareholders are not in compliance with the PRC s regulations relating to offshore investment activities by PRC residents, and as a result, the shareholders may be subject to penalties if we are not able to remediate the non-compliance. Failure to make adequate contributions to various employee benefit plans required by PRC regulations may subject us to penalties. The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, making it more difficult for us to pursue growth through acquisitions in China. PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law. If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. 8 Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future. If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, share price and reputation. 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. Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us. We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations. Increases in labor costs in the PRC may adversely affect our business and our profitability. Risks Related to the Offering and Our Ordinary Shares The initial public offering price of our Ordinary Shares may not be indicative of the market price of our Ordinary Shares after this offering. In addition, an active, liquid and orderly trading market for our Ordinary Shares may not develop or be maintained, and our share price may be volatile. There may not be an active, liquid trading market for our Ordinary Shares. Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on a price appreciation of the Ordinary Shares for a return on your investment. A sale or perceived sale of a substantial number of our Ordinary Shares may cause the price of our Ordinary Shares to decline. There can be no assurance that we will not be a passive foreign investment company ("PFIC") for United States federal income tax purposes for any taxable year, which could subject United States holders of our Ordinary Shares to significant adverse United States federal income tax consequences. For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies. If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired. Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and insiders will hold a large portion of the company s listed securities. 9 If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq Capital Market, although we exempt from certain corporate governance standards applicable to US issuers as a Foreign Private Issuer, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them. The market price of our ordinary shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price. We have broad discretion in the use of the net proceeds from our public offering and may not use them effectively. We will incur additional costs as a result of becoming a public company, which could negatively impact our net income and liquidity. Trademarks Implications of Being an Emerging Growth Company Implications of Our Being an "Emerging Growth Company" On September 9, 2022, the SEC adopted inflation adjustments mandated by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, an "emerging growth company" will lose its emerging growth company status on the last day of the fiscal year in which it has $1.235 billion or more in total. As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the JOBS Act. "An "emerging growth company" may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we: may present only two years of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition and Results of Operations; are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as "compensation discussion and analysis"; are not required to obtain an attestation and report from our auditors on our management s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; 10 are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the "say-on-pay," "say-on frequency" and "say-on-golden-parachute" votes); are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure; are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act; and will not be required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form 20-F following the effectiveness of our initial public offering. We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under 107 of the JOBS Act. Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an "emerging growth company" at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended (the "Securities Act") occurred, if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our Class A Ordinary Share held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period. Foreign Private Issuer Status We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example: we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; we are not required to provide the same level of disclosure on certain issues, such as executive compensation; we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction. Implications of Being a Controlled Company Controlled companies are exempt from the majority of independent director requirements. Controlled companies are subject to an exemption from Nasdaq standards requiring that the board of a listed company consist of a majority of independent directors within one year of the listing date. 11 Public Companies that qualify as a "Controlled Company" with securities listed on the Nasdaq Stock Market (Nasdaq), must comply with the exchange s continued listing standards to maintain their listings. Nasdaq has adopted qualitative listing standards. Companies that do not comply with these corporate governance requirements may lose their listing status. Under the Nasdaq rules, a "controlled company" is a company with more than 50% of its voting power held by a single person, entity or group. Under Nasdaq rules, a controlled company is exempt from certain corporate governance requirements including: the requirement that a majority of the board of directors consist of independent directors; the requirement that a listed company have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities; the requirement that a listed company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities; and the requirement for an annual performance evaluation of the nominating and governance committee and compensation committee. Controlled companies must still comply with the exchange s other corporate governance standards. These include having an audit committee and the special meetings of independent or non-management directors. 12
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+PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our Ordinary Shares discussed under Risk Factors before deciding whether to buy our Ordinary Shares. Our Mission Our mission is to provide entrepreneurs with new consumption scenarios and light entrepreneurship platforms through the offline USEE luxury collection store chain system, using the digital operation model of the e-commerce platform to link the entity, and at the same time allow consumers to obtain a convenient and preferential shopping experience. Overview of Our Company USEE ELECTRONIC COMMERCE LTD(Chinese name: ) is a one-stop industry and finance incubation and operation service provider integrating Internet technology, e-commerce operation, big data, SRM digital supply chain, brand management and other businesses. The company's business scope includes: Internet sales (except for the sale of goods that require licensing); Sales agents; luggage sales; luggage repair services; wholesale of jewelry; Jewelry retail; Jewelry recycling and repair services; sales of clocks and chronograph instruments; electronic product sales; wholesale of cosmetics; cosmetics retail; Art (art) art and collection appraisal services; Wholesale of computer software and hardware and auxiliary equipment; Retail of computer hardware and software and auxiliary equipment; sales of arts and crafts and ceremonial articles (except ivory and its products); Retail sale of arts and crafts and collectibles (except ivory and its products); clothing wholesale; clothing retail; wholesale of shoes and hats; footwear and hat retail; sales of household appliances; Information consulting services (excluding licensing information consulting services); Advertising design, agency; Import and export agent; Domestic trade agent; conference and exhibition services; Organize cultural and artistic exchange activities; New energy vehicle sales; Auto parts retail, etc. USEE ELECTRONIC COMMERCE LTD promote the real economy through Internet e-commerce to create green consumption scenarios and industrial foundations in the digital economy era, and activate related industries such as consumption and services. USEE ELECTRONIC COMMERCE LTD always integrate its own development into the exhibition of digital economy, improve the capacity building of digital industrialization, promote the real economy with e-commerce, build a commercial chain value-added ecology around the consumption side, channel end and brand side, take the promotion of consumption as the key element to activate the real economy, and build a one-stop industry and finance incubation operation service platform. The Industry 1.Description of the industry chain Upstream: Product supply USEE ELECTRONIC COMMERCE LTD relying on the capital support of the capital market and the policy opportunities of the times in the domestic and foreign supply chain markets, relying on the industrial advantages, resource advantages and the company's own talents, technical advantages, efficient and flexible capital advantages, we actively integrate the supply chain industrial cluster. Midstream: product communication, product trading USEE ELECTRONIC COMMERCE LTD takes the operation model of e-commerce joint entity and industrial integration finance, takes light luxury head brand goods as the entry point to create a consumption ecology, drives the layout of offline stores by online drainage, and promotes the industrial ecology with consumption ecology. Downstream: Consumption monetization USEE ELECTRONIC COMMERCE LTD takes light luxury brand goods as the starting point, while providing consumers with high-quality and high-quality products, it creates a consumption ecology with green consumption points, creates green consumption scenarios and industrial foundation in the digital economy era through the model of promoting the development of real industries through online green consumption, drives the common development of related industries, builds a consumer entrepreneurship platform for consumers, entrepreneurs, enterprises, etc., and realizes a new system of consumer entrepreneurship. 9 As filed with the Securities and Exchange Commission on April 5, 2023. 2.Industry pain points Luxury/light luxury e-commerce pain points The authenticity of light luxury/luxury goods has always been a major pain point in the light luxury/luxury e-commerce industry. In addition, if light luxury/luxury goods companies cannot obtain brand agency rights or stable supply sources, it is difficult to show the special competitive advantage of online channels. On the other hand, e-commerce platforms often attract consumers through large promotions and discounts, but in the field of luxury e-commerce, due to the limitation of supply sources, the profit margin of luxury e-commerce will be very limited, which makes it difficult for luxury e-commerce to obtain price advantages in the market. Pain points in the e-commerce industry The high cost of recruiting new people is the biggest pain point in the current e-commerce industry. Coupled with the lack of social marketing skills and ineffective fan interaction faced by enterprises in the transformation, etc., it also greatly affects the transaction conversion rate, and many e-commerce merchants do not have a standardized operation, collection, and analysis process for their own data, which directly leads to the serious problem of helplessness in the face of the big data obtained. At the same time, for consumer groups, it has shifted from material consumption to spiritual consumption and entrepreneurial consumption, and traditional e-commerce can no longer meet the needs of consumer groups. Physical store pain points At present, the rapid development of e-commerce and the rapid expansion of supermarket chains have made offline stores face more and more pressure! In addition, competition from the same industry, the squeeze of online platforms, etc., under the influence of these factors, many merchants have chosen to close stores to cope with these challenges. Pain points of real enterprises In the past two years, the economic situation has declined due to the impact of the epidemic, and consumers have become increasingly rational and mature. Many entrepreneurs generally have problems such as difficult to sell, large accumulation of inventory, and high inventory pressure. Seeing the mountains of goods, I frown every day, and thinking about how to sell goods quickly has become an urgent pain point for every entrepreneur. Our Services 1. Project operation mode: Our project is to use the application developed by our company as a platform to integrate and integrate the needs of service providers, consumers and entrepreneurs to achieve the purpose of business incubation and consumption monetization, and form a consumption ecology that drives the real economy through online drainage. At the same time, the needs of online platforms will be dataized, value-oriented and capitalized, and industrial integration in the real economy will be driven. Our projects are not limited to a single luxury category, in the future, we will integrate new energy, tourism, live streaming and other industries to form a situation of industrial sharing. 2.Mainly serve the population Consumer Consumers are positioned as the new elite of the city and high-net-worth people with certain requirements for quality of life. Entrepreneurs Create innovative consumption and entrepreneurship application scenarios to meet the needs of entrepreneurs in consumption entrepreneurship. Merchant/Enterprise De-inventory for merchants/enterprises, reduce costs and increase efficiency, and realize digital transformatio. 10 As filed with the Securities and Exchange Commission on April 5, 2023. Our Solution Consumer Through the e-commerce application of USEE ELECTRONIC COMMERCE LTD, we provide consumers with high-quality and low-cost goods, cooperate with supply chains, brands, merchants, and enterprises to create a super SRM digital supply chain, provide sellers with traceable high-quality products, and solve consumers' worries about counterfeit goods and no after-sales worries; At the same time, green points are used in the process of consumption and circulation, so that consumers can obtain a convenient and preferential shopping experience while realizing the recirculation of consumption value; Meet consumers' need to save money. Entrepreneurs Taking the mass consumption entrepreneurial demand as the core, combined with industrial points to promote new consumption, through the online platform to promote the real economy model to create a new form of consumption entrepreneurship, to provide entrepreneurs with new consumption scenarios and light entrepreneurship platform, entrepreneurs can purchase the products of the mall can convert green points into industrial points, industrial points are used to invest in the real industry under USEE ELECTRONIC COMMERCE LTD, solve the problem of traditional entrepreneurs investing heavily in entities, and meet the consumption of entrepreneurs = The need for entrepreneurship. Merchant/Enterprise Through consumption points, traffic certainty and marketing campaign certainty, merchants/enterprises focusing on manufacturing and R&D, through short and fast marketing rhythm and low marketing costs, can serve more consumers through USEE ELECTRONIC COMMERCE LTD's e-commerce and physical stores, so as to make good products known to more consumers, and solve the problems of difficult sales, high inventory, and no channels. Light luxury/luxury e-commerce industry The past of the era of traditional e-commerce dividends, the marketing model of traditional e-commerce is gradually difficult to adapt to the needs of the new era, and it is difficult to establish customer trust, the customer's sense of experience is getting worse and worse, the core concept of USEE ELECTRONIC COMMERCE LTD is to allow all participants to enjoy the value brought by consumption, traditional e-commerce only meets material consumption, content e-commerce only meets social, material consumption and spiritual consumption, and USEE Electronic Commerce The emergence of LTD has changed the development process of e-commerce, in addition to meeting the above, it also meets the needs of users to save money and start a business. Why choose us Consumers save money With its own SRM digital supply chain, it forms a unique competitive product supply channel, providing consumers with high-quality goods at high prices, and gradually returning them to consumers in the form of consumption points. Entrepreneurs make money USEE ELECTRONIC COMMERCE LTD provides an industrial ecological light entrepreneurship platform, entrepreneurs can use industry credits to participate in other industries in the industrial ecosystem, such as physical stores, liquor, new energy charging piles, etc. Businesses are more economical The development and change from consumer e-commerce to industrial e-commerce reflects that the growth space of the digital economy is continuously expanding. Industrial e-commerce is also an important means to reduce the cost of enterprises, when reducing the idle inventory of enterprises, with the help of upstream and downstream advantages of the industrial chain, accurately grasp the upstream supply capacity and downstream generation demand, but also improve the demand management ability of enterprises. Our business model 1. E-commerce platform business model USEE ELECTRONIC COMMERCE LTD e-commerce platform adopts the F2B2b2C model, and the biggest difference from traditional e-commerce is that the F2B2b2C model has four operating entities: brand owners (F2C), platform vendors (F2S), distributors (B2C), retailers (B2C). Based on the channel organization that the enterprise has established, through the brand session, brand session and other meeting forms and offline store membership system into an organized and organized connection to the C-end and connect users. 11 As filed with the Securities and Exchange Commission on April 5, 2023. 2.Offline physical store business model Self-operated model USEE ELECTRONIC COMMERCE LTD invested and operated brand flagship store, by the supply chain brand/merchant/enterprise directly provide product display, consumers offline close understanding of the product, at the same time complete online order, by supply chain brand/merchant/enterprise direct delivery. Joint venture model The joint operation stores funded by USEE ELECTRONIC COMMERCE LTD and established by entrepreneurs in the form of industry points + partial investment are divided into image stores, brand stores, and MINI stores according to different areas, and the company provides agency operation and hosting services. The product display is directly provided by the supply chain brand/merchant/enterprise, and consumers have a close understanding of the product offline, and at the same time complete the order online, and the supply chain brand/merchant/enterprise delivers the goods. Entrepreneurs participate in dividends according to the amount of capital contributed and the number of industrial points. Franchise model The franchisee's self-operated store established by the franchisee in the form of industry points + part of the franchise fee is directly provided by the supply chain brand/merchant/enterprise to display the product, and the consumer has a close understanding of the product offline, and at the same time completes the order online, which is shipped by the supply chain brand/merchant/enterprise. USEE ELECTRONIC COMMERCE LTD provides brand authorization, drainage and management background services, charging a 5% management fee, and franchisees are responsible for their own profits and losses. Our Competitive Strengths We are committed to integrating the needs of entrepreneurs, consumers and companies or enterprises to save the consumption costs of different users and directly address the pain points of different users. In addition, we also provide different promotion methods. 1.Consumption returns double points Set a certain time condition, after the consumer meets the conditions, the amount of consumption will be returned to the consumer in the form of consumption points, so that every cent of money spent is on the way back, and consumption points can also be used for consumption on e-commerce platforms. 2.Sharing acceleration It is mainly based on the interactive communication and dissemination of people invited by people, so that old consumers can promote a large number of new consumers, accelerate the return time of consumption points, and complete the actual effect of the drainage method. 3.Industry partners After the third consumption, consumers will consume points into industry points, and industry points can participate in the investment of real industries and projects under USEE ELECTRONIC COMMERCE LTD, and obtain dividends, and combine the interests of consumers with the interests of USEE ELECTRONIC COMMERCE LTD through the real industry to enhance the stickiness between consumers and the platform. 4.Public domain promotion, Private domain traffic conversion Through its own new media matrix and media resources, an online traffic portal is formed, and precipitated to the WeChat official account, which is converted into private domain traffic through the online education platform. 5.The system acquires newcomers Through salon meetings, brand sessions, brand sessions and other conference forms and offline store membership systems, we will connect the C-end in an organized and organized manner, connect users and expand influence. Our Challenges Unlike consumer e-commerce platforms, industrial e-commerce platforms mostly focus on a certain production area or even certain specific products, such as steel, cloth, ore, which will enter the next production process after the transaction. At present, there are no homogeneous enterprises in the industrial e-commerce segment that take light luxury/luxury goods as the entrance of consumption flow. 12 As filed with the Securities and Exchange Commission on April 5, 2023. In the future, USEE ELECTRONIC COMMERCE LTD will explore the implementation of the industrial consumption point system, continuously improve the innovation and entrepreneurship mechanism, create a business cycle ecosystem, and form a preferred platform for industry and finance incubation and operation services. Secondly, our challenges also include the existing mature e-commerce platforms, such as Amazon, TIK TOK and other e-commerce platforms, which will be the preferred shopping platform for consumers, which will have a certain impact and difficulty in our promotion, these mature e-commerce platforms have a huge consumer group, which will cause us certain challenges. Our market opportunity Industry forecasts Light luxury/luxury industry At present, the proportion of luxury goods consumption is increasing, people's spending power is increasing rapidly, and international luxury giants are paying more and more attention to the large scale and growth potential of the online market. Online consumption is gradually becoming mainstream, major brands are relying on the Internet to carry out various marketing activities to maintain contact and interaction with consumers, and the growth rate of online sales of luxury goods is much higher than offline. E-commerce industry Vertical markets are the main user group of USEE ELECTRONIC COMMERCE LTD, where goods and services are sold to a specific customer base who can connect with each other through different scenarios. This kind of e-commerce + industry model will usher in an explosive period in 2023. Our Corporate Structure Our company's organizational structure consists of a board of directors, a strategy committee and an executive committee. With Mr. Zhao Qiu as the chairman and Mr. Xiang Long as the executive president, there are 8 departments: comprehensive department, business department, finance department, planning department, business school, e-commerce department, customer service department and technology department to ensure that the company operates in a legal and compliant manner, and also ensures the company's business development. Our Strategy USEE ELECTRONIC COMMERCE LTD is committed to promoting industrial integration and industry-finance integration, insisting on deepening business connections and extending industrial chains, actively exploring new industry ecological models, discovering new development directions, and promoting industrial integration and growth. At the same time, United Capital institutions support the institutional mechanisms of new technologies, new industries, new formats and new models, realize the symbiosis of industry and finance, and promote the formation of high-quality industrial ecology and coordinated development. In the future, USEE ELECTRONIC COMMERCE LTD will gradually expand its strength and influence through investment, equity participation and strategic cooperation, so that all USEE ELECTRONIC COMMERCE LTD participants can share the wealth feast. Implications of Our Being an Emerging Growth Company On September 9, 2022, the SEC adopted inflation adjustments mandated by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). As a result, an emerging growth company will lose its emerging growth company status on the last day of the fiscal year in which it has $1.235 billion or more in total. As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an emerging growth company as defined in the JOBS Act. An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we: may present only two years of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition and Results of Operations; 13 As filed with the Securities and Exchange Commission on April 5, 2023. are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as compensation discussion and analysis ; are not required to obtain an attestation and report from our auditors on our management s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the say-on-pay, say-on frequency and say-on-golden-parachute votes); are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure; are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act; and will not be required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form 20-F following the effectiveness of our initial public offering. We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under 107 of the JOBS Act. Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an emerging growth company at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended (the Securities Act ) occurred, if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our Class A Ordinary Share held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period. Foreign Private Issuer Status We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the Exchange Act ). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example: We are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; For interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; We are not required to provide the same level of disclosure on certain issues, such as executive compensation; We are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; We are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and We are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any short-swing trading transaction. Implications of Being a Controlled Company Controlled companies are exempt from the majority of independent director requirements. Controlled companies are subject to an exemption from Nasdaq standards requiring that the board of a listed company consist of a majority of independent directors within one year of the listing date. 14 As filed with the Securities and Exchange Commission on April 5, 2023. Public Companies that qualify as a Controlled Company with securities listed on the Nasdaq Stock Market (Nasdaq), must comply with the exchange s continued listing standards to maintain their listings. Nasdaq has adopted qualitative listing standards. Companies that do not comply with these corporate governance requirements may lose their listing status. Under the Nasdaq rules, a controlled company is a company with more than 50% of its voting power held by a single person, entity or group. Under Nasdaq rules, a controlled company is exempt from certain corporate governance requirements including: The requirement that a majority of the board of directors consist of independent directors; The requirement that a listed company have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities; The requirement that a listed company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities; and The requirement for an annual performance evaluation of the nominating and governance committee and compensation committee. Controlled companies must still comply with the exchange s other corporate governance standards. These include having an audit committee and the special meetings of independent or non-management directors. Our Pre-IPO Prior to the IPO, we total share capital was about 80,000,000 ordinary shares. This time, about 8,000,000 ordinary shares were sold, which is we expect that the initial public offering price will be no less than US $6.66 per share. Our Corporate Information Our principal executive offices are located at FLOOR 1 OFFICE 25, 22 MARKET SQUARE, LONDON, ENGLAND. Our telephone number is +44 07514685567. Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our website is www.usee.vip. The information contained on our website is not a part of this prospectus. 15 As filed with the Securities and Exchange Commission on April 5, 2023.
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001986117_hainan_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001986117_hainan_prospectus_summary.txt
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+Prospectus Summary Transfer of Cash to and from Our Post-Combination Organization if We Acquire a Company Based in China (Post-Business Combination) and Risk Factors Risks Related to Being Located in China and Acquiring or Operating Businesses in the PRC PRC governmental control of currency conversion may limit the ability of our operating companies in China to utilize their revenues effectively and affect the value of your investment. We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. Table of Contents We are an emerging growth company under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves risks. See Risk Factors on page 52. Investors will not be entitled to protections normally afforded to investors in blank check offerings by Rule 419 under the Securities Act of 1933, as amended. Price to Public Underwriting Discounts and Commissions(1) Proceeds, before expenses, to us Per Unit $ 10.00 $ 0.50 $ 9.50 Total $ 60,000,000 $ 3,000,000 $ 57,000,000 ____________ (1) Includes $0.30 per unit, or $1,800,000 (or up to $2,070,000 if the underwriters over-allotment option is exercised in full) in the aggregate payable to the underwriters for deferred underwriting commissions which will be placed in a trust account located in the United States as described herein. The deferred commissions that will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.30 multiplied by the number of public shares sold as part of the units in this offering, subject to adjustment as described in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also Underwriting for a description of compensation and other items of value payable to the underwriters. Of the proceeds we receive from this offering and the sale of the private placement units described in this prospectus, $60,600,000 or $69,690,000 if the underwriters over-allotment option is exercised in full ($10.10 per public share), subject to increase of up to an additional $0.033 per public share per month in the event that our sponsor elects to extend the period of time of up to nine months to consummate a business combination, as described in more detail in this prospectus, will be deposited into a trust account in the United States at JPMorgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company acting as trustee. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders. The underwriters are offering the units for sale on a firm commitment basis. Delivery of the units will be made on or about _______, 2023. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. No offer or invitation to subscribe for units may be made to the public in the Cayman Islands. Ladenburg Thalmann The date of this prospectus is ___________, 2023 Table of Contents TABLE OF CONTENTS Page SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CIK0001986500_grd_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CIK0001986500_grd_prospectus_summary.txt
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+summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under the section of this prospectus entitled Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. 
+
+Unless otherwise stated in this prospectus, or the context otherwise requires, references to: 
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+ amended and restated memorandum and articles of association are to the amended and restated memorandum and articles of association that we will adopt prior to the consummation of this offering; 
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+ company, our, we or us are to GRD Biotechnology Acquisition Limited; 
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+ Companies Act are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time; 
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+ equity-linked securities are to any securities of our company that are convertible into or exchangeable or exercisable for, ordinary shares of our company; 
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+ founder shares are to our ordinary shares owned by our CEO prior to this offering; 
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+ initial shareholders are to holders of our founder shares prior to this offering; 
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+ management or our management team are to our officers and directors (including our director nominees that will become directors in connection with the consummation of this offering); 
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+ ordinary resolution are to a resolution adopted by the affirmative vote of at least a majority of the votes cast by the holders of the issued shares present in person or represented by proxy at a general meeting of the company and entitled to vote on such matter or a resolution approved in writing by all of the holders of the issued shares entitled to vote on such matter; 
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+ public shares are to ordinary shares sold in this offering (whether they are purchased in this offering or thereafter in the open market); 
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+ public shareholders are to the holders of our public shares, including our initial shareholders and members of our management team to the extent our initial shareholders and/or members of our management team purchase public shares, provided that each initial shareholder s and member of our management team s status as a public shareholder shall only exist with respect to such public shares; 
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+ special resolution are to a resolution adopted by the affirmative vote of at least a two-thirds (2/3) majority (or such higher threshold as specified in our amended and restated memorandum and articles of association) of the votes cast by the holders of the issued shares present in person or 
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+represented by proxy at a general meeting of the company and entitled to vote on such matter or a resolution approved in writing by all of the holders of the issued shares entitled to vote on such matter; 
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+ specified future issuance are to an issuance of a class of equity or equity-linked securities to certain purchasers, which may include affiliates of our management team, that we may determine to make in connection with financing our initial business combination; 
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+Table of Contents
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+Proposed business 
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+Overview 
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+We are a newly organized, blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any stage of its corporate evolution of in any industry, sector or geographic location (subject to certain limitations described in this prospectus), we intend to focus our search in the Asian biotechnology sector. 
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+We intend to source initial business combination opportunities through our management team s extensive network of biotechnology sector business owners, public and private company executives and board members, investment bankers, private equity and debt investors, high net worth families and their advisors, commercial bankers, attorneys, management consultants, accountants and other transaction intermediaries. We believe this approach, as well as our management team s recognized track record of 
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+completing acquisitions across a variety of subsectors within the biotechnology sector will provide meaningful opportunities to drive value creation for shareholders. 
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+Our directors have significant experience with acquisitions, divestitures and corporate strategy and implementation, as well as the public markets, which we believe will meaningfully benefit us as we evaluate potential initial business combinations, as well as after completing an initial business combination, to the extent they remain on our board of directors following the completion of our initial business combination. 
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+Our management team 
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+Our management team (in addition to our director nominees discussed below) includes Zhonghua Gao, our Chairman and Chief Executive Officer; and Meimei Xiao, our Chief Financial Officer and Director. These members of our management team each bring over 20 years of operating and transactional experience as well as a broad industry network that encompasses a wide array of subsectors within the biotechnology sector. We believe our management team has complementary skills and experience relevant to our target market, as well as a track record of working together and providing creative solutions for complex transactions, which we believe represents a competitive advantage. This experience is supplemented with an in-depth network of relationships that extend to corporations across the biotechnology sector as well as private equity firms. 
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+Our management team has experience in: 
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+sourcing, structuring, acquiring, financing and selling biotechnology businesses; 
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+operating companies as senior executives and active board members, and setting clear and effective business strategies for companies in the biotechnology sector; 
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+leveraging strategic insight from their mergers and acquisitions and capital structuring experience based on debt and equity capital executions; and 
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+deploying a broad value creation toolkit including identifying value enhancements and delivering operating efficiency. 
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+Zhonghua Gao serves as our Chairman and Chief Executive Officer. He has more than 20 years of experience in biotechnology, human cell and gene biological testing, and general health. He has a certain influence in related industries. He has served as Dean of the Gene Technology Research Institute, Chairman of Zhongjianlian Biotechnology Co., Ltd., and Chairman of Sichuan Gaorunde Biotechnology Co., Ltd. He graduated from Sichuan Normal University with a bachelor's degree, a master's degree in business administration, an EMBA degree from Tsinghua University, and he is a graduate student at Peking University.
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+Meimei Xiao serves as our Chief Financial Officer and Director. She has more than 20 years of financial work experience, is familiar with financial accounting standards, tax laws, financial statement analysis and other theories and skills, and has good analysis, decision making, communication and coordination skills. She is the financial director of a company listed on the Shanghai stock exchange and is currently the financial director of Sichuan Gaorunde Biotechnology Co., Ltd.
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+Our independent director nominees 
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+Our executive management team s efforts to seek a suitable business combination target will be complemented and augmented by the expertise and network of relationships of our director nominees. We believe that our access to and affiliation with our director nominees represents a competitive advantage. 
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+Xiaoning Nie, who has agreed to serve as a director following the completion of this offering, has a broad and professional investment vision, a deep understanding of and professional skills in the biotechnology industry, and has published professional papers in the field of biomedicine in many academic journals. He has participated in a number of research and development projects in the field of biotechnology. Mr. Nie graduated from Henan Institute of Science and Technology and is currently studying for a master's degree at the National University of the Philippines. 
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+Xue Zhang, who has agreed to serve as a director following the completion of this offering, is familiar with company law, contract law and other relevant legal fields, has skills in financial statement analysis, and has her own unique understanding of investment and capital operation. She has work experience in science and technology related fields. Ms. Zhang graduated from the Sichuan Tourism Institute.
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+Junjie Cheng, who has agreed to serve as a director following the completion of this offering, has served as the technical director of biotechnology companies for several years. She has rich experience and professional knowledge in the field of cell therapy and clinical research. Ms. Cheng graduated from Sichuan Agricultural University and studied biological science.
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+Market opportunity 
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+Our focus will be on the Asian biotechnology sector. We believe the market opportunity is both highly diverse and large, across many subsectors of biotechnology including medical devices, especially in the region of China.
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+We believe the market opportunity is both highly diverse and large. This is a broad and diverse market that is very fragmented. Companies differ through a combination of technology, innovation, technical know-how, customer relationships and value-added services. 
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+This sector is rapidly evolving due to technology and companies are continually searching for ways to improve productivity, lower costs and reduce their impact on the environment. As seen in many other sectors of the economy, technology is playing a larger and larger role in driving these strategic priorities. This disruptive technology includes but is not limited to, the proliferation of sensors, automation, robotics, computer vision, edge computing, artificial intelligence (AI), machine learning, analytics, industrial internet of things (IIoT), augmented reality (AR), virtual reality (VR), autonomous material handling, optimized supply chain management, alternative material 3D printing, industrial software as a service (SaaS) and real time inventory tracking. We believe these changes, along with other global macro trends such as the drive for sustainability and energy transition generally, are going to create opportunities in the biotechnology space and we are well positioned to capture those opportunities to the benefit of our shareholders. 
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+Business strategy 
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+Our business strategy is to identify and complete a business combination with a company in the biotechnology sector that demonstrates significant growth potential and/or value creation opportunities for our shareholders. Identified target companies may demonstrate the characteristics set out under Our Acquisition Criteria below. We believe our management team s operational, financial and transaction experience in good and bad economic environments, along with our deep understanding of the biotechnology sector will allow us to effectively and efficiently identify and evaluate potential opportunities for our initial business combination. Moreover, we believe our collective relationships and operational credibility, will facilitate deal flow and resonate with the management, customers and owners of prospective target companies. 
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+To achieve a successful initial business combination, our management team will leverage their experience and network in the sector and their data analysis proficiency to quickly identify a 
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+company with a strong competitive position, that can benefit from being a public company to execute its growth strategy and create value. We believe our targeted sector focus and our management team s background and experience will make us an attractive partner for strong management teams and owners looking to enter the next phase of business growth. 
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+Following the completion of this offering, we intend to begin the process of communicating with the network of relationships of our management team and their affiliates to articulate the parameters for our search for a potential initial business combination target and begin the process of pursuing and reviewing potential opportunities. 
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+Our acquisition criteria 
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+Consistent with our business strategy, we expect to identify companies that have compelling growth potential and a combination of the following characteristics. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter our initial business combination with a target business that does not meet these criteria and guidelines. We seek to acquire companies or assets with a significant share of the following characteristics: 
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+Biotechnology businesses. We will seek businesses that are in or may enter the biotechnology sector where businesses can benefit from our management team s deep operational experience and vast network of industry relationships. Additionally, our operational and financial experience in the sector will allow us to effectively evaluate the soundness of a potential target s business plans, management executional capabilities and potential impact of future industry trends. Our management team s collective profile enables us to conduct diligence efficiently, rapidly assess opportunities and identify value creation opportunities for our shareholders; 
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+Solid financial performance with financial visibility. We will seek businesses with either proven or attractive future financial performance, or the near-term opportunity to buttress profitable revenue streams, improve financial performance, and generate strong, sustainable cash flow; 
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+Strong competitive position and growth potential. We will seek businesses that have intellectual property, brand value or innovation in segments that can create growth opportunities or higher profitability compared to their competitors; 
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+Established management teams. We will seek businesses that have established, competent management teams that can benefit from our team s experience and networks; 
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+Consolidation opportunities. We will seek businesses that could serve as a solid foundation for industry consolidations and roll-ups; 
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+COVID-impacted businesses. The global pandemic has left previously strong businesses, with otherwise solid business plans, in a fragile operational state with limited liquidity options. We can utilize our equity capital, along with our management team s operational, financial and industry experience, to stabilize the capital structure and revenue base of such businesses; 
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+Entrepreneurs / unnatural owners. We will seek businesses that are owned by entrepreneurs and / or unnatural owners that are looking for a partner with our expertise and background to help execute the next stage of their growth; and 
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+Can benefit from being a public company. We will seek businesses that can benefit from being a public company, including broader access to equity and debt capital markets, the public profile associated with being a publicly-traded company and increased governance discipline as compared to being private. 
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+These criteria and guidelines are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general criteria and guidelines as well as other considerations, factors, criteria and guidelines that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria and guidelines in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC. 
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+Our acquisition process 
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+In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial and other information that will be made available to us. We will also utilize our operational and capital allocation experience. 
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+We are not prohibited from pursuing an initial business combination with a business that is affiliated with our officers or directors. In the event we seek to complete our initial business combination with a business that is affiliated with our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. 
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+Members of our management team will directly or indirectly own founder shares following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to our initial business combination. 
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+We currently have not selected a target business with which to consummate our initial business combination. 
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+Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability complete our business combination. Our 
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+amended and restated memorandum and articles of association will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. 
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+Initial business combination 
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+Our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount). The requirement that the target business or businesses together have an aggregate fair market value equal to at least 80% of the assets held in the trust account will be set forth in our amended and restated memorandum and articles of association, and will continue to apply to us even if our securities are no longer listed on the NASDAQ. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. 
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+We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own or acquire shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons. However, we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target, or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In such cases, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the outstanding equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired by us is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable. 
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+Corporate information 
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+Our executive offices are located at International Biomedical Technology Incubation Park A1-2, No. 66 Nanhu Road, Deyang, Sichuan, China and our telephone number is (+86) 13811291184. Upon completion of this offering, our corporate website address will be . Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus or the registration statement of which this prospectus forms a part. You should not rely on any such information in making your decision whether to invest in our securities. 
+
+We are an exempted company incorporated in the Cayman Islands. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have obtained a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of 
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+the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. 
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+We are an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. 
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+In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. 
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+We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that are held by non-affiliates equals or exceeds $700 million as of the end of that year s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company shall have the meaning associated with it in the JOBS Act. 
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+Additionally, we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals or exceeds $250 million as of the end of that year s second fiscal quarter, and (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of our ordinary shares held by non-affiliates equals or exceeds $700 million as of the end of that year s second fiscal quarter. 
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+The offering 
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+In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section of this prospectus entitled Risk Factors. 
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+Securities offered 
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+4,000,000 ordinary shares, at $10.00 per share
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+Proposed NASDAQ symbol
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+CGRD
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+Trading commencement
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+The shares will begin trading on or promptly after the date of this prospectus. 
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+Number outstanding before this offering 
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+3,000,000 ordinary shares
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+ 
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+7
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+Table of Contents
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+Number outstanding after this offering 
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+7,000,000 ordinary shares (1)
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+ 
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+Founder shares 
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+In June 2023, our CEO purchased 3,000,000 founder shares for an aggregate purchase price of $7,500. Prior to that, we had no assets, tangible or intangible. 
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+The founder shares are identical to the ordinary shares being sold in this offering, except that: 
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+the founder shares are subject to certain transfer restrictions, as described in more detail below; 
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+our officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive (i) their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination, (ii) their redemption rights with respect to any founder shares and any public shares held by them in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering or (B) with respect to any other 
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+Table of Contents
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+provision relating to shareholders rights or pre-initial business combination activity and (iii) their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of this offering or during any extended time that we have to consummate a business combination beyond 24 months as a result of a shareholder vote to amend our amended and restated memorandum and articles of association (an Extension Period ), although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame. If we submit our initial business combination to our public shareholders for a vote, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company; 
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+Our officers and directors have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition to their founder shares, we would need 500,001, or 7.14% (assuming all outstanding shares are voted), or 0, or 0% (assuming only the minimum number of shares representing a quorum are voted), of the 4,000,000 public shares sold in this offering to be voted in favor of a transaction in order to have our initial business combination approved; and 
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+the founder shares are subject to registration rights. 
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+Transfer restrictions on founder shares 
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+Our initial shareholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the last reported sale price of the 
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+Table of Contents
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+ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under the section of this prospectus entitled Principal Shareholders Restrictions on Transfers of Founder Shares ). We refer to such transfer restrictions throughout this prospectus as the lock-up. 
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+Proceeds to be held in trust account 
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+The net proceeds of this offering, $40,000,000, or $10.00 per unit will be placed into a U.S.-based trust account at [ ], with [ ] acting as trustee. The funds in the trust account will be invested only in specified U.S. government treasury bills or in specified money market funds. 
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+Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the proceeds from this offering will not be released from the trust account until the earliest of (a) the completion of our initial business combination, (b) the 
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+redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (ii) with respect to any other provisions relating to shareholders rights or pre-initial business combination activity and (c) the redemption of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering, subject to applicable law. Shareholders who do not exercise their rights to the funds in connection with an amendment to our amended and restated memorandum and articles of association would still have rights to the funds in connection with a subsequent business combination. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders. 
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+Anticipated expenses and funding sources 
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+Except as described above with respect to the payment of taxes and in connection with redemptions of our public shares in connection with certain amendments to our amended and restated memorandum and articles of association, unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use. The proceeds held in the trust account will be invested only in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We will disclose in each quarterly and annual report filed with the SEC prior to our initial business combination whether the proceeds deposited in the trust account are invested in U.S. government treasury obligations or money market funds or a combination thereof. 
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+Unless and until we complete our initial business combination, we may pay our expenses only from
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+any loans or additional investments from the members of our management team or their affiliates or other third parties, although they are under no obligation to advance funds to, or invest in, us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. 
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+Conditions to completing our initial business combination 
+
+There is no limitation on our ability to raise funds privately, including pursuant to any specified future issuance, or through loans in connection with our initial business combination. Our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount). The requirement that the target business or businesses together have an aggregate fair market value equal to at least 80% of the assets held in the trust account will be set forth in our amended and restated memorandum and articles of association, and will continue to apply to us even if our securities are no longer listed on the NASDAQ. 
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+If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own or 
+
+ 
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+acquire shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. 
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+11
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+Table of Contents
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+We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons. However, we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the outstanding equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired by us is what will be valued for purposes of the 80% of net assets test, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable. 
+
+ 
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+Permitted purchases of, and other transactions with respect to, our securities by our affiliates 
+
+If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial shareholders, directors, officers, advisors or 
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+12
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+Table of Contents
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+their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. There is no limit on the number of securities our directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of the NASDAQ. Any such price per share may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our initial shareholders, directors, officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to refrain from purchasing our securities during certain blackout periods and when they are in possession of any material non-public information and to clear all trades with our legal counsel prior to execution. 
+
+ 
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+We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as such purchases will be dependent upon several factors, including, but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary. 
+
+ 
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+Redemption rights for public shareholders upon completion of our initial business combination 
+
+We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our tax obligations, net of taxes payable, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive (i) their redemption rights with respect to any founder shares and any public shares held by them in connection 
+
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+
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+
+with the completion of our initial business combination and (ii) their redemption rights with respect to any founder shares and any public shares held by them in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination 
+
+ 
+
+or to redeem 100% of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders rights or pre-initial business combination activity. 
+
+ 
+
+Manner of conducting redemptions 
+
+We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. Except as required by applicable law or stock exchange rule, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We intend to conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC unless shareholder approval is required by applicable law or stock exchange listing requirements or we choose to seek shareholder approval for business or other reasons. 
+
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+ 
+
+If a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of association: 
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+13
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+Table of Contents
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+conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and 
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+file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business 
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+combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. 
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+ 
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+ 
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+Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we will terminate any plan established in accordance with Rule 10b5-1 under the Exchange Act to purchase the ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act. 
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+In the event that we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares, which number will be based on the requirement that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters fees and commissions (so that we do not then become subject to the SEC s penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination, and instead may search for an alternate business combination. 
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+If, however, shareholder approval of the transaction is required by law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, we will: 
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+conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and 
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+14
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+file proxy materials with the SEC. 
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+If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. Our officers and directors will count towards this quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding ordinary shares 
+
+ 
+
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+voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to their founder shares, we would need 500,001, or 7.14% (assuming all outstanding shares are voted), or 0, or 0% (assuming only the minimum number of shares representing a quorum are voted), of the 4,000,000 public shares sold in this offering to be voted in favor of a transaction in order to have our initial business combination approved. 
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+We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our officers and directors, may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. 
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+We may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. We believe that this will allow 
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+15
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+Table of Contents
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+our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public shareholders, which could delay redemptions and result in additional administrative cost. If the proposed business combination is not approved and we continue to search for a target company, we will promptly return any certificates delivered, or shares tendered electronically, by public shareholders who elected to redeem their shares. 
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+Our amended and restated memorandum and articles of association will provide that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters fees and commissions (so that we do not then become subject to the SEC s penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate 
+
+ 
+
+ 
+
+purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all ordinary shares submitted for redemption will be returned to the holders thereof, and instead may search for an alternate business combination. 
+
+ 
+
+Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold shareholder vote 
+
+Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct 
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+16
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+redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination. 
+
+ 
+
+Redemption rights in connection with proposed amendments to our amended and restated memorandum and articles of association 
+
+Some other blank check companies have a provision in their memorandum and articles which prohibits the amendment of certain provisions. Our amended and restated memorandum and articles of association will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering 
+
+17
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+ 
+
+into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution adopted by the affirmative vote of at least a two-thirds (2/3) majority, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares entitled to vote thereon. We may not issue additional securities that would entitle the holders thereof, prior to our initial business combination, to (1) receive funds from the trust account or (2) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association. Our initial shareholder, who will beneficially own 42.9% of our ordinary shares upon the closing of this offering (assuming they do not purchase any shares in this offering), may participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. Our officers, and directors have agreed, pursuant to a letter agreement with us (filed as an exhibit to the registration statement of which this prospectus forms a part), that they will not propose any amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest 
+
+ 
+
+shall be net of taxes payable) divided by the number of then outstanding public shares. Our officers and directors have entered into 
+
+ 
+
+ 
+
+a letter agreement with us pursuant to which they have agreed to waive (i) their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination, and (ii) their redemption rights with respect to any founder shares and any public shares held by them in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders rights or pre-initial business combination activity. 
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+18
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+Release of funds in trust account on closing of our initial business combination 
+
+On the completion of our initial business combination, all amounts held in the trust account will be disbursed directly by the trustee or released to us to pay amounts due to any public shareholders who properly exercise their redemption rights as described above adjacent to Redemption rights for public shareholders upon completion of our initial business combination, to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other assets, companies or for working capital. 
+
+Redemption of public shares and distribution and liquidation if no initial business combination 
+
+Our amended and restated memorandum and articles of association will provide that we will have only 24 months from the closing of this offering to complete our initial business combination. If we have not completed our initial business combination within such time period or during any Extension Period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, net of taxes payable (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. 
+
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+
+ 
+
+Our officers and directors have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our officers or directors acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time period. 
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+The underwriters have agreed to waive their rights to their deferred underwriting commission held in 
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+19
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+Table of Contents
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+the trust account in the event we do not complete our initial business combination and subsequently liquidate and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares. 
+
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+Limited payments to insiders 
+
+There will be no finder s fees, reimbursements or cash payments made by us to our officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination. However, the following payments will be made to our officers or directors, or our or their affiliates, none of which will be made from the proceeds of this offering held in the trust account prior to the completion of our initial business combination: 
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+Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and 
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+Repayment of loans which may be made by certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. The terms of such loans have not been determined nor have any written agreements been executed with respect 
+
+ 
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+thereto. 
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+Our audit committee will review on a quarterly basis all payments that were made by us to our officers or directors, or our or their affiliates. 
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+Audit Committee 
+
+We will establish and maintain an audit committee, which will be composed entirely of independent directors to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section of this prospectus entitled Management Committees of the Board of Directors Audit Committee. 
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+20
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+Table of Contents
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+Conflicts of Interest 
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+Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability complete our business combination. Our amended and restated memorandum and articles of association will provide that to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the 
+
+ 
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+same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. 
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+Risks 
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+We are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see the section of this prospectus entitled Proposed Business Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419. You should carefully consider these and the other risks set forth in the section of this prospectus entitled Risk Factors. 
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+Cautionary note regarding forward-looking statements and risk factor
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+F-1/A 1 zxtyf1a.htm As filed with the Securities and Exchange Commission on August 11, 2023. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM F-1 REGISTRATION STATEMENT Under The Securities Act of 1933 ZHONGXING HOLDING GROUP LTD (Exact name of Registrant as specified in its charter) United Kingdom 3949 Not Applicable (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) ORTON SOUTHGATE #100, 12 MANASTY ROAD PETERBOROUGH, PE2 6UP UNITED KINGDOM Tel:+44 07874693798 (Address, including zip code, and telephone number, including area code, of Registrant s principal executive offices) Copies to: Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 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 post-effective amendment filed pursuant to Rule 462(d) 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. 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 x 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. x 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, as amended, or until the 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 preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted. i PRELIMINARY PROSPECTUS (Subject to Completion) Dated August 11, 2023. PRELIMINARY PROSPECTUS Ordinary Shares We are offering ordinary shares. This is the initial public offering of ordinary shares of . The offering price of our ordinary shares in this offering is expected to be $6.90 per share. Prior to this offering, there has been no public market for our ordinary shares. We have applied to list our ordinary shares on the Nasdaq Capital Market under the symbol "ZXTY". There is no assurance that such application will be approved, and if our application is not approved, this offering may not be completed. Investing in our ordinary shares involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our ordinary shares in "Risk Factors". We are an "emerging growth company" as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company" for additional information. Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. We are a holding company incorporated in the United Kingdom as a holding company. The Ordinary Shares offered in this prospectus are shares of the United Kingdom holding company. Holders of our Ordinary Shares will own shares of a United Kingdom holding company. The UK regulatory authorities could disallow our corporate structure, which would likely result in a material change in our operations and/or a material change in the value of our Ordinary Shares, including that it could cause the value of our Ordinary Shares to significantly decline or become worthless. Unless otherwise stated, as used in this prospectus and in the context of describing our operations and consolidated financial information, "we," "us," "Company," or "our," refers to ZHONGXING HOLDING GROUP LTD, a United Kingdom holding company. For a description of our corporate structure, see "Corporate History and Structure." See also "Risk Factors – Risks Relating to Our Corporate Structure." PER SHARE TOTAL Initial public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ (1) Does not include accountable and non-accountable expense allowance payable to underwriters. Please see the section of this prospectus entitled "Underwriting" for additional information regarding underwriter compensation. We expect our total cash expenses for this offering (including cash expenses payable to our underwriters for their out-of-pocket expenses) to be approximately $[ ], exclusive of the above commissions. In addition, we will pay additional items of value in connection with this offering that are viewed by the Financial Industry Regulatory Authority, or FINRA, as underwriting compensation. These payments will further reduce proceeds available to us before expenses. See "Underwriting." ii Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor any of the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock. For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States. Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. iv Table of Contents About This Prospectus This prospectus is part of a registration statement on Form F-1 that we filed with the Securities and Exchange Commission (the "SEC"). As permitted by the rules and regulations of the SEC, the registration statement filed by us includes additional information not contained in this prospectus. You may read the registration statement and the other reports we file with the SEC at the SEC s website described below under the heading "Where You Can Find More Information". The information contained in this prospectus is accurate as of the date on the front of this prospectus only, regardless of the time of delivery of this prospectus or of any sale of our Common Shares. Our business, financial condition, results of operations and prospects may have changed since that date. This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. In this prospectus, unless the context otherwise requires: references to "Common Shares" or "our shares" refer to common shares of ZHONGXING HOLDING GROUP LTD; references to the "Company," "we," "us," "our" and "ZXTY" refer to ZHONGXING HOLDING GROUP LTD; references to "dollars," "U.S. dollars," "USD," "$," and "US$" are to United States Dollars; "U.S. GAAP" refers to generally accepted accounting principles in the United States; references to the "SEC" are to the United States Securities and Exchange Commission. Market data and certain industry data and forecasts used in, or incorporated by reference in, this prospectus were obtained from sources we believe to be reliable, including market research databases, publicly available information, reports of governmental agencies and industry publications and surveys. We have relied on certain data from third-party sources, including internal surveys, industry forecasts and market research, which we believe to be reliable based on our management s knowledge of the industry. Forecasts are particularly likely to be inaccurate, especially over long periods of time. In addition, we do not necessarily know what assumptions regarding general economic growth were used in preparing the third-party forecasts we cite. Statements as to our market position are based on the most currently available data. While we are not aware of any misstatements regarding the industry data presented in this prospectus, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus. Our historical results do not necessarily indicate our expected results for any future periods. Certain figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. We have obtained the statistical data, market data and other industry data and forecasts used in this prospectus and in our SEC filings incorporated herein by reference from publicly available information. We have not sought the consent of the sources to refer to the publicly available reports in this prospectus. v Table of Contents INTERNATIONAL FINANCIAL REPORTING STANDARDS Our financial statements are prepared in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board. Our fiscal year ends on December 31 of each year as does our reporting year. We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. MARKET AND INDUSTRY DATA This prospectus contains references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us. Some data is also based on our good faith estimates, which are derived from our review of internal surveys or data, as well as the independent sources referenced above. Assumptions and estimates of our and our industry s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors." These and other factors could cause future performance to differ materially from our assumptions and estimates. See "Cautionary Note Regarding Forward-Looking Statements." TRADEMARKS We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus also contains additional trademarks, trade names and service marks belonging to other companies. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the , or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties. vi Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Various statements contained in this prospectus, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include projections and estimates concerning our possible or assumed future results of operations, financial condition, business strategies and plans, market opportunity, competitive position, industry environment, and potential growth opportunities. In some cases, you can identify forward-looking statements by terms such as "may", "might", "will", "should", "believe", "expect", "could", "would", "intend", "plan", "anticipate", "estimate", "continue", "predict", "project", "potential", "target," "goal" or other words that convey the uncertainty of future events or outcomes. You can also identify forward-looking statements by discussions of strategy, plans or intentions. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, because forward-looking statements relate to matters that have not yet occurred, they are inherently subject to significant business, competitive, economic, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These and other important factors, including, among others, those discussed in this prospectus under the headings "Risk Factors", "Management s Discussion and Analysis of Financial Condition and Results of Operations" and "Business", may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements in this prospectus, including among other things: our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, including capital expenditures related to asset-intensive offerings, our ability to determine reserves and our ability to achieve and maintain future profitability; risks inherent in an SPORTING & ATHLETIC GOODS, NEC business; our ability to develop and market new products; the continued market acceptance of our products; exposure to product liability claims and actions; risks associated with product recalls; the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; our ability to manage operations-related risk; our expectations and management of future growth; our expectations concerning relationships with third parties; the impact of COVID-19 on the Company; our ability to maintain, protect and enhance our intellectual property; our ability to successfully acquire and integrate companies and assets; the increased expenses associated with being a public company; exposure to product liability and defect claims; protection of our intellectual property rights; damage to our reputation due to negative publicity; changes in the laws that affect our operations; inflation and fluctuations in foreign currency exchange rates; our ability to obtain all necessary government support; certifications, approvals, and/or licenses to conduct our business; continued development of a public trading market for our securities; the cost of complying with current and future governmental regulations and the impact of any changes in the regulations on our operations; risks related to our international operations in the United Kingdom, including the implications of the United Kingdom s recent withdrawal from the European Union; vii Table of Contents risks associated with expansion into new jurisdictions; managing our growth effectively; fluctuations in operating results; emerging market risks; global economy risks; our ability to maintain and enhance our market position; our ability to obtain and maintain adequate insurance coverage; our ability to identify and integrate strategic acquisitions, investments and partnerships and to manage our growth; our ability to continue to develop new technologies and/or upgrade our existing technologies; dependence on our senior management and key employees; our ability to maintain the listing of our securities on Nasdaq; our ability to continue to develop new technologies and/or upgrade our existing technologies;and other factors set forth under "Risk Factors." We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled "Risk Factors" and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. These and other factors are more fully discussed in the "Risk Factors", "Management s Discussion and Analysis of Financial Condition and Results of Operations" and "Business" sections and elsewhere in this prospectus. These risks could cause actual results to differ materially from those implied by the forward-looking statements contained in this prospectus. All forward-looking statements included herein attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Any forward-looking statement that we make in this prospectus speaks only as of the date of this prospectus. Except as required by applicable law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements in this prospectus, whether as a result of new information, future events or otherwise, after the date of this prospectus. viii Table of Contents As filed with the Securities and Exchange Commission on August 11, 2023. PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus that we consider important. This summary does not contain all of the information you should consider before investing in our Common Shares. You should read this summary together with the entire prospectus, including the risks related to our business, our industry, investing in our Common Shares and our location in British that we describe under "Risk Factors" and our consolidated financial statements and the related notes before making an investment in our securities. Our Mission ZHONGXING HOLDING GROUP LTD is a brand company focusing on providing high-quality high-tech sports and fitness services for students, young people, professionals, middle-aged and elderly people and other groups. It has a complete service process and perfect fitness equipment, and accurately matches individual needs with a powerful digital system. Form a personalized fitness program. The company focuses on the service innovation of the sports and fitness service market, and helps offline stores to rapidly enhance their brand power and influence through digital, standardized, technological and large-scale operations. At the same time, through the analysis of human body index data, it provides users with a set of systematic and intelligent fitness sports solutions suitable for their own individuals based on accurate analysis of scientific data. Through intelligent equipment, big data analysis, digital operation and other high-tech equipment and digital operation tools, through the fitness data collection system and digital big data analysis system of physical exercise, scientific, accurate and effective to improve the physical fitness of the people, and create a global sports fitness service industry of national fitness, inclusive sports and intelligent fitness. The vision of ZHONGXING HOLDING GROUP LTD is to continuously develop a scientific digital operation system and an accurate exercise data analysis method for fitness through its unique and powerful online and offline linkage capabilities, as well as supporting accurate intelligent wearable devices that can digitally confirm rights. Through the analysis of the user's body index data, it provides users with a personalized systematic intelligent fitness program, so as to change people's unhealthy living habits and exercise methods, solve the problem of declining physical fitness and sub-health of various people after the current epidemic, create an international intelligent sports fitness service industry ecology, and help improve the physical health index of all mankind. The goal of ZHONGXING HOLDING GROUP LTD is to build a digital first-class enterprise for national sports and fitness. Using scientific digital intelligent fitness theory and data analysis system, the company strives to become the first in the digital intelligent fitness industry, constantly innovates, introduces high-tech digital analysis technology, enhances its core competitiveness, and customizes and promotes fitness programs and fitness equipment. In the future, it is expected to become a benchmark brand in the digital national intelligent fitness industry in all aspects of volume and scale, brand awareness, and product quality. ZHONGXING HOLDING GROUP LTD will adhere to the belief of customer first, sincere and trustworthy, quality first, adhere to and realize the mission of striving to improve the public's health and better future. Overview of Our Company ZHONGXING HOLDING GROUP LTD is a high-tech digital sports operation company dedicated to national fitness, inclusive sports and intelligent fitness. 1 Table of Contents The company responds to the international trend of health, vitality and green, and establishes the concept of sports promoting health, national participation and sports fitness. Before the establishment of the company, our founder began to study the results of sports and fitness. After the establishment of the company, we used the data results accumulated over the years to guide the implementation of professional fitness sports projects. Through intelligent equipment, big data analysis, digital operation and other high-tech equipment and digital operation tools, a large number of physical exercise fitness data are collected and imported into the system, and through the digital big data analysis system, scientific and accurate calculation and analysis of fitness plans and needs can effectively improve the physical fitness of the whole people, and reduce and prevent the incidence of chronic diseases in a large area. In order to reduce sub-health conditions and achieve the goal of overall national health. The company will continue to develop scientific digital operation systems and sports data analysis methods for accurate fitness, as well as matching accurate intelligent wearable devices that have been digitally confirmed. Through the analysis of human index data, to provide users with a set of scientific data accurate analysis based on their own individual systematic intelligent fitness program, so as to change people's unhealthy living habits and exercise methods, to achieve the purpose of national health. Driven by the development of the market, the company will also develop community streets as a model market, integrating public fitness venues, fitness facilities and other aspects of fitness sports resources. Through systematic analysis of resource allocation, precise analysis of individual physical data indicators, digital operation, integration of national fitness resources to form a local fitness sports ecosystem suitable for local communities, replicated and promoted to all over the world, to achieve the company's purpose of national health. History and Development ZHONGXING HOLDING GROUP LTD was incorporated on 21 July 2023 with a registered address at #100, 12 MANASTY ROAD, ORTON SOUTHGATE, PETERBOROUGH, UNITED KINGDOM. Since its establishment, the company has been committed to promoting innovation in fitness market services. We adopt accurate, standardized, digital and intelligent operation methods to help offline stores quickly enhance brand power and influence, and create a fitness service industry with the concept of national fitness, national sports and intelligent fitness. Through the concept of sports for all, we systematically analyze and allocate resources, accurately analyze individual physical data indicators, and carry out digital operations. In addition, we also integrate national fitness resources to form a local fitness sports ecosystem suitable for local communities to achieve our company purpose - health for all. In the fitness service market, we are committed to integrating various resources and providing fitness services that meet individual needs through a precise operation model. Through systematic analysis, we can fully understand the needs of different groups, and carry out accurate analysis according to their physical data indicators, so as to provide tailored fitness programs for them. This personalized service model can not only meet the needs of users, but also help them achieve better results in the fitness process. At the same time, we apply digital technology to all aspects of fitness services, and improve the efficiency and quality of services through data analysis and intelligent operation means. We collect users' fitness data, analyze their exercise and physical condition, and provide them with accurate fitness guidance and advice. During the fitness process, we also use smart devices and apps to track users' exercise data, providing real-time feedback and incentives to help them better achieve their fitness goals. In addition, we work with National Fitness Resources to create a local fitness sports ecosystem suitable for local communities. Through partnerships with relevant institutions, community organizations and the public sector, we have integrated a wealth of fitness resources, including venue facilities, professional coaches and fitness activities. In this way, it can not only meet the fitness needs of local residents, but also promote the development of a healthy culture in the community and promote the popularization of the national fitness concept. 2 Table of Contents All in all, our company has been committed to driving innovation and development of services for the fitness market since its inception. Through precise, standardized, digital and intelligent operation methods, we help offline stores to enhance brand power and influence, and create a fitness service industry with the concept of national fitness and intelligent fitness. Through resource analysis and accurate analysis of individual physical data indicators, digital operation and integration with national fitness resources, we achieve the corporate purpose of national health. The Industry Industry analysis Fitness is a kind of sports, such as various calisthenics, rhythmic gymnastics, figure gymnastics and various resistance movements. With the development of society and the improvement of people's health awareness, fitness has become a popular way to reduce stress and maintain good health. Science says you should exercise at least three times a week if you want to reduce stress and improve fitness. In recent years, with the help of the rapid development of science and technology, the development of the fitness industry has accelerated, especially in the Olympic Games, college athletes, the East Olympic Games, the World Cup and other large-scale international events driven by the fitness trend, the fitness industry has maintained stable development, and gradually to developed countries, and even less developed cities, online and offline synchronous expansion, fitness demand is growing. And fitness needs to gradually upgrade, the industry is booming, spawned a variety of online fitness services, home fitness services and intelligent fitness equipment and other industries. At present, the upstream of the fitness industry includes fitness equipment, coach training, course research and development; The midstream includes offline gyms, O2O and fitness apps, covering all kinds of fitness scenes online and offline; The downstream includes data management, social platforms, information search, and sports surrounding to meet the different derivative needs of consumers. In the context of the development of the Internet, scientific and technological progress, and favorable policies, the sports and fitness industry continues to develop, especially since the outbreak of the novel coronavirus pneumonia epidemic, sports and fitness have attracted increasing attention, and the fitness industry has accelerated its online penetration, and online fitness has developed rapidly. It can be seen that the fitness industry has a broad prospect. Industry data I. Fitness industry market size. In recent years, the market size of the fitness industry has maintained a growing trend, the fitness concept has penetrated into developed countries and even less developed cities, the fitness population is increasing, and the market size of the fitness industry has steadily increased. In the past, gyms were dominated by men, but with the rise of the she-economy in recent years, more and more women are making fitness a daily habit. In 2022, the proportion of female fitness consumers reached 61.93%, which increased rapidly from 2021, and the gap between women and men in the fitness consumption market widened. In terms of consumer spending, in 2022, female consumers will spend more than 10,000 yuan on fitness consumption and peripheral consumption than men. From the perspective of age structure, the largest sports consumption group is young people aged 26 to 35, accounting for more than 40%, followed by 36 to 50 years old and 19 to 25 years old. 3 Table of Contents II. Fitness industry market structure. At present, the fitness industry market size is mainly divided into fitness equipment, fitness clubs and studios and online fitness, accounting for 49%, 36% and 15% respectively. Although the proportion of online fitness is not high, due to the impact of the epidemic, sports fitness has gradually received attention, traditional gyms have been affected, and the trend of online fitness has begun to strengthen. III. Online fitness market size. In recent years, due to the rapid development of the Internet, the online fitness market has been growing. Especially since the new coronavirus outbreak in 2020, great health has become people's basic needs, sports and fitness have received attention, the fitness industry has accelerated online penetration, and the online fitness market has grown rapidly. IV. Online fitness market industrial structure. From the perspective of market structure, China's online fitness market mainly includes four major segments: online health food, online fitness equipment and clothing, online fitness Internet of Things and online fitness members and courses. V. Online fitness market penetration. In recent years, with the national fitness boom and the development of the online fitness industry, the online fitness market penetration has been increasing, from 18% in 2017 to 46% in 2021. Industry pain point I. At present, there are a large number of sub-health people, there is no quality product can prevent and improve, through the national fitness to gradually improve the physical function and physical fitness, to prevent major diseases, especially since the outbreak of the epidemic, the national health awareness concept is constantly improving. According to incomplete statistics, the data of sub-healthy people currently exist: 160 million people with dyslipidemia (including hyperlipidemia), more than 100 million people with hyperlipidemia, about 120 million people with fatty liver, 270 million people with hypertension, 92.4 million people with diabetes, 70 million to 200 million people who are overweight or obese, one person has cancer every 10 seconds on average, one person has diabetes every 30 seconds on average, At least one person died of cardiovascular disease. II. There is no technical threshold, the gym has a low threshold and is easy to be copied. In 2017, the number of gyms has reached more than 100,000, of which 70.2% are fitness studios, and large clubs account for 29.8%. At present, there are a large number of fitness instructors with professional certificates flooding the market. III. The market competition is fierce, and the promotion channel is single and inefficient. At present, the most common way of publicity is to assign manpower around gyms to distribute leaflets. Moreover, considering the convenience of fitness, many gyms are located close to the community, and it is very common to compete within 1-3km. Some large communities even open more than 5 gyms, forming vicious competition and dispersed passenger flow. As a result, many gyms can only be forced to do some activities with greater discounts in order to compete for customers, leading to surrounding gyms to follow suit, fight a price war, and the competition is becoming increasingly fierce. IV. The use of Internet traffic dividends is still lacking, online fitness is rising, the current fitness industry in the face of the Internet wave can not keep up with the pace will be eliminated, embrace the Internet, explore a more healthy and sustainable development of the business model is more favorable. V. Lack of data analysis, resulting in weak personalized service, members of the specific physical indicators of the data is fuzzy and inaccurate, the service level can not afford to be uneven, chain stores also have quality distinctions. The fitness industry's high turnover rate, uneven levels of trainers, uneven quality of service, large number of chain store employees, and lack of supervision are all headaches for many gym owners. 4 Table of Contents VI. It is difficult to reach the pain points and needs of users, and there is a lack of customized fitness programs for users of different ages. As the traditional gym model has a single means of operation, mainly annual card + private education fee, group classes and small classes are bundled sales, mainly annual card, group classes and small classes, lack of personalized customized fitness programs for users of different ages. VII. There is a serious shortage of professional talents and resources in the sports and fitness industry, and the personnel training system is chaotic. Gym industry personnel turnover is high, many fitness coaches will change jobs after a period of time, plus many single stores on staff treatment, attitude, store business will also affect the coach's stay and go, and it is easy to appear excellent employees to start their own businesses, resulting in the lack of store training system, so that many coaches still stay in the initial stage, received system training to drink high level of coaches less. So a series of problems lead to customer loss. Industry forecast I. Policies to promote the development of fitness industry. In recent years, a number of policies have been introduced to promote the development of the sports industry in many places, and a number of industrial plans for niche sports have been successively released to encourage the innovative development of the sports and fitness industry. As the COVID-19 sweeps the world in 2020, In order to reduce the impact of the COVID-19 on the sports industry, many governments have encouraged residents to exercise at home, boosting the development of home fitness, Internet fitness and other industries. It is expected that with the help of government policies, the development of the fitness industry will develop rapidly and promote the market expansion of the fitness industry. The development prospects of the fitness industry are very broad, and the introduction of laws and regulations provides a strong policy and regulatory foundation for the development of the industry. Many places have issued laws, regulations and policies on the sports industry, clearly formulated the development plan of the sports industry, expanded the scale of the sports industry, and further refined many links in terms of guaranteeing the development of the sports fitness industry, which helps to promote the high-quality development of the sports industry and meet the diversified sports needs of the people. The sports industry has always been one of the five happiness industries. It is the policy trend of many countries to promote mass sports consumption, deeply implement the national fitness strategy, build a national trail system, promote the construction of sports parks, and develop new formats such as online fitness and online events. With the comprehensive liberalization of epidemic control and consumption upgrading, people's health awareness has been significantly improved, and residents' consumption has gradually transitioning from basic consumption and functional consumption to health consumption and experience consumption, and sports consumption has benefited significantly. II. The increase in sports participation is helping the fitness industry. In recent years, with the improvement of residents' living standards and the baptism of the novel coronavirus epidemic, people's health awareness has gradually increased, and the number of people who regularly participate in sports has also increased year by year. It is expected that the increasing number of sports participants will help the development of the fitness industry, and the market size of the fitness industry will maintain a growing trend. III. Intelligent fitness equipment drives the development of fitness industry. With the popularization of the Internet and the improvement of the level of science and technology, the intelligence of fitness equipment continues to improve, not only to increase the exercise fun of fitness users, relieve physical fatigue, but also pay more attention to the safety and personalization of fitness equipment. At the same time, the binding of smart fitness equipment with APP can improve the stickiness of fitness users, deeply explore the potential needs of users in the process of data collection, and continue to drive the development of the fitness industry. 5 Table of Contents IV. Fitness industry market structure adjustment and online fitness market scale is expanding rapidly. At present, the fitness industry market size is mainly divided into fitness equipment, fitness clubs and studios, government public inclusive fitness and online fitness, accounting for 49%, 36% and 15% respectively. Although the proportion of online fitness is not high, due to the impact of the epidemic, sports fitness has gradually received attention, traditional gyms have been affected, and the trend of online fitness has begun to strengthen. In recent years, due to the rapid development of the Internet, the online fitness market has been growing. Especially since the COVID-19 outbreak in 2020, great health has become people's basic needs, sports and fitness have received attention, the fitness industry has accelerated online penetration, and the online fitness market has grown rapidly. . The online fitness market structure is rich and optimized, and the market penetration rate is gradually increasing. From the perspective of market structure, the online fitness market mainly includes four major segments: online health food, online fitness equipment and clothing, online fitness Internet of Things, and online fitness membership and training courses. In recent years, with the national fitness craze and the development of online fitness industry, the online fitness market penetration has been increasing. Our Solution I. Major consumers of products or services. National fitness is not only a fashion habit of modern young people, but also after the epidemic, professionals and the elderly have accelerated the improvement of fitness awareness and concepts, which has become a popular health action. Suitable for students, young people, professionals, middle-aged and elderly people and other groups. II. The main reason consumers buy a product or service. i. ZHONGXING HOLDING GROUP LTD solves the problem of fragmented time for young people's fitness exercise, and forms a gathering place for professional counseling through the chain of intelligent fitness centers, and professional equipment can improve physical fitness more accurately. ii. Through cooperation with government departments, fitness and sports associations, universities for the elderly and other institutions, combined with free public venues and common fitness equipment provided by the government, it not only solves the problem of employment and entrepreneurship of fitness promoters, but also deeply popularizes fitness sports. Through these basic scenarios, a large number of membership systems and accurate data can be obtained. Provide a solid data foundation and membership system for precision fitness programs and customized fitness services. iii. ZHONGXING HOLDING GROUP LTD uses online and offline intelligent fitness equipment to accurately obtain members' physical data, and through data analysis, makes tailored fitness programs to accurately and quickly improve people's physical fitness. III. The company's current position in the industry and its target position. ZHONGXING HOLDING GROUP LTD was founded with a focus on becoming a leading provider of sports health solutions and smart fitness equipment. At present, the company plans to lay out the headquarters operation center, jointly build three intelligent equipment production bases, and build thousands of online and offline home fitness equipment sales and intelligent fitness services in one of the franchise chain network. Intelligent fitness products cover family fitness, commercial fitness, national fitness, physical training, fitness for the elderly, campus sports, fitness venues dedicated solutions such as products and national inclusive fitness training services, sub-health conditioning and other fields. At present, the company uses scientific digital intelligent fitness theory and data analysis system, and strives to become the first industry in the field of digital intelligent fitness, constantly innovates, introduces high-tech digital analysis technology, enhances its core competitiveness, and customizes and promotes fitness programs and fitness equipment. In the future, it is expected to become a benchmark brand in the digital national intelligent fitness industry in all aspects of volume and scale, brand awareness, and product quality. 6 Table of Contents IV. Sales channel: i. New media network platform promotion: Establish your own brand on Twitter, ins, Tiktok and other social media platforms, promote your own services and products, establish contact with potential customers, and increase exposure and popularity. ii. Franchise chain regional agent: By winning the agency of the city, district and county region, opening a number of branches in the region according to the specific market conditions, forming a national market promotion layout of thousands of stores. iii. Member system digital introduction and joint promotion platform: Through big data analysis, advertising to potential customers at the appropriate time and scene, such as providing sports fitness services for people with higher fitness needs and people who have first contact with sports fitness. iv. Partner marketing: Cooperate with relevant enterprise franchisees, such as sports equipment stores, sports clubs, etc., so that they can recommend their services and products to customers to improve visibility and exposure. v. Recommendation and word-of-mouth marketing: By providing high-quality services and products, students who buy services and products are satisfied and leave praise, so that more potential customers in the wait-and-see stage can understand and serve, and improve visibility and exposure. Our Products And Services Driven by the big environment, ZHONGXING HOLDING GROUP LTD is committed to developing the sports industry, and has a number of advanced technologies and patents, and has devoted itself to developing a variety of series products, which are listed as follows: I. Fitness equipment series products: ZHONGXING HOLDING GROUP LTD launched bench press, treadmill, stationary bicycle, elliptical machine, butterfly machine and other fitness equipment, each fitness equipment has played a different role in exercise. Such as: i. Treadmill is a convenient, time-saving, and not affected by the weather equipment, and often running can protect the heart, the heart is an important organ of the human body easy to age, the normal function of the heart has a direct impact on the function of other internal organs. ii. The elliptical machine can successfully combine the movement of the arm and the leg organically to achieve the purpose of limb coordination and bodybuilding line, and the movement of the foot pedal is conducive to cardiopulmonary function training, the amount of exercise is not too large, and it is suitable for people of different ages. iii. Stationary bicycle is a kind of exercise through the practice of different speeds and resistance, coupled with the dynamic music beat in the gym, colorful lights, let you sweat like rain, burn your excess fat exercise. iv. The advantage of the butterfly chest clip is that it does not change with the change of arm position. Because the chest can be lifted and the abdomen can be pulled in, the hand handles can touch each other, so the range of action can be larger. v. The Smith frame is limited in the sliding trajectory of the barbell, and the trainer can feel free to use large weights, and it is not only limited to squat training, but also can do bench press. It is an important safety device for beginners. vi. Bench press, that is, the instrument to assist in bench press. The bench press mainly works the muscles of the chest and upper limbs, and there are many variations. The free-weight barbell flat bench press can push 16% more weight than the Smith machine. II. Smart wearable fitness series products: smart wearable fitness series products are the most common smart bracelet, smart watch is a smart mobile device and smart wearable device function integration of the watch, it can carry out phone, SMS, email, music and other aspects of the operation, with notification reminder, health management, sports monitoring, voice control and other functions. Smart watches can provide more entertainment for our fitness time; In the fitness through the smart watch can also be faster to deal with messages, emails and so on; Smart watches can also assist in sports monitoring and health management, which is one of the more practical smart wearable products in life. ZHONGXING HOLDING GROUP LTD has independently developed smart bracelets with various styles, which are favored by consumers. 7 Table of Contents III. Intelligent analysis fitness equipment and data analysis system: Intelligent data analysis system refers to the use of computer image analysis technology, understanding the content of the video screen, by separating the background and the target in the scene to analyze and track the target in the camera scene. Intelligent analysis fitness equipment can analyze personal fitness data according to the user's fitness habits and personal fitness methods, collect the data and import it into the intelligent data analysis system, which conducts data analysis and optimizes the user's fitness plan and way according to each data change, providing users with a more suitable fitness mode and giving users a better sense of experience. IV. Smart gym chain and inclusive fitness base: ZHONGXING HOLDING GROUP LTD aims to promote the popularity of smart gym chain stores and provide users with more smart fitness equipment and products. In addition, the one-stop purchase of Pratt & Whitney Fitness base, which provides a combination of value, is also one of the services we provide. In the future, ZHONGXING HOLDING GROUP LTD will continue to develop and improve fitness products and systems in combination with the different needs of consumer groups, so that everyone can have their own private fitness plans through intelligent system analysis and develop fitness methods that are more suitable for themselves. Our business model ZHONGXING HOLDING GROUP LTD has carried out bold exploration and innovation for the traditional fitness and health management model, and formed a digital fitness ecological innovative business model. I. Community Fitness points model: The company creates a new fitness points ecosystem, quickly forms a national fitness data drainage entrance, and forms a multi-billion member system. By using the public fitness venues and facilities provided by the government, exercisers can obtain green fitness points through daily fitness exercises. The benchmark of green fitness points is converted into coupons for exercise and fitness in professional fitness venues or purchase of fitness equipment products, and the entry point discount accumulated by exercisers' daily consumption and the consumer capital profit created is transformed into a points quantization system. Detonate and improve the new efforts of users, accelerate the promotion of new expansion mechanisms, continue to stimulate the vitality of consumer fitness, promote the deep integration of online and offline, have more public fitness communities, form big data membership systems, create countless business opportunities and empower business ecosystem profit points, For professional fitness promotion channels, product attention, reputation, loyalty, traffic data, marketing model, science and technology research and development, brand promotion and other resources redistribution, to create a hot storm eye drainage fitness track, so that mass fitness become a popular sport, to achieve the dual benefits of fitness exercise and fitness consumption redistribution. II. Digital intelligent fitness chain model: ZHONGXING HOLDING GROUP LTD has established an independent innovation fitness course research and development system, body mechanics system, health management system and sub-health conditioning system. Through the digital operation technology system, Zhongxing has realized a digital fitness chain with unified management, promotion, sales and support from the headquarters. To build a diversified digital fitness industry chain service platform. With the unique and innovative online course training system and partnership mechanism, the company develops the national regional agents and franchise store chain system, online and offline multi-channel publicity and enrollment, the whole store output, expansion and replication, marketing promotion channels covering e-commerce platform, new media marketing platform, Tiktok live and other mainstream new media marketing matrix. At the same time, we cooperate with sports and fitness associations, government departments, universities for the elderly and other departments to innovate business systems and fully implement applications. Through the franchise chain model of direct digital operation, it covers the fitness industry ecosystem with online + offline + omni-channel and builds a 10-million-level digital member community system with sharing partners + Zhongxing Courses + full-service system. 8 Table of Contents III. Integrated Fitness Alliance mode: ZHONGXING HOLDING GROUP LTD has joined hands with high-quality intelligent products and venues in the upstream and downstream of the fitness industry chain, integrated high-end customized fitness center enterprises, intelligent fitness equipment enterprises, large health conditioning supply chain enterprises, Internet member integration system, etc., and joined hands in an all-round omni-channel cooperation to form a big data system. Integration produces value shaping and multiple benefits in the fields of private customization, high-end fitness consumption, digital industrialization services, and win-win development. Our Competitive Strengths Through its unique and powerful online and offline linkage capabilities, ZHONGXING HOLDING GROUP LTD accurately matches individual needs with a powerful digital system to form personalized fitness programs. Through the analysis of the user's body index data, it provides users with a personalized systematic intelligent fitness program, changes people's unhealthy living habits and exercise methods, and solves the problem of declining physical fitness and sub-health of various people after the current epidemic. ZHONGXING HOLDING GROUP LTD makes use of scientific digital intelligent fitness theory and data analysis system to become a competitive enterprise in the field of digital intelligent fitness. It breaks the geographical and social restrictions, so that people in different occupations and different ages who are restricted by traditional fitness conditions can achieve online physical fitness. The platform will use big data to identify physical data of objects, and provide them with unique intelligent fitness programs that are more suitable for individual personalization according to the data provided by the intelligent system. ZHONGXING HOLDING GROUP LTD hopes that through intelligent equipment, big data analysis, digital operation and other high-tech equipment and digital operation tools, through the physical exercise fitness data collection system and digital big data analysis system, to create an intelligent fitness program database based on the update of users' own health and fitness needs. At the same time, through the layout of offline stores, to serve the customers of ZHONGXING HOLDING GROUP LTD. Under the trend of population aging, the demand for the elderly to pursue health is increasing, and how to carry out scientific and effective physical fitness activities for the elderly also has certain limitations, this market is currently in a rapid development stage, but it is a relatively blank place. Combined with the development plan of ZHONGXING HOLDING GROUP LTD, its competitive advantages can be summarized as follows: I. User data: Through its unique and powerful online and offline linkage capabilities, ZHONGXING HOLDING GROUP LTD accurately matches individual needs with a powerful digital system. The combination of online and offline can attract more user traffic and help ZHONGXING HOLDING GROUP LTD effectively expand its market share. II. Professional services: ZHONGXING HOLDING GROUP LTD can develop a scientific digital operation system and an accurate exercise data analysis method for fitness, as well as supporting accurate intelligent wearable devices that can confirm rights digitally. Through the analysis of human index data, to provide users with a set of scientific data accurate analysis based on their own individual systematic intelligent fitness program, to help users better improve unhealthy living habits and exercise methods, so as to achieve effective fitness. 9 Table of Contents III. Brand awareness: ZHONGXING HOLDING GROUP LTD will build and form well-known brand benefits through the investment and distribution of various advertisements, as well as the company's own high-quality service level, diversified service content and innovative business scope with The Times, so as to help the company stand out in the fierce market competition. IV. Diversified service content: ZHONGXING HOLDING GROUP LTD will provide diversified service content according to different needs of social groups, including online services and offline services, to help users better meet their needs, improve user satisfaction and loyalty, and thus lock user traffic. V. Social media channels: ZHONGXING HOLDING GROUP LTD will promote through various social media channels. This can help enterprises promote their own services and attract more users. Meanwhile, through the online social platform, ZHONGXING HOLDING GROUP LTD can better promote the communication and interaction between enterprises and users. More in-depth understanding of users in the economic conditions and cultural background of contemporary society for their own health requirements and body aesthetic needs. Our Challenges I. Fierce market competition: When it comes to fitness technology companies, we have to mention Peloton Interactive, Inc. Peloton Interactive, Inc., a publicly traded fitness equipment and home fitness company headquartered in the United States, was founded in 2012 and is headquartered in New York. The company was co-founded by John Foley, Tom Cortese, Yony Feng, Graham Stanton and Hisao Kushi. They bring live classes from top fitness instructors to global customers and combine performance metrics and social interaction to make the fitness experience not only effective, but enjoyable. Peloton Interactive, Inc. combines live classes and on-demand fitness libraries to become an Internet fitness company that integrates fitness equipment + content + technology. Peloton Interactive, Inc. 's primary products are indoor exercise bikes, treadmachines, and rowing machines, as well as other wearable devices equipped with liquid crystal displays that connect to Peloton Interactive, Inc.' s subscription-based digital content platform. There is fierce competition in the digital sports operation market, and major companies have stepped into this space to provide various innovative solutions. For a start-up high-tech digital sports operations company, it can be difficult to stand out in the market compared to competitors who already have an established brand and customer base. II. Technical challenges: High-tech digital sports operation companies need to have advanced technical capabilities to meet the needs of users for real-time data, virtual reality and augmented reality. But the research and development and application of these technologies require a lot of capital and human resources investment, especially for startups, often difficult to bear these risks and costs. III. Lack of stable profit model: In the field of digital sports operation, the profit model is not clear, and the company often relies on advertising revenue, event operation service fees or cooperation with brands to obtain revenue. However, due to the fierce competition in the market, there are limited platforms where advertisers are willing to invest money, and working with brands also needs to establish a reliable user base and brand image, which is a challenge for startups. IV. It is difficult to cultivate and retain users: high-tech digital sports operating companies need to attract users, cultivate user engagement and keep users active. However, this requires continuous delivery of valuable content and experiences, as well as interaction and engagement with users. For start-up companies, there is often a lack of sufficient resources and capabilities to meet the needs of users, resulting in user loss. V. Regulations and policy restrictions: Digital sports operation involves the collection, storage and use of user data, and some countries and regions have formulated strict regulations and policies on personal privacy and data security. High-tech digital sports operation companies need to spend a lot of effort and resources to ensure compliance with the relevant protection of user privacy and data security. 10 Table of Contents In general, high-tech digital sports operating companies are facing a weak business in terms of fierce market competition, technical problems, unstable profit model, user training and retention difficulties, regulations and policy restrictions. Solving these problems requires companies to have innovative capabilities, financial strength and effective marketing strategies, while working with relevant government departments and industry bodies to jointly promote the development of the digital sports operation industry. Our market opportunity Under the background of the current development of the Internet, scientific and technological progress and favorable policies, the sports and fitness industry is showing a trend of sustainable development. Especially since the outbreak of the COVID-19 outbreak, people's attention to sports and fitness has been increasing, which has also accelerated the pace of fitness industry to penetrate online, and online fitness has developed rapidly. However, in the open social space, it is difficult to form a single dominant situation. Due to the diversification of market demand, people have different preferences for fitness methods and content, so there are multiple competitors to participate in the competition. Although the market competition is fierce, it also provides opportunities for ZHONGXING HOLDING GROUP LTD to seize market opportunities. As a competitive enterprise, ZHONGXING HOLDING GROUP LTD should take the initiative to adapt to changes in market demand, actively seek development opportunities and take the lead in the current international situation. First, companies should pay close attention to consumers' needs and preferences for online fitness, and launch more personalized and differentiated products and services for different groups. Secondly, the company should strengthen cooperation with related enterprises and achieve rapid development through resource sharing and mutually beneficial and win-win cooperation mode. At the same time, the company also needs to increase investment in scientific and technological innovation, the use of artificial intelligence big data analysis and other advanced technological means to improve product research and development and operational efficiency, to provide consumers with a better experience. In addition, when facing the international market, ZHONGXING HOLDING GROUP LTD should also actively expand overseas markets and find more partners and customers. Through the development of scientific internationalization strategy, combined with the local market demand and cultural characteristics, to promote the rapid development of the company in overseas markets. In short, the current international situation provides a broad development space for ZHONGXING HOLDING GROUP LTD to seize market opportunities. Companies can achieve their own rapid development and market leadership by paying close attention to market demand, strengthening cooperation, increasing investment in scientific and technological innovation, and expanding overseas markets. What we do ZHONGXING HOLDING GROUP LTD is a high-tech digital sports operation company dedicated to national fitness, intelligent fitness, scientific, accurate and effective improvement of national physical fitness. We have powerful digital operation tools and intelligent equipment. Integrate various fitness resources such as fitness venues and fitness facilities provided by the government, systematically analyze resource allocation, and accurately analyze individual physical data indicators; Based on the accurate analysis of scientific data, we create a systematic intelligent fitness program for users that suits their own individuals. 11 Table of Contents Our Corporate Structure The organizational structure of our company consists of a board of directors, a strategy committee and an executive committee. Mr. Lijie Wang serves as the chairman of the board, Ms. Fengyu Yang serves as the chief financial officer, Ms. Jihong Liu serves as the marketing director, and the management team has several core personnel to ensure the legal operation of the company and ensure the business development of the company. Our Strategy I. 2023 Enterprise planning preparation period: ZHONGXING HOLDING GROUP LTD completed the national fitness ecological strategic layout and the construction of digital technology system platform; Complete the layout of the headquarters operation center and the construction of three intelligent equipment production bases. II. 2024 Promotion and expansion financing M&A: i. Using the membership systems of government departments, fitness sports associations, elderly associations and other departments, promote the national fitness membership system to settle in the fitness industry digital ecological platform of ZHONGXING HOLDING GROUP LTD. ii. Build ZHONGXING HOLDING GROUP LTD fitness business headquarters base and model industrial park, and form a fitness sports display and experience area with multi-business integration. iii. Acting for the online and offline sales expansion of fitness brand products in the domestic market, building a digital fitness chain of ZHONGXING HOLDING GROUP LTD, and opening up the integration of online and offline membership systems. iv. Start the NASDAQ listing process. III. 2025 Patent application, industrial expansion, listing bell ringing transaction: i. Complete the theoretical system of independent brand patent intellectual property protection, intelligent fitness equipment, etc. ii. Self-owned brand products domestic market sales expansion; Improve ZHONGXING HOLDING GROUP LTD Qiancheng million store online and offline chain institutions. iii. Financing, mergers and acquisitions of upstream and downstream enterprises and high-quality products in the sports fitness industry chain to form a profit core value system. Help other enterprises to create customized brand products independently developed by ZHONGXING HOLDING GROUP LTD iv. Complete NASDAQ listing. IV. 2026 to complete the brand layout, improve the international market: i. ZHONGXING HOLDING GROUP LTD's self-branded fitness smart products enter the international fitness market. ii. Financing, mergers and acquisitions, help more other enterprise brands to enter the international trade market. iii. The formation of an international digital intelligent fitness product agent retail platform with a certain scale. iv. Into tens of millions of national fitness member data system. Risk Factors Summary ZHONGXING HOLDING GROUP LTD is a high-tech digital sports operation company dedicated to national fitness, intelligent fitness, scientific, accurate and effective improvement of national physical fitness. The factors affecting its operation can be roughly divided into social objective factors and internal factors. 12 Table of Contents I. Social objective factor i. Physical fitness and demographic structure. In the case of stable overall physical fitness and demographic structure, the market prospects of high-tech digital sports operating companies will be relatively stable. If the physical fitness status and demographics change, such as the overall physical fitness of people or the aging of the population, the market prospects of high-tech digital sports operators will be affected. ii. Level of economic development. The level of economic development also has a certain impact on the market prospects of high-tech digital sports operating companies. When the level of economic development is high, people will pay more attention to the quality of life after meeting the basic survival needs, and people's demand for healthy life will also increase, which will promote the development of high-tech digital sports operation companies. iii. Social and cultural background. Social and cultural context will also affect the market prospects of high-tech digital sports operation companies. In a society that strives for a thin aesthetic, the growth of high-tech digital sports operations companies may be limited; In a society more focused on fitness, the market prospects for high-tech digital sports operators may be better. iv. Social legal system. The social legal system has an impact on the operation of high-tech digital sports operating companies. If the social legal system is not perfect, high-tech digital sports operating companies will face greater risks. If the social legal system is not sound, high-tech digital sports operating companies will face greater risks, because the damage caused by fitness can not be protected by the legal system, people will lose basic confidence in fitness, resulting in reduced demand for fitness. v. Internet technology: The development of Internet technology has an impact on the operation of high-tech digital sports operation companies. The development of digital and intelligent high-tech digital sports operation companies depends on the development of contemporary Internet technology, can not adapt to the needs of Internet technology, will face the risk of elimination. vi. Economic globalization: Economic globalization has made the market competition of high-tech digital sports operation companies more intense, and the geographical scope of fitness equipment parts is no longer limited to a single region, but to countries around the world. Therefore, enterprises need to improve their competitiveness by improving service quality. II. Internal factors i. Cultural values. The cultural values of a high-tech digital sports operation company will determine the company's moral bottom line and code of conduct, and directly affect its internal employees and customers. ii. Recruitment and training. Enterprises need to recruit outstanding talents to ensure the long-term development of enterprises. In addition, training employees is also an important work of the company to ensure that employees have the ability to meet the development needs of the company. iii. Organizational structure and management mode. The organizational structure and management mode of the enterprise will affect the working atmosphere and incentive mechanism of the internal employees, and then affect the performance of the enterprise and customer satisfaction. iv. The financial situation. High-tech digital sports operating companies need a stable financial situation to support the operation and development of enterprises, which requires enterprises to reasonably plan budgets, control costs, and seek financial support. v. Product or service innovation. High-tech digital sports operation companies need to constantly innovate to ensure the competitiveness of products, which requires innovative talents in the enterprise to constantly explore and try new products or services. vi. Customer satisfaction. Customer satisfaction is one of the key indicators of enterprise development, which determines the loyalty and recommendation degree of customers to enterprises, and has a positive impact on enterprises. vii. Brand building and publicity. Enterprises need to improve their visibility and reputation through brand building and publicity, which helps to attract more outstanding talents and customers, and improve the market share of enterprises. viii. A partnership. Enterprises need to establish good cooperative relations with other relevant enterprises to achieve the purpose of resource sharing and mutual benefit, and further expand the business scope of enterprises. In general, the market prospect of ZHONGXING HOLDING GROUP LTD as a high-tech digital sports operation company depends on many factors, but with the development of society and the increasing demand of people, as well as the good construction of its own brand, the development prospect of high-tech digital sports operation company is still very potential. 13 Table of Contents Trademarks See Figure I for the logo of ZHONGXING HOLDING GROUP LTD. The logo of ZHONGXING HOLDING GROUP LTD is dominated by the size of the initial letter of the name, highlighting the name of the company. The purpose of this design is to create a connection between the company name and the trademark, and can make customers at a glance, create an impression, and firmly remember in the hearts of customers. Below the main body of the trademark is the word sports, which shows the industries mainly involved in our company to customers, so that customers can clearly understand our company's main business is related to the sports industry. In addition, the main color of our logo is composed of red and black, red represents energy and passion, showing our company's love and vitality for the sports industry. Black represents calm and calm, reflecting that our company will step by step on the development road, down to earth. The red part of the letter X is composed of different diagonal lines, like a runway, which not only represents our company in the sports industry, but also represents that we will strive to move forward in the sports industry. Figure I In addition to trademarks, we also involve some intellectual property issues in the course of our business, among which ZHONGXING HOLDING GROUP LTD is most likely to involve the following types of intellectual property: I. Invention patent: If the company has a unique technological innovation in the development of intelligent fitness equipment and sports health solutions, it can apply for an invention patent to protect its exclusive right in the field. Invention patents are aimed at real technological innovation, requiring "novelty", "creativity" and "practicality". For example, a company may develop a smart treadmill with intelligent perception, data analysis, and virtual training functions, and can apply for an invention patent for this innovative technology. II. Utility model patents: In addition to invention patents, companies can also apply for utility model patents to protect new structures, shapes or combinations of products. Compared with invention patents, utility model patents have lower requirements, focusing on product design and functional innovation. For example, the company can apply for a utility model patent for the appearance design and construction of intelligent fitness equipment to gain an advantage in market competition. III. Trademark: trademark is used to mark the source of products or services, which can be text, patterns, graphics, colors, etc. The company may use a unique trademark for the smart fitness equipment and sports health solutions it produces so that consumers can identify and identify the company's products. The registration of a trademark provides legal protection against unauthorized use of the same or similar trademark by others. IV. Copyright: Sports health solutions may involve the creation of software programs, algorithms, interface design, etc. These creations can be protected by copyright law. The company may register the source code and related documentation as copyright after the software is developed, ensuring exclusive rights and interests in these creations. V. Industrial design patent: The appearance design of intelligent fitness equipment can also be protected through industrial design patents to ensure that other companies will not copy the appearance of the product. Industrial design patents mainly focus on the appearance of the product, and ensure that the company has a competitive advantage in the market through patent protection. 14 Table of Contents In addition to the above types of intellectual property rights, there are some other intellectual property rights that can be applied to intelligent fitness equipment and sports health solutions, such as integrated circuit layout design patents, Copyrights of training materials and other specific protection strategies need to be developed based on the company's business model, technological innovation points and market demand. Before applying for a patent or trademark, we will conduct an adequate patent and trademark search to ensure that the intellectual property rights applied for will not infringe on the rights of others. In addition, timely application and maintenance of intellectual property rights is also very important, which can prevent others from infringing on the company's technology and brand, and protect the company's interests and competitive advantages. Implications of Our Being an "Emerging Growth Company" On September 9, 2022, the SEC adopted inflation adjustments mandated by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, an "emerging growth company" will lose its emerging growth company status on the last day of the fiscal year in which it has $1.235 billion or more in total. As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the JOBS Act. "An "emerging growth company" may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we: may present only two years of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition and Results of Operations; are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as "compensation discussion and analysis"; are not required to obtain an attestation and report from our auditors on our management s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the "say-on-pay," "say-on frequency" and "say-on-golden-parachute" votes); are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure; are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act; and will not be required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form 20-F following the effectiveness of our initial public offering. We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under 107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under 107 of the JOBS Act. Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an "emerging growth company" at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended (the "Securities Act") occurred, if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our Class A Ordinary Share held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period. 15 Table of Contents Foreign Private Issuer Status We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example: We are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; For interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; We are not required to provide the same level of disclosure on certain issues, such as executive compensation; We are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; We are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and We are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction. Implications of Being a Controlled Company Controlled companies are exempt from the majority of independent director requirements. Controlled companies are subject to an exemption from Nasdaq standards requiring that the board of a listed company consist of a majority of independent directors within one year of the listing date. Public Companies that qualify as a "Controlled Company" with securities listed on the Nasdaq Stock Market (Nasdaq), must comply with the exchange s continued listing standards to maintain their listings. Nasdaq has adopted qualitative listing standards. Companies that do not comply with these corporate governance requirements may lose their listing status. Under the Nasdaq rules, a "controlled company" is a company with more than 50% of its voting power held by a single person, entity or group. Under Nasdaq rules, a controlled company is exempt from certain corporate governance requirements including: The requirement that a majority of the board of directors consist of independent directors; The requirement that a listed company have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities; The requirement that a listed company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities; and The requirement for an annual performance evaluation of the nominating and governance committee and compensation committee. Controlled companies must still comply with the exchange s other corporate governance standards. These include having an audit committee and the special meetings of independent or non-management directors. 17 Table of Contents THE Offering Issuer ZHONGXING HOLDING GROUP LTD Securities Being Offered Ordinary Shares, par value US$0.0001 per share Offering Price We expect that the initial public offering price will be US$6.90 per Ordinary Share. Ordinary Shares Outstanding Immediately Before This Offering Ordinary Shares Ordinary Shares Outstanding Immediately After This Offering Ordinary Shares (or Ordinary Shares if the underwriters exercise their option to purchase additional Ordinary Shares in full). Voting Rights Each Ordinary Share is entitled to one vote. Use of Proceeds Product Development Build upstream and downstream ecological chain Decoration of physical store storefronts Online and offline media promotion Talent Team Building Build directly operated stores Market Expansion Business Negotiation Systems Development and Maintenance Public relations maintenance Proposed Nasdaq Trading Symbol and Listing We plan to apply to list our Ordinary Shares on the Nasdaq Capital Market under the symbol "ZXTY" This offering is contingent upon us listing our Ordinary Shares on Nasdaq Capital Market or another national exchange. No assurance can be given that such listing will be approved or that a liquid trading market will develop for our Ordinary Shares. Lock-up Our directors, executive officers, and shareholder who own 5% or more of the outstanding Ordinary Shares intended agreed with the underwriters not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Ordinary Shares or securities convertible into Ordinary Shares for a period of 6 months commencing on the date of this prospectus. The Company is also prohibited from conducting offerings during this period and from re-pricing or changing the terms of existing options and warrants. See "Underwriting" for additional information. Risk factors See "Risk Factors" for a discussion of risks you should carefully consider before investing in our Ordinary Shares. Transfer Agent Payment and settlement 18 Table of Contents RISK FACTORS An investment in our Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled "Management s Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks described below and in the documents referenced above are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in our Ordinary Shares if you can bear the risk of loss of your entire investment. Risks Related to Our Business We have grown rapidly in recent years and have limited experience operating at our current scale of operations. If we are unable to manage our growth effectively, our brand, company culture and financial results may suffer. We have grown rapidly in the past year and our recent growth rates and financial results should not be considered indicators of our future performance. In order to effectively manage and leverage our growth, we must continue to expand our sales and marketing, focus on innovative product and website development, and upgrade our management information systems. Our continued growth has in the past and may in the future strain our existing resources and we may experience ongoing operational difficulties in managing our operations in numerous jurisdictions, including difficulties in recruiting, training and managing a dispersed and growing employee base. Failure to expand and maintain our company culture through growth may harm our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate goals. SPORTING & ATHLETIC GOODS, NEC industry is evolving rapidly and may not evolve as we expect. Even if our net sales continue to grow, our net sales growth rate may decline in the future due to a variety of factors, including macroeconomic factors, changes in supply and supply chain, changes in consumer preferences, increased competition and the maturation of our business. Accordingly, you should not rely on our net sales growth rates for any prior period as an indicator of our future performance. Our overall growth in net sales will depend on many factors, including our ability to: 1) price our products and services effectively so that we can attract new customers and expand our relationships with existing customers. 2) accurately forecast our net sales and plan our operating expenses. 3) compete successfully with other companies that are or may be entering our competitive market in the future and respond to developments in those competitors, such as pricing changes and the introduction of new products and services. 4) Complying with existing and new laws and regulations that apply to our business. 5) Successfully expanding into existing markets and entering new markets, including new geographic areas and categories. 6) The successful introduction of new products and enhancements to our products and services and their features, including in response to new trends or competitive dynamics or customer needs or preferences. 7) Successfully identifying and acquiring or investing in businesses, products or technologies that we believe will complement or expand our business. 8) Avoiding disruptions or interruptions in the distribution of our products and services. 9) Providing quality support to our customers that meets their needs. 10) Hiring, integrating and retaining talented sales, customer service and other personnel. 11) Effectively managing the growth of our business, personnel and operations, including the opening of new showrooms. 12) Effectively managing the costs associated with our business and operations. 13) Maintaining and enhancing our reputation and brand value. 19 Table of Contents Because of our limited history of operating our business at our current scale, it is difficult to assess our current operations and future prospects, including our ability to plan for and model future growth. Our limited operating experience at this scale, combined with the rapidly evolving nature of the markets in which we sell our products and services, the significant uncertainty about how these markets will develop and other economic factors beyond our control, reduces our ability to accurately forecast quarterly or annual revenues. Failure to effectively manage our future growth could adversely affect our business, financial condition and results of operations. If we are unable to anticipate and satisfy consumer preferences and shifting views of health and fitness and successfully develop and introduce new, innovative and updated fitness services, our business may be adversely affected. The fitness industry is highly susceptible to changes in consumer preferences. Our success depends on our ability to identify and originate trends as well as to anticipate and react to changing consumer demands in a timely manner. If we are unable to introduce new services and products in a timely manner, or before our competitors do, or our new services and products are not accepted by our customers, our growth and profitability could be negatively affected. Failure to anticipate and respond in a timely manner to changing consumer preferences could lead to, among other things, lower membership and utilization rates. Even if we are successful in anticipating consumer preferences, our ability to adequately react to and address those preferences will in part depend upon our continued ability to develop and introduce innovative, high-quality health and fitness services. Our failure to effectively introduce new health and fitness services that are accepted by consumers could result in a decrease in revenue. In addition, developments or shifts in research or public opinion on the types of workouts and products we provide could negatively impact our business. Failure to predict and respond to changes in public opinion, public research and consumer preferences could materially and adversely impact our business. The high level of competition in the health club and fitness industry could materially and adversely affect our business. We operate in a highly competitive market, with multiple industry segments competing for consumers share of the wallet allocated to fitness spend. While we operate specifically within the studio fitness category, we consider companies in the following key industry segments as potential competition: other studio fitness concepts; full-service health clubs; racquet, tennis, country and other athletic clubs; value-focused health clubs; and at-home fitness offerings, including digital fitness content. We also compete for qualified franchisees, management, fitness training professionals and other personnel. Our franchisees also compete for qualified fitness trainers. We may not be able to compete effectively in the regions in which we currently operate or those in which we may operate in the future. Competitors may attempt to copy our business model, or portions thereof, which could erode our market share and brand recognition and impair our growth rate and profitability. Competitors, including companies that are larger and have greater resources than us, may compete with us to attract members and qualified fitness trainers in our regions. Other studio fitness concepts may lower their prices or create lower-priced brand alternatives within our markets. Furthermore, due to the increased number of low-cost studio fitness alternatives, we may face increased competition if our membership pricing increases or if discretionary spending declines. In addition, as we expand into new markets, we may face competitive challenges penetrating those markets due to, among other factors, competitors who may already have a significant presence in those markets, consumer unfamiliarity with our brand and our own unfamiliarity with the health and fitness market in such regions. Current and future competition may limit our and our franchisees ability to attract new members and retain existing members, may limit our ability to attract and retain new and existing franchisees and may hinder our franchisees ability to attract and retain qualified fitness trainers, which in each case could materially and adversely affect our business, results of operations and financial condition. 20 Table of Contents We have limited sources of working capital and will need substantial additional financing. The working capital required to implement our business strategy and R&D efforts will most likely be provided by funds obtained through offerings of our equity, debt, debt-linked securities, and/or equity-linked securities, and revenues generated by us. No assurance can be given that we will have revenues sufficient to sustain our operations or that we would be able to obtain equity/debt financing in the current economic environment. If we do not have sufficient working capital and are unable to generate sufficient revenues or raise additional funds, we may delay the completion of or significantly reduce the scope of our current business plan; delay some of our development and clinical or marketing efforts; postpone the hiring of new personnel; or, under certain dire financial circumstances, substantially curtail or cease our operations. We may need to engage in capital-raising transactions in the near future. Such financing transactions may well cause substantial dilution to our shareholders and could involve the issuance of securities with rights senior to the outstanding shares. Our ability to complete additional financings is dependent on, among other things, the state of the capital markets at the time of any proposed offering, market reception of the Company and the likelihood of the success of its business model and offering terms. There is no assurance that we will be able to obtain any such additional capital through asset sales, equity or debt financing, or any combination thereof, on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs and to support our operations. If we do not obtain adequate capital on a timely basis and on satisfactory terms, our revenues and operations and the value of our Ordinary Shares and Ordinary Share equivalents would be materially negatively impacted and we may cease our operations. We are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations. Our success is, to a certain extent, attributable to the management, sales and marketing, and research and development expertise of key personnel. We are dependent upon the services of Mr. Lijie Wang, our Chairman of the Board, for the continued growth and operation of our Company, due to his industry experience, technical expertise, as well as his personal and business contacts. Additionally, Ms. Fengyu Yang, performs key functions in the operation of our business. We may not be able to retain Ms. Jihong Liu for any given period of time. Although we have no reason to believe that Ms. Fengyu Yang will discontinue his services with us, the interruption or loss of his services would adversely affect our ability to effectively run our business and pursue our business strategy as well as our results of operations. We do not carry key man life insurance for any of our key personnel, nor do we foresee purchasing such insurance to protect against the loss of key personnel. We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. We rely on a wide portfolio of intellectual property to operate our businesses and we may not be able to effectively protect these intellectual property and proprietary rights against infringement, misappropriation or other violation, or efforts to safeguard our intellectual property may be costly. We rely on a combination of trademark, copyright and trade secret protection laws in the U.S., the England and other jurisdictions, as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights. We enter into confidentiality agreements with our employees and any third parties who may access our proprietary information, and we rigorously control access to our technology and information. However, we cannot guarantee that we have entered into confidentiality agreements with each party that may have or have had access to our trade secrets or proprietary information. Such agreements may be breached by counterparties, who may disclose our proprietary information, including our trade secrets, or claim ownership in intellectual property that we believe is owned by us, and there may not be adequate remedies available to us for any such breach. In addition, we do not enter into intellectual property assignment agreements in the ordinary course and rely on the intellectual property rights we obtain from our employees by operation of law. The intellectual property rights we obtain by operation of law may not extend to all intellectual property rights developed by our employees and contractors and individuals not subject to invention assignment agreements may make adverse ownership claims to our current and future intellectual property rights. We therefore may not possess ownership rights in all intellectual property rights that we regard as our own or that are necessary for the conduct of our business. 21 Table of Contents Intellectual property protection may not be sufficient in the regions in which we operate. Our trademarks or other intellectual property rights may be challenged by others through administrative process or litigation, and our pending trademark applications may not be allowed. In addition, policing any unauthorized use of our intellectual property is difficult, time-consuming and costly, and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation and some courts in the U.S. and certain foreign jurisdictions are less willing or unwilling to protect trade secrets. Furthermore, it is often difficult to maintain and enforce intellectual property rights in the England. Statutory laws and regulations in the England are subject to judicial interpretation and enforcement and may not be applied consistently due to the lack of clear guidance on statutory interpretation. Confidentiality and non-compete agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or the intellectual properties licensed from third parties, or to enforce our contractual rights in the England and other jurisdictions we operate. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third parties, we would have no right to prevent them from using that technology or information to compete with us. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. We may not be able to protect and enforce our trademarks and trade names, or build name recognition in our markets of interest thereby harming our competitive position. The registered or unregistered trademarks or trade names that we own may be challenged, infringed, circumvented, declared generic, lapsed or determined to be infringing on or dilutive of other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition. In addition, third parties have filed, and may in the future file, for registration of trademarks similar or identical to our trademarks, thereby impeding our ability to build brand identity and possibly leading to market confusion. If they succeed in registering or developing common law rights in such trademarks, and if we are not successful in challenging such rights, we may not be able to use these trademarks to develop brand recognition of our technologies, products or services. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Further, we may in the future enter into agreements with owners of such third-party trade names or trademarks to avoid potential trademark litigation which may limit our ability to use our trade names or trademarks in certain fields of business. 22 Table of Contents If we fail to maintain an effective quality control system, our business could be materially and adversely affected. We place great emphasis on product quality and adhere to stringent quality control measures and have obtained quality control certifications for our products. To meet our customers requirements and expectations for the quality and safety of our products, we have adopted a stringent quality control system to ensure that every step of the production process is strictly monitored and managed. Failure to maintain an effective quality control system or to obtain or renew our quality standards certifications may result in a decrease in demand for our products or cancellation or loss of purchase orders from our customers. Moreover, our reputation could be impaired. As a result, our business and results of operations could be materially and adversely affected. If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected. Our business model requires us to manage a large volume of inventory effectively. We procure products from third-party manufacturers and sell as our own inventory through our Marketplace and off-platform ecommerce. We depend on our demand forecasts for various kinds of products to make purchase decisions and to manage our inventory. Demand for products, however, can change significantly between the time inventory is ordered and the date by which we target to sell it. Demand may be affected by seasonality, new product launches, changes in product cycles and pricing, product defects, changes in consumer spending patterns, changes in consumer tastes with respect to our products and other factors, and our customers may not order products in the quantities that we expect. In addition, when we begin selling a new product, we may not be able to accurately forecast demand. The procurement of certain types of inventory may require significant lead time and prepayment, and they may not be returnable. If we are unable to anticipate or respond to changes in customer preferences or fail to bring products that satisfy new customer preferences to our Marketplace and off-platform ecommerce in a timely manner, our results of operations, financial condition and liquidity could be adversely affected. Any lack of requisite approvals, licenses or permits applicable to our business operations may harm our business. We may not be able to obtain all the licenses and approvals that may be deemed necessary to operate our business. Because we operate in multiple jurisdictions, the relevant laws and regulations, as well as their interpretations, could be different from the U.S. This can make it difficult to know which licenses and approvals are necessary, or the processes for obtaining them. For these same reasons, we also cannot be certain that we will be able to maintain the licenses and approvals that we have previously obtained, or that once they expire we will be able to renew them. We cannot be sure that our interpretations of the rules and their exemptions have always been or will be consistent with those of the local regulators. As we expand our businesses, we may be required to obtain new licenses and will be subject to additional laws and regulations in the markets we plan to operate in. If we fail to obtain, maintain or renew any required licenses or approvals or make any necessary filings or are found to require licenses or approvals that we believed were not necessary or we were exempted from obtaining, we may be subject to various penalties, such as confiscation of the revenues or assets that were generated through the unlicensed business activities, imposition of fines, suspension or cancelation of the applicable license, written reprimands, termination of third-party arrangements, criminal prosecution and the discontinuation or restriction of our operations. Any such penalties may disrupt our business operations and materially and adversely affect our business, financial condition and results of operations. We may experience significant fluctuations in our results of operations and growth rate. We have grown significantly in recent years, and we intend to continue to expand the scope and geographic reach of the services we provide. Our anticipated future growth will likely place significant demands on our management and operations. Our success in managing our growth will depend, to a significant degree, on the ability of our executive officers and other members of senior management to operate effectively and on our ability to further improve and develop our financial and management information systems, controls and procedures. In addition, we expect to have to adapt our existing systems and introduce new systems, train and manage our employees and improve and expand our sales and marketing capabilities. 23 Table of Contents Revenue growth may slow down or decline for any number of reasons, including our inability to attract and retain sellers and buyers, decreased buyer spending, increased competition, slowing overall growth of the sporting & athletic goods market, the emergence of alternative business models, changes in government policies and general economic conditions. We may also lose buyers and sellers for other reasons, such as a failure to deliver satisfactory customer or transaction experience or high-quality services. If we are unable to properly and prudently manage our operations as they continue to grow, or if the quality of our services deteriorates due to mismanagement, our brand name and reputation could be significantly harmed, and our business, prospects, financial condition and results of operations could be materially and adversely affected. Our results of operations may fluctuate significantly as a result of a variety of factors, including those described above. As a result, historical period-to-period comparisons of our results of operations are not necessarily indicative of future period-to-period results. You should not rely on the results of a single fiscal quarter as an indication of our annual results or our future performance. If we fail to effectively promote our business and attract new and retain current buyers and sellers, our business, results of operations and prospects may be materially and adversely affected. We believe that the effective promotion of our business is of significant importance to our success. Enhancing our brand recognition in the sporting & athletic goods market is critical to increasing the quantity and depth of engagement of sellers and buyers with our platform, which, in turn, enhances the appeal and assortment of products and services to buyers. We have conducted and will continue to conduct various marketing and promotional activities, including through both digital channels and offline media, aimed at increasing the visibility of our business, the attractiveness of our platform for our sellers and buyers and the growth of buyer traffic on our websites and mobile apps. We cannot assure you, however, that these activities will be effective in achieving the intended promotional impact on our business. In addition, our buyers and sellers may have conflicting views regarding some of the new initiatives we introduce to improve our platform, which can diminish our attempts to maintain a positive network effect and negatively affect our buyer and seller base. Further, any negative publicity relating to our products or services, regardless of its veracity, could harm our reputation and cause buyers and sellers to leave our platform, which would have a material adverse effect on our business, financial condition and results of operations. If our marketing efforts are not successful in attracting new and retaining current buyers, our business, prospects, financial condition and results of operations could be materially and adversely affected. If we are unable to anticipate and satisfy consumer preferences and shifting views of health and fitness and successfully develop and introduce new, innovative and updated fitness services, our business may be adversely affected. The fitness industry is highly susceptible to changes in consumer preferences. Our success depends on our ability to identify and originate trends as well as to anticipate and react to changing consumer demands in a timely manner. If we are unable to introduce new services and products in a timely manner, or before our competitors do, or our new services and products are not accepted by our customers, our growth and profitability could be negatively affected. Failure to anticipate and respond in a timely manner to changing consumer preferences could lead to, among other things, lower membership and utilization rates. Even if we are successful in anticipating consumer preferences, our ability to adequately react to and address those preferences will in part depend upon our continued ability to develop and introduce innovative, high-quality health and fitness services. Our failure to effectively introduce new health and fitness services that are accepted by consumers could result in a decrease in revenue. In addition, developments or shifts in research or public opinion on the types of workouts and products we provide could negatively impact our business. Failure to predict and respond to changes in public opinion, public research and consumer preferences could materially and adversely impact our business. 24 Table of Contents The high level of competition in the health club and fitness industry could materially and adversely affect our business. We operate in a highly competitive market, with multiple industry segments competing for consumers share of the wallet allocated to fitness spend. While we operate specifically within the studio fitness category, we consider companies in the following key industry segments as potential competition: other studio fitness concepts; full-service health clubs; racquet, tennis, country and other athletic clubs; value-focused health clubs; and at-home fitness offerings, including digital fitness content. We also compete for qualified franchisees, management, fitness training professionals and other personnel. Our franchisees also compete for qualified fitness trainers. We may not be able to compete effectively in the regions in which we currently operate or those in which we may operate in the future. Competitors may attempt to copy our business model, or portions thereof, which could erode our market share and brand recognition and impair our growth rate and profitability. Competitors, including companies that are larger and have greater resources than us, may compete with us to attract members and qualified fitness trainers in our regions. Other studio fitness concepts may lower their prices or create lower-priced brand alternatives within our markets. Furthermore, due to the increased number of low-cost studio fitness alternatives, we may face increased competition if our membership pricing increases or if discretionary spending declines. In addition, as we expand into new markets, we may face competitive challenges penetrating those markets due to, among other factors, competitors who may already have a significant presence in those markets, consumer unfamiliarity with our brand and our own unfamiliarity with the health and fitness market in such regions. Current and future competition may limit our and our franchisees ability to attract new members and retain existing members, may limit our ability to attract and retain new and existing franchisees and may hinder our franchisees ability to attract and retain qualified fitness trainers, which in each case could materially and adversely affect our business, results of operations and financial condition. We are subject to risks related to online transactions and payment methods. We accept payments using a variety of methods, including credit card, debit card, PayPal, credit accounts (including promotional financing) and customer invoicing. As we offer new payment options to our customers, we may be subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We are also subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. As our business changes, we may also be subject to different rules under existing standards, which may require new assessments that involve costs above what we currently pay for compliance. If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card and debit card payments from customers or to facilitate other types of online payments. If any of these events were to occur, our business, financial condition and operating results could be materially adversely affected. We may suffer losses as a result of orders placed with fraudulent credit card data even if the associated financial institution approved payment of the orders. Under current credit card practices, we may be liable for fraudulent credit card transactions. We may also suffer losses from other online transaction fraud, including fraudulent returns. If we are unable to detect or control credit card or transaction fraud, our liability for these transactions could harm our business, financial condition and operating results. 25 Table of Contents If we fail to maintain and enhance our brand, our business, prospects and results of operations may be materially and adversely affected. We believe that maintaining and enhancing our brand is significantly important to the success of our business. A well-recognized brand is critical to increasing the number of buyers and sellers and the level of their engagement and, in turn, enhancing the attractiveness of our products and services to them. Despite conducting a number of brand promotion and recognition activities from time to time, we cannot assure you that these activities will be successful in the future or that we will be able to achieve the brand promotion effects that we expect. In addition, our competitors may increase the intensity of their marketing campaigns, which may force us to increase our advertising spend to maintain our brand awareness. If our brand is harmed or we are forced to increase our marketing expenses, our business, prospects, financial condition and results of operations could be materially and adversely affected. If we are not able to respond successfully to technological or industry developments, including changes to the business models deployed in our industry, our business may be materially and adversely affected. The sporting & athletic goods market is characterized by rapid technological developments, frequent launches of new products and services, changes in buyer needs and behavior and evolving industry standards. As a result, participants in the e-commerce industry constantly change their product offerings and business models and adopt new technologies to, among other things, increase cost efficiency and adapt to buyer preferences. There can be no assurances that our key competitors will not adopt a more effective business strategy than us or that our competitors will not be able to more quickly adapt to industry changes than we will. If we fail to successfully and timely respond to technological or industry developments, it could result in a loss of sellers and buyers, and our brand, business, prospects, financial condition and results of operations could be materially and adversely affected. We rely on many counterparties and third-party providers in our business, and the nonperformance or loss of a significant third-party provider through bankruptcy, consolidation, or otherwise, could adversely affect our operations. We are party to agreements with third-party companies in various aspects of our business model, including the lessors of our fulfillment centers and various logistics providers. If we are unable to maintain or renew leases, or lease other suitable premises on acceptable terms, or if our existing leases are terminated for any reason (including in connection with a lessor s loss of its ownership rights to such premises), or if a lease s terms (including rental charges) are revised to our detriment, such matters could have a material adverse effect on our business, financial condition and results of operations. If these third parties do not comply with applicable legal or administrative requirements, were to default on their obligations, or if we lose a significant provider through bankruptcy, consolidation or otherwise, we may be subject to litigation with these third-party providers, fail to renew the respective agreements on commercially acceptable terms and, therefore, face the need of switching to new third-party providers, who may provide services to us at higher prices, and any of the following of which could have a material adverse effect on our business, prospects, financial condition and results of operations. We may have difficulties with sourcing the products we sell through our Direct Sales business. Besides connecting, and facilitating transactions between, buyers and sellers on our Marketplace, we sell products directly to our buyers through our Direct Sales business. In our Direct Sales business, we purchase and hold inventory of a selection of products in our fulfillment centers to be sold directly to buyers, and therefore are dependent on our suppliers we source the products from. There can be no assurance that we will be able to timely replace any of our suppliers in case their products are no longer available to us or otherwise procure the supply of products to our facilities to be sold through the Direct Sales business, which may adversely affect our business, prospects, financial condition and results of operations. 26 Table of Contents Computer viruses, undetected software errors and hacking may cause delays or interruptions on our systems and may reduce the use of our services and damage our brand reputation. Our online systems, including our websites, mobile apps and our other software applications, products and systems, could contain undetected errors, or "bugs," that could adversely affect their performance. While we regularly update and enhance our websites and IT platform and introduce new versions of our mobile apps, the occurrence of errors in any such updates or enhancements may cause disruptions in the provision of our services and may, as a result, cause us to lose market share, and our reputation and brand, business, prospects, financial condition and results of operations could be materially and adversely affected. In addition, computer viruses and cyber security compromises have in the past, which to date have not been material, and may in the future cause delays or other service interruptions on our systems. However, we may be subject to hacking attempts by malicious actors who seek to gain unauthorized access to our information or systems or to cause intentional malfunctions, loss or corruption of data or leakages of our buyers and sellers personal data. While we employ various antivirus and computer protection software in our operations, we cannot provide any assurance that such protections will successfully prevent all hacking attempts (whether through the use of "denial of service" attacks or otherwise) or the transmission of any computer viruses which, if not prevented, could significantly damage our software systems and databases, cause disruptions to our business activities (including to our e-mail and other communications systems), result in security breaches and the inadvertent disclosure of confidential and/or sensitive information and hinder access to our platform. We may incur significant costs to protect our systems and equipment against the threat of, and to repair any damage caused by, computer viruses and hacking. Moreover, if a computer virus or other compromise of our systems becomes highly publicized, our reputation could be materially damaged, resulting in a decrease in the use of our products and services. The inadvertent transmission of computer viruses could also expose us to liability and legal action, which may adversely affect our business, financial condition and results of operations. We may be unable to effectively communicate with our buyers and sellers through email, other messages or social media. We rely on newsletters in the form of emails and other messaging services in order to promote our platform and inform our buyers of our product offerings and/or the status of their orders, or inform our sellers of any updates on the terms and conditions of the sale of their products on our Marketplace. Changes in how webmail services organize and prioritize emails could reduce the number of buyers and sellers opening our emails. For example, some webmail services offer tools and features that could result in our emails and other messages being shown as "spam" or as lower priority to our consumers, which could reduce the likelihood of consumers opening or responding positively to them. Actions by third parties to block, impose restrictions on, or charge for the delivery of emails and other messages, as well as legal or regulatory changes with respect to "permission-based marketing" or generally limiting our right to send such messages or imposing additional requirements on our ability to conduct email marketing or send other messages, could impair our ability to communicate with our buyers and sellers. If we are unable to send emails or other messages to our buyers and sellers, if such messages are delayed or if buyers and sellers do not receive or decline to open them, we would no longer be able to use this free marketing channel. This could impair our marketing efforts or make them more expensive if we have to increase spending on paid marketing channels to compensate and as a result, our business could be adversely affected. Additionally, malfunctions of our email and messaging services could result in erroneous messages being sent and buyers and sellers no longer wanting to receive any messages from us. Furthermore, our process of obtaining consent from our buyers to receive newsletters and other messages from us and to allow us to use their data may be insufficient or invalid. As a result, such individuals or third parties may accuse us of sending unsolicited advertisements and other messages, and our use of email and other messaging services could result in claims against us. Since we also rely on social media to communicate with our buyers, changes to the terms and conditions of relevant providers could limit our ability to communicate through social media. These services may change their algorithms or interfaces without notifying us, which may reduce our visibility. In addition, there could be a decline in the use of such social media by our buyers, in which case we may be required to find other, potentially more expensive, communication channels. 27 Table of Contents An inability to communicate through emails, other messages or social media could have a material adverse effect on our business, prospects, financial condition and results of operations. Our business requires significant capital investments and a high level of working capital to sustain our operations and business growth. We require significant capital investments in our business which consist of building and setting up warehouse facilities, technology, sorting and other types of equipment. These investments support both our existing business and anticipated growth. Forecasting projected volume involves many factors which are subject to uncertainty, such as general economic trends, changes in governmental regulation and competition. If we do not accurately forecast our future capital investment needs, we could have excess capacity or insufficient capacity, either of which would negatively affect our revenues and profitability. In addition to forecasting our capital investment requirements, we adjust other elements of our operations and cost structure in response to adverse economic conditions; however, these adjustments may not be sufficient to allow us to maintain our operating margins. We and our franchisees could be subject to claims related to health and safety risks to members that arise while at both our corporate-owned and franchise stores. Use of our and our franchisees stores poses some potential health and safety risks to members or guests through physical exertion and use of our services and facilities, including exercise and tanning equipment. Claims might be asserted against us and our franchisees for injuries suffered by or death of members or guests while exercising and using the facilities at a store. We may not be able to successfully defend such claims. We also may not be able to maintain our general liability insurance on acceptable terms in the future or maintain a level of insurance that would provide adequate coverage against potential claims. Depending upon the outcome, these matters may have a material adverse effect on our results of operations, financial condition and cash flows. If we cannot retain our key employees and hire additional highly qualified employees, we may not be able to successfully manage our businesses and pursue our strategic objectives. We are highly dependent on the services of our senior management team and other key employees at our corporate headquarters and our corporate-owned stores, and on our and our franchisees ability to recruit, retain and motivate key employees. Competition for such employees can be intense, and the inability to attract and retain the additional qualified employees required to expand our activities, or the loss of current key employees, could adversely affect our and our franchisees operating efficiency and financial condition. We are subject to risks associated with leasing property subject to long-term non-cancelable leases. We do not own any real property, and all of our corporate-owned stores are located on leased premises. Generally, our leases are net leases that require us to pay our share of the costs of real estate taxes, utilities, building operating expenses, insurance and other charges in addition to rent. We generally cannot terminate these leases before the end of the initial lease term. Additional sites that we lease are likely to be subject to similar long-term, non-terminable leases. If we close a store, we nonetheless may be obligated to perform our monetary obligations under the applicable lease, including, among other things, payment of the base rent for the balance of the lease term. In addition, if we fail to negotiate renewals, either on commercially acceptable terms or at all, as each of our leases expire we could be forced to close stores in desirable locations. We depend on cash flows from operations to pay our lease expenses and to fulfill our other cash needs. If our business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise available to us from borrowings under our senior secured credit facility or other sources, we may not be able to service our lease expenses or fund our other liquidity and capital needs, which would materially affect our business. 28 Table of Contents Our strategic investments or acquisitions may be unsuccessful. We have acquired, and may continue to acquire other assets, technologies, products and businesses that are complementary to our existing business or otherwise. We may also enter into strategic partnerships or cooperation agreements with other businesses to expand our marketplace. Negotiating these transactions can be time-consuming, challenging and expensive, and our ability to close these transactions may often be subject to regulatory approvals that are beyond our control. In addition, investments and acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, significant amortization expenses related to intangible assets, significant diversion of management attention and exposure to potential unknown liabilities of the acquired business. Moreover, the cost of identifying and consummating investments and acquisitions and integrating the acquired businesses into ours may be significant, and the integration of acquired businesses may be disruptive to our existing business operations. Consequently, these transactions, even if undertaken and announced, may not close. For one or more of those transactions, we may issue additional equity securities that would dilute our shareholders ownership interest, use cash that we may need in the future to operate our business, incur debt on terms unfavorable to us or that we are unable to repay, incur expenses or substantial liabilities, encounter difficulties retaining key employees of the acquired company or integrating diverse software codes or business cultures, encounter difficulties in assimilating acquired operations, encounter diversion of management s attention to other business concerns, and become subject to adverse tax consequences, substantial depreciation, impairment losses, or deferred compensation charges. If our investments and acquisitions are not successful, our business, financial condition, results of operations and prospects may be materially and adversely affected. We may be subject to product liability claims when people or property are harmed or damaged by the products that are sold on our platform. We are exposed to product liability or food safety claims relating to personal injury or illness, death or environmental or property damage caused by the products that are sold by us or through our Marketplace, and we do not maintain any insurance with respect to such product liability. As the products offered by us or through our Marketplace are manufactured by third parties, we have only limited control over the quality of these products. In addition, we cannot always effectively prevent our sellers from selling harmful or defective products on our Marketplace, which could cause death, disease or injury to our buyers or damage their property. We may be seen as having facilitated the sale of such products and may be forced to recall such products. Under our Direct Sales model, where we act directly as seller, we may also have to recall harmful products. Although we require that our sellers only offer products that comply with the existing product safety rules and monitor such compliance, we may not be able to detect, enforce or collect sufficient damages for breaches of such agreements. In addition, any negative publicity resulting from product recalls or the assertion that we sold defective products could damage our brand and reputation. Any material product liability, food safety or other claim could have an adverse effect on our business, prospects, results of operations and financial condition. 29 Table of Contents We may be impacted by fraudulent or unlawful activities of sellers, which could have a material adverse effect on our reputation and business and may result in civil or criminal liability. The law relating to the liability of online service providers is currently unsettled in England, and governmental agencies have in the past and could in the future require changes in the way online businesses are conducted. Our standard agreement with the sellers on our Marketplace provides for monthly payments to sellers for the products sold rather than immediate payment after the sale of a product. Our standard form agreement with our sellers provides that we will directly compensate the buyer for the purchase price if a buyer makes a return and the seller must refund us the price of the returned product. These provisions are designed to prevent sellers from collecting payments, fraudulently or otherwise, in the event that a buyer does not receive the products they ordered or when the products received are materially different from the seller s descriptions, and to prevent sellers on our Marketplace from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others or otherwise violating our product requirements. If our sellers circumvent or otherwise fail to comply with these provisions, it could harm our business or damage our reputation, and we could face civil or criminal liability for unlawful activities by our sellers. We depend upon talented employees, including our senior management and IT specialists, to grow, operate and improve our business, and if we are unable to retain and motivate our personnel and attract new talent, we may not be able to grow effectively. Our success depends on our continued ability to identify, hire, develop, motivate and retain talented employees. Our ability to execute and manage our operations efficiently is dependent upon contributions from all of our employees. Competition for senior management and key IT personnel is intense, and the pool of qualified candidates is relatively limited. From time to time, some of our key personnel may choose to leave our company for various reasons, including personal career development plans or alternative compensation packages. An inability to retain the services of our key personnel or properly manage the working relationship among our management and employees may expose us to legal or administrative action or adverse publicity, which could adversely affect our reputation, business, prospects, financial condition and results of operations. Training new employees with no prior relevant experience could be time consuming and requires a significant amount of resources. We may also need to increase the compensation we pay to our employees from time to time in order to retain them. If competition in our industry intensifies, it may be increasingly difficult for us to hire, motivate and retain highly skilled personnel due to significant market demand. If we fail to attract additional highly skilled personnel or retain or motivate our existing personnel, we may be unable to pursue growth, and our business, prospects, financial condition and results of operations could be materially and adversely affected. Employee misconduct is difficult to determine and detect and could harm our reputation and business. We face a risk that may arise out of our employees lack of knowledge or willful, negligent or involuntary violations of laws, rules and regulations or other misconduct. Misconduct by employees could involve, among other things, the improper use or disclosure of confidential information (including trade secrets), embezzlement or fraud, any of which could result in regulatory sanctions or fines imposed on us, as well as cause us serious reputational or financial harm. We have experienced fraudulent misconduct by employees in the past, which to date has not caused any material harm to our business. However, any such further misconduct in the future may result in unknown and unmanaged risks and losses. We have internal audit, security and other procedures in place that are designed to monitor our employees conduct. However, despite these controls and procedures there can be no assurance that we will discover employee misconduct in a timely and effective manner, if at all. It is not always possible to guard against employee misconduct and ensure full compliance with our risk management and information policies. The direct and indirect costs of employee misconduct can be substantial, and our business, prospects, financial condition and results of operations could be materially and adversely affected. 30 Table of Contents The global coronavirus COVID-19 pandemic has caused significant disruptions in our business, which may continue to materially and adversely affect our results of operations and financial condition. On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. Many businesses and social activities in England and other countries and regions were severely disrupted in 2020, including those of our suppliers, customers and employees. This pandemic has also caused market panics, which materially and negatively affected the global financial markets, such as the plunge of global stocks on major stock exchanges in March 2020. Such disruption and slowdown of the world s economy in 2020 and beyond had, and may continue to have, a material adverse effect on our results of operations and financial condition. We and our customers experienced significant business disruptions and suspension of operations due to quarantine measures to contain the spread of the pandemic, which caused shortage in the supply of raw materials, reduced our production capacity, increased the likelihood of default from our customers and delayed our product delivery. All of these had resulted in a material adverse effect on our results of operations and financial condition in the fiscal year 2021. The extent to which the COVID-19 pandemic may impact our business, operations and financial results will depend on numerous evolving factors that the Company cannot accurately predict at this time, including the uncertainty on the potential resurgence of the COVID-19 cases in England, the continual spread of the virus globally, and the instability of local and global government policies and restrictions. We are closely monitoring the development of the COVID-19 pandemic and continuously evaluating any further potential impact on our business, results of operations and financial condition. If the pandemic persists or escalates, we may be subject to further negative impact on our business operations and financial condition. A severe or prolonged downturn in the global or British economy could materially and adversely affect our business and our financial condition. Although the British economy expanded well in the last two decades, the rapid growth of the British economy has slowed down since 2012, and there is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People s Bank of England and financial authorities of some of the world s leading economies, including the United States and England. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility in oil and other markets. There have also been concerns on the relationship among England and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes. Economic conditions in England are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in England. Any severe or prolonged slowdown in the global or British economy may materially and adversely affect our business, results of operations and financial condition. Natural disasters, pandemics, epidemics, acts of war, terrorist attacks and other events could materially and adversely affect our business. Severe weather conditions and other natural or man-made disasters, including storms, floods, fires, earthquakes, epidemics, pandemics, conflicts, unrest, or terrorist attacks, may disrupt our business and result in decreased revenues. Customers may reduce their demand for logistics services or shipments, or our costs to operate our business may increase, either of which could have a material adverse effect on us. Any such event affecting one of our major facilities could result in a significant interruption in or disruption of our business, financial condition and results of operations. 31 Table of Contents Government regulation of the Internet and ecommerce in the U.S. and globally is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations. We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and ecommerce in the U.S. and globally. Existing and future regulations and laws could impede the growth of the Internet, ecommerce or mobile commerce. These regulations and laws may involve taxes, tariffs, privacy and data security, anti-spam, content protection, electronic contracts and communications, consumer protection, Internet neutrality and gift cards. It is not clear how existing laws governing issues such as property ownership, sales and other taxes and consumer privacy apply to the Internet as the vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or ecommerce. It is possible that general business regulations and laws, or those specifically governing the Internet or ecommerce, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. We cannot be sure that our practices have complied, comply or will comply fully with all such laws and regulations. Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business and proceedings or actions against us by governmental entities or others. Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our sites by consumers and suppliers and may result in the imposition of monetary liability. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any such laws or regulations. Adverse legal or regulatory developments could substantially harm our business. Further, if we enter into new market segments or geographical areas and expand the products and services we offer, we may be subject to additional laws and regulatory requirements or prohibited from conducting our business, or certain aspects of it, in certain jurisdictions. We will incur additional costs complying with these additional obligations and any failure or perceived failure to comply would adversely affect our business and reputation. Trade restrictions could materially and adversely affect our business, financial condition and results of operations. Our cross-border logistics services may be affected by trade restrictions implemented by countries or territories in which our customers are located or in which our customers products are manufactured or sold. For example, we are subject to risks relating to changes in trade policies, tariff regulations, embargoes or other trade restrictions adverse to our customers business. Actions by governments that result in restrictions on movement of parcel or otherwise could also impede our ability to carry out our cross-border ecommerce solutions and logistics services. In addition, international trade and political issues, tensions and conflicts may cause delays and interruptions to cross-border transportation and result in limitations on our insurance coverage. If we are unable to connect our global customers in our marketplace or provide solutions to transports parcel to and from countries with trade restrictions in a timely manner or at all, our business, financial condition and results of operations could be materially and adversely affected. Significant merchandise refunds and product warranty claims could have a material adverse effect on our business. We allow our customers to claim refunds or product warranties for our sales subject to our return policy. If merchandise returns and product warranty claims are significant, our business, financial condition and results of operations could be harmed. Further, we modify our policies relating to returns and warranties from time to time, which may result in customer dissatisfaction or an increase in the number of product returns. Many of our products are large and require special handling and delivery. From time to time our products are damaged in transit, which can increase return rates and harm our brand. Under the strong supervision of the government, our business may be controlled. The Company s business segments may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Additionally, the governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 32 Table of Contents Furthermore, it is uncertain when and whether the Company will be required to obtain permission from the government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry. Risks Related to the Offering and Our Ordinary Shares The initial public offering price of our Ordinary Shares may not be indicative of the market price of our Ordinary Shares after this offering. In addition, an active, liquid and orderly trading market for our Ordinary Shares may not develop or be maintained, and our share price may be volatile. Prior to the completion of this offering, our Ordinary Shares were not traded on any market. Any active, liquid and orderly trading market for our Ordinary Shares may not develop or be maintained after this offering. Active, liquid and orderly trading markets usually result in less price volatility and more efficiency in carrying out investors purchase and sale orders. The market price of our Ordinary Shares could vary significantly as a result of a number of factors, some of which are beyond our control. In the event of a drop in the market price of our Ordinary Shares, you could lose a substantial part or all of your investment in our Ordinary Shares. The initial public offering price will be determined by us, based on numerous factors and may not be indicative of the market price of our Ordinary Shares after this offering. Consequently, you may not be able to sell our Ordinary Shares at a price equal to or greater than the price paid by you in this offering. The following factors could affect our share price: our operating and financial performance; quarterly variations in the rate of growth of our financial indicators, such as net income per share, net income and revenues; the public reaction to our press releases, our other public announcements and our filings with the SEC; strategic actions by our competitors; changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts; speculation in the press or investment community; the failure of research analysts to cover our Ordinary Shares; sales of our Ordinary Shares by us or other shareholders, or the perception that such sales may occur; changes in accounting principles, policies, guidance, interpretations or standards; additions or departures of key management personnel; actions by our shareholders; domestic and international economic, legal and regulatory factors unrelated to our performance; and the realization of any risks described under this "Risk Factors" section. The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Ordinary Shares. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company s securities. Such litigation, if instituted against us, could result in very substantial costs, diver our management s attention and resources and harm our business, operating results and financial condition. 33 Table of Contents There may not be an active, liquid trading market for our Ordinary Shares. Prior to the completion of this offering, there has been no public market for our Ordinary Shares. An active trading market for our Ordinary Shares may not develop or be sustained following this offering. You may not be able to sell your shares at the market price, if at all, if trading in our shares is not active. The initial public offering price was determined by negotiations between us and our advisors based upon a number of factors. The initial public offering price may not be indicative of prices that will prevail in the trading market. Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on a price appreciation of the Ordinary Shares for a return on your investment. We currently intend to retain most, if not all, of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the Ordinary Shares as a source for any future dividend income. A sale or perceived sale of a substantial number of our Ordinary Shares may cause the price of our Ordinary Shares to decline. If our shareholders sell substantial amounts of our Ordinary Shares in the public market, the market price of our Ordinary Shares could fall. Moreover, the perceived risk of this potential dilution could cause shareholders to attempt to sell their shares and investors to short our Ordinary Shares. These sales also make it more difficult for us to sell equity-related securities in the future at a time and price that we deem reasonable or appropriate. There can be no assurance that we will not be a passive foreign investment company ("PFIC") for United States federal income tax purposes for any taxable year, which could subject United States holders of our Ordinary Shares to significant adverse United States federal income tax consequences. A non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (i) at least 75% of its gross income for such taxable year is passive income or (ii) at least 50% of the value of its assets (based on average of the quarterly values of the assets) during such year is attributable to assets that that produce or are held for the production of passive income. Based on the current and anticipated value of our assets and the composition of our income assets, we do not expect to be a PFIC for United States federal income tax purposes for our current taxable year ended December 31, 2021 or in the foreseeable future. However, the determination of whether or not we are a PFIC according to the PFIC rules is made on an annual basis and depend on the composition of our income and assets and the value of our assets from time to time. Therefore, changes in the composition of our income or assets or value of our assets may cause us to become a PFIC. The determination of the value of our assets (including goodwill not reflected on our balance sheet) may be based, in part, on the quarterly market value of Ordinary Shares, which is subject to change and may be volatile. The classification of certain of our income as active or passive, and certain of our assets as producing active or passive income, and hence whether we are or will become a PFIC, depends on the interpretation of certain United States Treasury Regulations as well as certain IRS guidance relating to the classification of assets as producing active or passive income. Such regulations guidance is potentially subject to different interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one of more taxable years. If we are a PFIC for any taxable year during which a United States person holds Ordinary Shares, certain adverse United States federal income tax consequences could apply to such United States person. 34 Table of Contents For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies. We are classified as an "emerging growth company" under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor s attestation report on management s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies, or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.235 billion of revenues in a fiscal year, have more than $700 million in market value of our Ordinary Shares held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our Ordinary Shares to be less attractive as a result, there may be a less active trading market for our Ordinary Shares and our share price may be more volatile. If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired. Pursuant to Section 404 of the Sarbanes-Oxley Act, we will be required to file a report by our management on our internal control over financial reporting, including an attention report on internal control over financial reporting issued by our independent registered public accounting firm. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. The presence of material weakness in internal control over financial reporting could result in financial statement errors, which, in turn, could lead to error our financial reports and/or delays in our financial reporting, which could require us to restate our operating results. We might not identify one or more material weaknesses in our internal controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting. We will need to expend significant resources and provide significant management oversight. Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and divert management s attention from other business concerns. These changes may not, however, be effective in maintaining the adequacy of our internal control. If we are unable to conclude that we have effective internal controls over financial reporting, investors may lose confidence in our operating results, the price of the Ordinary Shares could decline and we may be subject to litigation or regulatory enforcement actions. In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, the Ordinary Shares may not be able to remain listed on the exchange. 35 Table of Contents As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, which may limit the information publicly available to our shareholders. As a foreign private issuer, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and therefore there may be less publicly available information about us than if we were a U.S. domestic issuer. For example, we are not subject to the proxy rules in the United States and disclosure with respect to our annual general meetings will be governed by England requirements. In addition, our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder. Therefore, our shareholders may not know on a timely basis when our officers, directors and principal shareholders purchase or sell our Ordinary Shares. As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards. As a foreign private issuer, we are permitted to take advantage of certain provisions in the Nasdaq listing standards that allow us to follow England law for certain governance matters. Certain corporate governance practices in the England may differ significantly from corporate governance listing standards as, except for general fiduciary duties and duties of care, England law has no corporate governance regime which prescribes specific corporate governance standards. Currently, we do not intend to rely on home country practice with respect to our corporate governance after we complete with this offering. However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would have under corporate governance listing standards applicable to U.S. domestic issuers. You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under England law. We are an exempted company incorporated under the laws of the England. Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (Revised) of the England and the common law of the England. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under England law are to a large extent governed by the common law of the England. The common law of the England is derived in part from comparatively limited judicial precedent in the England as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the England. The rights of our shareholders and the fiduciary duties of our directors under England law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the England has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the England. In addition, England companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. We are an exempted company incorporated under the laws of the England. Shareholders of England exempted companies have no general rights under England law to inspect corporate records or to obtain copies of lists of shareholders of these companies. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. Certain corporate governance practices in the England, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers. 36 Table of Contents As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. Certain judgments obtained against us by our shareholders may not be enforceable. We are a England company and substantially all of our assets are located outside of the United States. In addition, substantially all of our current directors and officers are nationals and/or residents of countries other than the United States. All or a substantial portion of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the England may render you unable to enforce a judgment against our assets or the assets of our directors and officers. Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and insiders will hold a large portion of the company s listed securities. Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by the Public Company Accounting Oversight Board ("PCAOB"), an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company s listed securities. Nasdaq was concerned that the offering size was insufficient to establish the company s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Our public offering will be relatively small, and our company s insiders will hold a large portion of the company s listed securities. Nasdaq might apply the additional and more stringent criteria for our initial and continued listing, which might cause delay or even denial of our listing application. If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq Capital Market, although we exempt from certain corporate governance standards applicable to US issuers as a Foreign Private Issuer, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them. We will seek to have our securities approved for listing on the Nasdaq Capital Market upon consummation of this offering. We cannot assure you that we will be able to meet those initial listing requirements at that time. Even if our securities are listed on the Nasdaq Capital Market, we cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market. 37 Table of Contents In addition, following this offering, in order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum stockholders equity, minimum share price, and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting. If the Nasdaq Capital Market does not list our securities or subsequently delists our securities from trading, we could face significant consequences, including: limited availability for market quotations for our securities; reduced liquidity with respect to our securities; a determination that our Ordinary Share is a "penny stock," which will require brokers trading in our Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Share; limited amount of news and analyst coverage; and a decreased ability to issue additional securities or obtain additional financing in the future. The market price of our ordinary shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price. The public offering price for our ordinary shares will be determined through negotiations between the underwriters and us and may vary from the market price of our ordinary shares following our public offering. If you purchase our ordinary shares in our public offering, you may not be able to resell those shares at or above the public offering price. We cannot assure you that the public offering price of our ordinary shares, or the market price following our public offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our public offering. The market price of our ordinary shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: actual or anticipated fluctuations in our revenue and other operating results; the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; announcements by us or our competitors of significant services or features, technical innovations, acquisitions, strategic relationships, joint ventures, or capital commitments; price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; lawsuits threatened or filed against us; and other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. In the event that we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business. 38 Table of Contents We have broad discretion in the use of the net proceeds from our public offering and may not use them effectively. To the extent (i) we raise more money than required for the purposes explained in the section titled "Use of Proceeds" or (ii) we determine that the proposed uses set forth in that section are no longer in the best interests of our Company, we cannot specify with any certainty the particular uses of such net proceeds that we will receive from our public offering. Our management will have broad discretion in the application of such net proceeds, including working capital, possible acquisitions, and other general corporate purposes, and we may spend or invest these proceeds in a way with which our stockholders disagree. The failure by our management to apply these funds effectively could harm our business and financial condition. Pending their use, we may invest the net proceeds from our public offering in a manner that does not produce income or that loses value. As of the date of this Prospectus, Management has not determined the types of businesses that the Company will target or the terms of any potential acquisition. We will incur additional costs as a result of becoming a public company, which could negatively impact our net income and liquidity. Upon completion of this offering, we will become a public company in the United States. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, Sarbanes-Oxley and rules and regulations implemented by the SEC and the Nasdaq Capital Market require significantly heightened corporate governance practices for public companies. We expect that these rules and regulations will increase our legal, accounting and financial compliance costs and will make many corporate activities more time-consuming and costly. We do not expect to incur materially greater costs as a result of becoming a public company than those incurred by similarly sized U.S. public companies. In the event that we fail to comply with these rules and regulations, we could become the subject of a governmental enforcement action, investors may lose confidence in us and the market price of our ordinary shares could decline. The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies. Upon completion of this offering, we will be a publicly listed company in the United States. As a publicly listed company, we will be required to file annual reports with the Securities and Exchange Commission. In some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we will be governed by U.S. laws that our competitors, which are mostly private British companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could affect our results of operations. Our international operations are subject to a variety of legal, regulatory, political and economic risks. Our international activities are significant to our revenues and profits, and we plan to further expand internationally. In certain international market segments, we have relatively little operating experience and may not benefit from any first-to-market advantages. It is costly to establish, develop, and maintain international operations, and promote our brand internationally. Our international operations may not become profitable on a sustained basis. 39 Table of Contents In addition, our international sales and operations are subject to a number of risks, including: local economic, inflation and political conditions; government regulation (such as regulation of our product and service offerings and of competition); restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs); nationalization; and restrictions on foreign ownership; restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less Internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights; business licensing or certification requirements; limitations on the repatriation and investment of funds and foreign currency exchange restrictions; limited fulfillment and technology infrastructure; potential impact of the COVID-19 pandemic on our business operations and the economy in globally; shorter payable and longer inventory and receivable cycles and the resultant negative impact on cash flow; laws and regulations regarding consumer and data protection, privacy, network security, encryption, payments, advertising, and restrictions on pricing or discounts; lower levels of use of the Internet; lower levels of consumer spending and fewer opportunities for growth compared to the U.S., Europe, Japan or the England; difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences; different employee/employer relationships and the existence of works councils and labor unions; differing labor regulations where labor laws may be more advantageous to employees as compared to the U.S. and the other jurisdictions we operate in; compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties; laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and geopolitical events, including pandemic, war and terrorism. As international physical, ecommerce, and omni-channel retail and other services grow, competition will intensify, including through adoption of evolving business models. Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on, the local customer, as well as their more established local brand names. The inability to hire, train, retain, and manage sufficient required personnel may limit our international growth. 40 Table of Contents INDUSTRY AND MARKET DATA This prospectus contains estimates, projections and other information concerning our industry, our business, and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. While we believe our internal company research as to such matters is reliable, it has not been verified by any independent source. In addition, assumptions and estimates of our and our industry s future performance are 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." These and other factors could cause our future performance to differ materially from our assumptions and estimates. See "Special Note Regarding Forward-Looking Statements." 41 Table of Contents USE OF PROCEEDS We estimate that we will receive net proceeds from this offering of approximately $ million after deducting estimated underwriting discounts and commissions and the estimated offering expenses payable by us and based upon an assumed initial offering price of $6.90 per ordinary share (excluding any exercise of the underwriters over-allotment option). A $ increase (decrease) in the assumed initial public offering price of $6.90 per share would increase (decrease) the net proceeds to us from this offering by approximately $ million, after deducting the estimated underwriting discounts and commissions and estimated aggregate offering expenses payable by us and assuming no change to the number of ordinary share offered by us as set forth on the cover page of this prospectus, provided, however, that in no case would we decrease the initial public offering price to less than $6.90 per share. Description of Use Estimated Amount of Net Proceeds (US $) Percentage Product Development 15% Build upstream and downstream ecological chain 10% Decoration of physical store storefronts 15% Online and offline media promotion 3% Talent Team Building 15% Build directly operated stores 15% Market Expansion 10% Business Negotiation 3% Systems Development and Maintenance 10% Public relations maintenance 3% Other operating liquidity 1% Total project input funds 100.00% The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have some flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not imminently used for the above purposes, we intend to invest in short-term, interest-bearing bank deposits or debt instruments. The net proceeds from this offering must be remitted to China beforwe we will be able to use the funds to grow our business. The procedure to remit funds may take several months after completion of this offering. and we will be unable to use the offering proceeds in China until remittance is completed. See "Risk Factors" for further information. 42 Table of Contents DIVIDEND POLICY We have never declared or paid any cash dividends on our common stock, and we do not currently intend to pay any cash dividends on our common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our business. Any future determination to pay dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend upon, among other factors, our results of operations, financial condition, contractual restrictions, and capital requirements. From time to time, we may also enter into other loan or credit agreements or similar borrowing arrangements that may further restrict our ability to declare or pay dividends on our common stock. Our board of directors will have sole discretion in making any future determination to pay dividends, subject to applicable laws, taking into account, among other factors, our results of operations, financial condition, contractual restrictions, and capital requirements. 43 Table of Contents CAPITALIZATION The following table sets forth our capitalization as of Dec 31, 2022 as follows: on an actual basis; and on an adjusted basis to reflect the sale of ordinary shares in this offering, at an assumed initial public offering price of $6.90 per share, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The adjustments reflected below are subject to change and are based upon available information and certain assumptions that we believe are reasonable. Total shareholders equity and total capitalization following the completion of this offering are subject to adjustment based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this capitalization table in conjunction with "Use of Proceeds," "Summary Consolidated Financial and Operating Data," "Management s Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the related notes appearing elsewhere in this prospectus. As of December 31, 2022 Actual Pro Forma As Adjusted Shareholder s Equity: Ordinary shares, US$0.0001 par value per share Statutory reserves Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders equity Total capitalization (1)Gives effect to the sale of Ordinary Shares in this offering at an assumed initial public offering price of $ per share and reflects the application of the proceeds after deducting the underwriting discounts, non-accountable expense allowance and our estimated offering expenses. (2)Pro forma adjusted additional paid in capital reflects the net proceeds we expect to receive, after deducting underwriting discounts and non-accountable expense allowance, and other expenses. We expect to receive net proceeds of approximately $ ($ offering, less underwriting discounts of $ , non-accountable expense allowance of $ , accountable expenses of $ and offering expenses of $ ). Each $1.00 increase (decrease) in the assumed initial public offering price of $ per Ordinary Share would increase (decrease) the pro forma as adjusted amount of total capitalization by $ million, assuming that the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts, non-accountable expense allowance and estimated offering expenses payable by us. An increase (decrease) of one million in the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of total capitalization by $ million, assuming no change in the assumed initial public offering price per Ordinary Share as set forth on the cover page of this prospectus. 44 Table of Contents DILUTION If you invest in our Ordinary Shares, your interest will be diluted to the extent of the difference between the initial public offering price per Ordinary Share and the pro forma net tangible book value per Ordinary Share after the offering. Dilution results from the fact that the offering price per Ordinary Share is substantially in excess of the book value per Ordinary Share attributable to the existing shareholders for our presently outstanding Ordinary Shares. Our net tangible book value attributable to shareholders on December 31, 2022 was $ or approximately $ per Ordinary Share. Net tangible book value per Ordinary Share as of December 31, 2022 represents the amount of total assets less intangible assets and total liabilities, divided by the number of Ordinary Shares outstanding. Our post offering pro forma net tangible book value, which gives effect to receipt of the net proceeds from the offering and issuance of additional shares in the offering, but does not take into consideration any other changes in our net tangible book value after December 31, 2022, will be $ or approximately $ per Ordinary Share. This would result in dilution to investors in this offering of approximately $ per Ordinary Share or approximately % from the assumed offering price of $ per Ordinary Share. Net tangible book value per Ordinary Share would increase to the benefit of present shareholders by $ per share attributable to the purchase of the Ordinary Shares by investors in this offering. The following table sets forth the estimated net tangible book value per Ordinary Share after the offering and the dilution to persons purchasing Ordinary Shares based on the foregoing firm commitment offering assumptions. The number of our Ordinary Shares had been adjusted retrospectively to reflect the increasing of share capital. See "Description of Share Capital" for more details. Offering Assumed public offering price per share Net tangible book value per share as of December 31, 2022 Increase in pro forma net tangible book value per share attributable to price paid by new investors Pro forma net tangible book value per share after this offering Dilution in pro forma net tangible book value per share to new investors in this offering The following table sets forth, on an as adjusted basis as of December 30, 2022, the difference between the number of common stock purchased from us, the total cash consideration paid, and the average price per share paid by our existing shareholders and by new public investors before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, using an assumed public offering price of $6.90 per share: Shares Purchased Total Cash Consideration Number Percent Amount Percent Existing shareholders New investors from public offering Total 45 Table of Contents CORPORATE HISTORY AND STRUCTURE Corporate History ZHONGXING HOLDING GROUP LTD, a British company established on 21st July 2023, is the issuer of the ordinary shares provided in this prospectus. Prior to this issuance and transaction (see the definition below), all our business operations were conducted through ZHONGXING HOLDING GROUP LTD. The original equity owners were Mr. Lijie Wang and Ms. Fengyu Yang. We will complete the transaction before completing this issuance, excluding this issuance. Transaction Prior to the transaction, we expect that there will initially be two holders of common stock of ZHONGXING HOLDING GROUP LTD. We will complete the following organizational transactions related to this offering: We will modify and restate the existing limited liability company agreement of ZHONGXING HOLDING GROUP LTD, which will come into force before the completion of this offering. Invest all existing ownership interests of ZHONGXING HOLDING GROUP LTD. into a certain number of LTD interests. Corporate Structure The following chart illustrates our corporate structure, including our subsidiaries, as of the date of this prospectus. The percentages shown on the following chart represent percentages of equity ownership: 46 Table of Contents MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See "Disclosure Regarding Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under "Risk Factors" and elsewhere in this prospectus. Our Company ZHONGXING HOLDING GROUP LTD is a high-tech digital sports operation company dedicated to national fitness, inclusive sports, intelligent fitness, and scientifically, accurately and effectively improving the physical fitness of the people. We have powerful digital operation tools and intelligent equipment; Integrating various fitness and sports resources provided by the government, such as fitness venues and facilities, by promoting the concept of inclusivity, systematically analyzing resource allocation, and accurately analyzing individual body data indicators; Based on precise analysis of scientific data, we aim to create a systematic and intelligent fitness and exercise program for users that suits their individual needs. Our History and Development ZHONGXING HOLDING GROUP LTD established on July 21,2023 with a registered address at ORTON SOUTHGATE # 100, 12 MANASTY ROAD, PETERBOROUGH, UNITED KINGDOM. Since its establishment, the company has been committed to promoting the innovation of fitness market services.We adopt a precise, standardized, digital and intelligent operation approach to help offline stores rapidly enhance their brand power and influence, and create a fitness service industry with the concepts of fitness for all, sports for all, and intelligent fitness. Through the concept of universal access, we systematically analyze and allocate resources, accurately analyze individual body data indicators, and conduct digital operations. In addition, we have integrated national fitness resources to form a local fitness sports ecosystem suitable for local communities, in order to achieve our company's mission-nationwide health. In the fitness service market, we are dedicated to integrating all types of resources and delivering fitness services that cater to individual needs through a precise operational model. Through systematic analysis, we are able to fully comprehend the needs of different groups and conduct precise analysis based on their health data. This personalized service model not only fulfills the requirements of our users but also aids them in achieving better results during their fitness journey. At the same time, we will apply digital technology to various aspects of fitness services, and improve the efficiency and quality of services through data analysis and intelligent operational methods. We collect fitness data from users, analyze their exercise and physical condition, and provide them with accurate fitness guidance and advice. During the fitness process, we also utilize intelligent devices and applications to track users' exercise data, provide real-time feedback and motivation, and help them better achieve their fitness goals. In addition, we also collaborate with national fitness resources to jointly create a local fitness and sports ecosystem suitable for local communities. Through cooperation with relevant institutions, community organizations, and the public sector, we have integrated rich fitness resources, including venue facilities, professional coaches, and fitness activities. In this way, not only can it meet the fitness needs of local residents, but it can also promote the development of healthy culture in the community and promote the popularization of the concept of national fitness. 47 Table of Contents In summary, our company has been committed to promoting innovation and development of fitness market services since its establishment. Through precise, standardized, digital, and intelligent operation methods, we help offline stores enhance brand strength and influence, and create a fitness service industry with the concept of national fitness, inclusive sports, and intelligent fitness. Through resource analysis and precise analysis of individual body data indicators, digital operation, and integration with national fitness resources, we have achieved the company's goal of national health. Our Products and Service ZHONGXING HOLDING GROUP LTD is committed to developing industry-leading sports and health solutions and intelligent fitness equipment. ZHONGXING HOLDING GROUP LTD's business scope involves the production and sales of fitness equipment; Design, research and development, production, and sales of intelligent wearable fitness series; Design and technical development of intelligent analysis fitness equipment and data analysis system; The operation and maintenance of intelligent fitness center chains and inclusive fitness bases; Universal fitness training services, sub health conditioning, etc. ZHONGXING HOLDING GROUP LTD has developed multiple fitness equipment series products, intelligent wearable fitness series products, and intelligent analysis fitness equipment and data analysis systems. National fitness is not only a fashionable habit among modern young people, but after the epidemic, professionals and the elderly have also accelerated the improvement of fitness awareness and concepts, becoming a popular health action suitable for students, young people, professionals, middle-aged and elderly people and other groups. ZHONGXING HOLDING GROUP LTD has solved the problem of fragmented time for young people's fitness exercises, and has formed a gathering place for professional coaching through a chain of intelligent fitness centers. Professional equipment can more accurately improve physical fitness; Through cooperation with government departments, fitness and sports associations, universities for the elderly, and other institutions, combined with free public venues and public fitness equipment provided by the government, we have not only solved the employment and entrepreneurship problem of fitness promoters, but also deeply popularized fitness activities. Through these basic venues, we can obtain a massive membership system and precise data, providing a solid data foundation and membership system for precision fitness projects and customized fitness services; By utilizing intelligent fitness equipment both online and offline, we can accurately obtain member body data. Through data analysis, we can tailor fitness plans to accurately and quickly improve the national physical fitness. Major Factors Affecting Our Results of Operations As a high-tech digital sports operation company, ZHONGXING HOLDING GROUP LTD is committed to national fitness, inclusive sports, intelligent fitness, and scientifically, accurately and effectively improving the physical fitness of the people. The factors that affect its operation can be roughly divided into social objective factors and internal factors of the company. (1) Social objective factors . Physical fitness and population structure. Under the overall condition of physical fitness and stable population structure, the market prospects of high-tech digital sports operation companies will be relatively stable. If there are changes in physical fitness and population structure, such as an overall increase in people's physical fitness or an aging population, the market prospects of high-tech digital sports operation companies will be affected. . Economic development level. The level of economic development also has a certain impact on the market prospects of high-tech digital sports operation companies. When the level of economic development is high, people will not only meet their basic survival needs, but also pay more attention to the quality of life. People's demand for a healthy life will also increase, which will promote the development of high-tech digital sports operation companies. 48 Table of Contents . Social and cultural background. The social and cultural background will also affect the market prospects of high-tech digital sports operation companies. In a society that pursues the aesthetic of thinness, the development of high-tech digital sports operation companies may be limited; In a society that pursues a more balanced and healthy body, the market prospects of high-tech digital sports operation companies may be better. . Social legal system. The social legal system has an impact on the operation of high-tech digital sports operation companies. If the social legal system is not sound, high-tech digital sports operation companies will face greater risks. If the social legal system is not sound, high-tech digital sports operation companies will face greater risks. The harm caused by fitness cannot be protected by the legal system, and people will lose basic confidence in fitness, leading to a decrease in fitness demand. . Internet technology. The development of Internet technology has an impact on the operation of high-tech digital sports operation companies. The development of digital and intelligent high-tech digital sports operation companies depends on the development of contemporary internet technology, and they cannot meet the needs of internet technology and will face the risk of being eliminated. . Economic Globalization. Economic globalization has made the market competition for high-tech digital sports operation companies more intense, and the geographical scope of the production of fitness equipment parts is no longer limited to a single region, but looking at countries around the world. Therefore, enterprises need to improve their competitiveness by improving service quality. (2) Internal factors within the company I. Cultural values. The cultural values of high-tech digital sports operation companies will determine the ethical bottom line and code of conduct of the enterprise, directly affecting internal employees and customers. II. Recruitment and training. Enterprises need to recruit excellent talents to ensure their long-term development. In addition, training employees is also an important task for enterprises to ensure that employees have the ability to meet the company's development needs. III. Organizational structure and management model. The organizational structure and management model of a company can affect the working atmosphere and incentive mechanism of internal employees, thereby affecting the performance and customer satisfaction of the company. IV. Financial condition. High tech digital sports operation companies need stable financial conditions to support their operations and development, which requires them to plan their budgets reasonably, control costs, and seek financial support. V. Product or service innovation. High tech digital sports operation companies need to constantly innovate to ensure product competitiveness, which requires innovative talents in the enterprise to constantly explore and try new products or services. VI. Customer satisfaction. Customer satisfaction is one of the key indicators of enterprise development, which determines customer loyalty and recommendation to the enterprise, and has a positive impact on the enterprise. VII. Brand building and promotion. Enterprises need to enhance their awareness and reputation through brand building and promotion, which helps to attract more outstanding talents and customers and increase their market share. VIII. Partnership. Enterprises need to establish good cooperative relationships with other relevant enterprises to achieve resource sharing, mutual benefit, and further expand their business scope. 49 Table of Contents Overall, the market prospects of ZHONGXING HOLDING GROUP LTD as a high-tech digital sports operation company depend on many factors. However, with the development of society and the increasing demand of people, as well as the good construction of its own brand, the development prospects of high-tech digital sports operation companies still have great potential. Our Research and Development ZHONGXING HOLDING GROUP LTD based on the open mobile social network and big data analysis platform, with online fitness equipment and intelligent fitness system as the main business direction, introducing the concept of national fitness, inclusive sports and intelligent fitness, leading the reform of online fitness applications. ZHONGXING HOLDING GROUP LTD committed to finding new breakthroughs in mature markets. In recent years, due to the rapid development of the Internet, the scale of the online fitness market is growing. Especially since the COVID-19 outbreak in 2020, big health has become a basic demand of people, and people have paid more attention to sports and fitness. The fitness industry has accelerated its online penetration, and the scale of the online fitness market has grown rapidly. With the popularity of mobile network platforms, online dating and online fitness have spawned more business service models. In recent years, the fitness industry development, especially in the Olympic Games and other large international events and national policy encouragement, the fitness industry maintains stable development, gradually to low line city penetration, online synchronous development, fitness demand gradually upgrade, industry booming, has given rise to a variety of online fitness services, home fitness services and intelligent fitness equipment. At present, the upstream of the fitness industry includes fitness equipment, coach training and course research and development; the midstream includes offline gym, O2O and fitness APP, covering all online and offline fitness scenarios; the downstream includes data management, social platform, information search and exercise peripheral to meet the different derivative needs of consumers. As an existing cutting-edge IT technology, the Internet of Things, etc., it is expected to solve the pain points of online fitness: professionalism and precision by building an open ecosystem.At present, there are a large number of sub-health people, and no high-quality products can help people prevent and improve sub-health diseases.ZHONGXING HOLDING GROUP LTD Establish independent innovation of fitness course research and development system, mechanical system, health management system, health conditioning system, through the digital operation technology system, realize the headquarters of unified management, unified promotion, unified sales, unified support of digital fitness chain, build diversified ecological digital fitness industry chain service platform. For the lack of data analysis, weak personalized service, members of the specific body index data fuzzy is not accurate, difficult to user pain points and demand, the lack of customized fitness solutions, the company through the analysis of human body index data, to provide users with a set of scientific data accurate analysis for their individual systematic intelligent fitness plan, scientific, accurate and effective improve the physical quality, to reduce and prevent the incidence of chronic diseases, so as to reduce sub-health conditions. Is the sports fitness industry professionals and serious shortage of resources, to "online + offline + all channel" covering fitness industry ecological system, to "Shared partners + Zhongxing Course + full service system" build millions of digital member community system, promote the sports fitness industry professionals and resource utilization, improve the utilization rate of fitness resources use. In the future, ZHONGXING HOLDING GROUP LTD will gradually expand its own strength and provide better services for users. Through investment, equity participation, strategic cooperation and other ways, gradually expand their own strength and influence, continue to build their own sports fitness service network platform, through the organic combination of online and offline, firmly follow up in the sports fitness service industry, to form their own brand effect. 50 Table of Contents We plan to layout the headquarters operation center, build three major intelligent equipment production bases, and build a franchise chain network that integrates thousands of online and offline home fitness equipment sales and intelligent fitness services. Intelligent fitness products cover solutions such as home fitness, commercial fitness, national fitness, physical fitness training, elderly fitness, campus sports, fitness venues, and other fields, as well as universal fitness training services and sub health conditioning. By utilizing scientific digital intelligent fitness theoretical solutions and data analysis systems, we strive to become the industry leader in the field of digital intelligent fitness. We continuously innovate, introduce high-tech digital analysis technology, enhance our core competitiveness, customize and promote fitness plans and equipment, and aim to become a benchmark brand in the digital national intelligent fitness industry in terms of size, brand awareness, product quality, and other aspects in the future. Our strategic plan is roughly as follows: 2023 is the preparation period for enterprise planning, completing the layout of the national fitness ecological strategy and the construction of the digital technology system platform, forming a model market and headquarters base. In 2024, to promote the expansion of financing and mergers and acquisitions period, we will use the membership systems of government sports guidance departments, fitness associations, elderly associations, and other departments to promote the establishment of the national fitness membership system on the digital ecological platform of ZHONGXING HOLDING GROUP LTD Fitness Industry; we will build a headquarters base for sports and fitness formats and a model industrial park, forming a fitness and sports exhibition and experience area that integrates multiple formats; We will act as an agent to expand sales of fitness and sports brand products in the domestic market both online and offline, establish a sports digital fitness chain, integrate online and offline membership systems, and initiate the NASDAQ listing process.In 2025, during the patent application, industrial expansion, and listing bell ringing trading period, we will complete the theoretical system for intellectual property protection of our own brand patents, intelligent fitness equipment, etc.; we will expand the sales of our own brand products in the domestic market, improve the online and offline chain institutions of ZHONGXING HOLDING GROUP LTD, and reach thousands of stores in thousands of cities; We will raise funds and acquire upstream and downstream enterprises and high-quality products in the sports and fitness industry chain, forming a profit core value system. Assist other enterprises in creating customized brand products independently developed by ZHONGXING HOLDING GROUP LTD; we will complete the bell ringing for the NASDAQ listing. In 2026, as the brand layout is completed and the market is improved, we will complete the plan for our own brand fitness intelligent products to enter the international fitness market; we will provide financing and mergers and acquisitions to help more other corporate brands enter the international trade market; We will form the largest digital intelligent fitness product agency retail platform; We will form a data system for tens of millions of national fitness members. Regulatory Environment The regulatory environment of high-tech digital sports operators may vary in different countries because it is influenced by different national laws and regulations and social cultures. Here are some of the factors that could influence the regulatory environment for high-tech digital sports operators: (1) Laws and regulations. For example, some countries encourage the development of high-tech digital sports operating companies, while others neither encourage nor suppress them. In addition, different laws in different countries will also have different provisions on the definition of fitness devices and the category of marketable devices. In terms of laws and policies, the state has strengthened the requirements for orderly competition and open connectivity among Internet enterprises, prohibited the abuse of dominant market position and monopoly operation, created more living space for new participants, and formed a healthy, fair and orderly environment for development. (2) Social culture. In different countries' social cultures, high-tech digital sports operation companies may encounter different concepts. For example, in some countries' societies, people may pursue a slender and slender body aesthetic, while others place greater emphasis on individual physical fitness and health. In addition, the cultural concepts of different countries can also have an impact on the service content and methods of high-tech digital sports operation companies. 51 Table of Contents (3) Regulators. Different countries have different regulators for high-tech digital sports companies. In some countries approve high-tech digital sports companies, while those in some countries may pay more attention to supervision and management. (4) Market competition. High-tech digital sports operating companies in different countries. Some countries may be more competitive, while others may be relatively moderate. (5) Source of funds. In some countries, high-tech digital sports operators may have government funding or policy support, while in others, high-tech digital sports operators may operate mainly on private funds. Therefore, the analysis of the regulatory environment of high-tech digital sports operating companies needs to consider many factors, such as laws and regulations, social culture, regulatory agencies, market competition and funding sources. Here are some examples of the different regulatory measures in the three countries: (1) The United States. Us government regulation of digital sports operators is dominated by the Federal Trade Commission (FTC) and the Justice Department. The Federal Trade Commission (FTC) oversees the company's marketing and advertising campaigns, as well as regulating the collection and use of user data. The Justice Department handles antitrust and antitrust issues. The Federal Communications Commission (FCC) is also involved in regulating the communications services of digital sports operating companies, such as Internet service providers (ISP). In addition, there are some state agencies in the United States that regulates the behavior of digital sports operating companies. (2) Australia. The Australian government's regulation of digital sports operators is dominated by the Australian Competition and Consumer Commission (ACCC). The role of the Australian Competition and Consumer Council (ACCC) is to ensure that companies do not abuse their dominant market position to protect consumers from misconduct. The Australian Competition and Consumer Council (ACCC) also oversees the collection and use of user data, as well as its advertising. (3) Japan. Japan's digital sports operating companies are regulated by the Japan Trade Promotion Agency (JETRO) and the Japan Intellectual Property Association (JIPA). The Japan Trade Promotion Agency (JETRO) responsibilities include assisting foreign investors with business in Japan, while the Japan Intellectual Property Association (JIPA) handles intellectual property issues. In addition, the Japanese government has enacted a series of laws and regulations to limit the market dominance of digital sports operators. Production Capacity ZHONGXING HOLDING GROUP LTD Was founded to become a leading provider of sports and health solutions and intelligent fitness equipment in the industry. At present, the company proposed layout headquarters operation center, the construction of three intelligent equipment production base, build thousands of online and offline family fitness appliance sales and intelligent fitness services in the integration of joining chain network, intelligent fitness products covering family fitness, commercial fitness, national fitness, physical fitness, elderly fitness, campus sports, special fitness venues solutions such as products and the pratt & whitney fitness training services, sub-health conditioning, etc. We will use the scientific digital intelligent fitness theory scheme and data analysis system, strive to become the industry first in the field of digital intelligent fitness, continuous innovation, the introduction of high-tech digital analysis technology, enhance their core competitiveness, customized promotion fitness plan and fitness equipment, in the future in the volume size, brand awareness, product quality and become a digital national intelligent fitness industry benchmarking brand. 52 Table of Contents Our Marketing and Sales (1) Business model ZHONGXING HOLDING GROUP LTD for the traditional fitness and health management mode of bold exploration, reform and innovation, forming a digital fitness ecological innovative business model. . Community fitness points model. The company creates a new fitness points ecosystem, quickly forms a national fitness data drainage entrance, and forms a multi-billion member system. By using the public fitness venues and facilities provided by the government, exercisers can obtain green fitness points through daily fitness exercises. The benchmark of green fitness points is converted into coupons for exercise and fitness in professional fitness venues or purchase of fitness equipment products, and the entry point discount accumulated by exercisers' daily consumption and the consumer capital profit created is transformed into a points quantization system. Detonate and improve the new efforts of users, accelerate the promotion of new expansion mechanisms, continue to stimulate the vitality of consumer fitness, promote the deep integration of online and offline, have more public fitness communities, form big data membership systems, create countless business opportunities and empower business ecosystem profit points, for professional fitness promotion channels, product attention, reputation, loyalty, traffic data, marketing model, science and technology research and development, brand promotion and other resources redistribution, to create a hot storm eye drainage fitness track, so that mass fitness becomes a popular sport, to achieve the dual benefits of fitness exercise and fitness consumption redistribution. . Digital intelligent fitness chain model. ZHONGXING HOLDING GROUP LTD establishes independent innovation of fitness course research and development system, mechanical system, health management system, health conditioning system, through the digital operation technology system, realize the headquarters of unified management, unified promotion, unified sales, unified support of digital fitness chain, build diversified ecological digital fitness industry chain service platform. Company with a unique innovation of online course training system, partnership mechanism, development of national regional agents and franchisees chain system, online multi-channel promotion recruitment of students, the whole store output, expands replication, marketing channels covering electric business platform, new media marketing platform, TikTok live mainstream new media marketing matrix, at the same time and sports fitness association, government departments, the elderly university departments to cooperate, innovative business system and fully implement application. Through the franchise chain mode of direct digital operation, the company covers the fitness industry ecosystem with "online + offline + all-channel" and the "shared partner + Zhongxing Course +full service system" to build a tens of millions of level digital member community system. . Integrated business form of fitness alliance mode. ZHONGXING HOLDING GROUP LTD to fitness industry chain upstream and downstream quality intelligent products and formats, fusion of high-end custom gym enterprise, intelligent fitness equipment enterprises, big health conditioning supply chain enterprises, Internet membership integration system, etc., all channels to cooperation, form a big data system, fusion of private custom, high-end fitness consumption, digital industrialization services in the field of value shaping and multiple benefits, win-win development. (2) Sales and promotion channels . New media network platform promotion.Build your own brand on Twitter, Instagram, TikTok and other social media platforms, promote your services and products, connect with potential customers, and increase exposure and awareness. . Join the chain regional agency. By winning the regional agency right, in the region according to the specific market conditions to open a number of branches, the formation of a national market promotion layout. . Member system digital import and joint promotion platform. Through the analysis of big data, advertise to potential customers at appropriate times and scenarios, such as providing physical fitness services for people with higher fitness needs and those who contact physical fitness for the first time. 53 Table of Contents . Partner marketing. Cooperate with relevant enterprise franchisees, such as sports equipment shopping malls, sports clubs, etc., let them recommend their own services and products to customers, improve visibility and exposure rate. . Recommendation and word-of-mouth marketing. By providing high-quality services and products, the students who buy the services and products are satisfied and leave good praise, so that more potential customers in the wait-and-see stage can understand and serve, and improve the visibility and exposure rate. 54 Table of Contents BUSINESS Our Mission ZHONGXING HOLDING GROUP LTD is a brand company focusing on providing high-quality high-tech sports and fitness services for students, young people, professionals, middle-aged and elderly people and other groups. It has a complete service process and perfect fitness equipment, and accurately matches individual needs with a powerful digital system. Form a personalized fitness program. The company focuses on the service innovation of the sports and fitness service market, and helps offline stores to rapidly enhance their brand power and influence through digital, standardized, technological and large-scale operations. At the same time, through the analysis of human body index data, it provides users with a set of systematic and intelligent fitness sports solutions suitable for their own individuals based on accurate analysis of scientific data. Through intelligent equipment, big data analysis, digital operation and other high-tech equipment and digital operation tools, through the fitness data collection system and digital big data analysis system of physical exercise, scientific, accurate and effective to improve the physical fitness of the people, and create a global sports fitness service industry of national fitness, inclusive sports and intelligent fitness. The vision of ZHONGXING HOLDING GROUP LTD is to continuously develop a scientific digital operation system and an accurate ZHONGXING HOLDING GROUP LTD exercise data analysis method for fitness through its unique and powerful online and offline linkage capabilities, as well as supporting accurate intelligent wearable devices that can digitally confirm rights. Through the analysis of the user's body index data, it provides users with a personalized systematic intelligent fitness program, so as to change people's unhealthy living habits and exercise methods, solve the problem of declining physical fitness and sub-health of various people after the current epidemic, create an international intelligent sports fitness service industry ecology, and help improve the physical health index of all mankind. ZHONGXING HOLDING GROUP LTD aims to build a first-class digital enterprise for all people's sports and fitness. The company strives to become the first in the field of digital intelligent fitness by using scientific digital intelligent fitness theoretical solutions and data analysis systems. It constantly innovates, introduces high-tech digital analysis technology, enhances its core competitiveness, and customized and promotes fitness programs and fitness equipment, hoping to become a benchmark brand in the digital intelligent fitness industry in all aspects of size, brand awareness, and product quality in the future. ZHONGXING HOLDING GROUP LTD will adhere to the belief of "customer first, sincere and trustworthy, quality first", adhere to and realize the mission of "striving to improve the public's health and better future". Overview ZHONGXING HOLDING GROUP LTD is a high-tech digital sports operation company dedicated to the development of national fitness, inclusive sports and smart fitness. As an enterprise focused on improving the physical fitness of the whole people, ZHONGXING HOLDING GROUP LTD's main businesses include providing sports health solutions and manufacturing intelligent fitness equipment. ZHONGXING HOLDING GROUP LTD adheres to the concept of enabling everyone to enjoy national fitness and strives to provide quality services for the masses. Through sports health solutions, ZHONGXING HOLDING GROUP LTD helps users develop personalized fitness plans, and provides professional guidance and training, so that everyone can enjoy scientific, accurate and effective fitness experience. ZHONGXING HOLDING GROUP LTD focuses on popularizing sports knowledge, broadening sports methods, and promoting the popularization and development of national fitness. Secondly, ZHONGXING HOLDING GROUP LTD focuses on the research and development and application of intelligent fitness technology. With the help of modern scientific and technological means, such as artificial intelligence and big data analysis, ZHONGXING HOLDING GROUP LTD has developed a series of intelligent fitness equipment and combined it with traditional fitness. These intelligent fitness equipment through scientific and accurate data analysis, to provide users with personalized fitness guidance and monitoring, to help them better grasp the status and progress of fitness. At the same time, smart fitness equipment also provides interactivity and entertainment, increasing user engagement and enthusiasm. 55 Table of Contents ZHONGXING HOLDING GROUP LTD also attaches importance to the promotion and practice of inclusive sports. Through cooperation with communities, schools and other institutions, ZHONGXING HOLDING GROUP LTD creates national fitness activities and events to provide diverse sports options for people of different ages, genders and occupational backgrounds. These activities not only promote physical health, but also enhance social communication and teamwork. Through the efforts of Puhui Fitness Base, ZHONGXING HOLDING GROUP LTD provides equal opportunities for everyone to participate in fitness activities and promotes the development of national fitness. Prior to the IPO, we total share capital was about 200,000,000 ordinary shares. This time, about 50,000,000 ordinary shares were offered, which is we expect that the initial public offering price will be no less than US $6.90 per share. ZHONGXING HOLDING GROUP LTD is committed to using scientific and technological innovation and smart fitness concept to improve the physical fitness of all people. Through the application of sports health solutions and intelligent fitness equipment, ZHONGXING HOLDING GROUP LTD not only meets people's needs for fitness, but also provides users with convenient, scientific and efficient fitness methods. ZHONGXING HOLDING GROUP LTD is committed to promoting the popularization and development of national fitness and helping everyone achieve the goal of healthy life. ZHONGXING HOLDING GROUP LTD is engaged in the retail business of fitness equipment; Design, development and retail of smart wearable fitness series; Intelligent analysis fitness equipment and data analysis system design and technology development; Operation and maintenance of intelligent gym chain and Puhui Fitness Base; Universal fitness training services, sub-health conditioning, etc. are currently mainly operated independently. ZHONGXING HOLDING GROUP LTD aims to solve the problem of fragmented time for young people's fitness exercises. Through the chain of intelligent fitness centers, Zhongxing has formed a gathering place for professional counseling, and professional equipment can improve physical fitness more accurately. Through cooperation with government departments, fitness and sports associations, universities for the elderly and other institutions, combined with free public venues and common fitness equipment provided by the government, it not only solves the problem of employment and entrepreneurship of fitness promoters, but also deeply popularizes fitness sports. Through these basic scenarios, a huge number of membership systems and accurate data can be obtained. Provide a solid data foundation and membership system for precision fitness programs and customized fitness services; The use of online and offline intelligent fitness equipment, accurate access to members' physical data, through data analysis, tailored fitness programs, accurate and rapid improvement of national physical fitness. Our Competitive Strengths Through its unique and powerful online and offline linkage capabilities, ZHONGXING HOLDING GROUP LTD accurately matches individual needs with a powerful digital system to form personalized fitness programs. Through the analysis of the user's body index data, it provides users with a personalized systematic intelligent fitness program, changes people's unhealthy living habits and exercise methods, and solves the problem of declining physical fitness and sub-health of various people after the current epidemic. ZHONGXING HOLDING GROUP LTD makes use of scientific digital intelligent fitness theory and data analysis system to become a competitive enterprise in the field of digital intelligent fitness. It breaks the geographical and social restrictions, so that people in different occupations and different ages who are restricted by traditional fitness conditions can achieve online physical fitness. The platform will use big data to identify physical data of objects, and provide them with unique intelligent fitness programs that are more suitable for individual personalization according to the data provided by the intelligent system. 56 Table of Contents ZHONGXING HOLDING GROUP LTD hopes that through intelligent equipment, big data analysis, digital operation and other high-tech equipment and digital operation tools, through the physical exercise fitness data collection system and digital big data analysis system, To create an intelligent fitness program database based on the update of users own health and fitness needs. At the same time, through the layout of offline stores, to serve ZHONGXING HOLDING GROUP LTD s customers. Under the trend of population aging, the demand for the elderly to pursue health is increasing, and how to carry out scientific and effective physical fitness activities for the elderly also has certain limitations, this market is currently in a rapid development stage, but it is a relatively blank place. Combined with the development plan of ZHONGXING HOLDING GROUP LTD, its competitive advantages can be summarized as follows: (1) User data. ZHONGXING HOLDING GROUP LTD accurately matches individual needs with a powerful digital system through its unique and powerful online and offline linkage capabilities. The combination of online and offline can attract more user traffic and help ZHONGXING HOLDING GROUP LTD effectively expand its market share. (2) Professional services. ZHONGXING HOLDING GROUP LTD can use the development of scientific digital operation system and accurate fitness exercise data analysis methods, as well as supporting accurate intelligent wearable devices that can confirm rights digitally. Through the analysis of human index data, to provide users with a set of scientific data accurate analysis based on their own individual systematic intelligent fitness program, to help users better improve unhealthy living habits and exercise methods, so as to achieve effective fitness. (3) Brand awareness. ZHONGXING HOLDING GROUP LTD will build and form well-known brand benefits through the investment and distribution of various advertisements, as well as the company's own high-quality service level, diversified service content and innovative business scope with The Times, so as to help the company stand out in the fierce market competition. (4) Diversified service content. ZHONGXING HOLDING GROUP LTD will provide diversified service content according to different needs of social groups, including online services and offline services, to help users better meet their needs, improve user satisfaction and loyalty, and thus lock user traffic. (5) Social media channels. ZHONGXING HOLDING GROUP LTD will promote the company through various social media channels. This can help enterprises promote their own services and attract more users. At the same time, through the online social platform, ZHONGXING HOLDING GROUP LTD can better promote the communication and interaction between enterprises and users. More in-depth understanding of users in the economic conditions and cultural background of contemporary society for their own health requirements and body aesthetic needs. Our Opportunities Under the background of the current Internet development, scientific and technological progress and favorable policies, the sports and fitness industry is showing a trend of sustainable development. Especially since the outbreak of COVID-19, people have paid more attention to sports and fitness, which has also accelerated the online penetration of the fitness industry, and online fitness has developed rapidly. However, in the open social space, it is difficult to form a dominant situation. Due to the diversification of market demand, people have different preferences for fitness methods and content, so there are many competitors to participate in the competition situation. Although the market competition is fierce, it also provides an opportunity for ZHONGXING HOLDING GROUP LTD to seize the market opportunity. ZHONGXING HOLDING GROUP LTD As a competitive enterprise, in the current international situation, we should take the initiative to adapt to the changes in market demand, actively look for development opportunities and seize the first opportunity. 81 Table of Contents PRINCIPAL SHAREHOLDERS Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of the date of this prospectus by: each of our directors and executive officers; and each person known to us to beneficially own more than 5% of our Ordinary Shares on an as-converted basis. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person. Ordinary Shares Beneficially Owned Prior to This Offering Shares Beneficially Owned After This Offering Number % Number % Directors and Executive Officers: Mr. Lijie Wang 3500000 35 Ms. Fengyu Yang 6500000 57 Table of Contents First, companies should pay close attention to consumers' needs and preferences for online fitness, and launch more personalized and differentiated products and services for different groups of people. Secondly, the company should strengthen the cooperation with relevant enterprises and achieve rapid development through the cooperation mode of resource sharing and mutual benefit. At the same time, the company also needs to increase the investment in scientific and technological innovation, the use of artificial intelligence big data analysis and other advanced technical means, improve the product research and development and operation efficiency, to provide consumers with a better experience. In addition, in the international market, ZHONGXING HOLDING GROUP LTD should also actively expand overseas markets and find more partners and customers. Through the development of scientific internationalization strategy, and combined with the local market demand and cultural characteristics, to promote the rapid development of the company in the overseas market. In short, the current international situation provides a broad development space for ZHONGXING HOLDING GROUP LTD to seize the market opportunity. The company can achieve its own rapid development and market leading position by paying close attention to market demand, strengthening cooperation, increasing investment in scientific and technological innovation, and expanding overseas markets. Our Weaknesses ZHONGXING HOLDING GROUP LTD Is a high-tech digital sports operation company, its operating weakness can be analyzed from many aspects, the following are some possible reasons: (1) Fierce market competition. There is fierce competition in the digital sports operation market, and major companies are getting involved in this field to provide various innovative solutions. Instead, a fledgling high-tech digital sports operator is struggling to stand out in the market from competitors that have established brands and customer base. (2) Technical problems. High-tech digital sports operating companies need to be equipped with advanced technological capabilities to meet users' needs for technologies such as real-time data, virtual reality and augmented reality. But the development and application of these technologies require a lot of capital and human resources, especially for startups, which is often difficult to bear these risks and costs. (3) Lack of a stable profit model. In the field of digital sports operations, the profit model is not clear, and companies often rely on advertising revenue, event operation service fees or cooperation with brands to obtain revenue. However, due to fierce competition, advertisers have limited platforms willing to spend money, and working with brands also needs to build a reliable user base and brand image, which is a challenge for startups. (4) It is difficult to cultivate and retain users. High-tech digital sports operators need to attract users, cultivate user engagement and keep users active. However, this requires continuously providing valuable content and experiences, as well as interaction and engagement with users. For start-up companies, they often lack enough resources and capabilities to meet the needs of users, resulting in the loss of users. (5) Regulations and policy restrictions. Digital sports operation involves the collection, storage and use of user data, and some countries and regions have formulated strict regulations and policies on personal privacy and data security. High-tech digital sports operating companies need to spend a lot of energy and resources to ensure that the relevant protection of user privacy and data security. 58 Table of Contents In general, high-tech digital sports operating companies are facing operational weakness in terms of fierce market competition, technical problems, unstable profit model, difficulties in user training and retention, and regulatory and policy restrictions. To solve these problems requires the company to have innovation ability, financial strength and effective marketing strategy, and to cooperate with relevant government departments and industry institutions to jointly promote the development of digital sports operation industry. Our Threats ZHONGXING HOLDING GROUP LTD is a high-tech digital sports operating company that faces many threats in its development. Here are some possible threats: (1) Technological change. With the continuous progress and innovation of science and technology, new technologies and solutions continue to emerge. For high-tech digital sports operating companies, if they fail to grasp and apply new technology, they may be surpassed by competitors. For example, the rise of virtual reality, augmented reality and other technologies may make the traditional digital sports operation mode uncompetitive. (2) Competitors. There is fierce competition in the digital sports operation market, and major companies are getting involved in this field to provide various innovative solutions. Competitors that have established brands and customer base often have more resources and experience and are easier to acquire users and brand partners. If high-tech digital sports operators cannot effectively compete with their competitors, they risk being eliminated. (3) Changes in user needs. The user needs of the digital sports operation are constantly changing, and the high-tech digital sports operation companies need to constantly update and adjust their products and services to adapt to the changing market demand. If the company fails to meet the needs of users in time, it may lead to user loss and market share decline. (4) Safety risks. Digital sports operators need to process a large amount of user data, including personal information, transaction records, etc. If the company's data security measures are not in place, it will face security risks such as hacker attacks and data leakage. This will not only affect the company's reputation and user trust, but also be punished by laws and regulations. (5) Regulations and policy restrictions. Digital sports operation involves the collection, storage and use of user data, and some countries and regions have formulated strict regulations and policies on personal privacy and data security. If high-tech digital sports operating companies fail to comply, they may face serious consequences such as fines and suspension for rectification. (6) The economic environment is unstable. The instability of the economic environment is also a threat faced by high-tech digital sports operating companies. Economic recession, financial crisis and other situations will lead to the contraction of corporate investment and the decline of consumer purchasing power, which will affect the profitability and business expansion of companies.In general, high-tech digital sports operating companies face threats from technological change, competitors, user demand changes, security risks, regulatory and policy restrictions, and instability of the economic environment in the development process. The key to addressing these threats is to keep the technology leading, provide innovative solutions, build strong brands and user groups, while operating in compliance, and timely adapt strategies to meet changes in the market. Our Strategies ZHONGXING HOLDING GROUP LTD is a fitness enterprise leading the trend of The Times. It has carried out bold exploration and reform and innovation for the traditional fitness and health management mode, and formed a digital fitness ecological innovative business model. This mode includes community fitness integral mode, digital intelligent fitness chain mode and integrated business fitness alliance mode. 59 Table of Contents (1) Community fitness points model. The company creates a new fitness points ecosystem, quickly forms a national fitness data drainage entrance, and forms a multi-billion member system. By using the public fitness venues and facilities provided by the government, exercisers can obtain green fitness points through daily fitness exercises. The benchmark of green fitness points is converted into coupons for exercise and fitness in professional fitness venues or purchase of fitness equipment products, and the entry point discount accumulated by exercisers' daily consumption and the consumer capital profit created is transformed into a points quantization system. Detonate and improve the new efforts of users, accelerate the promotion of new expansion mechanisms, continue to stimulate the vitality of consumer fitness, promote the deep integration of online and offline, have more public fitness communities, form big data membership systems, create countless business opportunities and empower business ecosystem profit points, For professional fitness promotion channels, product attention, reputation, loyalty, traffic data, marketing model, science and technology research and development, brand promotion and other resources redistribution, to create a hot storm eye drainage fitness track, so that mass fitness become a popular sport, to achieve the dual benefits of fitness exercise and fitness consumption redistribution. (2) Digital intelligent fitness chain model. ZHONGXING HOLDING GROUP LTD establish independent innovation of fitness course research and development system, mechanical system, health management system, health conditioning system, through the digital operation technology system, realize the headquarters of unified management, unified promotion, unified sales, unified support of digital fitness chain, build diversified ecological digital fitness industry chain service platform. Company with a unique innovation of online course training system, partnership mechanism, development of national regional agents and franchisees chain system, online multi-channel promotion recruitment of students, the whole store output, expand replication, marketing channels covering electric business platform, new media marketing platform, TikTok live mainstream new media marketing matrix, at the same time and sports fitness association, government departments, the elderly university departments to cooperate, innovative business system and fully implement application. Through the franchise chain mode of direct digital operation, the company covers the fitness industry ecosystem with "online + offline + all-channel" and the "shared partner + Zhongxing Course + comprehensive service system" to build a tens of millions of level digital member community system. (3) Integrated business form of fitness alliance mode. ZHONGXING HOLDING GROUP LTD to fitness industry chain upstream and downstream quality intelligent products and formats, fusion of high-end custom gym enterprise, intelligent fitness equipment enterprises, big health conditioning supply chain enterprises, Internet membership integration system, etc., all channels to cooperation, form a big data system, fusion of private custom, high-end fitness consumption, digital industrialization services in the field of value shaping and multiple benefits, win-win development. Secondly, ZHONGXING HOLDING GROUP LTD also pays great attention to sales and promotion channels, the main ways are: (1) New media network platform promotion.Build your own brand on Twitter, Instagram, Tiktok and other social media platforms, promote your services and products, connect with potential customers, and increase exposure and awareness. (2) Join the chain regional agency. By winning the regional agency right, in the region according to the specific market conditions to open a number of branches, the formation of a national market promotion layout. (3) Member system digital import and joint promotion platform. Through the analysis of big data, advertise to potential customers at appropriate times and scenarios, such as providing physical fitness services for people with higher fitness needs and those who contact physical fitness for the first time. (4) Partner marketing. Cooperate with relevant enterprise franchisees, such as sports equipment shopping malls, sports clubs, etc., let them recommend their own services and products to customers, improve visibility and exposure rate. 60 Table of Contents (5) Recommendation and word-of-mouth marketing. By providing high-quality services and products, the students who buy the services and products are satisfied and leave good praise, so that more potential customers in the wait-and-see stage can understand and serve, and improve the visibility and exposure rate. In the future, ZHONGXING HOLDING GROUP LTD proposed layout headquarters operation center, the construction of three intelligent equipment production base, build thousands of online and offline family fitness appliance sales and intelligent fitness services in the integration of chain network, intelligent fitness products covering family fitness, commercial fitness, national fitness, elderly fitness, fitness, fitness, campus sports, special solutions such as products and the pratt & whitney fitness training services, sub-health conditioning, etc. Using scientific digital intelligent fitness theory scheme and data analysis system, strive to become the industry first in the field of digital intelligent fitness, continuous innovation, the introduction of high-tech digital analysis technology, enhance their core competitiveness, customized promotion fitness plan and fitness equipment, in the future in the volume size, brand awareness, product quality comprehensive become a digital national intelligent fitness industry benchmarking brand. Our Products and Services ZHONGXING HOLDING GROUP LTD committed to the research and development of industry-leading sports and health solutions and intelligent fitness equipment. ZHONGXING HOLDING GROUP LTD business scope covers the production and sales of fitness equipment; design, development, production and sales of intelligent wearable fitness series; design and technology development of intelligent analysis fitness equipment and data analysis system; operation and maintenance of intelligent gym chain and inclusive fitness base, sub-health training service, etc. ZHONGXING HOLDING GROUP LTD is a company that has developed a number of fitness equipment products, smart wearable fitness products and intelligent analysis of fitness equipment and data analysis system. As a company focused on the fitness field, ZHONGXING HOLDING GROUP LTD is committed to providing users with a full range of fitness solutions. First, ZHONGXING HOLDING GROUP LTD has developed a series of fitness equipment products designed to meet the fitness needs of different users. These products include aerobic equipment, strength training equipment, core training equipment, etc., covering a variety of different types of fitness equipment. These devices not only have a high-quality manufacturing process and comfortable use experience, but also can interact with users through intelligent technology to provide personalized fitness guidance and training programs. Second, ZHONGXING HOLDING GROUP LTD has also launched a series of smart wearable fitness products to meet users' needs for convenience, real-time monitoring and analysis of their own health conditions. These products include smart wristbands, smart watches, etc., which can monitor users' heart rate, steps, sleep quality and other health indicators in real time, and conduct data analysis and fitness plan formulation through mobile APP or cloud platform, providing users with personalized fitness guidance and health management. In addition, ZHONGXING HOLDING GROUP LTD has also developed an intelligent fitness analysis equipment and data analysis system designed to help users better understand and analyze their fitness data. Through the built-in sensors and intelligent technology, these fitness equipment can collect the user's exercise data in real time, and process and analyze these data through the analysis system, providing comprehensive and accurate exercise assessment and training recommendations. 61 Table of Contents National fitness is not only a fashionable habit among modern young people, but after the epidemic, professionals and the elderly have also accelerated the improvement of fitness awareness and concepts, becoming a popular health action suitable for students, young people, professionals, middle-aged and elderly people and other groups. ZHONGXING HOLDING GROUP LTD has solved the problem of fragmented time for young people's fitness exercises, and has formed a gathering place for professional coaching through a chain of intelligent fitness centers. Professional equipment can more accurately improve physical fitness; Through cooperation with government departments, fitness and sports associations, universities for the elderly, and other institutions, combined with free public venues and public fitness equipment provided by the government, we have not only solved the employment and entrepreneurship problem of fitness promoters, but also deeply popularized fitness activities. Through these basic venues, we can obtain a massive membership system and precise data, providing a solid data foundation and membership system for precision fitness projects and customized fitness services; By utilizing intelligent fitness equipment both online and offline, we can accurately obtain member body data. Through data analysis, we can tailor fitness plans to accurately and quickly improve the national physical fitness. Our Business Model ZHONGXING HOLDING GROUP LTD is a fitness enterprise leading the trend of The Times. It has carried out bold exploration and reform and innovation for the traditional fitness and health management mode, and formed a digital fitness ecological innovative business model. This mode includes community fitness integral mode, digital intelligent fitness chain mode and integrated business fitness alliance mode. I. Community fitness points mode. ZHONGXING HOLDING GROUP LTD create a new fitness points ecosystem, quickly form a drainage entrance of national fitness data, and form a billions of million-level membership system. Using public government-provided fitness venues and fitness facilities, Exercisers can get green fitness points through their daily fitness activities, Green fitness points will be converted into deduction coupons for professional fitness venues or purchasing fitness equipment products, Seize the integral discount accumulated by the daily consumption into the integral quantitative system, Detonate the new efforts to increase users, We will accelerate the new capacity expansion mechanism, Continue to stimulate consumer fitness vitality, Promote the deep integration of online and offline services, With more mass fitness communities, Form a big data membership system, Create countless business opportunities and empower the business circle ecosystem profit points, For professional fitness promotion channels, product attention, reputation, loyalty, flow data, marketing mode, scientific and technological research and development, brand promotion and other resources redistribution, Create a hot eye of storm drainage fitness track, Make public fitness a universal exercise, Realize the double benefits of fitness exercise and fitness consumption benefits. II. Digital and intelligent fitness chain mode. ZHONGXING HOLDING GROUP LTD established the independent innovation of the fitness course research and development system, body mechanics system, health management system and sub-health conditioning system, and relying on the digital operation technology system, to achieve the headquarters of the unified management, promotion, sales and support of the digital fitness chain. ZHONGXING HOLDING GROUP LTD through the online course training system and partnership mechanism, develop the national regional agent and franchise chain system through multi-channel recruitment promotion, and promote the mainstream new media marketing matrix such as e-commerce platform, new media marketing platform and Douyin Live. At the same time, ZHONGXING HOLDING GROUP LTD cooperates with sports and fitness associations, government departments and universities for the elderly to fully implement the application and build a diversified and ecological digital fitness industry chain service platform. Through the above measures, ZHONGXING HOLDING GROUP LTD covers the fitness industry ecosystem with online + offline + all-channel, and builds a community system of tens of millions of members with the "shared partner + Zhongxing course + comprehensive service system". . Fitness alliance mode of combined business format. ZHONGXING HOLDING GROUP LTD to fitness industry chain upstream and downstream quality intelligent products and formats, fusion of high-end custom gym enterprise, intelligent fitness equipment enterprises, big health conditioning supply chain enterprises, Internet membership integration system, etc., all channels to cooperation, form a big data system, fusion of private custom, high-end fitness consumption, digital industrialization services in the field of value shaping and multiple benefits, win-win development. 62 Table of Contents Competition When it comes to fitness technology companies, we have to mention Peloton Interactive, Inc. Peloton Interactive, Inc is a US-based listed fitness equipment and home fitness company founded in 2012 and based in New York, co-founded by John Foley, Tom Cortese, Yony Feng, Graham Stanton and Hisao Kushi. They bring fitness classes guided by top fitness coaches to clients around the world live, and combine exercise performance metrics with social interaction to make the fitness experience not only effective but also enjoyable. Peloton Interactive, Inc combines live broadcast courses and on-demand fitness library, and has become an Internet fitness enterprise integrating "fitness equipment + content + technology". Peloton Interactive, Inc's main products are indoor fitness bikes, treadmills, rowing machines and other wearable devices, equipped with LCD screens that can connect to Peloton Interactive, Inc's subscription digital content platform. In 2022, in the face of declining market demand, supply chain layout, cash flow, stock price decline, and market value evaporation, the CEO Barry McCarthy of Peloton Interactive and Inc urgently discussed with the senior management and adopted the following important strategies: Peloton Interactive, Inc reaffirmed its position as a luxury brand by raising the price of its flagship bicycle and treadmill products in the United States. By re-refining and re-designing, Bike + will rise $500 to $2,495 (base), while the Tread will rise $800 to $4,295 (base). In the same year, Peloton Interactive, Inc successively closed stores in expensive malls and other premium retailers to cut costs. On the supply chain side, the acquisition of other similar manufacturers is temporarily suspended; and the company needs more reviews. By 2023, Peloton Interactive, Inc's global workforce decline is flat from 2020. From 2022, Peloton Interactive and Inc will change their marketing strategy, pay more attention to customer experience, and provide more excellent product upgrades. Peloton Interactive, Inc encourages users to participate, inviting users to compete with each other and track their progress in real time. Peloton Interactive, Inc listens to its user base. After completing the exercise, members are asked to immediately check the exercise and make targeted suggestions to encourage users to try other courses. Peloton Interactive, The Inc marketing strategy includes an advanced film studio that produces about 950 original programs per month. The studio has top producers, some of whom have won Emmy Awards for their outstanding production. Peloton Interactive, Inc continues to launch the latest and best products, which is why users sign up and stay. To stay away from cycling, choose yoga, stretching, and even sleep meditation. As theme training became popular in Peloton Interactive, Inc's community platforms, The company decided to partner with influential celebrities. Like Peloton Interactive, Inc has announced a multi-year partnership with Beyonce Knowles to produce thematic training for its members. Peloton Interactive, Inc is actively working with multiple platforms to expand its user base and market presence. For example, Peloton Interactive, Inc. cooperate with Apple Inc. to enable users to track fitness data during the fitness process by integrating the applications of Peloton Interactive, and Inc into Apple Watch and share fitness results with other users. Peloton Interactive, Inc has partnered with Amazon to sell its products on the Amazon platform, which allows users to buy Peloton Interactive, Inc devices through Amazon and get Amazon's delivery and after-sales service. Peloton Interactive, Inc has worked with music streaming platform Spotify to launch exclusive music playlists to add power and fun to users' fitness experience. The loyalty created by optimizing customer service from the way the brand was found online is considerable. According to statistics, 55.71% of the traffic comes from direct traffic, 38.36% comes from search, fanatical fan tribes share the brand with friends, and the praise rate has been greatly improved. So far, Peloton Interactive, Inc, has more than 6.6 million fan members, 90% of which maintain membership for more than a year. 63 Table of Contents For the third quarter of fiscal year 2023, Peloton Interactive, Inc. lost only $55.3 million in free cash flow, ended March 31,2023. That's much better than losing $746.7 million in the year-earlier period, and as the Wall Street Journal discussed its next corporate strategy, Barry McCarthy talked about a few key points: (1) Global market expansion. Peloton Interactive, Inc plans to further expand its global market share. It has now launched products in Canada, the United Kingdom, Germany and Australia, and has achieved some success. In the future, the company will continue to expand into the international market, enter more countries and regions, to increase the number of users and revenue sources. (2) Product innovation and diversification. Peloton Interactive, Inc will continue to invest in product innovation, to continuously improve and develop new fitness equipment and accessories. It will also expand its digital content library and launch a wider variety of fitness classes and activities to meet the needs and preferences of different users. (3) Technology integration and improvement. Peloton Interactive, Inc will continue to integrate the latest technologies to improve the user experience and product features. At present, functions such as automatic adjustment resistance and intelligent interactive screen have been introduced, and the application of new technologies such as virtual reality VR and augmented reality AR may be further explored in the future. This will bring users to a more immersive and personalized fitness experience. (4) User social interaction: Peloton Interactive, Inc will continue to pay attention to the importance of user social interaction. The company's platform allows users to interact with coaches and other users to share fitness outcomes and experiences.In the future, Peloton Interactive, Inc may further develop social functions, such as online group discussions, competition challenges, to promote interaction and communication between users. (5) Brand development and cooperative partnership. Peloton Interactive, Inc will continue to expand the brand and build partnerships with other companies. By working with established brands and individuals, such as famous coaches, athletes and celebrities, Peloton Interactive, Inc, can further enhance the brand image and user appeal. (6) Continuous improvement of the user experience. Peloton Interactive, Inc will continue to focus on the user experience and continue to improve its products and services. User feedback and data analysis will optimize the functionality and interface to ensure that users have a top fitness experience. Overall, Peloton Interactive, Inc., as a leading fitness technology company, has been committed to providing a high-quality indoor fitness experience. Their development strategies still include global market expansion, product innovation and diversification, technology integration and improvement, user social interaction, brand development and partnerships, and continuous improvement in the user experience. By continuously meeting user needs and supporting technological innovation and partnerships, Peloton Interactive, Inc is expected to achieve continued growth and market expansion, further consolidating its leadership in fitness technology. In the future, ZHONGXING HOLDING GROUP LTD company will also learn from and reference the excellent business strategy of Peloton Interactive and Inc, to further improve their brand competitiveness and influence, and strive to occupy an important position in the market. 64 Table of Contents Our Marketing and Sales Sales and promotion channels are crucial to the development of high-tech digital sports operating companies. Here are ZHONGXING HOLDING GROUP LTD's main sales and promotion channels: (1) Promotion of new media network platform. Use Twitter, Instagram, Tiktok and other social media platforms to build a brand image, connect with potential customers by publishing content about the company's services and products, and increase exposure and awareness. Content can be updated regularly to attract attention and interaction, and attract more users to understand and use the company's products and services. At the same time, the social media advertising function is used to accurately target specific groups to improve the market coverage and conversion rate. (2) Join the chain regional agency. Through the establishment of agency relations with partners in various regions, the company's services and products are introduced into various cities and regions, forming a multi-point layout of the national market promotion. Through our joint efforts with local partners, we will increase our market share and enhance our brand awareness and awareness. (3) Member system digital import and joint promotion platform. Through big data analysis and personalized recommendation algorithm, advertising is targeted to the interests and needs of potential customers, and potential customers are guided to the company's membership system. Use the interactive function of the membership system to establish closer contact with potential customers, and provide personalized service and recommendations. At the same time, through the joint promotion platform, cooperate with other enterprises to jointly promote the company's services and products, to achieve mutual benefit and win-win results. (4) Partner marketing. Cooperate with related enterprise franchisees, such as sports equipment shopping malls, sports clubs, etc., through establishing cooperative relations with these enterprises, let them recommend the company's services and products to their customers. Expand market penetration and visibility through mutual benefit with partners. (5) Recommendation and word-of-mouth marketing: By providing high-quality services and products, students who purchase services and products will be satisfied and leave praise, and actively show positive user comments and feedback on social media and online platforms. Use the word of mouth effect to attract more potential customers' attention to the company, and improve the reputation and exposure of the brand. Through the combined application of the above sales and promotion channels, ZHONGXING HOLDING GROUP LTD can gain greater influence and competitive advantage in the market. The combination of different channels will help the company reach more potential customers and build good relationships with them, thus making the company grow and grow. Our Customer Base National fitness is not only a fashion habit of modern young people, but also gradually become a common action for other people to pay attention to and participate in. Especially after the epidemic, professionals and the elderly have also accelerated their awareness and concept of fitness, which is promoting the popularization of fitness activities to a wider range of people. First of all, fitness is of great significance for the students. In today's society, students are facing a lot of academic pressure, and regular participation in fitness activities can help them release the pressure, adjust their physical and mental state, and improve their learning effect. In addition, fitness is also conducive to cultivating their good living habits and exercise awareness, to develop lasting physical health and good physical quality. At the same time, young people also play an active role in the national fitness wave. The younger generation is very concerned about pursuing physical fitness and maintaining good physical fitness, proactively participating in various fitness campaigns as part of their lifestyle. Young people are keen on fitness exercise, which not only help to enhance physical fitness and build a good image, but also help to promote social interaction and reduce work pressure. 65 Table of Contents Professionals are also gradually joining the ranks of national fitness. In a fast-paced, high-stress workplace environment, professionals participating in fitness activities can help release stress, relieve physical and mental fatigue, and improve work efficiency and focus. Fitness can not only help them maintain a good body and health, but also the key to preventing disease and improving immunity. Therefore, more and more professionals include fitness in their daily life and use it as a necessary means to maintain personal health. In addition, the middle-aged and elderly people are accelerating to enhance the awareness and concept of fitness. With the popularization of medical conditions and health knowledge, the middle-aged and older people recognize the importance of maintaining a good physical condition to prolong the life span and improve the quality of life. Fitness activities can help them improve their physical fitness, improve blood circulation, improve muscle strength, increase flexibility and other needs. Therefore, more and more middle-aged and elderly people join in the fitness exercise, through scientific training and guidance to improve their own health level. To sum up, national fitness is not only suitable for students, young people and professionals, but also attracts more and more middle-aged and elderly people to join them. It has become a universal health action that has a positive impact on people's physical and mental health and quality of life. Both the young people who pursue fashion and the middle-aged and elderly people who pay attention to health care can realize the dual benefits of physical health and mental pleasure by participating in the national fitness activities. Therefore, ZHONGXING HOLDING GROUP LTD is aimed at different people of all ages and classes, and is not limited to a certain group. Our Quality Control As a high-tech digital sports operation company, ZHONGXING HOLDING GROUP LTD quality control management is an important link to ensure the quality of products and services and improve user experience. Quality control management usually includes process management, quality assessment and monitoring, risk management, supply chain management and data analysis and improvement, etc. I. Process management is the basis of quality control management. For the different business links of digital sports operation companies, a clear standard operation process (SOP) is established to ensure that each task can be carried out according to a unified standard, so as to avoid quality problems caused by personal differences. Improve efficiency and accuracy by not optimizing the process. Monitor the key process links, and use the process management tools to track and monitor, to ensure that the quality of each link meets the standards. For example, use project management tools to ensure the project is as planned and use collaborative platform for collaborative management to ensure collaborative efficiency of the team. Establishing a problem feedback mechanism is also an important part of the process management. It is inevitable that problems will occur in the operation process. Stimulate problems and take corrective measures is an important link of quality control. By establishing a problem feedback mechanism, employees can report problems in a timely manner, and the management can respond and solve problems quickly. This can be achieved through internal communication platforms, problem reporting systems, etc. II. Quality assessment and monitoring is an important means to ensure the quality of products and services. The quality of products and services can be assessed by a user satisfaction survey. By designing reasonable questionnaires and regularly investigating users to understand their satisfaction, needs and suggestions on products and services. By analyzing user feedback, products and services can be adjusted in time, and constantly improved and optimized. Product function and performance testing is also an important means of quality assessment. By developing a detailed test plan and test cases, the functions of the product are fully tested to ensure that it meets the expectations. At the same time, the product also needs to evaluate the performance of the product, including the server response time, loading speed and other indicators to test, and ensure the stability of the product under high load conditions. Analysis of user behavior data is also an important means of quality assessment and monitoring. Through the use of big data technologies and tools, in-depth analysis of users 'browsing behavior click behavior and purchase behavior, to understand users' preferences and needs, and optimize product design and functions, to improve user experience. 66 Table of Contents . Risk management is also a link that cannot be ignored in quality control management. The risks faced by high-tech digital sports operating companies include technical vulnerabilities and security risks, compliance risks, competition risks, etc. By establishing a risk assessment mechanism, identify and evaluate the risk factors that may affect the quality of products and services, and take corresponding measures to prevent and manage them, so as to minimize the impact of risk on quality. For example, technical vulnerabilities and security risks are common risk factors. In order to reduce the emergence of technical vulnerabilities, companies need to establish appropriate development processes, including code review, automated testing, etc., to ensure the stability and security of the code, and at the same time to conduct network security testing for products to ensure the security of user data. IV. Supply chain management is also an important link in quality control management. Digital sports operating companies often rely on suppliers and partners for their products and services. Establish a good supplier management mechanism to ensure that the products and services of suppliers meet the quality requirements of the company, solve problems in the supply chain, and ensure the quality stability of products and services. V. Data analysis and improvement are the key links of quality control management. By collecting and analyzing large amounts of data to understand user needs and behaviors, find potential problems and room for improvement, and make decisions and improvements based on data results. Data analysis can be realized through user behavior analysis tools, business data analysis tools, etc., to help companies better optimize their products and services. To sum up, the quality control management of high-tech digital sports operation companies needs to comprehensively consider many factors, such as process management, quality assessment and monitoring, risk management, supply chain management and data analysis and improvement. Through the establishment of a sound quality control management system, to continuously improve the quality of products and services, improve user experience, and achieve the long-term sustainable development of the company. Warranty and After Sales Services With the rapid development of the Internet, high-tech digital sports operation companies have gradually become an important part of the sports industry. However, in the products and services of high-tech digital sports operation companies, after-sales service, as an important link to ensure user satisfaction and loyalty, needs to be fully valued and reasonably planned. High-quality after-sales service can not only improve user satisfaction and loyalty, but also bring more business opportunities and word-of-mouth effect to the company. ZHONGXING HOLDING GROUP LTD should play the following important roles in after-sales service: I. Maintain the product image. Good after-sales service can enhance the company's image and brand value, increase user trust, so as to attract more users to choose the company's products and services. II. Solve user problems. After-sales service helps to timely solve the problems and puzzles encountered by users in the process of use, provide technical support, ensure the normal use of users, and enhance users' confidence in the product. . Collect user feedback and suggestions. Through communication and feedback with users, after-sales service can help companies understand user needs and pain points, and then improve and optimize products, enhance user experience, and increase user stickiness. 67 Table of Contents IV. Establish long-term cooperative relations. High-quality after-sales service not only meets the short-term needs of users, but more importantly, it is able to establish a long-term and stable cooperative relationship with users to promote sustainable business growth. As a high-tech digital sports operation company, ZHONGXING HOLDING GROUP LTD will establish a perfect after-sales service process, so that the after-sales service can efficiently and quickly respond to user needs, aiming to find problems and propose improvement solutions to improve user satisfaction and company competitiveness. Specifically, the ZHONGXING HOLDING GROUP LTD's after-sales service process includes the following links: I. After-sales service contact point. To provide users with a variety of convenient after-sales service contact methods, such as telephone, online customer service, mail, etc., to ensure that users can communicate and consult with after-sales personnel anytime and anywhere. II. Service request registration. Keep users' personal information and service request records to provide accurate basis and reference for subsequent services and improve service efficiency. . Fault diagnosis and resolution. Establish a professional technical support team, quickly and accurately diagnose users' problems, and provide effective solutions. IV. Service feedback and follow-up. Collect user feedback and suggestions in time, and evaluate the effectiveness of the solution to ensure that the problems are improved and solved. Government Regulation The regulatory environment of high-tech digital sports operators may vary in different countries because it is influenced by different national laws and regulations and social cultures. Here are some of the factors that could influence the regulatory environment for high-tech digital sports operators: (1) Laws and regulations. For example, some countries encourage the development of high-tech digital sports operating companies, while others neither encourage nor suppress them. In addition, different laws in different countries will also have different provisions on the definition of fitness devices and the category of marketable devices. In terms of laws and policies, the state has strengthened the requirements for orderly competition and open connectivity among Internet enterprises, prohibited the abuse of dominant market position and monopoly operation, created more living space for new participants, and formed a healthy, fair and orderly environment for development. (2) Social culture. In different countries' social cultures, high-tech digital sports operation companies may encounter different concepts. For example, in some countries' societies, people may pursue a slender and slender body aesthetic, while others place greater emphasis on individual physical fitness and health. In addition, the cultural concepts of different countries can also have an impact on the service content and methods of high-tech digital sports operation companies. (3) Regulators. Different countries have different regulators for high-tech digital sports companies. In some countries approve high-tech digital sports companies, while those in some countries may pay more attention to supervision and management. (4) Market competition. High-tech digital sports operating companies in different countries. Some countries may be more competitive, while others may be relatively moderate. 68 Table of Contents (5) Source of funds. In some countries, high-tech digital sports operators may have government funding or policy support, while in others, high-tech digital sports operators may operate mainly on private funds. Therefore, the analysis of the regulatory environment of high-tech digital sports operating companies needs to consider many factors, such as laws and regulations, social culture, regulatory agencies, market competition and funding sources. Here are some examples of the different regulatory measures in the three countries: (1)The United States. Us government regulation of digital sports operators is dominated by the Federal Trade Commission (FTC) and the Justice Department. The Federal Trade Commission (FTC) oversees the company's marketing and advertising campaigns, as well as regulating the collection and use of user data. The Justice Department handles antitrust and antitrust issues. The Federal Communications Commission (FCC) is also involved in regulating the communications services of digital sports operating companies, such as Internet service providers (ISP). In addition, there are some state agencies in the United States that regulate the behavior of digital sports operating companies. (2)Australia. The Australian government's regulation of digital sports operators is dominated by the Australian Competition and Consumer Commission (ACCC). The role of the Australian Competition and Consumer Council (ACCC) is to ensure that companies do not abuse their dominant market position to protect consumers from misconduct. The Australian Competition and Consumer Council (ACCC) also oversees the collection and use of user data, as well as its advertising. (3) Japan. Japan's digital sports operating companies are regulated by the Japan Trade Promotion Agency (JETRO) and the Japan Intellectual Property Association (JIPA). The Japan Trade Promotion Agency (JETRO) responsibilities include assisting foreign investors with business in Japan, while the Japan Intellectual Property Association (JIPA) handles intellectual property issues. In addition, the Japanese government has enacted a series of laws and regulations to limit the market dominance of digital sports operators. Research and Development ZHONGXING HOLDING GROUP LTD based on the open mobile social network and big data analysis platform, with online fitness equipment and intelligent fitness system as the main business direction, introducing the concept of national fitness, inclusive sports and intelligent fitness, leading the reform of online fitness applications. ZHONGXING HOLDING GROUP LTD committed to finding new breakthroughs in mature markets. In recent years, due to the rapid development of the Internet, the scale of the online fitness market is growing. Especially since the outbreak of COVID-19 in 2020, big health has become a basic demand of people, and sports and fitness have received attention. The fitness industry has accelerated to online penetration, and the scale of online fitness market has grown rapidly. With the popularity of mobile network platforms, online dating and online fitness have spawned more business service models. In recent years, the fitness industry development, especially in the Olympic Games and other large international events and national policy encouragement, the fitness industry maintains stable development, gradually to low line city penetration, online synchronous development, fitness demand gradually upgrade, industry booming, has given rise to a variety of online fitness services, home fitness services and intelligent fitness equipment. 69 Table of Contents At present, the upstream of the fitness industry includes fitness equipment, coach training and course development; the midstream includes offline gym, O2O and fitness APP, covering all online and offline fitness scenarios; the downstream includes data management, social platform, information search and exercise peripheral to meet different derivative needs of consumers. As an existing cutting-edge IT technology, the Internet of Things, etc., it is expected to solve the pain points of online fitness: professionalism and precision by building an open ecosystem. There are a large number of sub-health people, no high quality products can prevent and improve, ZHONGXING HOLDING GROUP LTD establish independent innovation of fitness course research and development system, mechanical system, health management system, health conditioning system, through the digital operation technology system, headquarters unified management, unified promotion, unified sales, unified support of digital fitness chain, build diversified all ecological digital fitness industry chain service platform. For the lack of data analysis, weak personalized service, members of the specific body index data is not accurate, difficult to reach the user's pain points and demand, the lack of customized fitness solutions, the company through the human body index data analysis, provide users with a set of scientific data accurate analysis of suitable for their individual systematic intelligent fitness plan, scientific and accurate effectively improve the physical quality, widespread to reduce and prevent the incidence of chronic diseases, so as to reduce sub-health conditions. Is the sports fitness industry professionals and serious shortage of resources, to "online + offline + all channel" covering fitness industry ecological system, to "Shared partners + Zhongxing Course + full service system" build millions of digital member community system, promote the sports fitness industry professionals and resource utilization, improve the utilization rate of fitness resources use. In the future, ZHONGXING HOLDING GROUP LTD will gradually expand its own strength and provide better services for users. Through investment, equity participation, strategic cooperation and other ways, gradually expand their own strength and influence, continue to build their own sports fitness service network platform, through the organic combination of online and offline, firmly follow up in the sports fitness service industry, to form their own brand effect. Intellectual Property ZHONGXING HOLDING GROUP LTD the intellectual property rights involved in the sports health solutions, mainly protect the legal rights of the knowledge and technology created in the development, production and sale of related products and services. Among them, the most likely types of IP involved by ZHONGXING HOLDING GROUP LTD are as follows: (1) Invention patent. If a company has a unique technological innovation in the development of smart fitness equipment and sports and health solutions, it can apply for an invention patent to protect its exclusive rights in the field. The invention patent is aimed at the real technological innovation, which requires "novelty", "creativity" and " practicality. For example, the company may have developed an smart treadmill with intelligent sensing, data analysis and virtual training that could apply for a patent for the innovative technology. (2) The utility model patent. In addition to invention patents, companies can also apply for utility model patents to protect the new structure, shape, or combination of products. Compared with invention patents, utility model patents have lower requirements, focusing on product appearance design and functional innovation. For example, the company can apply for utility model patents for the appearance design and structure of intelligent fitness equipment, in order to gain advantages in the market competition. (3) Trademark. A trademark is a symbol used to divide the source of a product or service, which can be text, patterns, graphics, colors, etc. Companies can use unique trademarks for their smart fitness equipment and sports and health solutions, so that consumers can identify and identify the company's products. The registration of a trademark may provide legal protection against the unauthorized use of the same or similar trademark by others. (4) Copyright. Sports and health solutions may involve the creation of software programs, algorithms, interface design, etc. These creations can be protected by copyright law. After the development of the software, the company can register the source code and related documents to ensure the exclusive rights and interests in these creations. 70 Table of Contents (5) Industrial design patent. The design of smart fitness equipment can also be protected by industrial design patents to ensure that other companies do not copy the appearance of the product. Industrial design patents mainly focus on the appearance and shape of the product, and ensure that the company has a competitive advantage in the market through patent protection. In addition to the intellectual property types mentioned above, there are some other intellectual property rights that can be applied to intelligent fitness equipment and sports health solutions, such as integrated circuit layout design patent, copyright of training materials, and other specific protection strategies need to be formulated according to the company's business model, technological innovation points and market demand. Before applying for a patent or trademark, we will conduct sufficient patent and trademark searches to ensure that the requested intellectual property rights do not infringe upon the rights of others. In addition, timely application and maintenance of intellectual property is also very important, which can prevent the infringement of the company's technology and brand, and protect the company's interests and competitive advantages. Legal Proceedings ZHONGXING HOLDING GROUP LTD it mainly produces intelligent fitness equipment and provides sports and health solutions. The main types of lawsuits involved are as follows: (1) Product liability litigation. In the process of producing intelligent fitness equipment, users may cause accidents or injuries if the product has design defects, manufacturing problems or potential risks. Victims can file a product liability lawsuit against the company for compensation for medical expenses, losses and mental distress. To avoid such litigation, we will develop a series of standards and management measures to ensure that the products meet the relevant quality standards and provide clear and adequate warnings and safety guidance. (2) Intellectual property rights infringement litigation. As a high-tech digital sports operating company, we may face intellectual property infringement lawsuits brought by others against the smart fitness equipment and the sports and health solutions we provide, including patent infringement, trademark infringement and copyright infringement. To avoid this, we will carefully investigate and ensure that its products and solutions do not infringe on others' intellectual property rights, while applying to protect their own innovation. (3) Contract disputes. Contracts between companies and suppliers, partners or customers may cause contractual disputes. For example, the supplier fails to provide the required parts on time, resulting in production delays or breach of the contract terms. In this case, the affected party may seek damages for default or demand performance of the contract. To reduce the risk of contract disputes, we will carefully review and clarify the terms of the contract to ensure that the parties understand and comply with the contractual obligations. (4) Labor disputes. As a high-tech digital sports operating company, it has a large number of employees who may initiate labor disputes, such as wages, overtime pay, benefits, or termination. We will comply with local labor regulations, provide fair and reasonable working conditions, and ensure smooth communication with employees to reduce potential labor disputes. (5) False advertising and publicity litigation. When promoting and marketing intelligent fitness equipment and solutions, the company may face false advertising lawsuits if it is suspected of false advertising or misleading consumers. Consumers or competitors may file a lawsuit to stop the false claims and compensate for related losses. Therefore, we should follow the principle of honesty and trustworthiness in the advertising campaign to ensure the accuracy and reality of the advertised products and solutions. 71 Table of Contents (6) Privacy and data security litigation. Companies may need to deal with lawsuits related to users' personal data and privacy. Privacy and data security lawsuits may be triggered if a company fails to properly protect users 'personal information, or if it collects, stores, or uses personal data without the user's consent. To avoid this situation, we will take a series of measures to strengthen data security management. The above are some types of litigation that we may involve in, and the specific situation will also vary according to the company's business scope, market environment, compliance and other factors. To avoid litigation risks, we focus on compliance in our product development, marketing and operation processes, and work with a team of professional lawyers to regularly assess and manage legal risks. Our Culture I. Our corporate vision is "to pursue excellence, to create brilliance". Our company has the vision of excellence, and we are committed to achieving excellence and success in the industry. In the pursuit of excellence, we always strive to improve our ability and performance to achieve the highest standards in the industry. We believe that only by constantly improving ourselves can we achieve true excellence. At the same time, we also hope to establish partnerships with other companies and work together to achieve success and success. We believe that through cooperation, we can realize resource sharing and complementary advantages, so as to better meet customer needs and promote the development of the whole industry. We are willing to work with other companies to explore opportunities for innovation and share the joy of success. Our goal of excellence includes the spirit of continuous improvement and innovation, and we will continue to improve our professional quality and skills to learn and adapt to market changes. We believe that by continuously improving our capabilities and performance, we are able to provide our customers with higher quality products and services, while gaining a firm foothold in the industry and achieving the highest level of achievement. II. Our corporate mission is to "strive to improve a better health fitness and a better future for the public". We will help the public improve their physical fitness by providing more marketable smart fitness equipment and more personalized sports fitness solutions, aiming to make people live a better future. In order to realize this mission, we will provide intelligent fitness equipment to meet the requirements of the market, we will continue to develop and improve intelligent fitness equipment, to meet people to fitness equipment innovation, functional diversity and the demand of the user experience, our equipment will have the characteristics of intelligent, convenient operation, to adapt to the different fitness needs and skill level. We will provide personalized sports health solutions, according to the needs and health goals of different people, provide personalized sports health solutions, through scientific evaluation and customized training programs, to help everyone find the most suitable for their own exercise, so as to improve their physical and health level. In addition to providing products and services, we will also actively advocate a healthy lifestyle, including good eating habits, moderate exercise, scientific rest, etc. We will cooperate with professional health institutions to carry out health publicity and education activities to guide the public to develop healthy living habits, so as to jointly create a healthy and upward social atmosphere. . Our corporate values are "hard work, innovation, integrity and win-win". These values run through our working attitude and our code of conduct, and they are the beliefs that our team follows together. We advocate a positive working attitude and the spirit of hard work. We believe that only through hard work and perseverance can we achieve individual and corporate goals, encouraging employees to overcome difficulties, challenge themselves and constantly pursue excellence. We encourage employees to constantly come up with new ideas and innovative solutions to promote innovation and development in the company, and encourage team members to try new things and learn and progress to meet changes and challenges. Honesty, integrity and morality are the foundation of our trust with our customers and partners. We are committed to our commitment and consistent adherence to ethical and legal requirements, and we are committed to building sustainable partnerships focused on transparency and equity. We adhere to the principle of working with other companies for mutual benefit and win-win, we realize that cooperation can bring more opportunities and common development, so we are committed to establishing a mutually beneficial partnership with all parties to achieve a win-win situation. 72 Table of Contents IV. Our service concept is "customer first, sincere and trustworthy, quality first". This is the basic principle of our customers and partners, is to meet customer needs and provide quality products and services. Our top priority is customer-focused to meet their needs and expectations, we value their input and feedback and strive to exceed their expectations to provide them with a superior service experience. We have a clear understanding of our customers' needs and do our best to meet their requirements in the most appropriate way. We adhere to the principle of sincerity and trustworthiness, and build a relationship of mutual trust with our customers and partners. We keep our commitments and always fulfill our responsibilities in accordance with the contract and agreement. We focus on communication and transparency, maintain timely feedback and information sharing, and ensure good cooperation with customers and partners. We pursue excellent quality and are committed to providing high quality products and services. We strictly control the production process, adopt advanced technology and equipment to ensure the stability and reliability of products. We also continue to optimize the service process, improve the quality of service, to meet the changing needs of customers and improve their satisfaction. V.Our management policy is "unity and cooperation, timely communication, clear responsibility, positive improvement, and common development". These principles will guide our team members in achieving common goals in their work. We value the spirit of teamwork and collaboration, and encourage employees to support and cooperate with each other, and we realize that greater success is achieved only through collective wisdom and synergy. We encourage the establishment of a good team atmosphere and strengthen the communication and collaboration between teams to better complete tasks and face challenges. We emphasize active and effective communication to ensure the circulation and sharing of information. Good communication can reduce misunderstandings and obstacles, promote the smooth progress of work, encourage employees to communicate and listen to each other, and promote the communication inside and outside the team, so as to better understand the needs, solve problems and make decisions. We require everyone to be clear about their responsibilities and assume corresponding responsibilities, clear responsibilities to improve work efficiency and quality, avoid waste of resources and duplication of tasks, encourage employees to take the initiative to take responsibility, and provide necessary support and resources to complete the work. We continue to emphasize the importance of improvement and innovation, and encourage employees to learn and reflect to find ways and opportunities to improve their own and team performance. We advocate the establishment of a learning organization, through continuous improvement process, adopt new technologies and explore new markets, maintain our competitiveness we emphasize enterprise with the common development of employees, customers and partners, is committed to establish good cooperative relations, through joint efforts to achieve common goals, encourage employees to continue learning and personal growth, and provide training and development opportunities, we also attach importance to the cooperation with customers and partners, jointly promote business development and create greater value. VI.Our corporate goal is to "build a digital first-class enterprise of national sports and fitness". We strive to be a leader in the digital field, by introducing advanced technologies and innovative solutions, we will open up new markets and provide users with unique sports and fitness experience, we will actively invest in research and development to continuously launch competitive and forward-looking products and services. We will strengthen innovation in the digital field. Through the integration of the Internet, big data, artificial intelligence and other advanced technologies, we will develop intelligent sports and fitness products and platforms, to provide personalized training programs and data analysis, to help users to achieve better fitness results. We are committed to providing high-quality sports and fitness products and services for the whole people. We will focus on the quality and innovation of products, and ensure that users can get safe, professional and personalized training experience. We will also establish a perfect after-sales service system, pay attention to user feedback and timely solve problems, and provide continuous support and guidance. Our goal is to provide opportunities and equality of physical fitness for all people. Whether young, middle-aged or old, whether professional athletes or ordinary office workers, we all hope to meet their different fitness needs, and will carry out various forms of publicity and promotion activities to improve the public's awareness and participation in physical fitness. 73 Table of Contents These ideas and goals demonstrate the company's commitment to excellence, collaboration with stakeholders and common development, and its mission to provide a healthier and better future for the general public. Facilities ZHONGXING HOLDING GROUP LTD mainly produce intelligent fitness equipment, and provide sports and health solutions, its facility requirements are mainly as follows: I. R & D laboratory. It needs to be equipped with a professional research and development laboratory, including testing instruments, measuring equipment, simulation software, etc., for product design, development, research and performance testing. II. Production workshop. Need to have the industrial production equipment production of intelligent fitness equipment, such as mechanical processing equipment, automatic production lines, 3D printers, etc., to ensure the quality and output of products. . Supply chain of electronic components and components. A stable and reliable supply chain needs to be established to ensure access to high-quality electronic components and components for the production and assembly of intelligent fitness equipment. IV. Quality inspection and control equipment. In order to ensure that the products meets the quality standards and performance requirements, quality testing and control equipment, such as strength testing instruments, functional testing equipment, etc. V. IT infrastructure. Including servers, storage devices, network equipment, etc., used for data management, remote monitoring, and product operation support. VI. Logistics and storage equipment. Equipment used for logistics management, product distribution and storage management, such as trucks, forklifts, warehouse management systems, etc. VII. Training and display facilities. Places and equipment used for training technicians, displaying products and holding meetings, such as training room, exhibition hall, large screen display equipment, etc. These facility requirements can improve the efficiency of the development, production and sales of intelligent fitness equipment, and ensure the quality and competitiveness of products. Depending on the company's future size, product type, and market demand, our specific requirements for the facilities will also vary. PESTEL Analysis I. Description of the industrial chain (upper, middle and downstream) Under the background of Internet development, scientific and technological progress and favorable policies, the sports and fitness industry has been developing continuously, especially since the outbreak of COVID-19, sports and fitness have been paid increasing attention. The fitness industry has accelerated online penetration, and online fitness has developed rapidly. Thus, the fitness industry prospects, ZHONGXING HOLDING GROUP LTD company still has a leap to occupy an important position in the market. Fitness is a sport, such as various aerobics, rhythmic gymnastics, physical gymnastics and a variety of self-resistance movements. With the development of society and the improvement of people's health awareness, fitness has become a popular way to relieve stress and maintain physical health. Science suggests that you should exercise at least three times a week if you want to relieve stress and improve your fitness results. In recent years, the fitness industry development, especially in large international events and policy encouragement, fitness industry maintains stable development, gradually to the low line city penetration, online synchronous development, fitness demand gradually upgrade, industry booming, has given rise to a variety of online fitness services, home fitness services and intelligent fitness equipment. 74 Table of Contents At present, the upstream of the fitness industry includes fitness equipment, coach training and course research and development; the midstream includes offline gym, O2O service platform and fitness APP, covering all online and offline fitness scenarios; the downstream includes data management, social platform, information search and exercise peripheral to meet the different derivative needs of consumers. II. Industry data (2010-2020) At present, the development status of the fitness industry is as follows: . Market size of the fitness industry. In recent years, the market size of the fitness industry has maintained a growth trend. . Market structure of the fitness industry. At present, the market size of the fitness industry is mainly divided into fitness equipment, fitness clubs and studios and online fitness, accounting for 49%, 36% and 15% respectively. Although the proportion of online fitness is not high, due to the influence of the epidemic, sports and fitness have been gradually paid attention to, traditional gyms have been affected, and the trend of online fitness has begun to increase. . Size of the online fitness market. In recent years, due to the rapid development of the Internet, the scale of the online fitness market is growing. Especially since the outbreak of COVID-19 in 2020, big health has become the basic demand of people, and sports and fitness have received attention. The online fitness industry has accelerated to online penetration, and the scale of online fitness market has grown rapidly. . Size of the online fitness market. In recent years, due to the rapid development of the Internet, the scale of the online fitness market is growing. Especially since the outbreak of COVID-19 in 2020, big health has become the basic demand of people, and sports and fitness have received attention. The online fitness industry has accelerated to online penetration, and the scale of online fitness market has grown rapidly. . Online fitness market penetration rate. In recent years, with the national fitness boom and the development of the online fitness industry, the penetration rate of the online fitness market has been increasing rapidly, from 18% in 2017 to 46% in 2021. The online fitness market penetration rate is expected to reach 48% in 2022. . Industry pain points . At present, there are a large number of sub-health people, no high-quality products can be prevented and improved, and can be gradually improved through national fitness, especially since the outbreak of the epidemic, the awareness of public health has been constantly improving. . Technical threshold and professionalism are not high, and they are easy to be copied. In recent years, the number of gyms has been increasing, among which the highest proportion is fitness studios, followed by large clubs. The number of fitness coaches with corresponding professional qualification certificates is also rising. . The market competition is fierce, and the promotion channel is single and inefficient (the most common is to send people around the gym). . The use of Internet traffic dividend is still lacking. . Lack of data analysis results in weak personalized service and vague and inaccurate data of specific physical indicators of members. . Difficult to reach the pain points and needs of users, and the lack of customized fitness programs for users of different ages. . Serious shortage of professional talents and resources in the sports and fitness industry. 75 Table of Contents IV. Main consumer groups of products or services National fitness is not only a fashion habit of modern young people, but also after the epidemic, professionals and the elderly have accelerated the enhancement of the awareness and concept of fitness, which has become a popular health action. Suitable for students, young people, professionals, the elderly and other groups. By choosing the right way of exercise for them and exercising under the guidance of a professional, everyone can improve their physical health and quality of life by participating in regular physical activities. Fitness requires persistence and patience, but it has a positive impact on one's physical and mental health and the overall development of society. V. Main reasons for consumers to buy ZHONGXING HOLDING GROUP LTD fitness products or services . We have solved the problem of fragmented time of young people's fitness and exercise, and formed a gathering place for professional tutoring through the chain of intelligent fitness gyms, so that professional equipment can more accurately improve the physical quality. . We through with government departments and fitness sports association, the elderly university institutions such as cooperation, combined with the government to provide free public space and public general fitness equipment, both solve the problem of fitness promoter employment entrepreneurship, and further popularize fitness movement, through these basic scenario, obtain huge amount of member system and accurate data, for accurate fitness programs and customized fitness services to provide solid data base and membership system. . We use online and offline intelligent fitness equipment to accurately obtain the body data of members. Through data analysis, we tailor fitness plans to accurately and quickly improve the physical quality of the people. VI. The company's current position in the industry and its target status ZHONGXING HOLDING GROUP LTD aims to become a leading provider of sports health solutions and intelligent fitness equipment in the industry. At present, the company plans to layout headquarters operations center, the construction of three intelligent equipment production base, build thousands of online family fitness appliance sales and intelligent fitness services in the integration of joining chain network, intelligent fitness products covering family fitness, commercial fitness, national fitness, elderly fitness, fitness, campus sports, fitness solutions products and universal pratt & whitney fitness training services, sub-health conditioning, etc. At present, the company use scientific digital intelligent fitness theory scheme and data analysis system, strive to become the first in the field of digital intelligent fitness, continuous innovation, the introduction of high-tech digital analysis technology, enhance their core competitiveness, customized promotion fitness plan and fitness equipment, in the future in the size, brand awareness, product quality comprehensive become a digital intelligent fitness industry benchmarking brand. VII. Industry forecast (for the next three years) . Policies to promote the development of the fitness industry. In recent years, a number of policies have been introduced to promote the development of the sports industry, and a number of industrial plans for minority sports have been released to encourage the innovative development of the sports and fitness industry. In 2020, Novel Coronavirus swept the world in 2020. In order to reduce the impact of the epidemic on the sports industry, residents are encouraged to exercise at home and boost the development of home fitness, Internet fitness and other industries. It is expected that under the boost of the policy, the development of the fitness industry will develop rapidly and promote the market expansion of the fitness industry.Under the stimulus of local policies, the development prospect of the fitness industry is very broad, which provides a strong policy foundation for the development of the industry. With the comprehensive liberalization of epidemic control and the upgrading of consumption, people's health awareness has been significantly improved, and residents' consumption has gradually transitioned from basic consumption and functional consumption to health consumption and experience consumption, and sports consumption has benefited significantly. 76 Table of Contents . The increase in the number of sports participants has helped the fitness industry develop. In recent years, with the improvement of residents 'living standards and the baptism of COVID-19, people's health awareness has gradually increased, and the number of people who regularly participate in sports has also increased year by year. It is expected that the increasing number of sports participants will help the development of the fitness industry. The market size of the fitness industry has been growing trend. . Intelligent fitness equipment drives the development of the fitness industry. With the popularization of the Internet and the improvement of science and technology level, the intelligence of fitness equipment is continuously improved, which not only increases the exercise fun of builders, alleviates physical fatigue, but also pays more attention to the safety and individuation of fitness equipment. At the same time, the binding of intelligent fitness equipment and APP can improve the stickiness of fitness users, and deeply explore the potential needs of users in the process of data collection, which will continue to drive the development of the fitness industry. . Fitness industry market structure adjustment and the online fitness market scale is expanding rapidly. At present, the market size of the fitness industry is mainly divided into fitness equipment, fitness clubs and studios, government public inclusive fitness and online fitness. Although the proportion of online fitness is not high, due to the influence of the epidemic, sports and fitness have been gradually paid attention to, traditional gyms have been affected, and the trend of online fitness has begun to increase. In recent years, due to the rapid development of the Internet, the scale of the online fitness market is growing. Especially since the outbreak of COVID-19 in 2020, big health has become a basic demand of people, and sports and fitness have been paid attention by people. The fitness industry has accelerated online penetration, and the scale of online fitness market has grown rapidly. . The online fitness market structure is rich and optimized, and the market penetration rate is gradually increased. From the perspective of market structure, = online fitness market mainly includes four market segments: online health food, online fitness equipment and clothing, online fitness Internet of Things, and online fitness membership and training courses. Data show that online accounts for the largest proportion of healthy food in the online fitness market, followed by online fitness equipment and clothing. Online fitness Internet of Things, online fitness membership and course market accounted for 8% and 1% of the total online fitness market, respectively. In recent years, with the national fitness boom and the development of online fitness industry, the penetration rate of online fitness market is constantly increasing. Company name translation table Company name translation table ZHONGXING HOLDING GROUP LTD Korean Japanese Chinese Russian " " 77 Table of Contents MANAGEMENT Directors and Executive Officers The following table sets forth information regarding our directors and executive officers as of the date of this prospectus. Name Age Position/Title Mr. Lijie Wang 61 Chairman Of The Board Ms. Fengyu Yang 64 Director & Chief Financial Officer Ms. Jihong Liu 55 Chief Marketing Officer Introduction Mr. Lijie Wang is the Chairman of ZHONGXING HOLDING GROUP LTD. Mr. Wang was a sports athlete when he was young. He loved sports very much, especially swimming. At the age of 15, he broke a number of Xinjiang swimming records, and three years later successfully received the admission notice of Beijing Sport University, where he majored in swimming. Four years of college study and life have laid a solid foundation of sports knowledge for Mr. Wang. Combined with his more than 20 years of sports exercise, he has further enriched his professional sports knowledge. After graduation, Mr. Wang worked as a physical education teacher in Xinjiang Petroleum Institute for 7 years. During this period, Mr. Wang applied the professional knowledge he learned in the classroom. In the teaching process, he learned more specific and comprehensive student situations and enriched his professional knowledge of sports through practice. Since 1991, Mr. Wang, who loved challenges and was not willing to live a stable life, decided to quit his job as a physical education teacher and resolutely went into business. During the entrepreneurial period, Mr. Wang worked in border trade, visa translation service as an intermediary, and TCM acupuncture and massage clinic, accumulating rich experience in business management and marketing. While starting his own business and accumulating experience, Mr. Wang also keeps learning and updating his professional knowledge of sports, and expresses his own opinions on certain sports viewpoints. In 2009, Mr. Wang published two influential articles in the field of sports, Reflections on the Crisis and Countermeasures of China's Physical Education and Who is to Blame for the Continuous Decline of Students' physical Fitness in 30 Years. In September 2016, Mr. Wang wrote and published an article entitled It is a waste of social resources for sports venues to be reduced or open to the society for free. From 2010 to 2011, Mr. Wang summarized the innovative basic theory of health management based on his years of practice and investigation and published the book Sports Health Management. Mr. Wang's published articles and books reflect his solid foundation of professional sports knowledge, and he also uses a large amount of data to study and demonstrate his own views. His published articles and books have helped a lot of people in sports. Mr. Wang is a restless person. In addition to writing articles, he is also obsessed with innovative inventions. In 2012, his invention of motion sensing intelligent equipment won the national patent for new practical inventions. Now, his self-created ECI fitness system invention patent is being applied for, this system is a special collection of human movement data for effective analysis to provide users with health management theories and methods of the system. Mr. Wang has been engaged in the work and practice in the field of physical fitness for many years, and has rich professional knowledge and practical experience in sports, and has systematically created the basic theoretical system of physical fitness, and has a high reputation and rich resources in the industry. Mr. Wang's vision is to build a digital first-class enterprise for national sports and fitness, and contribute to human health. 78 Table of Contents Ms. Fengyu Yang is a director and Chief Financial Officer of ZHONGXING HOLDING GROUP LTD. Ms. Yang has outstanding abilities, and has dual degrees in business enterprise management and business accounting. She has been engaged in management and financial work for many years since joining the work, and has served as senior executives, general managers and financial directors in many large enterprises. She has rich industry experience and is good at business management, company operation, business negotiation, financial management, etc. From 1986 to 1991, Ms. Yang worked at the Vocational Education Center of Urumqi Municipal Education Commission as a teaching researcher and director of the Training Center. During her tenure, she participated in the editing of the syllabus of six major courses of vocational high school and middle school set up by 19 middle schools under her management, which included education and teaching knowledge in physical education and other aspects. In 1990, Ms. Yang established Bailan Village Hotel, the first hotel in Urumqi, which was mainly employed by vocational high school students, from grassroots civil construction to staff training, and served as the preparatory general manager. Ms. Yang started her business in 1991, when she founded the first private school Urumqi China Vocational and Technical Training Center. The training center has more than 100,000 people who have received work permits and professional completion certificates issued by the local government, training them in a trade, enhancing their survival skills, and helping them solve employment problems. Ms. Yang founded Urumqi Shunda Technology Co., LTD in 1993 and served as the general manager. In 1994, she co-founded Xinjiang Shunda Medical Equipment Co., LTD and served as the deputy general manager. The above experiences have greatly trained her business operation and management ability. Until 2002, Ms. Yang founded the first private secondary hospital in Urumqi: Xinjiang Cancer Specialized Hospital, which was later renamed as Urumqi Modern Dermatology Specialized Hospital. She is the legal person of the hospital and serves as the president, which shows that Ms. Yang has rich and solid medical knowledge. But Ms. Yang is not confined to the status quo, she is eager to learn more and newer knowledge, so she co-founded Hunan Tianfeng Zidao High-tech Co., LTD in Changsha, Hunan Province, China, in 2012 with other partners. In addition, she served as the chief financial officer of this company, so as to enrich her financial work experience and improve her ability. In addition, Ms. Yang has more social status. She was appointed vice chairman of the board of directors of Shenzhen Tianyuan Dingsheng Equity Investment Fund Management Co., Ltd. in 2012, and successfully served a number of large enterprises. Since 2012, Ms. Yang has focused on studying the theoretical system of the integration of industry and finance, and has been involved in the field of e-commerce and industrial Internet. After in-depth investigation and research of many enterprises, she has accumulated rich industry experience, and now she is committed to the digital operation of the sports health industry. Ms. Jihong Liu is the Marketing Director of ZHONGXING HOLDING GROUP LTD. She graduated from Xinjiang University of Finance and Economics with a bachelor's degree in accounting computerization. Since 2000, Ms. Liu has been working in Urumqi Huiwei Window Industry Co., LTD., where she has successively served as Chief financial Officer, production designer and Marketing Director. Ms.Liu has been serving in corporate management, company operation, market development and other positions for many years, and has participated in many business contacts and investment promotion of enterprises. She is rigorous, serious, enthusiastic, lively and quick in thinking. She has rich market and management experience, has operated many large-scale business cases, and has accumulated rich operational experience and human resources channels. Ms.Liu actively participates in the affairs of the company and leads the continuous development of the company with her rich experience and resources, providing the backbone for promoting the steady development of the company's various undertakings. Ms.Liu said that integrating more capital forces to create a true, healthy and happy global digital sports industry is our common goal. Ms.Liu believes that as a senior manager of the company, she shoulders important responsibilities for the formulation and implementation of the company's strategy. In the future, we will continue to adhere to the development concept of customer first, sincere and trustworthy, quality first, focus on core business, in-depth market segmentation, strengthen team building, and comprehensively promote the steady development of the company's various undertakings. Board of Directors Our board of directors will consist of two directors upon the SEC s declaration of effectiveness of our registration statement on Form F-1 of which this prospectus is a part. 79 Table of Contents Subject to the Nasdaq rules and disqualification by the chairman of the relevant board meeting, a director may vote in respect of any contract or proposed contract or transaction notwithstanding that he may be interested therein provided that the nature of the interest of any director in such contract or transaction shall be disclosed by him or her at or prior to its consideration and any vote on that matter, and if he or she does so his or her vote shall be counted and he may be counted in the quorum at any meeting of the directors at which any such contract or proposed contract or transaction is considered. Our board of directors may exercise all the powers of the company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party. None of our directors has a service contract with us that provides for benefits upon termination of service as a director. Duties of Directors Under England law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. In certain limited exception circumstances, a shareholder has the right to seek damages in our name if a duty owed by our directors is breached. Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs. The functions and powers of our board of directors include, among others: convening shareholders annual general meetings and reporting its work to shareholders at such meetings; declaring dividends and distributions; appointing officers and determining the term of office of officers; exercising the borrowing powers of our company and mortgaging the property of our company; and approving the transfer of shares of our company, including the registering of such shares in our share register. Terms of Directors and Executive Officers Our directors are not subject to a term of office and hold office until such time as they are removed from office by ordinary resolution or the unanimous written resolution of all shareholders. Our officers are elected by and serve at the discretion of our board of directors, and may be removed by our board of directors. Corporate Governance Our board of directors has adopted a code of business conducts and ethics, which is applicable to all of our directors, officers, employees and advisors. We will make our code of business conducts and ethics publicly available on our website. In addition, our board of directors has adopted a set of corporate governance guidelines. The guidelines reflect certain guiding principles with respect to our board s structure, procedures and committees. The guidelines are not intended to change or interpret any law, or our memorandum and articles of association, as amended from time to time. The code of business conducts and ethics and corporate governance guidelines all become effective upon completion of this offering. 80 Table of Contents Limitation on Liability and Other Indemnification Matters England law allows us to indemnify our directors, officers and auditors acting in relation to any of our affairs against actions, costs, charges, losses, damages and expenses incurred by reason of any act done or omitted in the execution of their duties as our directors, officers and auditors. Under our amended and restated memorandum and articles of association to be adopted upon the closing of this offering, we may indemnify our directors and officers to, among other persons, our Directors and officers from and against all actions, costs, charges, losses, damages and expenses which they or any of them may incur or sustain by reason of any act done, concurred in or omitted in or about the execution of their duty or supposed duty in their respective offices or trusts, except such (if any) as they shall incur or sustain through their own fraud or dishonesty. Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers for a specified time period providing that the agreements are terminable for cause at any time. The terms of these agreement are substantially similar to each other. A senior executive officer may terminate his or her employment at any time by 30-day prior written notice. We may terminate the executive officer s employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. Each executive officer has agreed to hold in strict confidence and not to use, except for the benefit of our company, any proprietary information, technical data, trade secrets and know-how of our company or the confidential or proprietary information of any third party, including our subsidiaries and our clients, received by our company. Each of these executive officers has also agreed to be bound by noncompetition and non-solicitation restrictions during the term of his or her employment and typically for two years following the last date of employment. We expect to enter into indemnification agreements with our directors and executive officers, pursuant to which we will agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer. Foreign Private Issuer Exemption We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example: we are not required to provide as many Exchange Act reports, or as frequently, as a U.S. domestic public company; for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; we are not required to provide the same level of disclosure on certain issues, such as executive compensation; we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction. We intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers, which permit us to follow certain corporate governance rules that conform to the England requirements in lieu of many of the Nasdaqcorporate governance rules applicable to U.S. companies. As a result, our corporate governance practices may differ from those you might otherwise expect from a U.S. company listed on Nasdaq. 82 Table of Contents DESCRIPTION OF SHARE CAPITAL We are an exempted company incorporated in the United Kingdom and our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act, and the common law of the United Kingdom. As of the date of this prospectus, our authorized share capital is US$ , divided into Ordinary Shares of par value of US$0.0001 each. All of our shares to be issued in the offering will be issued as fully paid. There are Ordinary Shares issued and outstanding as of the date of this prospectus. Ordinary Shares As of the date of this Prospectus, the Company has no outstanding options, warrants and other convertible securities. Listing We have received the approval letter from Nasdaq to have our Ordinary Shares listed on the Nasdaq Capital Market under the symbol "ZXTY". Transfer Agent and Registrar The transfer agent and registrar for the Ordinary Shares is . Dividends The holders of our Ordinary Shares are entitled to such dividends as may be declared by our board of directors, subject to the Companies Act. Our articles of association provide that the directors may from time to time declare dividends (including interim dividends) and other distributions on shares of the Company in issue and authorize payment of the same out of the funds of the Company lawfully available therefor. No dividend shall be paid otherwise than out of profits or, subject to the restrictions of the Companies Act, the share premium account. Voting Rights At each general meeting, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will have one (1) vote for each Ordinary Share. 83 Table of Contents An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attached to the Ordinary Shares cast by those shareholders entitled to vote who are present in person or by proxy (or, in the case of corporations, by their duly authorized representatives) at a general meeting, while a special resolution requires the affirmative vote of a majority of not less than two-thirds of the votes attached to the Ordinary Shares cast by those shareholders who are present in person or by proxy (or, in the case of corporations, by their duly authorized representatives) at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our company, as permitted by the Companies Act and our amended and restated memorandum and articles of association. A special resolution will be required for important matters such as a change of name or making changes to our amended and restated memorandum and articles of association. Cumulative Voting There are no prohibitions in relation to cumulative voting under the laws of the United Kingdom but our amended and restated memorandum and articles of association do not provide for cumulative voting. Pre-emptive Rights There are no pre-emptive rights applicable to the issue by us of Ordinary Shares under our amended and restated memorandum and articles of association. Our Memorandum and Articles of Association The following are summaries of the material provisions of our amended and restated memorandum and articles of association and the Companies Act, insofar as they relate to the material terms of our Ordinary Shares. They do not purport to be complete. Reference is made to our amended and restated memorandum and articles of association, a copy of which is filed as an exhibit to the registration statement of which this prospectus is a part (and which is referred to in this section as, respectively, the "memorandum" and the "articles"). Meetings of Shareholders The directors may convene a meeting of shareholders whenever they think necessary or desirable. We must provide notice counting from the date service is deemed to take place, stating the place, the day and the hour of the general meeting and, in the case of special business, the general nature of that business, to such persons who are entitled to receive such notices from the Company. Our board of directors must convene a general meeting upon the written requisition of one or more shareholders entitled to attend and vote at general meeting of the Company holding not less than 10% of the paid up voting share capital of the Company in respect to the matter for which the meeting is requested. No business may be transacted at any general meeting unless a quorum is present at the time the meeting proceeds to business. One or more shareholders present in person or by proxy holding in aggregate at least a majority of the paid up voting share capital of the Company shall be a quorum. If, within half an hour from the time appointed for the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week, at the same time and place and if, at the adjourned meeting, a quorum is not present within half an hour from the time appointed for the meeting, the shareholders present and entitled to vote shall be a quorum. At every meeting, the shareholders present shall choose someone of their number to be the chairman. 84 Table of Contents A corporation that is a shareholder shall be deemed for the purpose of our amended and restated memorandum and articles of association to be present at a general meeting in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder. Meetings of Directors The business of our company is managed by the directors. Our directors are free to meet at such times and in such manner and places within or outside the United Kingdom as the directors determine to be necessary or desirable. The quorum necessary for the transaction of the business of the directors may be fixed by the directors, and unless so fixed, if there be more than two directors shall be two, and if there are two or less Directors shall be one. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by all of the directors. Winding Up If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the paid up capital at the commencement of the winding up, the excess shall be distributable among those shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the paid up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them, respectively. If we are wound up, the liquidator may with the sanction of a special resolution and any other sanction required by the Companies Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not), and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders. The liquidator may also vest the whole or any part of these assets in trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability. Calls on Ordinary Shares and forfeiture of Ordinary Shares Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Ordinary Shares in a notice served to such shareholders at least one month prior to the specified time of payment. The Ordinary Shares that have been called upon and remain unpaid are subject to forfeiture. 85 Table of Contents Redemption, Repurchase and Surrender of Ordinary Shares We may issue shares on terms that such shares are subject to redemption, at our option, on such terms and in such manner as may be determined, before the issue of such shares, by our board of directors or by an ordinary resolution of our shareholders. The Companies Act and our amended and restated memorandum and articles of association permits us to purchase our own shares, subject to certain restrictions and requirements. Subject to the Companies Act, our amended and restated memorandum and articles of association and to any applicable requirements imposed from time to time by the Nasdaq, the U.S. Securities and Exchange Commission, or by any other recognized stock exchange on which our securities are listed, we may purchase our own shares (including any redeemable shares) on such terms and in such manner as been approved by the directors or by an ordinary resolution of our shareholders. Under the Companies Act, the repurchase of any share may be paid out of our Company s profits, or out of the share premium account, or out of the proceeds of a fresh issue of shares made for the purpose of such repurchase, or out of capital. If the repurchase proceeds are paid out of our Company s capital, our Company must, immediately following such payment, be able to pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act, no such share may be repurchased (1) unless it is fully paid up, and (2) if such repurchase would result in there being no shares outstanding other than shares held as treasury shares. The repurchase of shares may be effected in such manner and upon such terms as may be authorized by or pursuant to the Company s articles of association. If the articles do not authorize the manner and terms of the purchase, a company shall not repurchase any of its own shares unless the manner and terms of purchase have first been authorized by a resolution of the company. In addition, under the Companies Act and our amended and restated memorandum and articles of association, our Company may accept the surrender of any fully paid share for no consideration unless, as a result of the surrender, the surrender would result in there being no shares outstanding (other than shares held as treasury shares). Variations of Rights of Shares If at any time, our share capital is divided into different classes of shares, all or any of the rights attached to any class of our shares may (unless otherwise provided by the terms of issue of the shares of that class) be varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a resolution passed by at least a two-thirds majority of holders of shares of that class as may be present in person or by proxy at a separate general meeting of the holders of shares of that class. Changes in Capital We may from time to time by an ordinary resolution of our shareholders: increase the share capital of our Company by new shares of such amount as it thinks expedient; consolidate and divide all or any of our share capital into shares of larger amount than its existing shares of shares; subdivide its existing shares, or any of them, into shares of a smaller amount provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and cancel any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled. Our shareholders may by special resolution, subject to confirmation by the Grand Court of the United Kingdom on an application by our company for an order confirming such reduction, reduce its share capital and any capital redemption reserve in any manner authorized by the Companies Act. iii TABLE OF CONTENTS Page About This Prospectus v INTERNATIONAL FINANCIAL REPORTING STANDARDS vi MARKET AND INDUSTRY DATA vi TRADEMARKS vi SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS vii PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under "Risk Factors" and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus, or the context otherwise requires: references to "amended and restated memorandum and articles of association" are to the amended and restated memorandum and articles of association that we will adopt prior to the consummation of this offering; references to "we," "us" or "our company" are to AMERICAN TUOYUAN INTERNATIONAL SECURITIES GROUP INC, a American domestic business company; references to the "Companies Act" are to the Companies Act (Revised) of the New York as the same may be amended from time to time; references to our "initial shareholders" are to our sponsor and any other holder of founder shares, including our officers and directors; references to "ordinary shares" are to our ordinary shares, par value of $0.0001 per share; references to our "management" or our "management team" are to our officers and directors; references to our "private shares" are to the ordinary shares included in the private units; references to our "private units" are to the units, each consisting of one ordinary share, one right and one warrant, that our sponsor is purchasing privately from us in a private placement concurrent with this offering, as well as any units issued upon conversion of working capital loans; references to our "private warrants" are to the warrants included in the private units; references to our "public shares" are to ordinary shares which are being sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and references to "public shareholders" refer to the holders of our public shares, including our initial shareholders to the extent our initial shareholders purchase public shares, provided that their status as "public shareholders" shall exist only with respect to such public shares; references to our "public warrants" are to the redeemable warrants sold as part of the units in this offering (whether they are subscribed for in this offering or in the open market); references to our "warrants" are to the public warrants as well as the private warrants and any warrants included in private units issued upon conversion of working capital loans. You should rely only on the information contained in this prospectus. We have not, authorized anyone to provide you with different information. We are not, making an offer of these securities in any jurisdiction where the offer is not permitted. General We are a newly incorporated blank check company incorporated on November 30, 2022 as a New York corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the ability of our management team to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns. We intend to identify and acquire a business that could benefit from a hands-on owner with extensive investment and operational expertise and that presents potential for an attractive risk-adjusted return profile under our stewardship. Even fundamentally sound companies can often under-perform their potential due to underinvestment, inefficient capital allocation, over-levered capital structures, excessive cost structures, incomplete management teams and/or inappropriate business strategies. Our management team has extensive experience in identifying and executing such full potential acquisitions across industries and business cycles. In addition, our management has hands-on experience working with companies as active owners and directors by working closely with these companies to continue their transformations and help create value. We believe that our management team is well positioned to identify attractive risk-adjusted returns in the marketplace. Our management team s contacts and transaction sources, ranging from industry executives, private owners, private equity funds, credit funds and investment bankers in addition to the extensive global industry and geographical reach of the Fortress platform will enable us to pursue a broad range of opportunities. Our management believes that its ability to identify and implement value creation initiatives has been an essential driver of past performance and will remain central to its differentiated acquisition strategy. I We are also subject to other risks and uncertainties about any future actions of the PRC government, which may result in a material change in operations of a target business. PRC laws and regulations are sometimes vague and uncertain, and therefore, these risks may result in a material change in operations of a target business, significant depreciation of the value of our ordinary shares, or a complete hindrance of our ability to offer or continue to offer our securities to investors. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas that use a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on a China-based target company s daily business operation, the ability to accept foreign investments and list on a U.S. or other foreign exchange. Additionally, if we effect our initial business combination with a business located in the PRC, the laws applicable to such business will likely govern all of our material agreements and we may not be able to enforce our legal rights. There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations which may have a material adverse impact on the value of our securities. If we enter into a business combination with a target business operating in China, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to any future PRC subsidiaries via capital contribution or shareholder loans, as the case may be. All these risks could result in a material change in our or the target company s post-combination operations and/or the value of our ordinary shares or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. Furthermore, the PRC government has significant authority to exert influence on the ability of a China-based company to conduct its business, make or accept foreign investments or list on a U.S. stock exchange. For example, if we enter into a business combination with a target business operating in China, the combined company may face risks associated with regulatory approvals of the proposed business combination between us and the target, offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy. The PRC government may also intervene with or influence the combined company s operations at any time as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect our potential business combination with a PRC operating business and the business, financial condition and results of operations of the combined company. Any such action, once taken by the PRC government, could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC, result in material changes in the combined company s post-combination operations and cause the value of the combined company s securities to significantly decline, or in extreme cases, become worthless or completely hinder the combined company s ability to offer or continue to offer securities to investors. On February 17, 2023, the China Securities Regulatory Commission (the "CSRC") promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures"), which took effect on March 31, 2023. The Trial Measures supersede prior rules and clarified and emphasized several aspects, which include but are not limited to: (1) comprehensive determination of the "indirect overseas offering and listing by PRC domestic companies" in compliance with the principle of "substance over form" and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: (a) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year comes from PRC domestic companies, and (b) the main parts of the issuer s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; (2) exemptions from immediate filing requirements for issuers that (a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures, (b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and (c) whose such overseas securities offering or listing shall be completed before September 30, 2023, provided however that such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (3) a negative list of types of issuers banned from listing or offering overseas, such as (a) issuers whose listing or offering overseas has been recognized by the State Council of the PRC as a possible threat to national security, (b) issuers whose affiliates have been recently convicted of bribery and corruption, (c) issuers under ongoing criminal investigations, and (d) issuers under major disputes regarding equity ownership; (4) issuers compliance with web security, data security, and other national security laws and regulations; (5) issuers filing and reporting obligations, such as the obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and the obligation after offering or listing overseas to report to the CSRC material events including a change of control or voluntary or forced delisting of the issuer; and (6) the CSRC s authority to fine both issuers and their shareholders between 1 and 10 million RMB for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. II We believe we are not required to obtain approvals from any PRC government authorities, including the CSRC or the Cyberspace Administration of China, or any other government entity, to issue our securities to foreign investors and to list on a U.S. exchange. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or any other PRC governmental authorities. However, applicable laws, regulations, or interpretations of the PRC may change, and the relevant PRC government agencies could reach a different conclusion and may subject us to a stringent approval process from the relevant government entities in connection with this offering, continued listing on a U.S. exchange, the potential business combination, the issuance of shares or the maintenance of our status as a publicly listed company outside China, and the post business combination entity s PRC operations if our business combination target is a PRC Target Company. We may also be subject to registration with the CSRC following this Offering pursuant to the Trial Measures. It is uncertain when and whether we will be required to obtain permission from the PRC government to continue to list on a U.S. exchange in the future and offer our securities to foreign investors. If approval is required in the future, including pursuant to the Trial Measures, and we are denied permission from Chinese authorities to list on U.S. exchanges or offer our securities to foreign investors, we may not be able to continue listing on a U.S. exchange or be subject to other severe consequences, which would materially affect the interest of the investors. In addition, any changes in PRC law, regulations, or interpretations may severely affect our operations after this offering. The use of the term "operate" and "operations" includes the process of searching for a target business and conducting related activities. To that extent, we may not be able to conduct the process of searching for a potential target company in China. Subject to the considerations set forth above, if we decide to consummate our initial business combination with a China-based company, the combined company may make capital contributions or extend loans to any future PRC subsidiaries through intermediate holding companies subject to compliance with relevant PRC foreign exchange control regulations. From our inception to the date of this prospectus, no dividends or distributions have been made. After an initial business combination with a China-based company, the combined company s ability to pay dividends, if any, to the shareholders and to service any debt it may incur will depend upon dividends paid by any future PRC subsidiaries. Under PRC laws and regulations, PRC companies are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to offshore entities. In particular, under the current PRC laws and regulations, dividends may be paid only out of distributable profits. Distributable profits are the net profit as determined under Chinese accounting standards and regulations, less any recovery of accumulated losses and appropriations to statutory and other reserves required to be made. A PRC company is required to set aside at least 10% of its after-tax profits each year to fund certain statutory reserve funds (up to an aggregate amount equal to half of its registered capital). As a result, the combined company s PRC subsidiaries may not have sufficient distributable profits to pay dividends to the combined company. Furthermore, if certain procedural requirements are satisfied, the payment in foreign currencies on current account items, including profit distributions and trade and service related foreign exchange transactions, can be made without prior approval from the State Administration of Foreign Exchange, or SAFE, or its local branches. However, where Renminbi ("RMB"), the legal currency of the PRC, is to be converted into foreign currency and remitted out of China to pay capital expenses, such as the repayment of loans denominated in foreign currencies, approval from or registration with competent government authorities or its authorized banks is required. The PRC government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions. If the foreign exchange control regulations prevent the PRC subsidiaries of the combined company from obtaining sufficient foreign currencies to satisfy their foreign currency demands, the PRC subsidiaries of the combined company may not be able to pay dividends or repay loans in foreign currencies to their offshore intermediary holding companies and ultimately to the combined company. We cannot assure you that new regulations or policies will not be promulgated in the future, which may further restrict the remittance of RMB into or out of the PRC. We cannot assure you, in light of the restrictions in place, or any amendment to be made from time to time, that the PRC subsidiaries of the combined company will be able to satisfy their respective payment obligations that are denominated in foreign currencies, including the remittance of dividends outside of the PRC. In December 2020, Congress enacted the HFCA Act, and the SEC released interim final amendments that begin to address the components of this Act. In November 2021, the SEC approved PCAOB Rule 6100, which establishes a process for determining which registered public accounting firms the board is unable to inspect or investigate completely. In December 2021, the SEC adopted amendments to finalize its rules under the HFCA Act that set forth submission and disclosure requirements for commission-identified issuers identified under the Act, specify the processes by which the SEC will identify and notify Commission-Identified Issuers, and implement trading prohibitions after three consecutive years of identification. In December 2022, Congress passed the omnibus spending bill and the President signed it into law. This spending bill included the enactment of provisions to accelerate the timeline for implementation of trading prohibitions from three years to two years. Separately, on December 15, 2022, the PCAOB published its determination that in 2022, the PCAOB was able to inspect and investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. This determination reset the now two-year clock for compliance with the trading prohibitions for identified issuers audited by these firms. The amendment had originally been passed by the U.S. Senate in June 2021, as the "Accelerating Holding Foreign Companies Accountable Act." We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 and will therefore be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See "Risk Factors" beginning for a discussion of information that should be considered in connection with an investment in our securities. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. No offer or invitation to subscribe for securities may be made to the public in the American. III TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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+S-1 1 wmbt_s1.htm S-1 As filed with the U.S. Securities and Exchange Commission on [ ], 2023. Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Sichuan Wanma Benteng Technology Co., Ltd. (Exact name of registrant as specified in its charter) Cayman Islands 6770 00-0000000 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) No. 418, 4th Floor, Unit 1, Building 2 No. 978, Section 1, Riyue Avenue, Qingyang District Chengdu, Sichuan, China (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Xinchun Wu c/o Sichuan Wanma Benteng Technology Co., Ltd. (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 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 post-effective amendment filed pursuant to Rule 462(d) 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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, 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. CALCULATION OF REGISTRATION FEE Title of Each Class of Security Being Registered Amount Being Registered Proposed Maximum Offering Price Per Security Proposed Maximum Aggregate Offering Price Amount of Registration Fee Ordinary shares (2) 7,000,000 Shares $10.00(1) $70,000,000(1) $10,332.00 Total $70,000,000 $10,332.00 (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the Securities Act ). (2) Pursuant to Rule 416 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share sub-divisions, share capitalizations or similar transactions. 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 the 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 preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS Subject to Completion [ ], 2023 Sichuan Wanma Benteng Technology Co., Ltd. $70,000,000 7,000,000 Ordinary Shares Sichuan Wanma Benteng Technology Co., Ltd. is a newly incorporated blank check company, incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any stage of its corporate evolution of in any industry, sector or geographic location (subject to certain limitations described in this prospectus), we intend to focus our search in the China and Asia-Pacific area. This is an initial public offering of our securities. Each ordinary share has an offering price of $10.00. We will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below, calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise, income and other tax obligations, net of taxes payable, divided by the number of then outstanding ordinary shares that were sold in this offering, which we refer to collectively as our public shares throughout this prospectus, subject to the limitations described herein. If we have not completed our initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, net of taxes payable (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and as further described herein. Currently, there is no public market for our ordinary shares. We intend to apply to list our shares on the NASDAQ Capital Market, under the symbol WMBT on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on the NASDAQ. We are an emerging growth company and smaller reporting company under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See the section of this prospectus entitled Risk Factors beginning on page 45 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. No offer or invitation to subscribe for securities may be made to the public in the Cayman Islands. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Share Total Public offering price $10.00 $70,000,000 Underwriting discounts and commissions(1) $ 0.20 $ 1,400,000 Proceeds, before expenses, to Sichuan Wanma Benteng Technology Co., Ltd. $ 9.80 $68,600,000 (1) Includes $0.20 per ordinary share, or $1,400,000 in the aggregate payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, as described in this prospectus. See the section of this prospectus entitled Underwriting for a description of compensation payable to the underwriters. All of the proceeds we receive from this offering described in this prospectus will be deposited into a U.S.-based trust account at [ ], with [ ] acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the proceeds from this offering held in the trust account will not be released from the trust account until the earliest to occur of (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (ii) with respect to any other provisions relating to shareholders rights or pre-initial business combination activity and (c) the redemption of our public shares if we have not completed our business combination within 24 months from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders. The underwriters are offering the shares for sale on a firm commitment basis. The underwriters expect to deliver the shares to the purchasers on or about , 2023. Sole Book-Running Manager [ ] Lead Manager [ ] , 2023 We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and neither we nor the underwriters take responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus or the date specified herein. TABLE OF CONTENTS Summary 1
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+PROSPECTUS SUMMARY This summary highlights, and is qualified in its entirety by, the more detailed information contained in other parts of this prospectus, including any applicable free writing prospectus and the documents incorporated by reference herein. This summary does not contain all of the information that may be important to you in making your investment decision. You should read this entire prospectus carefully, especially the Risk Factors section beginning on page 8 and our financial statements and the related notes incorporated by reference herein, before deciding to invest in our Securities. As used in this prospectus, unless the context otherwise requires, references to Chemomab Therapeutics Ltd., Chemomab, the Company, us, we and our refer to Chemomab Therapeutics Ltd., an Israeli company and its consolidated subsidiaries; however, with respect to the presentation of financial results for historical periods that preceded the Merger (as defined below), these terms refer to the financial results of the Company s wholly owned subsidiary, Chemomab Ltd. (the Subsidiary ), which was the accounting acquirer in the Merger. References to the Merger refer to the merger involving Anchiano Therapeutics Ltd., or Anchiano, and the Subsidiary, whereby a wholly owned subsidiary of Anchiano merged with and into the Subsidiary, with the Subsidiary surviving as a wholly owned subsidiary of Anchiano. Upon consummation of the Merger on March 16, 2021, Anchiano changed its name to Chemomab Therapeutics Ltd. and the business conducted by the Subsidiary became primarily the business conducted by the Company. Company Overview Chemomab is a clinical-stage biotechnology company focused on the discovery and development of innovative therapeutics for fibrotic and inflammatory diseases with high unmet needs. Based on the unique and pivotal role of the soluble protein CCL24 in promoting fibrosis and inflammation, Chemomab developed CM-101, a monoclonal antibody designed to bind and block CCL24 activity. CM-101 has demonstrated the potential to treat multiple severe and life-threatening fibrotic and inflammatory diseases. Chemomab has pioneered the therapeutic targeting of CCL24, a chemokine that promotes various types of cellular processes that regulate inflammatory and fibrotic activities through the CCR3 receptor. The chemokine is expressed in various types of cells, including immune cells, endothelial cells and epithelial cells. We have developed a novel CCL24 inhibiting product candidate with dual anti-fibrotic and anti-inflammatory activity that modulates the complex interplay of both of these inflammatory and fibrotic mechanisms, which drive abnormal states of fibrosis and clinical fibrotic diseases. This innovative approach is being developed for difficult to treat rare diseases, also known as orphan indications or diseases, such as primary sclerosing cholangitis ( PSC ), and systemic sclerosis ( SSc ), for which patients have no established disease modifying or standard of care treatment options. We estimate that there are approximately 77 thousand patients suffering from PSC in the U.S., EU and Japan, representing over a $1 billion market opportunity, and approximately 170 thousand patients suffering from SSc in those same markets, representing over a $1.5 billion market opportunity. CM-101, our lead clinical product candidate, is a first-in-class humanized monoclonal antibody that attenuates the basic function of the soluble chemokine CCL24, also known as eotaxin-2, as a regulator of major inflammatory and fibrotic pathways. We have demonstrated that CM-101 interferes with the underlying biology of inflammation and fibrosis through a novel and differentiated mechanism of action. Based on these findings, we are actively advancing CM-101 in Phase 2 clinical studies directed toward two distinct clinical indications that include patients with liver or skin, and/or lung fibrosis. We are currently conducting a Phase 2 clinical study in PSC, a rare obstructive and cholestatic liver disease. The study is actively recruiting patients in the U.S., Europe and Israel and is being expanded by adding clinical sites, an additional high dose arm (20mg/kg) as well as an open label extension. We had earlier proposed to add both low and high dose arms to the study but the recent encouraging results reported from our Phase 2 liver fibrosis trial in NASH patients, dosed at 5mg/kg, along the positive Phase 1b data we previously reported in non-alcoholic fibrotic liver disease ( NAFLD ) patients dosed at 5mg/kg and 2,5mg/kg, are seen as providing us sufficient data on the performance of the lower dose to drop it from the current trial, which is focusing on the 10mg/kg and 20g/kg doses. We believe this change will facilitate timely conduct and completion of the trial. If regulators in the future do not agree that the existing low dose data are sufficient, we always have the option to add a lower dose group as part of the Phase 3 clinical program. We are also planning to open a Phase 2 clinical trial in SSc around midyear of 2023. The trial in SSc, a rare autoimmune rheumatic disease characterized by fibrosis in the skin and lung and other organs, will focus on establishing biological and clinical proof of concept in this patient population. Although our primary focus is on these two rare indications, as we noted, an additional Phase 2 clinical study in patients with liver fibrosis due to non-alcoholic steatohepatitis, or NASH has recently been completed. This trial provided safety and pharmacokinetic ( PK ) data and is informative in determining whether the company advances the development of its current subcutaneous formulation of CM-101. Additionally, the trial measured a number of biomarkers that may be relevant to the potential activity of CM-101 in other fibro-inflammatory conditions. We recently reported results from this trial, which showed that the trial met its primary endpoint of safety and tolerability, and that CM-101 demonstrated encouraging activity in secondary endpoints that include a range of liver fibrosis biomarkers and physiologic assessments. As filed with the Securities and Exchange Commission on May 19, 2023 Registration No. 333-269218 TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/CRGOW_freightos_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/CRGOW_freightos_prospectus_summary.txt
new file mode 100644
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--- /dev/null
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@@ -0,0 +1,170 @@
+SUMMARY OF THE PROSPECTUS
+This summary highlights selected information from this prospectus and does not contain all of the information that is important to you in making an investment decision. This summary is qualified in its entirety by the more detailed information included in this prospectus. Before making your investment decision with respect to our securities, you should carefully read this entire prospectus, including the information under Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operation, and the financial statements included elsewhere in this prospectus.
+Unless otherwise indicated or the context otherwise requires, references in this prospectus to Freightos, Company, we, our, us and other similar terms refer to Freightos Limited and our subsidiaries.
+General
+Freightos operates a leading, vendor-neutral booking and payment platform for international freight. Freightos Platform supports supply chain efficiency and agility by enabling real-time procurement of ocean and air shipping across more than ten thousand importers/exporters, thousands of freight forwarders, and dozens of airlines and ocean carriers.
+Freightos.com is a premier digital international freight marketplace for importers and exporters for instant pricing, booking and shipment management. Thousands of SMBs and enterprises have sourced shipping services via Freightos across dozens of logistics service providers.
+WebCargo by Freightos is a leading global freight platform connecting carriers and freight forwarders. In particular, it is the largest air cargo eBooking platform, enabling simple and efficient freight pricing and booking between thousands of freight forwarders, including the top-twenty global freight forwarders, and hundreds of airlines, ocean liners and trucking carriers. Airlines on the platform represent over a third of global air cargo capacity. WebCargo also offers software as a service for forwarders to facilitate digital freight rate management, quoting and online sales.
+Freightos Data calculates the Freightos Baltic Index, the industry s key daily benchmark of container shipping prices, the Freightos Air Index, as well as other market intelligence products that improve supply chain decision-making, planning, and pricing transparency.
+Founded by serial entrepreneur Zvi Schreiber in 2012, Freightos is a widely recognized logistics technology leader with a worldwide presence and a broad customer network.
+On October 14, 2021, Gesher consummated its initial public offering of 10,000,000 units at $10.00 per unit (the Gesher Units ), each consisting of one ordinary share (the Gesher Ordinary Shares ) and one-half of one warrant (the Gesher Warrants ). Each whole Gesher Warrant entitled the holder to purchase one Gesher Ordinary Share at a price of $11.50 per share. 
+Freightos HK was initially incorporated in January 2012 as Tradeos Limited in Hong Kong and shortly thereafter adopted the business name of Freightos, formally changing the company name in 2016 to Freightos Limited and in February 2023 to Freightos Hong Kong Limited. The group redomiciled to the Cayman Islands in May 2022. While incorporated in the Cayman Islands, Freightos Limited is a tax resident in Israel. The mailing address of Freightos principal executive office is Technology Park Building 2, 1 Derech Agudat Sport HaPo el, Jerusalem, Israel 9695102.
+Business Combination
+On January 25, 2023, Merger Sub I merged with and into Gesher, with Gesher surviving as a wholly owned subsidiary of Freightos. Immediately thereafter, Gesher, as a wholly owned subsidiary of Freightos, merged with and into Merger Sub II with Merger Sub II surviving as a wholly owned subsidiary of Freightos. As a result of the Business Combination and the other Transactions, Gesher became a direct, wholly-owned subsidiary of Freightos, and its outstanding securities were exchanged for the securities of Freightos. In connection with the Closing, 10,287,844, or 89.46%, of the 11,500,000 outstanding Gesher Ordinary Shares were redeemed.
+
+8
+
+Table of Contents
+
+Upon the Closing, Freightos consummated the private placements contemplated by the Forward Purchase Agreement and the Backstop Agreement, each as assigned from Gesher to Freightos. Pursuant to the Forward Purchase Agreement, the Forward Purchaser purchased 4,000,000 Freightos Units for a purchase price of $40,000,000. Additionally, the Forward Purchaser fulfilled the FPA Backstop Commitment in exchange for 1,000,000 Freightos Ordinary Shares and 500,000 Freightos Warrants. Pursuant to the Backstop Agreement, the Backstop Investor fulfilled the Additional Backstop Commitment in exchange for 1,000,000 Freightos Ordinary Share and 100,000 Freightos Warrants. In addition, pursuant to the PIPE Agreement, the PIPE Investor purchased 1,000,000 Freightos Ordinary Shares for a purchase price of $10,000,000.
+Emerging Growth Company
+We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). As such, we will be eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
+We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the date on which Freightos Ordinary Shares were offered in exchange for Gesher Ordinary Shares in connection with the Transactions, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company have the meaning associated with it in the JOBS Act.
+Foreign Private Issuer
+We qualify as a foreign private issuer under U.S. securities laws. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from compliance with certain laws and regulations of the Exchange Act including, but not limited to, those related to the solicitations of proxies, consents or authorizations, those related to the public reporting of insider stock ownership and trading activities, and those requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K.
+We intend to take all actions necessary for us to maintain compliance as a foreign private issuer under the applicable corporate governance requirements of the Sarbanes-Oxley Act, the rules adopted by the SEC and the Nasdaq corporate governance rules and listing standards. Because we are a foreign private issuer, our officers, directors and principal shareholders are not subject to short-swing profit and insider trading reporting obligations under Section 16 of the Exchange Act. They will, however, be subject to the obligations to report changes in share ownership under Section 13 of the Exchange Act and related SEC rules.
+We may utilize these exemptions until such time as we are longer a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are directly or indirectly held of record by U.S. holders and any one of the following is true: (i) the majority of our executive officers or directors are U.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our business is administered principally in the United States.
+Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are not emerging growth companies and will continue to be permitted to follow our home country practice on such matters.
+Risk Factors Summary
+Investing in our securities involves risks. You should carefully consider the risks described in Risk Factors before making a decision to invest in our ordinary shares. If any of these risks actually occurs, our business, financial condition and results of 
+
+9
+
+Table of Contents
+
+operations would likely be materially adversely affected. In such case, the trading price of our securities would likely decline, and you may lose all or part of your investment. Set forth below is a summary of some of the principal risks we face:
+ 
+Our growth depends on our ability to attract and retain carriers, freight forwarders and importers/ exporters using our Platform, and the failure to maintain or grow the number of users, and the level of activity of such users, could adversely impact our business;
+
+ 
+We have a limited operating history and history of net losses, and we anticipate that we will experience net losses for the foreseeable future;
+
+ 
+If we fail to maintain and improve the quality of our Platform, we may not be able to attract and retain users;
+
+ 
+We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results and financial condition;
+
+ 
+A limited number of Sellers provide a substantial portion of the offerings available on our Platform. If we fail to retain these Sellers, our GBV could decline significantly, impacting our revenue and EBITDA;
+
+ 
+Adverse global economic conditions, geopolitical issues and other conditions that impact our increasingly global operations could have a negative effect on our business, results of operations and financial condition and liquidity;
+
+ 
+Additional changes in international trade laws, regulations, policies and relations and commercial trends such as nearshoring could significantly reduce the volume of goods transported globally and adversely affect our business and results of operations;
+
+ 
+We may need to raise additional funds to finance our future capital needs, which may dilute the value of our outstanding ordinary shares or prevent us from growing our business;
+
+ 
+We have experienced growth in recent periods and expect to continue to invest in our growth for the foreseeable future. If we are unable to maintain similar levels of growth or manage our growth effectively, our business, revenue, profits and financial condition could be adversely affected;
+
+ 
+Because we expect the substantial majority of our future revenue to come from our Platform-with most of our revenue derived from our freightos.com marketplace and WebCargo Platform offerings-our inability to generate revenue from our Platform would adversely affect our business operations, financial results and growth prospects;
+
+ 
+We are subject to various risks related to our data products and in particular our freight indexes, and if we are unable to accurately calculate an index or comply with our published guides for calculating an index,we may face liability or reputational damage and lose clients and revenue,which could have a material impact on our financial results;
+
+ 
+Our internal computer and information technology systems, or those of our vendors, users or contractors, have been and may in the future be subject to cyberattacks or security incidents, including sabotage, which could result in a material operational or developmental disruption, or otherwise adversely affect our business, financial condition, results of operations, cash flows, result in reputational damage or liability, and cause us to lose existing or future users and revenue;
+
+ 
+If we are unable to comply with our security obligations or our computer systems are or become vulnerable to security incidents or other operational disruptions, we may face reputational damage and lose clients and revenue;
+
+ 
+We are subject to a complex regulatory environment, and failure to comply with and adapt to these regulations could result in penalties or otherwise adversely impact our business, and future regulation changes including sanctions could limit our ability to conduct parts of our business;
+
+10
+
+Table of Contents
+
+ 
+The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies or changes in tax legislation or policies could impact our future financial position and results of operations;
+
+ 
+Our qualification as an emerging growth company and a foreign private issuer and the reduced disclosure requirements applicable to us may make our securities less attractive to investors;
+
+ 
+The requirements of being a public company may strain our resources, divert our management s attention and affect our ability to attract and retain qualified board members;
+
+ 
+Economic substance legislation of the Cayman Islands may adversely impact us or our operations;
+
+ 
+Relations between Israel and the other jurisdictions in which we operate, and geopolitical issues in the various jurisdictions in which our employees and users reside could materially affect our business;
+
+ 
+Our Israeli subsidiary currently maintains a beneficial tax treatment status. Changes in tax laws, tax incentives, benefits or differing interpretations of tax laws or our inability to maintain our Israeli subsidiary s beneficial tax status may adversely affect our results of operations;
+
+ 
+Our business is currently concentrated in certain geographies, especially Europe and the United States, with many shipments originating in Asia, which exposes our business to local economies, regional downturns or other political, social or economic disruptions or events that may materially adversely affect our financial condition and results of operations;
+
+ 
+The listing of our securities on Nasdaq did not benefit from the process customarily undertaken in connection with an underwritten initial public offering, which could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for our securities;
+
+ 
+The markets for Freightos Ordinary Shares or Freightos Warrants have limited volume and liquidity and may further lose liquidity in the future, which would adversely affect the liquidity and price of Freightos Ordinary Shares or Freightos Warrants;
+
+ 
+We are subject to various risks related to our data products and in particular our freight indexes, and if we are unable to accurately calculate an index or comply with our published guides for calculating an index, we may face reputational damage and lose clients and revenue, which could have a material impact on our financial results; and
+
+ 
+The other matters described in the section titled Risk Factors of this prospectus.
+
+Recapitalization
+Unless otherwise indicated, all share numbers set forth in this prospectus reflect the Recapitalization.
+ 
+
+11
+
+Table of Contents
+
+THE OFFERING
+ 
+
+ 
+
+Issuer
+Freightos Limited
+
+Securities offered by the Selling Securityholders
+We are registering the resale by the Selling Securityholders named in this prospectus, or their permitted transferees, of an aggregate of up to 33,891,682 Freightos Ordinary Shares, up to 8,550,549 Freightos Ordinary Shares underlying Freightos Warrants, and up to 8,550,549 Freightos Warrants.
+
+Securities registered for issuance
+We are registering the issuance of an aggregate of up to 14,850,000 Freightos Ordinary Shares underlying the Freightos Warrants.
+
+Terms of the Offering
+The Selling Securityholders will determine when and how they will dispose of the ordinary shares registered under this prospectus for resale.
+
+Shares outstanding prior to the Offering
+As of March 20, 2023, we had 47,435,357 Freightos Ordinary Shares issued and outstanding.
+
+Shares outstanding after the Offering
+62,285,357 Freightos Ordinary Shares (assuming the exercise for cash of outstanding warrants to purchase 14,850,000 Freightos Ordinary Shares).
+The Freightos Ordinary Shares being offered for resale pursuant to this prospectus by the Selling Securityholders represent approximately 68.1% of the outstanding Freightos Ordinary Shares as of the date of this prospectus, assuming the exercise of all Freightos Warrants. Given the substantial number of Freightos Ordinary Shares being registered for potential resale by Selling Securityholders pursuant to this prospectus, the sale of shares by the Selling Securityholders, or the perception in the market that the Selling Securityholders of a large number of shares intend to sell shares, could increase the volatility of the market price of the Freightos Ordinary Shares or result in a significant decline in the public trading price of the Freightos Ordinary Shares. See Risk Factors Risks Related to Ownership of our Securities Sales of Freightos Ordinary Shares, or the perception of such sales, by us or the Selling Securityholders pursuant to this prospectus in the public market or otherwise could cause the market price for the Freightos Ordinary Shares to decline and certain Selling Securityholders still may receive significant proceeds. 
+
+Use of proceeds
+We will not receive any proceeds from the sale of the Freightos Warrants (each
+of which is generally exercisable for $11.50 per share) or Freightos Ordinary Shares by the Selling Securityholders except with respect to amounts received by us due to the exercise of warrants. However, given the recent price volatility of our Freightos Ordinary Shares and relative lack of liquidity in our stock, there is no certainty that warrant holders will exercise their warrants and, accordingly, we may not receive any proceeds in relation to our outstanding warrants. We believe that the likelihood that warrant holders determine to exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of our Freightos Ordinary Shares. If the market price for our Freightos Ordinary Shares is less than the exercise price of the warrants (on a per share basis), we believe that warrant holders will be very unlikely to exercise any of their warrants, and accordingly, we will not receive any such proceeds. There is no assurance that the warrants will be in the money prior to their expiration or that the warrant holders will exercise their warrants. As of April 13, 2023, the closing price of our Freightos Ordinary Shares was $3.02 per share. We expect to 
+
+12
+
+Table of Contents
+
+use the proceeds received from the exercise of the warrants, if any, for working capital and general corporate purposes. See Use of Proceeds. 
+
+Nasdaq Capital Market ticker symbol
+Freightos Ordinary Shares and Freightos Warrants are listed on Nasdaq under the symbols CRGO and CRGOW, respectively.
+
+ 
+ 
+ 
+ 
+
+13
+
+Table of Contents
+
+RISK FACTORS
+An investment in our securities involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, prospectus, financial condition or operating results could be harmed by any of these risks, as well as other risks not known to us or that we consider immaterial as of the date of this prospectus. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment. The following discussion should be read in conjunction with our financial statements and notes thereto included herein. You should carefully consider the following risk factors in addition to the other information included in this prospectus, including matters addressed in the section titled
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index 0000000000000000000000000000000000000000..0339624efa2652b0191b2235cedcf6773034c6d0
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@@ -0,0 +1,53 @@
+PROSPECTUS SUMMARY
+ 
+The following summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision in our common stock. You should read this entire prospectus carefully, including the sections titled Risk Factors and Management s Discussion and Analysis and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms Crown Equity Holdings, Inc., Crown Equity, Crown Equity Holdings, CRWE , the company, we, us and our in this prospectus refer to Crown Equity Holdings, Inc. All currency amounts in this prospectus are expressed in United States ( U.S. ) dollars, unless otherwise indicated. This is only a summary and may not contain all the information that is important to you. You should carefully read both this prospectus and any accompanying prospectus supplement, and any other offering materials, together with the additional information described under the heading Where You Can Find More Information. 
+ 
+About Us
+ 
+We are an integrated media company focused on providing powerful solutions to enhance worldwide visibility and universal relevance, enabling companies to achieve accelerated growth and rapid results that span all the stages of a company's life cycles. Additionally, the Company is developing its CRWE WORLD and related digital properties into a global online community that will launch, manage, and own select businesses and projects.
+ 
+The Company
+ 
+Crown Equity Holdings, Inc. (the Company) was incorporated on August 31, 1995 under the laws of the State of Nevada with its principal executive office at 11226 Pentland Downs Street, Las Vegas, NV 89141, telephone (702) 683-8946. Our website can be found at crownequityholdings.com.
+ 
+The Company is offering for sale a maximum of 10,000,000 Units at a price of $5.00 per Unit. Each Unit comprises of one share of common stock and four warrants to each purchase one share of common stock with each warrant having a specified exercise price and expiration date. The total number of shares registered will be up to 50,000,000 common shares being comprised of up to 10,000,000 common shares and up to 40,000,000 common shares underlying the warrants, if the warrants are exercised resulting in a share issuance.
+ 
+This is a direct participation offering since we are offering the stock directly to the public without the participation of an underwriter. Our directors will be solely responsible for selling shares under this offering and no commission will be paid to them on any sales. There has been no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. We do not have an arrangement in place for a market maker to file such and application and there is no guarantee that we will be able to find one to do so.
+ 
+Company s History
+ 
+Crown Equity Holdings, Inc. (the Company) was formerly known as "Visioneering Corporation", which was incorporated on August 31, 1995 under the laws of the State of Nevada.
+ 
+ 
+4
+
+Table of Contents
+ 
+The Company changed its name from Visioneering Corporation to "Asiamerica Energy Group, Inc." on January 12, 1996, when it entered into an agreement to acquire an oil and gas company. No stock was issued, and no assets were acquired as this acquisition was not consummated. On April 29, 1996, the Company then changed its name to "Care Financial Group, Inc."
+ 
+On May 15, 1997, the Company changed its name to "Trump Oil Corporation." Trump proposed to merge with Fenway Resources Ltd., a Canadian company involved in natural resource development which wanted to develop and construct a cement manufacturing facility in the Philippines. This proposed merger was also never consummated, and no shares were issued pursuant to this agreement.
+ 
+On March 10, 1999, the Company entered a letter of intent with 20/20 Web Design, Inc., a Colorado corporation, a wholly owned subsidiary of Multi-Source Capital, Ltd. ("MSC"), also a Colorado corporation. The Company entered into an Agreement and Plan of Reorganization and completed its acquisition of 20/20 Web Design, Inc., with the Company changing its name as a result.
+ 
+On April 10, 2001 the Company changed its name to "BentleyTel", since the Company entered a letter of intent with BentleyTel.com, Inc., a Nevada corporation, to acquire BentleyTel in a statutory merger. The transaction was not completed, and the Company changed its name back to 20/20 Web Design, Inc. on June 8, 2001
+ 
+On February 10, 2003, the Company changed its name to "20/20 Networks, Inc. 
+ 
+Thereafter, on December 10, 2003, the Company changed its name to " Micro Bio-Medical Waste Systems, Inc. 
+ 
+On September 28, 2006, the Company changed to its current name of Crown Equity Holdings, Inc. 
+ 
+The Company maintains its executive office at 11226 Pentland Downs Street, Las Vegas, NV 89141
+ 
+Overview
+ 
+The Company operates CRWEWorld website (crweworld.com), (hereafter CRWE World ) and is in the business of aggregating pertinent general and financial news and publishes it on its website for visitors to the site. The Company believes the aggregating and categorizing of business content from news organizations such as GlobeNewswire, PR Newswire, Business Wire, Accesswire, and many others, will allow CRWE World the opportunity to become a one stop online site location for business related news and information overall.
+ 
+The site also provides advertisers an opportunity to use online banners designed for digital advertising for sponsored hyperlinks, pay-per-click, pop ups or impressions ads, to reach and persuade the publication s audience to buy, drive traffic to their website, increase their brand, or create product awareness for a fee.
+ 
+In addition to Crown Equity Holdings, Inc. doing business as CRWE WORLD, the Company is conducting businesses as CRWE Press Release (crwepressrelease.com), which engages in the dissemination of news and press releases for publicly and privately held companies, CRWE Tube (crwetube.com), a video sharing platform, CRWE Tech (crwetech.com), an IT/technology services provider of web design, development and hosting services, and iB2B Global (ib2bglobal.com), a business to business (B2B) international e-commerce platform. The Company charges fees for its services offered on these sites.
+ 
+ 
+5
+
+Table of Contents
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diff --git a/parsed_sections/prospectus_summary/2023/DTI_drilling_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/DTI_drilling_prospectus_summary.txt
new file mode 100644
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should read this entire prospectus carefully, including the matters discussed under the sections entitled Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, Business and the consolidated financial statements and related notes included elsewhere in this prospectus before making an investment decision. Our Business We are a leading OSC, based on the percentage of active rigs to which we supply tools in the geographies in which we are active, that rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas. We operate from 18 locations in North America and four locations in Europe and the Middle East, and maintain a large fleet of rental equipment consisting of drill collars, stabilizers, crossover subs, wellbore conditioning tools, drill pipe, hevi-wate drill pipe and tubing. We also rent surface control equipment such as blowout preventers and handling tools, and provide downhole products for producing wells. Drilling and producing oil and gas is a complex endeavor that requires tools of various shapes and sizes. Many of our customers rent these tools, as opposed to owning them, because of the many factors that affect which tools are needed for a specific task. Such factors include different formations, drilling methodologies, drilling engineer preferences, drilling depth and hole size. We believe that we are successful because we meet our customers wide demands by operating from multiple locations with over 65,000 tools in our fleet. We are led by an accomplished management team that has significant experience in the oil and gas industry and has worked together for much of the last decade. Since 2012, we have grown the business and strengthened our standing in the industry. Specifically, we have: Grown our revenue by 271%, from $35 million in 2012 to $130 million in 2022; Increased substantially our market share within North American land drilling, in which we are the market leader, based on the percentage of active projects to which we supply tools, and regularly have active tool rentals on more than 50% of working locations; Expanded our footprint from three facilities to 18 locations in North America, allowing us to serve all major oil and gas producing basins in North America land and offshore; Established four additional locations with international partners in Europe and the Middle East; Secured distribution rights for Drill-N-Ream, a patented specialty reaming tool that saves our customers time and money; Become the market leader in GOM deepwater drilling operation tool rentals, based on the percentage of active projects to which we supply tools, growing from serving only a single GOM project in 2012; Upgraded our customer base from one comprised primarily of independent directional service providers to one comprised of major diversified OSCs and global E&P operators; Built a large sales and marketing organization focused on team selling; and Secured distribution rights for emerging technologies that fulfill the growing demand for longer horizontal lateral drilling.
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diff --git a/parsed_sections/prospectus_summary/2023/EMPD_empery_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/EMPD_empery_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e59968f922a0f0b70fc2d65de1dd5c3c09b83187
--- /dev/null
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@@ -0,0 +1,458 @@
+Prospectus
+Summary
+
+ 
+
+This summary highlights
+certain information about us, this offering and selected information contained elsewhere in or incorporated by reference into this prospectus.
+This summary provides an overview of selected information and does not contain all of the information you should consider before deciding
+whether to invest in our common stock. Therefore, you should read the entire prospectus (including the documents incorporated by reference
+herein and therein), especially the "Risk Factors" section beginning on page 8 of this prospectus,
+and any similar section contained in the documents incorporated by reference herein, and our consolidated financial statements and the
+related notes incorporated by reference in this prospectus, before deciding to invest in our common stock. Unless otherwise indicated
+or the context requires otherwise, the words "we," "us," "our," the "Company," or "our
+Company," and "Volcon" refer to Volcon, Inc., a Delaware corporation.
+
+ 
+
+Our Company
+
+ 
+
+We are an all-electric, off-road
+powersports vehicle company developing electric two and four-wheel motorcycles and utility terrain vehicles, or UTVs, also known as side-by-sides,
+along with a complete line of upgrades and accessories. In October 2020, we began building and testing prototypes for our future offerings
+with two off-road motorcycles – the Grunt and the Runt. Our motorcycles feature unique frame designs protected by design patents.
+Additional utility and design patents have been filed for other aspects of Volcon s vehicles.
+
+ 
+
+We initially began to sell
+and distribute the Grunt and related accessories in the United States on a direct-to-consumer sales platform. We terminated our direct-to-consumer
+sales platform in November 2021. Prior to the termination of our direct-to-consumer sales platform, U.S. consumers made deposits for 360
+Grunts (net of cancellations) and five Runts, plus accessories and a delivery fee representing total deposits of $2.2 million. These orders
+were cancelable by the consumer until the vehicle was delivered and after a 14-day acceptance period, therefore the deposits were recorded
+as deferred revenue. As of June 30, 2022, we had completed shipping of all Grunts sold through our direct-to-consumer sales platform.
+Due to delays in developing the Runt, we refunded the deposits made for all Runts.
+
+ 
+
+ Beginning in November
+2021, we began negotiating dealership agreements with powersports dealers to display and sell our vehicles and accessories. Customers
+can now, or will soon be able to, buy our vehicles and accessories directly from a local dealership. Some of these dealers will also
+provide warranty and repair services to customers. As of September 30, 2023, we have 133 active dealers. Dealers can order any of our
+available products provided they are current on their accounts receivable and are within their established credit limit. We are offering
+dealers payment terms of up to 90 days to make larger purchases of our vehicles. We have entered into an accounts receivable factoring
+arrangement to allow the Company the ability to generate cash for working capital. We have agreements with third-party financing companies
+to provide financing to qualified customers of each dealer. There is no recourse to the Company or the dealer if the dealer s customer
+defaults on the financing agreement with the third-party. 
+
+ 
+
+As of September 30, 2023,
+we have signed agreements with six importers in Latin America and one importer for the Caribbean Region, collectively referred to
+herein as the LATAM importers, to sell our vehicles and accessories in their assigned countries/markets. In June 2022, we signed an exclusive
+distribution agreement with Torrot Electric Europa S.A., referred to herein as Torrot, to distribute their electric motorcycles for youth
+riders in Latin America. As discussed below, the agreement with Torrot was superseded by the December 2022 agreement to sell Volcon cobranded
+Torrot youth motorcycles. We use our LATAM importers to sell Volcon cobranded Torrot youth motorcycles in Latin America.
+
+ 
+
+In October 2022, we signed
+an expanded agreement with Torrot to also be the exclusive distributor of Torrot and Volcon co-branded youth electric motorcycles in
+the United States as well as Latin America. This agreement supersedes the original Torrot agreement and once all Torrot branded inventory
+is sold, we will no longer distribute Torrot branded motorcycles. Finally, in December 2022, we signed an expanded agreement with Torrot
+to be the exclusive distributor of Volcon co-branded youth electric motorcycles in Canada. In June 2023, we wrote down all remaining
+Torrot branded inventory in the amount of $84,000. On September 27, 2023, we wrote down the Volcon cobranded Torrot youth motorcycles
+by $1,622,262 to reduce their cost to the estimated net realizable value.
+
+ 
+
+We expect to expand our global
+sales of our vehicles and accessories beyond our current LATAM importer base. We expect to sign more LATAM importers in 2023 and in
+October 2023 we signed an agreement with an importer who will sell our vehicles in New Zealand. In October 2023, the Company made a decision
+to postpone expanding our dealer network in Canada for the foreseeable future and we have terminated the employment of our Canadian regional
+sales managers. We expect export sales to be executed with individual importers in each country that buy vehicles by the container. Each
+importer will sell vehicles and accessories to local dealers or directly to customers. Local dealers will provide warranty and repair
+services for vehicles purchased in their country. 
+
+ 
+
+ 
+
+ 3 
+
+ 
+
+ 
+
+ 
+
+ In July 2022, we expanded
+our offerings with the introduction of the first of our Volcon UTV models, the Stag, which we initially anticipated would be available
+for delivery to customers in the fourth quarter of 2023, followed by additional models of the Stag expected in 2024 and 2025. Due to
+a delay in certain parts from third-party vendors, we expect delivery to customers to begin in November 2023. The Stag is being manufactured
+by a third-party and incorporates electrification units, which include batteries, drive units and control modules provided by General
+Motors. Beginning in June 2022, we have taken non-binding pre-production orders which are cancelable prior to delivery. We also expect
+to introduce a higher performance, longer range UTV (to be named) but development of this vehicle has not yet begun and no timeline for
+its development and release has been determined. 
+
+ 
+
+ Through August 2022, we
+assembled the Grunt in a leased production facility in Round Rock, Texas. In August 2022, we announced that we will outsource the manufacturing
+of the Grunt to a third-party manufacturer, which has reduced costs and improved profitability on the Grunt. We also outsourced the manufacturing
+of the 2023 Grunt EVO to the same third-party manufacturer. The 2023 Grunt EVO has replaced the Grunt and has a belt drive rather than
+a chain drive as well as an updated rear suspension. We received prototypes of the Grunt EVO in the first quarter of 2023 and began selling
+the Grunt EVO in the third quarter of 2023. 
+
+ 
+
+In September 2022, we reduced
+our headcount in our product development and administration departments as we outsourced the design and development of certain components
+of our vehicle development. We also hired our Chief Marketing Officer and hired additional sales and marketing employees and increase
+marketing activities to further support our brand and products. In September 2023, we reduced our headcount in several departments to
+reduce costs and we continue to evaluate other cost reduction opportunities.
+
+ 
+
+We began taking pre-orders
+for an E-Bike, the Brat, in September 2022 and shipments to customers began in the fourth quarter of 2022. The Brat is being manufactured
+by a third-party. In January 2023, we began selling the Brat directly to consumers through our website. Consumers who order the Brat from
+our website can have the Brat shipped to their specified destination.
+
+ 
+
+In November 2022, we finalized
+an agreement for a third-party to manufacture the Runt LT. We received prototypes of the Runt LT in the first quarter of 2023 and expect
+to begin sales in the first quarter of 2024.
+
+ 
+
+The estimated fulfillment
+of all orders we have received assumes that our third-party manufacturers can successfully meet our order quantities and deadlines. If
+they are unable to satisfy orders on a timely basis, our customers may cancel their orders.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 4 
+
+ 
+
+ 
+
+ 
+
+Implications of Being an Emerging Growth Company
+
+ 
+
+We qualify as an "emerging
+growth company" as the term is used in The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and therefore,
+we may take advantage of certain exemptions from various public company reporting requirements, including:
+
+ 
+
+ a requirement to only have two years of audited financial statements and only two years of related selected
+financial data and management s discussion and analysis;
+
+ 
+
+ exemption from the auditor attestation requirement on the effectiveness of our internal controls over
+financial reporting;
+
+ 
+
+ reduced disclosure obligations regarding executive compensation; and
+
+ 
+
+ exemptions from the requirements of holding a non-binding advisory stockholder vote on executive compensation
+and any golden parachute payments. 
+
+ 
+
+We may take advantage of
+these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an
+emerging growth company if we have more than $1.235 billion in annual revenues, have more than $700.0 million in market value
+of our capital stock held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may
+choose to take advantage of some, but not all, of the available benefits of the JOBS Act. We have taken advantage of some of the reduced
+reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive
+from other public companies in which you hold stock. In addition, the JOBS Act provides that an emerging growth company can delay adopting
+new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves
+of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting
+standards as other public companies that are not emerging growth companies.
+
+ 
+
+Risks Affecting Our Company
+
+ 
+
+In evaluating an investment
+in our securities, you should carefully read this prospectus and especially consider the factors incorporated by reference in the sections
+titled "Risk Factors" commencing on page 8 of this prospectus and the Annual Report on Form 10-K
+for the year ended December 31, 2022 incorporated by reference herein.
+
+ 
+
+Company Information 
+
+ 
+
+Our principal executive offices
+are located at 3121 Eagles Nest Street, Suite 120, Round Rock, TX 78665. Our phone number is (512) 400-4271 and our website address is
+www.volcon.com. We make our periodic reports and other information filed with, or furnished to, the SEC available free of charge through
+our website. The information on or accessible through our website is not part of and is not incorporated by reference into this prospectus.
+
+ 
+
+ 5 
+
+ 
+
+ 
+
+ 
+
+THE OFFERING
+
+ 
+
+ 
+ Common Units
+ offered by us
+ We are offering
+ 19,565,217 Common Units, each Common Unit consisting of one share of common stock, 0.35 of a Series A Warrant to purchase one share
+ of common stock and 0.35 of a Series B Warrant to purchase one share of common stock (22,500,000 Common Units if the underwriter exercises its over-allotment option in full). 
+
+ 
+ 
+ 
+
+ 
+ Pre-Funded Units offered by us 
+ We are also offering to those purchasers, if any, whose purchase of Common Units in this offering
+ would otherwise result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than
+ 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of common stock immediately following the consummation
+ of this offering, the opportunity to purchase, if any such purchaser so chooses, Pre-Funded Units, in lieu of Common Units that would
+ otherwise result in such purchaser s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of
+ our outstanding shares of common stock. Each Pre-Funded Unit consists of one Pre-Funded Warrant to purchase one share of our common
+ stock, 0.35 of a Series A Warrant and 0.35 of a Series B Warrant. The Pre-Funded Warrants are immediately exercisable and may be
+ exercised at any time until all of the Pre-Funded Warrants are exercised in full. For each Pre-Funded Unit we sell, the number of
+ Common Units we are offering will be decreased on a one-for-one basis. 
+
+ 
+ 
+ 
+
+ 
+ Over-allotment option 
+ The offering is being underwritten on a firm commitment basis. We have granted the underwriter
+ a 45-day option to purchase up to 2,934,783 additional shares of common stock, representing 15% of the Common Units sold in the offering
+ (at an assumed public offering price of $0.92 per Common Unit, which is the last reported sales price of our common stock on the
+ Nasdaq Capital Market on November 6, 2023), and/or up to 2,934,783 additional Pre-Funded Warrants, representing 15% of the Pre-funded
+ Warrants sold in the offering, and/or up to 1,027,174 additional Series A Warrants, representing 15% of the Series A Warrants sold
+ in the offering, and/or up to 1,027,174 additional Series B Warrants, representing 15% of the Series B Warrants sold in the offering,
+ on the same terms and conditions set forth above solely to cover over-allotments. The underwriter may exercise the over-allotment
+ option with respect to shares of common stock only, Pre-Funded Warrants only, Series A Warrants only, Series B Warrants only, or
+ any combination thereof. 
+
+ 
+ 
+ 
+
+ 
+ Common stock to be outstanding
+ before this offering
+ 6,819,278
+ shares 
+
+ 
+ 
+ 
+
+ 
+ Common stock to be outstanding after this offering 
+ 26,384,495 shares of common stock (or 29,319,278 shares of common stock if the underwriters exercise
+ their option in full) (assuming no sale of Pre-Funded Units and no exercise of any Warrants issued in this offering). 
+
+ 
+ 
+ 
+
+ 
+ Use of Proceeds
+ We
+ expect to use the net proceeds from this offering for general corporate purposes. See "Use of Proceeds"
+ on page 12. 
+
+ 
+ 
+ 
+
+ 
+ Risk Factors
+ Investing
+ in our securities involves a high degree of risk. See "Risk Factors" beginning on page 8
+ of this prospectus and the risk factors incorporated by reference into this prospectus.
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+
+ Lock-up
+
+ We have agreed not to offer, issue, sell, contract to sell, encumber,
+grant any option for the sale of or otherwise dispose of any of our securities for a period of 180 days after the date of this prospectus.
+Our directors, executive officers, and certain shareholders have agreed not to offer, issue, sell, contract to sell, encumber,
+grant any option for the sale of or otherwise dispose of any of our securities for a period of 120 days after the date of this prospectus. See "Underwriting" for more information.
+
+ 
+ 
+ 
+
+ 
+ Nasdaq Capital Market Symbol
+ Our common stock is
+ listed on the Nasdaq Capital Market under the symbol "VLCN". We do not intend to list the Pre-Funded Warrant, the Series
+ A Warrants or the Series B Warrants on any securities exchange or nationally recognized trading system. Without a trading market,
+ the liquidity of such securities will be extremely limited. 
+
+ 
+ 
+
+ 
+
+ 6 
+
+ 
+
+ 
+
+ 
+
+The number of shares of our common stock expected
+to be outstanding after this offering is based on 6,819,278 shares of common stock outstanding as of November 3, 2023, after given
+effect for the 1 for 5 reverse stock split the Company completed on October 13, 2023, and excludes, as of that date, the following: 
+
+ 
+
+ 889,379
+ shares of common stock issuable upon the exercise of outstanding stock options, vested and
+ unvested, with a weighted-average exercise price of $9.34 per share; 
+
+ 1,661,531
+ shares of common stock issuable upon the exercise of outstanding warrants (excluding the
+ warrants issued in our August 2022 and May 2023 offerings that are discussed below) with
+ a weighted-average exercise price of $6.26 per share;
+
+ 23,454,124
+ shares of our common stock issuable upon the conversion of the convertible notes we issued
+ in May 2023 (which conversion price is currently $1.369 and will be reduced to
+the price per share in this offering); 
+
+ 4,498,554
+ shares of common stock issuable upon the exercise of outstanding warrants issued in our August
+ 2022 and May 2023 note offerings with a weighted-average exercise price of $1.26 per share
+ (which exercise price will be reduced to the price per share in this offering pursuant to
+ the terms of such warrants); 
+
+ up
+ to an aggregate of 361,988 shares of common stock reserved for future issuance under
+ our stock plan, as amended; and
+
+ 978,261
+ shares of common stock underlying warrants to be issued to the underwriter in this offering
+ (up to 1,125,001 if the overallotment is exercised); 
+
+ up to 20,543,478 shares of common stock underlying the Series A Warrants
+assuming the Series A Warrants are exercise utilizing the alternative cashless exercise option based on at an assumed public offering
+price of $0.92 per Common Unit, which is the last reported sales price of our common stock on the Nasdaq Capital Market on November 6,
+2023; and 
+
+ Up to 6,847,826 shares of common stock underlying the Series B Warrants
+based on at an assumed public offering price of $0.92 per Common Unit, which is the last reported sales price of our common stock on the
+Nasdaq Capital Market on November 6, 2023. 
+
+ 
+
+Except as otherwise indicated herein, all information
+in this prospectus supplement assumes no exercise by the underwriter of its over-allotment option to purchase additional shares.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 7 
+
+ 
+
+ 
+
+ 
+
+Risk
+Factors
+
+ 
+
+An investment in our securities involves risks.
+We urge you to consider carefully the risks described below, and in the documents incorporated by reference in this prospectus, before
+making an investment decision, including those risks identified under "Item IA. Risk Factors" in our Annual Report on Form
+10-K for the year ended December 31, 2022, which is incorporated by reference in this prospectus and which may be amended, supplemented
+or superseded from time to time by other reports that we subsequently file with the SEC. If any of these risks actually occurs, our business,
+financial condition, results of operations or cash flow could be seriously harmed. This could cause the trading price of our common stock
+to decline, resulting in a loss of all or part of your investment. Please also read carefully the section above entitled "
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/ESLAW_estrella_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ESLAW_estrella_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/ESLAW_estrella_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/EUBG_entreprene_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/EUBG_entreprene_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/EUBG_entreprene_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/EVEX-WT_eve_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/EVEX-WT_eve_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/EVEX-WT_eve_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/EVFM_evofem_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/EVFM_evofem_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..7e2cad5de75c233fe29e35994091ac54f70935d3
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/EVFM_evofem_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained in other parts of this prospectus. Because it is only a summary, it does not contain all the information you should consider before investing in shares of our common stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. You should read all such documents carefully, especially the risk factors included herein and our audited consolidated financial statements and the related notes included herein, before deciding to buy shares of our common stock. Unless the context requires otherwise, references in this prospectus to Evofem, Company, we, us and our refer to Evofem Biosciences, Inc. and our subsidiaries. Company Overview We are a San Diego-based commercial-stage biopharmaceutical company committed to developing and commercializing innovative products to address unmet needs in women s sexual and reproductive health. Our first commercial product, Phexxi, was approved by the FDA on May 22, 2020 and is the first and only FDA-approved, hormone-free, woman-controlled, on-demand prescription contraceptive gel for women. We commercially launched Phexxi in September 2020 in the United States. We intend to commercialize Phexxi in global markets through partnerships or licensing agreements. While we have increased annual net sales of Phexxi year over year since launch, we have not yet reached cash flow breakeven; we continue to incur operating losses and negative cash flows from operating activities, as we have done since inception. As of August 3, 2023, we had $0.3 million in restricted and unrestricted cash. If we are unable to raise additional capital finance our operations when needed or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our business initiatives. Additionally, we may be required to utilize proceeds of subsequent financings to redeem outstanding debt, in which case we would not be able to use such funds to support our ongoing operations. As noted in the discussion of risk factors later in this document, we received a Notice of Default on the Baker Bros. Purchase Agreement. As of June 30, 2023, we owe $95.7 million, in aggregate, under this agreement. Additionally, we are currently over 90 days past due on a significant amount of vendor obligations. Our current indebtedness and accounts payable to these vendors is approximately $15.7 million, in aggregate, as of June 30, 2023. If we are unable to refinance, extend or repay our substantial indebtedness owed to our secured and unsecured lenders, this would have a material adverse effect on our financial condition and ability to continue as a going concern and could cause investors to lose their entire investment in the Company. Given our current financial condition, we have considered and continue to consider filing for bankruptcy protection. While we have not initiated bankruptcy proceedings, we caution that trading in our securities is highly speculative and poses substantial risks relating to the potential of bankruptcy proceedings. Trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in Bankruptcy proceedings, if any. Phexxi as a Contraceptive; Commercial Strategies Our sales force promotes Phexxi directly to obstetrician/gynecologists and their affiliated health professionals, who collectively write the majority of prescriptions for contraceptive products. Our sales force consists of 16 sales representatives, three business managers and a VP of sales, supported by a self-guided virtual health care provider (HCP) learning platform. Additionally, we offer women direct access to Phexxi via our telehealth platform. Using the platform, women can directly meet with an HCP to determine their eligibility for a Phexxi prescription and, if eligible, have the prescription written by the HCP, filled, and mailed directly to them by a third-party pharmacy. Our commercial strategy for Phexxi includes marketing and product awareness campaigns targeting women of reproductive potential in the U.S., including the approximately 23 million women who are not using hormonal contraception and the approximately 18.8 million women who are using a prescription contraceptive, some of whom, particularly pill users, may be ready to move to an FDA-approved, non-invasive hormone-free contraceptive, as well as certain identified target HCP segments. In addition to marketing and product awareness campaigns, our commercial strategy includes payer outreach and execution of our consumer digital and media strategy. According to our market research since Phexxi s commercial launch, HCPs indicate they would recommend Phexxi to approximately: 47% of patients experiencing side effects from current contraception; 37% of patients using non-hormonal prescription contraception; 36% of patients seeking pregnancy prevention; and 19% of patients using hormonal prescription contraception. Additional research into the demographics of more than 5,000 women who are using Phexxi revealed that 79% of Phexxi users are between 18 to 34 years of age. Among the subset of Phexxi users for whom prior contraceptive data is available (n=2,512), 80% of women who had recently started Phexxi were not on any method of prescription contraception. Another 20% switched to Phexxi from either oral contraceptives, hormonal rings or patches. Market acceptance and sales of Phexxi will depend in part on the extent to which reimbursement is available from third-party payers, which include government health administration authorities, managed care organizations, private health insurers and PBMs. Third-party payers decide which therapies they will pay for and establish reimbursement levels. Decisions regarding the extent of coverage and amount of reimbursement to be provided for any product are made on a payer-by-payer basis. One payer s determination to provide coverage for a drug does not assure that other payers will also provide coverage and adequate reimbursement for that drug. 1 Managed care organizations and other private insurers frequently adopt their own payment or reimbursement reductions. The continued integration between commercial health plans and PBMs has increased the negotiating power of these entities. Third-party payers increasingly employ formularies, which may not include all the products approved for a particular indication, to control costs by negotiating discounted prices in exchange for formulary inclusion. We continue to work with health plans and PBMs to secure additional formulary positioning for Phexxi. Coverage for and access to Phexxi is expected to further increase as additional insurers and PBMs comply with the current Health Resources and Services Administration (HRSA) Women s Preventive Services Guidelines, which took effect on January 1, 2023 for calendar year plans, and adhere to the updated guidance related to contraceptive access that was issued by the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments ) in January 2022. Collectively, these agencies specify that most insurers and PBMs must provide coverage, with no out-of-pocket costs to women, for FDA-approved contraceptive products, like Phexxi, prescribed by healthcare providers. To comply with these Guidelines, payers are increasingly covering Phexxi by: adding Phexxi to formulary (commercial insurers) or preferred drug list (Medicaid); removing the requirement for a Prior Authorization letter from the HCP (commercial insurers); and/or moving Phexxi to $0 copay (commercial insurers). We continue working to increase the number of lives covered and to gain a preferred formulary position for Phexxi. We gained coverage for 32.5 million lives in 2022 and have added 22.1 million lives since December 31, 2022. We currently have 65% coverage within our Commercial and Medicaid books of business, including 19.3 million lives covered at no out-of-pocket cost as of May 9, 2023 and approximately 13.7 million lives covered under our December 2020 contract award from the U.S. Department of Veterans Affairs. As of March 2023, the Phexxi approved claims rate increased to 81%. Phexxi is classified in the databases and pricing compendia of Medi-Span and First Databank, two major drug information databases that payers can consult for pricing and product information, as the first and only vaginal pH modulator. In 2022, Evofem developed and introduced a new educational chart for patients and HCPs that details high-level information about birth control methods currently available to women in the U.S., including the vaginal pH modulator. This new educational tool has been extremely well received and has had a positive impact with HCPs and patients alike. We have not paid our Fiscal Year 2023 PDUFA Invoice for Phexxi to the FDA. The balance due continues to incur interest and penalties. As a result, any drug application or supplement we submit will be considered incomplete and will not be accepted for consideration for filing until all fees, interest and penalties are paid. We are unable to determine the full impact of this non-payment on the Company. Research and Development EVO100 for the Prevention of Chlamydia and Gonorrhea Based on positive and statistically significant top-line results of our Phase 2B/3 AMPREVENCE trial, in October 2020 we initiated the Phase 3 EVOGUARD clinical trial to evaluate EVO100 for the prevention of urogenital chlamydia and gonorrhea infections in women. This randomized, placebo-controlled clinical trial enrolled 1,903 women with a prior chlamydia or gonorrhea infection who were at risk for future infection. On October 11, 2022, we reported that EVOGUARD did not meet its primary efficacy endpoint. The Company believes COVID-19 related changes in clinical site operations, subject behavior and actions including deviations from following the clinical study protocol requirements related to STI acquisition, detection, and prevention contributed to this outcome. The product safety profile was consistent with what has been observed in prior clinical trials, and only two women (0.1%) in the study discontinued due to adverse events. Due to financial constraints, we discontinued investment in this clinical program. EVO200 for Recurrent Bacterial Vaginosis Our investigational candidate for the reduction of recurrent bacterial vaginosis (BV), EVO200 vaginal gel, uses the same proprietary vaginal pH modulator platform as Phexxi. In a Phase 1 dose-finding trial for this indication, the highest dose formulation of the study drug demonstrated reduced vaginal pH for up to seven days following a single administration. The FDA has designed EVO200 as a Qualified Infectious Disease Product (QIDP) for this indication. Due to financial constraints, all further development of EVO200 is on hold. Multipurpose Prevention Technology Vaginal Gel for HIV Prevention In December 2021, we launched a collaboration with Orion Biotechnology Canada Ltd. (Orion) to evaluate the compatibility and stability of Orion s novel CCR5 antagonist, OB-002, in Phexxi with the goal of developing a Multipurpose Prevention Technology (MPT) product candidate for indications including the prevention of HIV in women. Assuming positive preclinical results, Evofem and Orion will seek government and philanthropic funding for subsequent clinical trials of any resulting MPT vaginal gel product candidate. 2 Thin Film Project In February 2020, we contracted with the University of South Australia to explore the development of a vaginally applied thin film as a second-generation vaginal pH modulator product. The lead thin film candidates have been selected, and stability data has been generated with positive results. The project is currently on hold due to financial constraints. Senior Subordinated Convertible Notes On December 20, 2022, the Company entered into a Securities Purchase Agreement (the December 2022 SPAs), with certain investors (the December 2022 Notes Purchasers) pursuant to which the Company agreed to sell in a registered direct offering (i) unsecured 8.0% Senior Subordinated Notes due December 21, 2025 with an aggregate issue price of $2.3 million (the December 2022 Notes), which included an original issue discount of $0.8 million (ii) warrants (the December 2022 Warrants) to purchase up to 369,230 shares of the Company s common stock, $0.0001 par value per share, and (iii) an aggregate 70 shares of Series D Preferred Stock (the Preferred Shares) (collectively, the Offering). The Offering closed on December 21, 2022, with net proceeds to the Company from the Offering, after deducting offering expenses, of $1.25 million. The December 2022 Notes are convertible at $6.25, and the December 2022 Warrants have a strike price of $6.25. In February and March 2023, the Company entered into securities purchase agreements with certain investors providing for the sale and issuance of senior subordinate convertible notes (collectively, the February and March 2023 SPAs). The February and March 2023 SPAs included (i) convertible promissory notes with aggregate original principal amounts of approximately $1.4 million, $0.6 million, and $0.5 million, respectively (the February and March 2023 Notes), and (ii) warrants to purchase an aggregate 553,846, 240,000, and 215,384 shares of common stock, respectively (the February and March 2023 Warrants and collectively, the February and March 2023 Offerings). The 2023 Offerings closed on February 17, 2023 (the February 2023 Closing), and March 13, 2023, March 20, 2023 (the March 2023 Closing), respectively, with gross proceeds to the Company, before deducting offering expenses, of approximately $0.9 million, $0.4 million, and $0.3 million, respectively. The February and March 2023 SPAs also included a Registration Rights Agreement that us to register the common stock underlying the February and March 2023 Notes and Warrants within the timeframes specified therein. In addition, the Company issued warrants to purchase an aggregate 99,692 and 43,200 shares of common stock in February and March 2023 Closing to the placement agent. In April 2023, the Company entered into a securities purchase agreement with certain investors providing for the sale and issuance of senior subordinate convertible notes (the April 2023 SPA). The April 2023 SPA included (i) convertible promissory notes with aggregate original principal amounts of approximately $0.8 million (the April 2023 Notes), and (ii) warrants to purchase 615,384 shares of common stock (the April 2023 Warrants and collectively, the April 2023 Offering). The April 2023 Offering closed on April 5, 2023 (the April 2023 Closing), with net proceeds to the Company, after deducting offering expenses, of approximately $0.5 million. The April 2023 SPA also included a Registration Rights Agreement that requires the Company to register the common stock underlying the April 2023 Notes and April 2023 Warrants within the timeframes specified therein. This prospectus covers the resale or other disposition by the Selling Securityholders of the shares of common stock issuable upon the exercise Warrants and conversion of the Notes. Summary
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+This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under the section of this prospectus entitled Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus, or the context otherwise requires, references to: common stock are to our Class A common stock and our Class B common stock, collectively; extension option are to our option to extend the period of time to consummate our business combination from 12 months up to two times by an additional three months each time, for a total of 18 months, at $0.10 per unit per extension ($650,000 or $747,500 if the underwriters over-allotment option is exercised in full), up to an aggregate of $0.20 per unit ($1,300,000 or $1,495,000 if the underwriters over-allotment option is exercised in full), on or prior to the date of the applicable deadline; equity-linked securities are any debt or equity securities that are convertible, exercisable or exchangeable for shares of Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt; founder shares are to shares of our Class B common stock initially purchased by our sponsor in a private placement prior to this offering, and the shares of our Class A common stock issuable upon the conversion thereof as provided herein; initial stockholders are to our sponsor and any other holders of our founder shares prior to this offering (or their permitted transferees); management or our management team are to our officers and directors; placement warrants are to the warrants being purchased separately by our sponsor in the private placement and to the warrants that may be issued upon conversion of extension option loans and working capital loans; private placement is to the private placement of 4,645,000 placement warrants (or up to 5,083,750 placement warrants depending on the extent to which the underwriter s over-allotment option is exercised) being purchased by our sponsor which will occur simultaneously with the completion of this offering at a purchase price of $1.00 per warrant for a total purchase price of $4,645,000 or a total purchase price of $5,083,750 if the underwriters over-allotment option is exercised in full); public shares are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); public stockholders are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder s and member of our management team s status as a public stockholder shall only exist with respect to such public shares; public warrants are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market, including warrants that may be acquired by our sponsor or its affiliates in this offering or thereafter in the open market) and to any placement warrants that are sold to third parties that are not initial purchasers or executive officers or directors (or permitted transferees) following the consummation of our initial business combination; representative are to EF Hutton, division of Benchmark Investments, LLC, who is the representative of the underwriters in this offering. Table of Contents The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED March 6, 2023 $65,000,000 Four Leaf Acquisition Corporation 6,500,000 Units Four Leaf Acquisition Corporation is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any business or industry, we intend to focus our search on companies in the IoT space or adjacent spaces. IoT refers to the Internet of Things, that is, physical objects (or groups of objects) with sensors, processing ability, software, and other technologies that connect and exchange data with other devices and systems over the Internet or other communications networks, sometimes called smart devices. We will also consider adjacent spaces such as devices, components or software that are used in IoT applications. We intend to target companies in both developing markets (e.g., China and India), and the developed markets (e.g., United States and Europe), however, we affirmatively exclude as an initial business combination target any company whose financial statements are audited by an accounting firm that the United States Public Company Accounting Oversight Board, or the PCAOB, is unable to inspect for two consecutive years beginning in 2021 and any target company with China operations consolidated through a variable interest entity, or a VIE, structure. This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our Class A common stock and one redeemable warrant. Each redeemable warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described herein. We have granted EF Hutton, a division of Benchmark Investments, LLC, or EF Hutton , as the representative of the underwriters, a 45-day option to purchase up to an additional 975,000 (over and above the 6,500,000 units referred to above) solely to cover over-allotments, if any. We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination, subject to the limitations described herein. If we are unable to complete our initial business combination within 12 months (or up to 18 months from the consummation of this offering if we extend the period of time to consummate a business combination as described in more detail in this prospectus), we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described herein. However, if we anticipate that we may not be able to consummate our initial business combination within 12 months from closing of this offering, we may, but are not obligated to, extend the period of time to consummate a business combination up to two times by an additional three-month period each time for a total of up to 18 months to complete a business combination. Pursuant to the terms of our second amended and restated certificate of incorporation and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company, LLC on the date of this prospectus, in order to extend the time available for us to consummate our initial business combination, our sponsor, upon at least five days advance notice prior to the applicable deadline, must deposit into the trust account for each three-month extension, $650,000 or $747,500 if the underwriters over-allotment option is exercised in full ($0.10 per unit in either case), up to an aggregate of $1,300,000 or $1,495,000 if the underwriters over-allotment option is exercised in full, on or prior to the date of the applicable deadline. Our sponsor, ALWA Sponsor LLC, will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the lender s discretion, converted upon consummation of our business combination into additional warrants at a price of $1.00 per warrant. Our public stockholders will not be afforded an opportunity to vote on our extension of time to consummate an initial business combination from 12 months to 18 months described above or redeem their shares in connection with such extensions. Our sponsor, ALWA Sponsor LLC, is controlled by Mr. Alvin Wang, a resident of the People s Republic of China, which we refer to throughout this prospectus as the PRC or China, and a member of our Board of Directors, who holds 83% of the outstanding membership interests of our sponsor. Following completion of this offering, our sponsor will own approximately 19.2% of our outstanding shares. Additionally, Coco Kou, our Chief Financial Officer, is a PRC national. Our sponsor has agreed to purchase an aggregate of 4,645,000 placement warrants (or 5,083,750 placement warrants if the underwriters over-allotment option is exercised in full) at a price of $1.00 per warrant, for an aggregate purchase price of $4,645,000 (or $5,083,750 if the underwriters over-allotment option is exercised in full). Each placement warrant will be identical to the public warrants included in the units sold in this offering, except as described in this prospectus. The placement warrants will be sold in a private placement that will close simultaneously with the closing of this offering. Our initial stockholders, which include our sponsor, own an aggregate of 1,868,750 shares of our Class B common stock (up to 243,750 shares of which are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised), which will automatically convert into shares of Class A common stock at the time of our initial business combination, as described herein. Currently, there is no public market for our units, Class A common stock or warrants. We have applied to list our units on the Nasdaq Global Market, or Nasdaq , under the symbol FORLU . We expect that our units will be listed on the Nasdaq Global Market on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. We expect the Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless EF Hutton, the representative of the underwriters, inform us of their decision to allow earlier separate trading, subject to our satisfaction of certain conditions. Once the securities comprising the units begin separate trading, we expect that the Class A common stock and warrants will be listed on Nasdaq under the symbols FORL and FORLW, respectively. Although we currently do not have any PRC subsidiaries or operations, as noted above, Mr. Alvin Wang, one of our directors, is located in and has significant ties to the PRC, which may make us a less attractive partner to potential target companies outside the PRC than to a non-PRC related special purpose acquisition company. As a result, we are more likely to acquire a company based in the PRC in an initial business combination. If we decide to consummate our initial business combination with a target business based in or primarily operating in the PRC, the combined company may face various legal and operational risks and uncertainties after the business combination. In order to reduce or limit such risks, we affirmatively exclude as an initial business combination target any company whose financial statements are audited by an accounting firm that the PCAOB is unable to inspect for two consecutive years beginning in 2021 or any target company that consolidates financial results of PRC operating entities through a VIE structure in the PRC instead of direct holdings. As a result, this may limit the pool of acquisition candidates we may acquire in the PRC, in particular, due to the relevant PRC laws and regulations against foreign ownership of and investment in certain assets and industries, known as restricted industries, including but not limited to value-added telecommunications services such as internet content providers. Furthermore, this may also limit the pool of acquisition candidates we may acquire in the PRC relative to other special purpose acquisition companies that are not subject to such restrictions, which could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC relative to such other companies. See Risk Factors Risks Associated with Acquiring and Operating a Target Business with its Primary Operations in the PRC We will not conduct an initial business combination with any target company that conducts operations through VIEs, which may limit the pool of acquisition candidates we may acquire in the PRC and make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC on page 86. Notwithstanding the foregoing, Chinese laws and regulations are sometimes vague and uncertain, and therefore, these risks may result in a material change in the combined company s principal operations in the PRC, significant depreciation of the value of the combined company s securities, or a complete hindrance of the combined company s ability to offer its securities to investors and cause the value of such securities to significantly decline or be worthless. The PRC government has significant authority to exert influence on the ability of a PRC-based company to conduct its business, make or accept foreign investments or list on a U.S. stock exchange. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect our potential business combination with a PRC operating business and the business, financial condition and results of operations of the combined company. The PRC government also recently initiated a series of regulatory actions and statements to regulate business operations in the PRC with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, according to the New Measures for Cybersecurity Review effective on February 15, 2022, network platform operators with personal information of more than one million users must apply for cyber security review to the Cybersecurity Review Office when they go public abroad, and accordingly these companies may not be willing to list on a U.S. stock exchange or enter into a definitive business combination agreement with us. If we enter into a business combination with a target business operating in the PRC, the combined company may face risks associated with regulatory approvals of the proposed business combination between us and the target, offshore offerings, anti-monopoly regulatory actions, and cybersecurity and data privacy. The PRC government may also intervene with or influence the combined company s Table of Contents representative shares are to the 65,000 shares of Class A common stock issued to the representative or its designee (74,750 if the over-allotment option is exercised in full). sponsor are to ALWA Sponsor LLC, a Delaware limited liability company which is an affiliate of certain of our officers and directors; VIE refers to a variable interest entity which, for the purpose of this prospectus, is a PRC-based operating entity that has entered into a series of contractual arrangements with a wholly-foreign-owned-entity, or WFOE, in the PRC in order to allow for the WFOE to control the PRC-based operating entity or VIE and allow for the consolidation of the VIE s financial results with those of the WFOE and its offshore holding company under US GAAP with the offshore holding company as the primary beneficiary. A VIE structure is often used by PRC operating entities for an offshore listing especially given the PRC legal restrictions on foreign ownership in certain sectors or matters. warrants are to our redeemable warrants, which includes the public warrants as well as the placement warrants to the extent they are no longer held by the initial purchasers of the placement warrants or their permitted transferees; and we, us, company or our company are to Four Leaf Acquisition Corporation Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. Our Company We are a newly organized, blank check company formed on March 3, 2022 as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have generated no operating revenues to date and do not expect to generate any operating revenues until after we consummate our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated or engaged in any substantive discussions, directly or indirectly, with any business combination target. We intend to target companies in both developing markets (e.g., China and India), and the developed markets (e.g., United States and Europe), however, we affirmatively exclude as an initial business combination target any company whose financial statements are audited by an accounting firm that the PCAOB is unable to inspect for two consecutive years beginning in 2021 and any target company with China operations consolidated through a VIE structure. Although we may pursue an acquisition in any industry or geography, we intend to focus on an acquisition capitalizing on the burgeoning Internet of Things, or IoT and adjacent technologies that target the IoT market (e.g. devices, components, software, communication protocols). The IoT market has seen substantial growth as the instrumentation of the internet coupled with advances in artificial intelligence, or AI, machine learning, and automation continue to accelerate the proliferation of products and services. The world-wide explosion in smartphone utilization, 5G proliferation, Web 3.0 adoption, improved internet access, are culminating in new market opportunities with massive disruptive potential across a number of industries. According to industry sources, the global IoT market size in 2021 was valued at USD $384.70 billion. The market is projected to grow from USD $478.36 billion in 2022 to USD $2,465.26 billion by 2029 with a compound annual growth rate, or CAGR , of 26.4% during this forecast period.1 Industrial IoT includes smart and highly collaborative robots, machines, equipment, scheduling systems, and logistics. Consumer IoT includes smart phones, wearables, fashion items, appliances, and automation systems. 1 Fortune Business Insights, last accessed April 6, 2022 <https://www.fortunebusinessinsights.com/> Table of Contents operations as the government deems appropriate to further regulatory, political, and societal goals. Any such action, once taken by the PRC government, could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC, result in material changes in the combined company s post-combination operations and cause the value of the combined company s securities to significantly decline, or in extreme cases, become worthless or completely hinder the combined company s ability to offer or continue to offer securities to investors. For a detailed description of risks associated with being based in or acquiring a company that does business in the PRC, see Risk Factors Risks Associated with Acquiring and Operating a Target Business with its Primary Operations in the PRC on page 85. If we acquire a company based in the PRC, to the extent that the combined company in the future seeks to fund the business through distributions, dividends or transfers of funds among and between the holding company and subsidiaries, any such transfer of funds within and among the subsidiaries will be subject to PRC regulations. Specifically, investment in PRC companies is governed by the Foreign Investment Law of China, or the Foreign Investment Law, the dividends and distributions from a PRC subsidiary are subject to regulations and restrictions on dividends and payments to parties outside of China, and any transfer of funds among the PRC subsidiaries is subject to regulations on private lending and must be permitted thereunder. Additionally, the PRC government may impose controls on the conversion of Renminbi (yuan) into foreign currencies and the remittance of currencies out of the PRC. Consequently, in order for the combined company to pay dividends to its stockholders, the combined company would need to rely on payments made from the PRC subsidiaries of the combined company and the distribution of such payments to the combined company as dividends from the PRC subsidiaries of the combined company. If we are to acquire a China-based operating company, the dividends and distributions from a PRC subsidiary will be subject to regulations and restrictions on dividends and payments to parties outside of China and the combined company may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from its subsidiaries, if any. See Prospectus Summary Transfer of Cash to and from Our Post-Combination Organization If We Acquire a Company Based in the PRC (Post-Business Combination) and Risk Factors Risks Associated with Acquiring and Operating a Target Business with its Primary Operations in the PRC PRC governmental control of currency conversion may limit the ability of our operating companies in the PRC to utilize their revenues effectively and may affect the value of your investment on pages 91-92. Pursuant to the Holding Foreign Companies Accountable Act, or the HFCA Act, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in (1) mainland China of the PRC because of a position taken by one or more authorities in mainland China and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB s report identified the specific registered public accounting firms which are subject to these determinations. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, or the AHFCAA, which, if signed into law, would amend the HFCA Act and require the delisting of one s securities and prohibition of trading such securities on a national securities exchange or in the over-the-counter trading market in the U.S. if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. On August 26, 2022, the PCAOB signed a Statement of Protocol, or the SOP, with the China Securities Regulatory Commission, or the CSRC, and the Ministry of Finance of PRC, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong completely, consistent with U.S. law. Pursuant to the SOP, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the U. S. Securities and Exchange Commission, or the SEC. However, uncertainties still exist as to whether the applicable parties, including governmental agencies, will fully comply with the framework. Depending on the implementation of the SOP, if the PCAOB continues to be prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in China, then China-based companies will be delisted pursuant to the HFCA Act despite the SOP. Therefore, there is no assurance that the SOP could give relief to China-based companies against the delisting risk from the application of the HFCA Act or AHFCAA. Our independent accountant, Marcum LLP, is a United States accounting firm based in New York City and is subject to regular inspection by the PCAOB. Marcum LLP is not headquartered in mainland China or Hong Kong and was not identified in the Determination Report as a firm subject to the PCAOB s determinations. As a special purpose acquisition company, our current business activities only involve preparation of this offering and will involve searching for targets and consummation of a business combination following this offering. Marcum LLP has access to our books and records which are currently and will be maintained in the United States prior to the consummation of a business combination. In addition, we affirmatively exclude any target company of which financial statements are audited by an accounting firm that the PCAOB is unable to inspect for two consecutive years beginning in 2021 at the time of our initial business combination. Notwithstanding the foregoing, in the event that we decide to consummate our initial business combination with a target business based in or primarily operating in the PRC, if there is any regulatory change which prohibits the independent accountants from providing audit documentations located in mainland China or Hong Kong to the PCAOB for inspection or investigation or the PCAOB expands the scope of the Determination Report so that the target company or the combined company is subject to the HFCA Act, as the same may be amended, you may be deprived of the benefits of such inspection. This could limit or restrict our access to the U.S. capital markets and the trading of our securities on a national securities exchange or in the over-the-counter trading market in the U.S. may be prohibited and our securities may be delisted by such exchange under the HFCA Act or AHFCAA. See Risk Factors Risks Associated with Acquiring and Operating a Target Business with its Primary Operations in the PRC Though we affirmatively exclude as an initial business combination target any company of which financial statements are audited by an accounting firm that the PCAOB is unable to inspect for two consecutive years beginning in 2021, we cannot assure you that certain existing or future U.S. laws and regulations may restrict or eliminate our ability to complete a business combination with certain companies, particularly those target companies in the PRC on pages 98-100. We are an emerging growth company under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See Risk Factors beginning on page 46 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Unit Total Public offering price $ 10.00 $ 65,000,000 Underwriting discounts and commissions(1) $ 0.50 $ 3,250,000 Proceeds, before expenses, to Four leaf Acquisition Corporation $ 9.50 $ 61,750,000 (1) Includes $0.35 per unit, or $2,275,000 (or up to $2,616,250 if the underwriters over-allotment option is exercised in full) in the aggregate, payable to the representative of the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the representative of the underwriters only on completion of an initial business combination, as described in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. In addition, we will issue EF Hutton and/or its designees 65,000 shares of Class A common stock (74,750 if the over-allotment option is exercised in full), which we refer to herein as the representative shares as underwriter compensation in connection with this offering. See the section of this prospectus entitled Underwriting beginning on page 165 for a description of compensation and other items of value payable to the underwriters. Of the proceeds we receive from this offering and the sale of the placement warrants described in this prospectus, $66,950,000 or $76,992,500 if the underwriters over-allotment option is exercised in full ($10.30 per unit in either case) will be deposited into a trust account in the United States with Continental Stock Transfer & Trust Company, LLC acting as trustee. The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about , 2023. Sole Book-Running Manager EF HUTTON division of Benchmark Investments, LLC , 2023 Table of Contents In addition to market forces, IoT markets are receiving support from government and regulatory agencies. Various countries are providing both monetary and regulatory support for research and development activities related to standardization of IPv6, 5G deployments, and increased use of cloud computing platforms. When combined with the market forces, governmental support is accelerating industry innovation and standardization. Rapid adoption and advances in AI, machine learning, cloud computing, mobile applications, automation throughout global supply chains, clean energy solutions, and autonomous vehicles will continue to drive sustained growth and accelerate the digital transformation of the enterprise and the home leading to significant value creation. The development and application of these new technologies are expected to create massive opportunities within new and existing sectors, such as technology, media and telecom, medicine and healthcare, transportation, and traditional industries. Coupling automation technologies, AI and machine learning, with advances in sensor technologies, communication protocols and dramatically increased bandwidths, produce a perfect storm of innovation across enterprise and consumer markets. The COVID-19 pandemic, in combination with growing geopolitical and macroeconomic complexity and uncertainty, are fueling volatility, creating financial market dislocations and increasing the availability of attractive assets. The traditional model of globalization is evolving under the pressures of geopolitical competition and instability. Nonetheless, we believe global interconnection via trade remains and will continue to be a powerful driver of economic growth. For companies to operate in this new environment, they will need to re-examine their market access strategies to navigate new barriers and restrictions, reengineer their supply chains for greater resilience, and structure their organizations to leverage the best talent globally. Our management team possesses the skills and expertise needed to unlock growth and value in this dynamic environment. Given the worldwide scenario, it is our intent to invest in an IoT company that is focused on the consumer or other large market, which given current developments, has proven to offer extraordinary growth and expansion. We are looking to acquire a company offering a highly differentiated technical advantage and capable of navigating the complexities of the global economy. We will target companies benefiting from the disruptive impact of emerging technologies and the continuing growth in both developing markets (e.g., China and India), and the developed markets (e.g., United States and Europe). We intend to drive long-term growth and build a successful public company through disciplined strategic execution and a commitment to environmental sustainability, social responsibility and strong corporate governance. Management Team With recognized operating capabilities developed at leading large-scale global technology companies, as well as entrepreneurial insight and expertise, we believe our founders diverse and complementary backgrounds can have a transformative impact on a target business. We will seek to capitalize on the diverse industry experience of our Chief Executive Officer, Angel Orrantia. Mr. Orrantia is a proven technology executive with a history of investing, acquiring, and building successful companies, while generating attractive stockholder returns. Over the past decade, Mr. Orrantia has created returns for investors while managing secular disruption and cyclical industry risk. Mr. Orrantia has operated and completed transformational cross-border transactions on a global basis. Our broader management team, which includes Coco Kou, our Chief Financial Officer, and Robert de Neve, our Chief Strategy Officer, is comprised of industry leaders with deep roots in Silicon Valley, India, China and broader Asia. Our management team includes proven leaders with a diverse set of experiences and complementary skills, as investors, entrepreneurs, senior executives and transactional professionals. This group will leverage their extensive network for access to global acquisition opportunities and proven executives to augment the management team of potential acquisitions. We believe our management team has a competitive advantage as a result of their experience leading global technology companies, with strengths in corporate strategy and transactions, public company operations and Table of Contents applying innovative technologies to enable business growth and industry transformations. We believe our combined experience uniquely qualifies us to offer public investors and target company stakeholders a differentiated approach to accelerating growth in key global markets, extending the management team, enhancing operating efficiency and operating successfully as a public company. Notwithstanding our founders and management team s past experiences, past experience or performance is not a guarantee of either: (i) that we will be able to identify a suitable candidate for our initial business combination; or (ii) that we will provide an attractive return to our stockholders from any business combination we may consummate. You should not rely on the historical record of our management team, directors, director nominees or founders as indicative of our future performance. See Risk Factors Past performance our management team or their respective affiliates may not be indicative of future performance of an investment in us. For a complete list of our executive officers and entities for which a conflict of interest may or does exist between such officers and the company, please refer to Management Conflicts of Interest. Business Strategy Our business strategy will leverage a purpose-built model to focus on areas of growth by capitalizing on long-term trends and technology disruption driven by the ongoing instrumentation of the internet, dramatically increased bandwidths, and advances in AI and automation. We have chosen to domicile the company in Delaware, so that we can more efficiently access acquisition opportunities globally. We will seek to identify and complete our initial business combination with a company that complements the experiences and skills of our founders and can benefit from their operational expertise. We will capitalize on the management team s relationship networks for access to high quality potential targets. The selection process will leverage our founders industry skills and experience to add value to a target company. We will apply the capabilities of our management team to enhance growth and profitability of the potential targets, including through access to key global markets and technology development ecosystems, as well as through strategic acquisitions and operational transformations. Upon completion of this offering, members of our management team will communicate with their network of relationships to discuss our acquisition criteria and we will begin a disciplined process of pursuing and reviewing potential acquisition targets. Acquisition Criteria Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. Size: We intend to focus on companies that alone, or through a strategic combination with another company, have an enterprise valuation between $200 million and $300 million. We believe at this scale we can most effectively apply the experience and resources of the management team to accelerate growth and enhance profitability. Location: We are searching for attractive target acquisition opportunities globally, with particular emphasis on companies in Asia and North America. Focus: We plan to target companies in the Consumer IoT and consumer facing Industrial IoT sectors globally. Within those broader sectors, we will concentrate on companies that are aligned to the secular trends of automation, digitization, and broader technology adoption and positioned for strong growth that can be enhanced through partnership with our management team. Table of Contents Management Capability: We plan to target companies with strong management teams that are capable of scaling to operate successfully on a global basis as a public company. Our management team is committed to providing support, guidance and, where necessary, additional management talent to assist the target company in executing its value creation strategy and achieving its vision. Differentiation: We are looking for potential acquisitions that have powerful competitive advantages, strong innovation capabilities and an adaptive management team committed to a positive culture grounded in strong values, including the importance of diversity and inclusion and serving the interests of a broader set of stakeholders. These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation materials or tender offer documents that we would file with the U.S. Securities and Exchange Commission, or the SEC. In addition to any potential business candidates we may identify on our own, we anticipate that other target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions. We may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination. We intend to acquire a company with an enterprise value significantly above the net proceeds of this offering and the sale of the placement warrants. Depending on the size of the transaction or the number of public shares we become obligated to redeem, we may potentially utilize several additional financing sources, including but not limited to the issuance of additional securities to the sellers of a target business, debt issued by banks or other lenders or the owners of the target, a private placement to raise additional funds, or a combination of the foregoing. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient to meet our obligations or our working capital needs, we may need to obtain additional financing. Status as a Public Company We believe our structure will make us an attractive business combination partner. As an existing public company, we offer a partner business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the partner business may, for example, exchange their capital stock, shares or other equity interests in the partner business for shares of our Class A common stock (or shares of a new holding company) or for a combination of shares of our Class A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe partner businesses will find this method a more expeditious and cost-effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us. Furthermore, once a proposed business
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+Prospectus Summary 1
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+PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY
+ 
+This summary highlights selected information contained elsewhere in this Prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our common stock. You should read the entire Prospectus carefully, including Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations and our combined financial statements and the related notes thereto that are included elsewhere in this Prospectus, before making an investment decision. Other than in our financial statements and notes thereto, and except where otherwise noted, all references to our common stock presented in this Prospectus have been adjusted to reflect our planned Common Stock Reverse Split.
+ 
+Overview 
+ 
+We are an own-label distributor of nutritional beverages. Our niche is the formulation, manufacturing, marketing, and distribution of soluble fiber infused nutritional beverages. In November 2017, we registered the trademark GLUCODOWN and have since launched the first soluble fiber infused, powdered iced tea, and flavored drink mixes, in North America. We launched GLUCODOWN because we identified an absence of product variety and/or nutritional suitability among the healthier beverage offerings from other companies, serving pre-diabetic and diabetic consumers. Nutritional suitability means we apply the nutritional recommendations and guidelines of experts, for example, the American Diabetes Association, to the extent feasible, when formulating our beverages. We are currently in the early stages of marketing and distributing GLUCODOWN . 
+ 
+We believe the physiological impacts of soluble fiber can nutritionally satisfy other interests of health-conscious consumers, and as result, we plan to launch more soluble fiber infused nutritional beverages, marketed under more brands. Building upon our knowledge capital gained from formulating, manufacturing, marketing, and distributing GLUCODOWN , we registered the trademark FIBER UP in September 2020, and are developing our second soluble fiber infused nutritional beverage brand. We plan to launch FIBER UP as a ready-to-drink beverage and to initially focus our marketing and distribution efforts to persons 45 and older. 
+ 
+Recent Developments
+ 
+On January 25, 2022, we entered into an investment banking agreement with EF Hutton, which was amended on November 16, 2022. The agreement contemplates the Company raising additional capital in a registered offering, listing on a stock exchange, and preparing a registration statement under the Securities Act. The Company is responsible for EF Hutton s external counsel legal costs, whether any offering is consummated or not. 
+ 
+Effective on March 11, 2022, we filed Articles of Conversion with the Nevada Secretary of State and a Certificate of Conversion and Certificate of Incorporation with the Delaware Department of State, Division of Corporations and converted to a Delaware corporation. 
+ 
+On March 29, 2022, we merged with a subsidiary, created on March 23, 2022, for the sole purpose of the merger, amended and restated our Certificate of Incorporation, and the surviving corporation is Glucose Health, Inc. Our authorized capital stock consists of (i) 40,000,000 shares of common stock, $0.001 par value per share ( Common Stock ), (ii) 10,000,000 shares of preferred stock, $0.001 par value per share ( Preferred Stock ). 
+ 
+Subsequent Events
+ 
+On October 9, 2022, 2,133,334 shares of our Series B Preferred Stock and 700,001 shares of our Series C Preferred Stock were converted to a total of 2,833,335 shares of our Common Stock (figure not adjusted for our planned Common Stock Reverse Split).
+ 
+On October 24, 2022, we filed a Certificate of Amendment to our Certificate of Incorporation and increased our authorized shares of Series D Preferred Stock to 1,200,000 shares, and our authorized shares of Series E Preferred Stock increased to 1,440,000 shares. On the same day, we forward split our Series D Preferred Stock at a ratio of 4-for-1, and our Series E Preferred Stock at a ratio of 3-for-1, such that 1,200,000 shares of our Series D Preferred Stock and 1,440,000 shares of our Series E Preferred Stock are issued and outstanding.
+ 
+On January 3, 2023, 180,000 shares of our Series E Preferred Stock were converted to 180,000 shares of our Common Stock (figure not adjusted for our planned Common Stock Reverse Split).
+ 
+As of January 6, 2023, 1,686,197 shares of our Common Stock and 2,627,667 shares of our Preferred Stock are issued and outstanding.
+ 
+Market Opportunity - GLUCODOWN 
+ 
+The National Diabetes Statistics Report (Source: Centers for Disease Control and Prevention. Website. www.cdc.gov/diabetes/data/statistics-report/index.html. Accessed April 10, 2022) estimates 96 million adults have pre-diabetes and 37.3 million adults have diabetes. We believe the National Diabetes Statistics Report points to a large and growing market of consumers likely receptive to nutritional beverages which help maintain healthy serum glucose levels (healthy blood sugar). Prior to the introduction of GLUCODOWN , the only nutritional beverages formulated for healthy blood sugar by the companies addressing this large and growing consumer market, were dairy shakes (ready-to-drink and powder). By formulating a new form of nutritional beverage for this consumer market, delicious tasting iced tea, and drink mixes, we believe GLUCODOWN will gain market share. We additionally believe, as this market of consumers becomes aware of GLUCODOWN , they will discontinue purchasing sugar-free and low-calorie beverages from other companies which, while delicious tasting, do not provide the nutritional efficacy of GLUCODOWN .
+ 
+
+3
+
+Table of Contents
+ 
+Market Opportunity - FIBER UP 
+ 
+In addition to helping maintain healthy post-prandial serum glucose levels (blood sugar levels measured after meals), soluble fiber has other important physiological impacts. These include helping maintain healthy triglycerides and cholesterol levels, healthy blood pressure, promoting weight loss and healthy waste circumference, preserving bone density, and maintaining gut health, which includes regular digestion and immune health. We believe these additional nutritional impacts of soluble fiber will enable us to launch more soluble fiber infused beverage brands targeted to satisfying many other interests of health-conscious consumers. In this regard, we plan to launch our second brand, FIBER UP . We believe FIBER UP will expand our Company s addressable consumer market, from pre-diabetic and diabetic persons served by GLUCODOWN , to also serve the 95% of Americans understood to be fiber deficient (Source: Closing America s Fiber Intake Gap. Website https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6124841/. Accessed April 10, 2022). While the beneficial impacts of increasing soluble fiber intake are applicable across all age cohorts, we plan to initially focus our launch of FIBER UP to persons 45 and older - a consumer market we believe to be underserved by other beverage companies. 
+ 
+Products
+ 
+GLUCODOWN 
+ 
+In fourth quarter of 2017, we launched the first soluble fiber infused iced tea mix in North America in four flavors (Peach Tea, Lemon Tea, Raspberry Tea, and Mixed Berry Tea) under the GLUCODOWN brand to principally serve pre-diabetic and diabetic persons.
+ 
+
+ 
+GLUCODOWN provides nutritional support for the maintenance of healthy blood sugar. The principal ingredient in GLUCODOWN is a soluble form of dietary fiber invented by Matsutani Chemical Industry Co. Ltd, of Japan. For an ingredient to be labeled as dietary fiber in the United States, the ingredient must be determined by the Food and Drug Administration (FDA) to have at least one physiological impact beneficial to human health (See Government Regulation ). Dietary fiber has beneficial physiological impacts related to blood sugar and insulin (and other beneficial impacts). These beneficial physiological impacts are also replicated in nutritional investigations made available to us by our ingredient supplier related to their dietary fiber. Several of the nutritional investigations compiled by our ingredient supplier evaluated beverages including tea drinks, coffee drinks and soft drinks, enriched with their dietary fiber, in similar concentrations as GLUCODOWN . These drinks are analogous to GLUCODOWN . We derive our statements of nutritional support from the dietary fiber in GLUCODOWN . 
+ 
+GLUCODOWN is also enriched with micronutrients (vitamins and minerals). We selected chromium in picolinate form, zinc in picolinate form, manganese in citrate form and vitamins B1 (thiamine), B6 (pyridoxine), B7 (biotin) and B12 (cyanocobalamin) based upon some evidence of beneficial physiological impacts related to serving our target market of diabetic and pre-diabetic persons. For example, some research indicates regular consumption of metformin may potentially be associated with vitamin B12 deficiency. We formulated these micronutrients at 50% of the FDA recommended % daily value except for chromium picolinate which is 100% of the FDA % daily value. We do not derive any of our statements of nutritional support from the micronutrients in GLUCODOWN . 
+ 
+GLUCODOWN is also enriched with an extract of the banaba leaf plant standardized to a 1% concentration of corosolic acid. For more than 2,000 years, to the present day, the leaf of the banaba plant has been utilized in Ayurveda, a traditional form of healing in India, for healthy blood sugar. We do not derive any of our statements of nutritional support from the banaba leaf extract in GLUCODOWN . 
+ 
+We manufacture GLUCODOWN in powder form which consumers can use to make their own beverages. We have developed formulations, which we consider trade secrets, of natural flavors (we do not use artificial flavors), flavor enhancing acidulants (citric and malic acid), and for our iced teas, of decaffeinated pure black tea powder sourced directly from India s largest manufacturer. To make our beverages sweet tasting without sugar, we were informed by the joint scientific statement of the American Heart Association and the American Diabetes Association regarding non-nutritive sweeteners (Source: Nonnutritive Sweeteners: Current Use and Health Perspectives. A Scientific Statement From the American Heart Association and the American Diabetes Association. Website https://pubmed.ncbi.nlm.nih.gov/22777177/. Accessed August 18, 2022) in our selection of (pure) sucralose for our formulations. While we have, and continue to evaluate other non-nutritive sweeteners as they are introduced by manufacturers, it is our current belief (pure) sucralose is superior to all other non-nutritive sweeteners, based upon our criteria of safety, taste and manufacturing stability
+ 
+We distinguish the labeling and marketing of our GLUCODOWN brand with three statements of nutritional support deriving from the physiological impacts of the dietary fiber infused in GLUCODOWN :
+ 
+ 
+Moderate rising glucose levels after meals to maintain healthy post-prandial glycemic response
+
+ 
+ 
+
+ 
+Block metabolism of dietary sugars and fats to maintain healthy glucose, cholesterol and triglycerides levels.
+
+ 
+ 
+
+ 
+Improve regularity to maintain healthy digestion
+
+ 
+In 2021, we extended our GLUCODOWN product line by launching four new GLUCODOWN drink (not iced tea) mix flavors (Cherry, Strawberry-Banana, Peach Mango, and Watermelon) also in powder form. 
+ 
+
+ 
+We manufacture all eight GLUCODOWN flavor variations in two packaging formats (foil resealable pouches and bulk containers). 
+ 
+
+4
+
+Table of Contents
+ 
+Additionally, we are formulating more GLUCODOWN line extensions to serve prediabetic and diabetic persons, all to be manufactured in powder form, including flavored instant coffees, such as Mocha Coffee, and Horchata.
+ 
+
+ 
+We are also developing new GLUCODOWN packaging formats, including single-serve stick-packs for all our iced tea mix, drink mix and planned future flavor variations.
+ 
+
+ 
+However, to launch more GLUCODOWN line extensions in the current fiscal year, we require additional capital, which we do not presently have. 
+ 
+FIBER UP 
+ 
+FIBER UP will be our second soluble fiber infused nutritional beverage brand and our first ready-to-drink (not powder) beverage. We plan to utilize a variation suitable for ready-to-drink beverages, of the same soluble fiber from our ingredient supplier, for FIBER UP , as we use for GLUCODOWN . We plan to formulate approximately 5 grams of dietary fiber per serving size (16 oz. bottle) which compares to approximately 4 grams of dietary fiber per serving size (one scoop per 8 oz. of water) for GLUCODOWN . We plan to distinguish the labeling and marketing of our FIBER UP brand with four statements of nutritional support deriving from the physiological impacts of the dietary fiber infused in FIBER UP . Our identified target market consists of health-conscious persons 45 years and older who may be fiber deficient. We believe most Americans are not aware of their fiber deficiency. Accordingly, we intend to emphasize the physiological benefits of our dietary fiber, with four statements of nutritional support prominently displayed in our labeling and marketing, which we believe are compelling to our identified consumer market.
+ 
+ 
+Supports a healthy heart 
+
+ 
+ 
+
+ 
+Promotes weight loss
+
+ 
+ 
+
+ 
+Preserves bone strength
+
+ 
+ 
+
+ 
+Maintains a healthy gut 
+
+ 
+Whereas the micronutrients selected for GLUCODOWN were chosen based upon some evidence of potential physiological benefit targeted to diabetic and pre-diabetic consumers, we intend to enrich FIBER UP with a broader spectrum of micronutrients targeted to serve health-conscious consumers who may be fiber deficient. For example, we also plan to include calcium in FIBER UP which complements dietary fiber s beneficial physiological impacts related to preserving bone strength. We will not derive any of our statements of nutritional support from the micronutrients in FIBER UP 
+ 
+Whereas extract of banaba leaf (for corosolic acid) was selected for GLUCODOWN based upon its use in Ayurveda traditional healing for healthy blood sugar, we intend to enrich FIBER UP with a different plant extract, such as ginseng, for which some evidence indicates potential physiological benefit related to heart health, weight loss, bone strength and a healthy gut. We will not derive any of our statements of nutritional support from the plant extracts in FIBER UP .
+ 
+As we plan to manufacture FIBER UP as a ready-to-drink beverage, we have developed formulas, which we consider trade secrets, of natural flavors (we do not use artificial flavors), flavor enhancing acidulants (citric and malic acid) and our preferred non-nutritive sweetener, (pure) sucralose. Consumer perception of ready-to-drink beverages is also enhanced by appearance. In this regard, we have utilized colors derived from vegetables to develop vibrant purple and red colors for the FIBER UP drink flavors we have formulated to date, grape and cherry. 
+ 
+We believe consumer awareness of FIBER UP will be enhanced by attractive artwork and packaging. We evaluated many different forms of consumer packaging for FIBER UP and determined aluminum bottles to be the most environmentally friendly due to their essentially infinite recyclability. We considered various aluminum bottle options from different manufacturers and opened an account with our chosen supplier. We have completed the graphic design and labeling for FIBER UP including review by our FDA/FTC attorney for compliance with applicable regulations and industry guidance statements.
+ 
+
+5
+
+Table of Contents
+ 
+
+ 
+We have also begun early manufacturing, marketing, and distribution planning for FIBER UP , including hiring a brand management firm to assist us. However, to launch FIBER UP in the current fiscal year, we require substantial additional capital, which we do not presently have. 
+ 
+Marketing and Distribution
+ 
+Our most important marketing and distribution objectives are:
+ 
+ 
+(1)
+Build awareness of GLUCODOWN among the persons which comprise our identified pre-diabetic and diabetic consumer market for this brand.
+
+ 
+(2)
+Increase sales of GLUCODOWN via direct end-user consumer purchase
+
+ 
+(3)
+Secure distribution of GLUCODOWN at national and large regional retailers.
+
+ 
+(4)
+Grow sales of GLUCODOWN at the national and large regional retailers who are already our customers.
+
+ 
+(5)
+Launch FIBER UP in at least one regional market.
+
+ 
+Competition
+ 
+GLUCODOWN competes directly on the shelves and/or online at the retailers who are our customers, and online at Amazon, with other nutritional beverages which serve our market niche of pre-diabetic and diabetic consumers. These nutritional beverages include Glucerna , distributed by Abbott Laboratories; Boost , distributed by Nestle; Splenda distributed by Heartland Food Products Group, and Slimfast , distributed by Glanbia, PLC. Our principal competitors are far larger companies than our Company, with much greater financial and human resources to allocate to their brands. Our principal competitor s brands all have extensive retailer and online distribution, and established consumer recognition and loyalty. 
+ 
+Nevertheless, GLUCODOWN has two competitive advantages over our much larger principal competitor s brands - its nutritional attributes and its product differentiation. 
+ 
+
+6
+
+Table of Contents
+ 
+We believe there are four essential nutritional attributes when formulating a nutritional beverage for diabetic and pre-diabetic consumers:
+ 
+ 
+ 
+No sugar (including no added sugar)
+ 
+ 
+No saturated fat
+ 
+ 
+Low-calorie (10 calories per serving)
+ 
+ 
+Good Source of Fiber (soluble)
+ 
+Our belief in the nutritional suitability of GLUCODOWN with respect to our target market, and in particular the essential nature of all four nutritional attributes named above, is informed by the guidelines and recommendations of experts, such as, for example, that published by the American Diabetes Association.
+ 
+No sugar (including no added sugar)
+The consumption of sugar-sweetened beverages is strongly discouraged (1)
+ People with diabetes and those at risk are advised to minimize the consumption of foods with added sugar (2)
+ 
+
+No saturated fat
+ The type of fats consumed is more important than total amount of fat when looking at metabolic goals and CVD risk, and it is recommended that the percentage of total calories from saturated fats should be limited (3)
+ 
+
+Low-calorie (10 calories per serving)
+ Management and reduction of weight is important for people with type 1 diabetes, type 2 diabetes, or prediabetes with overweight or obesity. (4)
+ 
+ For some people with diabetes who are accustomed to regularly consuming sugar-sweetened products, non- nutritive sweeteners (containing few or no calories) may be an acceptable substitute for nutritive sweeteners. (5)
+ 
+
+Good Source of Fiber (soluble)
+Lifestyle modification focusing on .increase of viscous fiber (6)
+
+ 
+(1)
+ The American Diabetes Association Standards of Medical Care in Diabetes-2022 page S66.
+
+ 
+ 
+
+(2)
+ The American Diabetes Association Standards of Medical Care in Diabetes-2022 page S63.
+
+ 
+ 
+
+(3)
+ The American Diabetes Association Standards of Medical Care in Diabetes-2022 page S66.
+
+ 
+ 
+
+(4)
+ The American Diabetes Association Standards of Medical Care in Diabetes-2022 page S64.
+
+ 
+ 
+
+(5) 
+ The American Diabetes Association Standards of Medical Care in Diabetes-2019 (Abridged for Primary Care Providers) page 17.
+
+ 
+ 
+
+(6) 
+ The American Diabetes Association Standards of Medical Care in Diabetes-2019 (Abridged for Primary Care Providers) page 26.
+
+ 
+While all our principal competitors utilize dietary fiber, GLUCODOWN is the only brand, to the best of our knowledge, which possesses all four nutritional attributes identified above. Consistent with their Nutrition Facts panel disclosures, we believe all our principal competitor s beverages indicate the presence of saturated fat; all our principal competitor s beverages range between 10x to 19x more calories per serving compared to GLUCODOWN ; and three of our four principal competitors beverages indicate the presence of sugar.
+ 
+Additionally, some of our competitors utilize dietary protein in their formulations. We believe dietary protein supplementation is not scientifically supported for glycemic management (maintaining healthy blood sugar) and is therefore, not nutritionally suitable, for GLUCODOWN . In support of our belief, we cite The American Diabetes Association Standards of Medical Care in Diabetes-2022 which, on page S66, sub-heading Protein, provides that [t]here is no evidence that adjusting the daily level of protein intake (typically 1-1.5 g/kg body wt/day or 15-20% total calories) will improve health, and research is inconclusive regarding the ideal amount of dietary protein to optimize either glycemic management or CVD risk (121,153). (The American Diabetes Association Standards of Medical Care in Diabetes-2022.diabetesjournals.org/care/article/45/Supplement_1/S60/138923/5-Facilitating-Behavior-Change-and-Well-being-to)
+ 
+GLUCODOWN is also a unique and distinctive product compared to all others manufactured by our competitors. Our competitor s products are all dairy shakes (powdered or ready-to-drink) with each brand offering a limited choice of flavors, typically chocolate, strawberry, and vanilla. In contrast, GLUCODOWN offers an array of delicious iced tea mixes (Peach Tea, Lemon Tea, Raspberry Tea, and Mixed Berry Tea) and delicious (not iced tea) drink mixes (Cherry, Peach-Mango, Strawberry-Banana, and Watermelon). 
+ 
+GLUCODOWN indirectly competes with a myriad of dietary supplements in tablet and capsule form found in brick-and-mortar retailers and online marketplaces, targeted to our consumer market niche. These dietary supplements include many different plant extracts, such as, for example, cinnamon, bitter melon, fenugreek and others, and some also include many combinations of different plant extracts. The dietary supplements we indirectly compete with further include many vitamins and minerals, such as B12 or chromium, and also include many combinations of these vitamins and minerals (and plant extracts). The dietary supplements we indirectly compete with are usually not themselves branded but can be marketed by large and well-established vitamin manufacturers with established company brand awareness, who have greater financial, staff and distribution resources, compared to our Company. Nevertheless, we believe that as our GLUCODOWN brand continues to steadily gain consumer recognition, we will effectively compete against all such dietary supplements. 
+ 
+Although GLUCODOWN is infused with dietary fiber, we believe it to be a deliciously flavored beverage, which does not directly, or indirectly, compete with dietary fiber supplements. Most dietary fiber supplements are tasteless or alternatively, pleasant tasting, but not conceived by manufacturers as a beverage meant to be also evaluated by consumers based upon delicious taste. Additionally, a number of dietary fiber supplements are insoluble dietary fiber which does not possess the properties of soluble fiber, which helps to inhibit the metabolism of dietary sugars into serum glucose (i.e., maintain healthy blood sugar). 
+ 
+We expect that upon launch, FIBER UP will compete in the healthy soft drink market segment, which includes but is not limited to other drinks that are fiber infused. Consumer preference for healthier soft drinks is a recognized industry trend with many established brands participating in the market segment. Additionally, there are a myriad of smaller beverage companies that also market healthier soft drinks, each with varying degrees of brand recognition and distribution success and even some, such as Wanu Water, Olipop, Halfday and Gist that have launched soft drinks infused with dietary fiber. As a new entrant to the healthier soft drink consumer market, we expect that FIBER UP will face intense competition from all healthier drinks generally, and possibly healthier drinks infused with dietary fiber, if and when it is launched. 
+ 
+Despite this intensely competitive market, we believe that FIBER UP will be successful because it will have two important competitive advantages vs. the many other healthier soft drinks available to consumers today- statements of nutritional support and early-entrant market status in our category segment.
+ 
+As a consequence of the physiological impacts on the human body of the soluble fiber we plan to infuse in FIBER UP , we intend to incorporate various statements of nutritional support in our labeling and marketing of FIBER UP , such as, for example, supports a healthy heart . We believe health-conscious consumers will find such statements compelling, particularly in comparison to other healthier beverages. We believe many, if not most, healthier soft-drinks presently marketed to health-conscious consumers, utilize only simple nutritive statements, such as no-sugar, caffeine-free, gluten-free, or low-calorie. We believe our planned statements of nutritional support for FIBER UP provide important brand differentiation because they are not apparent in the labeling and marketing of other healthier soft drink brands from other beverage companies. We have limited information to assess whether such statements of nutritional support are also present in the labeling and marketing of other healthier soft drinks we believe to be infused with dietary fiber and whether, as a result, whether these brands may pose a competitive threat. We believe consumers at the age of 45 and older, in particular, will be receptive to our statements of nutritional support. If we obtain the capital to launch FIBER UP , of which there is no certainty, it is our intention to initially focus our limited marketing resources on 45 and older consumers.
+ 
+
+7
+
+Table of Contents
+ 
+In the last two decades, leading beverage companies have marketed, or test-marketed, various fiber infused soft drinks in the United States, without apparent commercial success. In contrast, in Asian countries, particularly with older populations such as Japan, soluble fiber infused soft drinks are today marketed by leading beverage companies with apparent commercial success and brand longevity. We believe consumer interest in the United States in the physiological benefits of soluble fiber is nascent, for reasons of an aging population and increasing health consciousness but, is still not yet at scale for brand investment by leading beverage companies. The current absence of leading beverage companies manufacturing and distributing soluble fiber infused soft drinks in North America provides an early-entrant market opportunity for our Company. If we are successful, we believe we will be among the first beverage companies in North America to launch soluble fiber infused, healthier soft drinks. As an early-entrant in this category segment, we may potentially gain brand recognition and meaningful distribution without having to face direct competition from the leading beverage companies.
+ 
+Corporate History
+ 
+We were incorporated under the laws of the State of Nevada as Bio-Solutions Corp. on March 27, 2007. From inception, through the third quarter of 2014, we were engaged in various businesses which were unrelated to our current business and corporate officers. On November 19, 2014, we changed our name to Glucose Health, Inc., and our business to that of an own-label distributor of nutritional beverages, which is our business today. Following the name change and the changes in the focus of our business, on April 16, 2018, we filed Form 15 to terminate our registered class of securities and reporting requirements under the Exchange Act.
+ 
+Corporate Information 
+ 
+Our principal executive office is located at 609 SW 8th Street, Suite 600, Bentonville, AR 72712, and our telephone number is 479-802-3827. Our corporate website is www.glucosehealthinc.com, and our principal product website is www.glucodown.com. Information available on our websites is not incorporated by reference in and is not deemed a part of this Prospectus or the registration statement of which this Prospectus is a part.
+ 
+Nasdaq Listing and Reverse Stock Split
+ 
+We have applied to list of our Common Stock on the Nasdaq under the symbol GLUC . There can be no assurance that such listing will be approved or that a liquid trading market will develop. If our listing is not approved, we will not proceed this offering. Nasdaq listing standards include, among other things, a stock price threshold. In order to meet that threshold, we intend to implement a reverse stock split of our Common Stock at a ratio of 1-for-10 prior to the closing of this offering. No fractional shares will be issued in connection with the reverse split and all such fractional interests will be rounded up to the nearest whole number of shares of Common Stock. Our planned reverse split is referred to herein as our Common Stock Reverse Split . Other than in our financial statements and notes thereto, and except where otherwise noted, information presented in this Prospectus indicates our planned Common Stock Reverse Split. 
+ 
+Implications of Being a Smaller Reporting Company
+ 
+We are a smaller reporting company as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares held by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our shares held by non-affiliates equals or exceeds $700 million as of the prior June 30th. Such reduced disclosure and corporate governance obligations may make it more challenging for investors to analyze our results of operations and financial prospects.
+ 
+We are a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies and As a smaller reporting company, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders. 
+ 
+
+8
+
+Table of Contents
+ 
+Implications of Being an Emerging Growth Company
+ 
+We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. We will remain an emerging growth company until the earlier of (1) December 31, 2024 (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (3) the last day of the fiscal year in which we are deemed to be a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur on the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company, we may:
+ 
+ 
+ 
+present only two years of audited financial statements, plus unaudited condensed financial statements for any interim period, and related management s discussion and analysis of financial condition and results of operations in this Prospectus;
+
+ 
+ 
+avail ourselves of the exemption from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley;
+
+ 
+ 
+provide reduced disclosure about our executive compensation arrangements; and
+ 
+ 
+not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.
+ 
+In addition, under the JOBS Act, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period, and, as a result we will adopt new or revised accounting standards on relevant dates on which adoption of such standards is required for other public companies.
+ 
+
+9
+
+Table of Contents
+ 
+SUMMARY OF THE OFFERING
+ 
+Issuer:
+ 
+Glucose Health, Inc.
+
+ 
+ 
+ 
+
+Securities Offered by us:
+ 
+2,125,000 shares of Common Stock, at an assumed public offering price of $4.00 per share of Common Stock. 
+
+ 
+ 
+ 
+
+Over-allotment option:
+ 
+We have granted to the Representative a 45-day option to purchase up to 318,750 additional shares of our Common Stock at our public offering price of $4.00 per share, in any combination solely to cover over-allotments, if any. 
+
+ 
+ 
+ 
+
+Representative s warrants:
+ 
+We have agreed to issue to the Representative compensatory warrants to purchase a number of shares of Common Stock equal in the aggregate to 2% of the total number of shares issued in this offering. The Representative s warrants will be exercisable at a per share exercise price equal to 150% of the public offering price per share of Common Stock sold in this offering. The representative s warrants will only be exercisable during the four and a half-year period commencing six (6) months from the commencement date of sales in this offering. The Representative s warrants also provide for customary anti-dilution provisions, one-time demand registration right (with a duration of such right not to exceed five years from the commencement of sales of Common Stock in this offering) and unlimited piggyback registration rights (with a duration of such rights not to exceed seven years from the commencement of sales of Common Stock in this offering) with respect to the registration of the shares of Common Stock underlying the warrants. The registration statement of which this Prospectus forms a part also registers the shares of Common Stock issuable upon exercise of the Representative s warrants.
+
+ 
+ 
+ 
+
+Securities Offered by Selling Stockholders
+ 
+The Selling Stockholders are offering 1,313,402 shares of Common Stock, consisting of (i) 103,402 shares of Common Stock, (ii) 640,000 shares of Common Stock to be issued upon conversion of Series D Preferred Stock after our Common Stock Reverse Stock Split, and (iii) 570,000 shares of Common Stock to be issued upon conversion of Series E Preferred Stock after our Common Stock Reverse Split.
+
+ 
+ 
+ 
+
+Common stock issued and outstanding before this offering:
+ 
+1,686,197 shares 
+
+ 
+ 
+ 
+
+Common stock issued and outstanding after this offering1:
+ 
+5,021,197 shares. 
+
+ 
+ 
+ 
+
+Use of proceeds:
+ 
+We estimate that the net proceeds to us from this offering will be approximately $7,593,500 (or approximately $8,755,025 if the Representative exercises its over-allotment option in full) assuming an offering price of $4.00 per share. We will not receive any proceeds from the sale of the Selling Stockholder Shares by the Selling Stockholders.
+ 
+We intend to use the net proceeds of this offering primarily for working capital, sales and marketing, research and development, and general corporate purposes. See Use of Proceeds for additional information. 
+
+ 
+ 
+ 
+
+Proposed Nasdaq Trading Symbol and Listing:
+ 
+ 
+We have applied to list of our Common Stock on the Nasdaq under the symbol GLUC . If our listing is not approved, we will not proceed with this offering. 
+
+ 
+ 
+ 
+
+Common Stock Reverse Split:
+ 
+We plan to effect a reverse stock split of our Common Stock by a ratio of 1-for-10 prior to the closing of this offering ( Common Stock Reverse Split ). Other than in our financial statements and notes thereto, and except where otherwise noted, information presented in this Prospectus reflects our planned Common Stock Reverse Split.
+
+ 
+ 
+ 
+
+Risk Factors:
+ 
+See Risk Factors beginning on page 15 and the other information contained in this Prospectus for a discussion of factors you should carefully consider before investing in our securities.
+
+ 
+ 
+ 
+
+Lock-up agreements:
+ 
+ 
+The Company, each of our directors and executive officers, and our 5% and greater shareholders have agreed not to, subject to certain limited exceptions, offer, pledge, sell, contract to sell, grant any option to purchase, or otherwise dispose of our Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, or to enter into any hedge or other arrangement or any transaction that transfers, directly or indirectly, the economic consequence of ownership of the shares of our Common Stock, in the case of the Company for a period of 360 days after the date of this Prospectus, and in the case of our directors and executive officers and our 5% and greater stockholders for a period of 180 days after the date of this Prospectus. See Underwriting for additional information.
+
+ 
+(1)
+Unless otherwise indicated, shares of our Common Stock issued and outstanding after this offering excludes the following:
+
+ 
+ 
+ 
+1,416,667 shares of Common Stock which may be issued upon exercise of the 1-for-1 conversion option of 1,416,667 issued and outstanding shares of Preferred Stock.
+
+ 
+ 
+Any shares of Common Stock issuable upon exercise of the Representative s over-allotment option and underlying the Representative s warrants.
+
+ 
+
+10
+
+Table of Contents
+ 
+SUMMARY FINANCIAL INFORMATION
+ 
+The following summary statements of operations and balance sheet data for interim period ending September 30, 2022, and the fiscal years ended December 31, 2021, and 2020, have been derived from our audited financial statements included elsewhere in this Prospectus. The historical financial data presented below is not necessarily indicative of our financial results in future periods. You should read the summary financial data in conjunction with those financial statements and the accompanying notes and Management s Discussion and Analysis of Financial Condition and Results of Operations. Our financial statements are prepared and presented in accordance with United States generally accepted accounting principles, or U.S. GAAP. Our financial statements have been prepared on a basis consistent with our audited financial statements and include all adjustments, consisting of normal and recurring adjustments that we consider necessary for a fair presentation of the financial position and results of operations as of and for such periods. The financial statements presented below do not reflect our planned Common Stock Reverse Split.
+ 
+GLUCOSE HEALTH INC.
+STATEMENTS OF OPERATIONS (UNAUDITED)
+ 
+ 
+ 
+For the three months ended
+ 
+ 
+For the nine months ended
+ 
+
+ 
+ 
+September 30,
+ 
+ 
+September 30,
+ 
+
+ 
+ 
+2022
+ 
+ 
+2021
+ 
+ 
+2022
+ 
+ 
+2021
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+REVENUE, NET
+ 
+$340,681 
+ 
+$234,930 
+ 
+$918,516 
+ 
+$759,498 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+COST OF REVENUES
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Cost of revenues
+ 
+ 
+186,892 
+ 
+ 
+172,898 
+ 
+ 
+523,653 
+ 
+ 
+479,672 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+GROSS PROFIT
+ 
+ 
+153,789 
+ 
+ 
+62,032 
+ 
+ 
+394,863 
+ 
+ 
+279,826 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+OPERATING EXPENSES
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Selling and marketing
+ 
+ 
+83,748 
+ 
+ 
+152,723 
+ 
+ 
+385,405 
+ 
+ 
+419,230 
+
+General and administrative
+ 
+ 
+46,879 
+ 
+ 
+28,953 
+ 
+ 
+153,827 
+ 
+ 
+85,340 
+
+Professional fees
+ 
+ 
+15,070 
+ 
+ 
+12,091 
+ 
+ 
+149,416 
+ 
+ 
+49,187 
+
+Uncollectible receivables
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Total operating expenses
+ 
+ 
+145,697 
+ 
+ 
+193,767 
+ 
+ 
+688,648 
+ 
+ 
+553,757 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+INCOME (LOSS) FROM OPERATIONS
+ 
+ 
+8,092 
+ 
+ 
+(131,735) 
+ 
+(293,785) 
+ 
+(273,931)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+OTHER INCOME (EXPENSE)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Interest income (expense)
+ 
+ 
+- 
+ 
+ 
+- 
+ 
+ 
+- 
+ 
+ 
+(2,785)
+Total other expense
+ 
+ 
+- 
+ 
+ 
+- 
+ 
+ 
+- 
+ 
+ 
+(2,785)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+INCOME (LOSS) BEFORE INCOME TAXES
+ 
+ 
+8,092 
+ 
+ 
+(131,735) 
+ 
+(293,785) 
+ 
+(276,716)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+PROVISION FOR (BENEFIT FROM) INCOME TAXES
+ 
+ 
+- 
+ 
+ 
+- 
+ 
+ 
+- 
+ 
+ 
+- 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET LOSS ATTRIBUTABLE TO GLUCOSE HEALTH, INC.
+ 
+ 
+8,092 
+ 
+ 
+(131,735) 
+ 
+(293,785) 
+ 
+(276,716)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Dividends to preferred stock holders
+ 
+ 
+(25,125) 
+ 
+(25,125) 
+ 
+(75,375) 
+ 
+(74,319)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET LOSS AVAILABLE FOR COMMON STOCK HOLDERS
+ 
+$(17,033) 
+$(156,860) 
+$(369,160) 
+$(351,035)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+- BASIC AND DILUTED
+ 
+ 
+13,848,630 
+ 
+ 
+13,848,630 
+ 
+ 
+13,848,630 
+ 
+ 
+12,550,039 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED
+ 
+$0.00 
+ 
+$(0.01) 
+$(0.02) 
+$(0.02)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+COMMON SHAREHOLDERS - BASIC AND DILUTED
+ 
+$(0.00) 
+$(0.01) 
+$(0.03) 
+$(0.03)
+ 
+The accompanying notes are an integral part of these financial statements. 
+ 
+
+11
+
+Table of Contents
+ 
+GLUCOSE HEALTH INC.
+STATEMENTS OF OPERATIONS
+FOR THE YEARS ENDED DECEMBER 31,
+ 
+ 
+ 
+2021
+ 
+ 
+2020
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+REVENUE, NET
+ 
+$953,681 
+ 
+$480,713 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+COST OF REVENUES
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Cost of revenues
+ 
+ 
+543,639 
+ 
+ 
+307,168 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+GROSS PROFIT
+ 
+ 
+410,042 
+ 
+ 
+173,545 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+OPERATING EXPENSES
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Selling and marketing
+ 
+ 
+596,936 
+ 
+ 
+213,410 
+
+General and administrative
+ 
+ 
+92,885 
+ 
+ 
+61,735 
+
+Professional fees
+ 
+ 
+46,340 
+ 
+ 
+82,061 
+
+Stock compensation
+ 
+ 
+- 
+ 
+ 
+440,694 
+
+Uncollectible receivables
+ 
+ 
+10,000 
+ 
+ 
+- 
+
+Total operating expenses
+ 
+ 
+746,161 
+ 
+ 
+797,900 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+INCOME (LOSS) FROM OPERATIONS
+ 
+ 
+(336,119) 
+ 
+(624,355)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+OTHER INCOME (EXPENSE)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Interest income (expense)
+ 
+ 
+(2,785) 
+ 
+(12,156)
+Interest income (expense), non-cash item
+ 
+ 
+- 
+ 
+ 
+(5,604)
+Recovery of retailer chargebacks
+ 
+ 
+- 
+ 
+ 
+163,765 
+
+Loss on debt settlement
+ 
+ 
+- 
+ 
+ 
+(14,370)
+Gain on forgiveness of accounts payable
+ 
+ 
+- 
+ 
+ 
+15,042 
+
+Total other expense
+ 
+ 
+(2,785) 
+ 
+146,677 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+INCOME (LOSS) BEFORE INCOME TAXES
+ 
+ 
+(338,904) 
+ 
+(477,678)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+PROVISION FOR (BENEFIT FROM) INCOME TAXES
+ 
+ 
+- 
+ 
+ 
+- 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET LOSS ATTRIBUTABLE TO GLUCOSE HEALTH, INC.
+ 
+ 
+(338,904) 
+ 
+(477,678)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Dividends to preferred stockholders
+ 
+ 
+(99,443) 
+ 
+(49,607)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET LOSS AVAILABLE FOR COMMON STOCKHOLDERS
+ 
+$(438,347) 
+ 
+(527,285)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+- BASIC AND DILUTED
+ 
+ 
+12,877,355 
+ 
+ 
+11,467,101 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED
+ 
+$(0.03) 
+$(0.04)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+COMMON SHAREHOLDERS - BASIC AND DILUTED
+ 
+$(0.03) 
+$(0.05)
+ 
+ The accompanying notes are an integral part of these financial statements. 
+ 
+
+12
+
+Table of Contents
+ 
+GLUCOSE HEALTH, INC.
+BALANCE SHEETS 
+ 
+ASSETS
+
+ 
+ 
+September 30, 
+ 
+ 
+December 31, 
+ 
+
+ 
+ 
+2022
+ 
+ 
+2021
+ 
+
+CURRENT ASSETS
+ 
+(unaudited)
+ 
+ 
+ 
+ 
+
+Cash
+ 
+$308,536 
+ 
+$752,402 
+
+Accounts receivable, net of allowance for doubtful accounts
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+of $12,052 and $10,742, respectively
+ 
+ 
+145,476 
+ 
+ 
+29,435 
+
+Inventory
+ 
+ 
+321,537 
+ 
+ 
+267,861 
+
+Prepaid expenses
+ 
+ 
+- 
+ 
+ 
+103,114 
+
+Total current assets
+ 
+ 
+775,549 
+ 
+ 
+1,152,812 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Other Assets
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Website domains
+ 
+ 
+3,295 
+ 
+ 
+3,295 
+
+Intellectual assets, net of accumulated
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+amortization of $300
+ 
+ 
+- 
+ 
+ 
+- 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+TOTAL ASSETS
+ 
+$778,844 
+ 
+$1,156,107 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+LIABILITIES AND STOCKHOLDERS' EQUITY
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+CURRENT LIABILITIES
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Accounts payable and accrued expenses
+ 
+$1,452 
+ 
+$9,555 
+
+Total current liabilities
+ 
+ 
+1,452 
+ 
+ 
+9,555 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+TOTAL LIABILITIES
+ 
+ 
+1,452 
+ 
+ 
+9,555 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+COMMITMENTS AND CONTINGENCIES 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+STOCKHOLDERS' EQUITY
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Preferred stock, $.001 par value, 10,000,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Series A, $0.001 par value, 1,000 shares authorized
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+1,000 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+September 30, 2022 and December 31, 2021, respectively
+ 
+ 
+1 
+ 
+ 
+1 
+
+Series B, $0.075 stated value, 3,466,668 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+2,133,334 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+September 30, 2022 and December 31, 2021, respectively
+ 
+ 
+2,133 
+ 
+ 
+2,133 
+
+Series C, $0.075 stated value, 866,668 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+866,668 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+September 30, 2022 and December 31, 2021, respectively
+ 
+ 
+867 
+ 
+ 
+867 
+
+Series D, $0.25 stated value, 1,200,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+1,200,000 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+September 30, 2022 and December 31, 2021, respectively
+ 
+ 
+1,200 
+ 
+ 
+1,200 
+
+Series E, $0.667 stated value, 1,440,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+1,440,000 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+September 30, 2022 and December 31, 2021, respectively
+ 
+ 
+1,440 
+ 
+ 
+1,440 
+
+Common stock, $0.001 par value, 40,000,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+13,848,630 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+September 30, 2022 and December 31, 2021, respectively
+ 
+ 
+13,849 
+ 
+ 
+13,849 
+
+Additional paid in capital
+ 
+ 
+8,829,373 
+ 
+ 
+8,829,373 
+
+Accumulated deficit
+ 
+ 
+(8,071,470) 
+ 
+(7,702,310)
+Total stockholders' equity
+ 
+ 
+777,392 
+ 
+ 
+1,146,552 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
+ 
+$778,844 
+ 
+$1,156,107 
+
+ 
+The accompanying notes are an integral part of these financial statements. 
+ 
+
+13
+
+Table of Contents
+ 
+GLUCOSE HEALTH, INC. 
+BALANCE SHEETS 
+ 
+ASSETS
+
+ 
+ 
+December 31, 
+ 
+ 
+December 31, 
+ 
+
+ 
+ 
+2021
+ 
+ 
+2020
+ 
+
+CURRENT ASSETS
+ 
+ 
+ 
+ 
+ 
+ 
+
+Cash
+ 
+$752,402 
+ 
+$69,151 
+
+Accounts receivable, net of allowance for doubtful accounts of $10,742 and $742, respectively
+ 
+ 
+29,435 
+ 
+ 
+18,048 
+
+Inventory
+ 
+ 
+267,861 
+ 
+ 
+254,122 
+
+Prepaid expenses
+ 
+ 
+103,114 
+ 
+ 
+- 
+
+Total current assets
+ 
+ 
+1,152,812 
+ 
+ 
+341,321 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Other Assets
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Website domains
+ 
+ 
+3,295 
+ 
+ 
+3,295 
+
+Intellectual assets, net of accumulated amortization of $300 
+ 
+ 
+- 
+ 
+ 
+- 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+TOTAL ASSETS
+ 
+$1,156,107 
+ 
+$344,616 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+LIABILITIES AND STOCKHOLDERS' EQUITY
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+CURRENT LIABILITIES
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Accounts payable and accrued expenses
+ 
+$9,555 
+ 
+$- 
+
+Accrued interest
+ 
+ 
+- 
+ 
+ 
+27,604 
+
+Convertible note payable, related party
+ 
+ 
+- 
+ 
+ 
+112,157 
+
+Total current liabilities
+ 
+ 
+9,555 
+ 
+ 
+139,761 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+TOTAL LIABILITIES
+ 
+ 
+9,555 
+ 
+ 
+139,761 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+COMMITMENTS AND CONTINGENCIES 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+STOCKHOLDERS' EQUITY
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Preferred stock, $.001 par value, 10,000,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+Series A, $0.001 par value, 1,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+1,000 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+December 31, 2021 and 2020, respectively
+ 
+ 
+1 
+ 
+ 
+1 
+
+Series B, $0.075 stated value, 3,466,668 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+2,133,334 shares and 3,466,668 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+December 31, 2021 and 2020, respectively
+ 
+ 
+2,133 
+ 
+ 
+3,467 
+
+Series C, $0.075 stated value, 866,668 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+866,668 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+December 31, 2021 and 2020, respectively
+ 
+ 
+867 
+ 
+ 
+867 
+
+Series D, $0.25 stated value, 1,200,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+1,200,000 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+December 31, 2021 and 2020, respectively
+ 
+ 
+1,200
+ 
+ 
+ 
+1,200
+ 
+
+Series E, $0.667 stated value, 1,440,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+1,440,000 shares and -0- shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+December 31, 2021 and 2020, respectively
+ 
+ 
+1,440
+ 
+ 
+ 
+- 
+
+Common stock, $0.001 par value, 40,000,000 shares authorized,
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+13,848,630 and 11,627,949 shares issued and outstanding as of
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+December 31, 2021 and 2020, respectively
+ 
+ 
+13,849 
+ 
+ 
+11,628 
+
+Additional paid in capital
+ 
+ 
+8,829,373
+ 
+ 
+ 
+7,451,655
+ 
+
+Accumulated deficit
+ 
+ 
+(7,702,310) 
+ 
+(7,263,963)
+Total stockholders' equity
+ 
+ 
+1,146,552 
+ 
+ 
+204,855 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
+ 
+$1,156,107 
+ 
+$344,616 
+
+ 
+ The accompanying notes are an integral part of these financial statements. 
+ 
+
+14
+
+Table of Contents
+ 
+RISK FACTORS
+ 
+An investment in our securities involves a high degree of risk. Before making a decision to invest in our securities, you should carefully consider the risks that are described in this section and elsewhere in this Prospectus. Additional risks not presently known or that we currently deem immaterial could also materially and adversely affect us. You should consult your own financial and legal advisors as to the risks entailed by an investment in our securities and the suitability of investing in our securities in light of your particular circumstances. If any of the risks contained in this Prospectus develop into actual events, our assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, long-term performance goals, prospects, and/or results of operations could be materially and adversely affected, the trading price of our Common Stock could decline, and you may lose all or part of your investment. Some statements in this Prospectus, including statements in the following risk factors, constitute forward-looking statements. See Cautionary Note Regarding Forward-Looking Statements. 
+ 
+Risks Related to Our Company and Business
+ 
+We have a limited operating history and may not be able to operate our business successfully.
+ 
+On November 19, 2014, we changed our name to Glucose Health, Inc., and our business to that of an own-label distributor of nutritional beverages. Our business has a relatively limited operating history. Historical results are not indicative of, and may be substantially different than, the results we achieve in the future. We cannot assure you that we will be able to operate our business successfully or implement our operating policies and strategies. The results of our operations depend on several factors, our success in attracting and retaining motivated and qualified personnel, the availability of adequate short and long-term financing, conditions in the financial markets, and general economic conditions. In addition, our future operating results and financial data may vary materially from the historical operating results and financial data as well as the pro forma operating results and financial data because of a number of factors, including costs and expenses associated with being a public company.
+ 
+We have limited capital resources, and we will need to raise additional capital through additional funding raises. Such funding, if obtained, could result in substantial dilution or significant debt service obligations. We may not be able to obtain additional capital on commercially reasonable terms in a timely manner, which could adversely affect our liquidity, financial position, and ability to continue operations.
+ 
+As of September 30, 2022, we had a cash balance of $308,536. We thus have limited capital resources and require the funds from this offering to continue and grow our business. Even if we substantially increase revenue and reduce operating expenses, we will need to raise additional capital. In order to continue operating, we may need to obtain additional financing, either through borrowings, private offerings, public offerings, or some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits. We may be unable to acquire the additional funding necessary to continue operating. Accordingly, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our investors losing all of their investment in our company.
+ 
+If we are able to raise additional capital, we do not know what the terms of any such capital raising would be. In addition, any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially below prices at which our shares currently trade. Our inability to raise capital could require us to significantly curtail or terminate our operations. We may seek to increase our cash reserves through the sale of additional equity. The sale of additional equity securities could result in additional and potentially substantial dilution to our shareholders. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition.
+ 
+
+15
+
+Table of Contents
+ 
+The loss of key officers, executives or personnel, or the inability of replacements to quickly and successfully perform in their new roles could adversely affect our business.
+ 
+We depend on the leadership and experience of our Chief Executive Officer and Chief Financial Officer, Murray Fleming. The loss of his services could have a material adverse effect on our business and prospects, as we may not be able to find suitable individuals to replace our Chief Executive Officer and Chief Financial Officer on a timely basis or without incurring increased costs, or at all. Furthermore, if in the future, we lose or terminate the services of one or more of our key employees or if one or more of our current or former executives or key employees joins a competitor or otherwise competes with us, it could impair our business and our ability to successfully implement our business plan. Additionally, if in the future, we are unable to hire qualified replacements for our executive and other key positions in a timely fashion, our ability to execute our business plan would be harmed. Even if we can quickly hire qualified replacements, we would expect to experience operational disruptions and inefficiencies during any transition. We believe that our future success will depend on our continued ability to attract and retain highly skilled and qualified personnel. There is a high level of competition for experienced, successful personnel in our industry. Our inability to meet our executive staffing requirements in the future could impair our growth and harm our business.
+ 
+We are dependent on our ability to attract and retain qualified technical, sales and managerial personnel.
+ 
+Our future success depends in part on our ability to attract and retain highly qualified technical, sales and managerial personnel. Competition for such personnel in the beverage industry is intense and we may not be able to attract and retain additional highly qualified technical, sales and managerial personnel in the future. Any inability to attract and retain the necessary technical, sales and managerial personnel could materially adversely affect us.
+ 
+Our financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making critical accounting estimates.
+ 
+Financial statements prepared in accordance with GAAP require the use of estimates, judgments, and assumptions that affect the reported amounts. Actual results may differ materially from these estimates under different assumptions or conditions. These estimates, judgments, and assumptions are inherently uncertain, and, if they prove to be wrong, then we face the risk that charges to income will be required. In addition, because we have limited operating history and limited experience in making these estimates, judgments, and assumptions, the risk of future charges to income may be greater than if we had more experience in these areas. Any such charges could significantly harm our financial condition, results of operations, and the price of our securities.
+ 
+Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control, which could cause fluctuations in the price of our securities. 
+ 
+We are subject to the following factors that may negatively affect our operating results:
+ 
+ 
+ 
+the announcement or introduction of new products by our competitors;
+ 
+ 
+our ability to upgrade and develop our systems to accommodate growth;
+ 
+ 
+our ability to attract and retain key personnel in a timely and cost-effective manner;
+ 
+ 
+the amount and timing of operating costs relating to the expansion of our business operations;
+ 
+ 
+our ability to identify and enter into relationships with appropriate and qualified third-party providers for operations, tolling and contract manufacturing services;
+ 
+ 
+regulation by federal, state, or local governments;
+ 
+ 
+general economic conditions;
+ 
+ 
+economic conditions specific to the nutritional beverage industry, including for ingredient suppliers, tolling and contract manufactures, packaging suppliers and printers, warehousing, and logistics providers;
+ 
+ 
+various risks related to health epidemics, pandemics, and similar outbreaks, such as the coronavirus disease 2019 ( COVID-19 ) pandemic, which may have material adverse effects on our business, financial position, results of operations and/or cash flows.
+ 
+
+16
+
+Table of Contents
+ 
+As a result of our limited operating history and the nature of the markets in which we compete, it is difficult for us to forecast our revenues or earnings accurately. As a strategic response to changes in our competitive environment, we may from time to time make certain decisions concerning production, marketing and distribution of our products that could have a material and adverse effect on our business, results of operations, and financial condition. Due to the foregoing factors, our quarterly revenues and operating results are difficult to forecast. 
+ 
+We are increasingly dependent on information technology, and potential cyberattacks, security problems, or other disruption and expanding social media vehicles present new risks.
+ 
+We rely on information technology networks such as EDI (electronic data interchange), and the internet, to process, transmit, and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, billing, and operating data. We may purchase some of our information technology from vendors, on whom our systems will depend, and we rely on commercially available systems, software, tools, and monitoring to provide security for processing, transmission, and storage of confidential operator and other customer information. We depend upon the secure transmission of this information over public networks. Our networks and storage applications could be subject to unauthorized access by hackers or others through cyberattacks, which are rapidly evolving and becoming increasingly sophisticated, or by other means, or may be breached due to operator error, malfeasance, or other system disruptions. In some cases, it will be difficult to anticipate or immediately detect such incidents and the damage they cause. Any significant breakdown, invasion, destruction, interruption, or leakage of information from our systems could harm our reputation and business.
+ 
+Further, in the normal course of our business, we collect, store, and transmit proprietary and confidential information regarding our customers, employees, suppliers, and others, including personally identifiable information. An operational failure or breach of security from increasingly sophisticated cyber threats could lead to loss, misuse, or unauthorized disclosure of this information about our customers, employees, suppliers, and others, which may result in regulatory or other legal proceedings, and have a material adverse effect on our business and reputation. We also may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Any such attacks or precautionary measures taken to prevent anticipated attacks may result in increasing costs, including costs for additional technologies, training, and third-party consultants. The losses incurred from a breach of data security and operational failures as well as the precautionary measures required to address this evolving risk may adversely impact our financial condition, results of operations and cash flows.
+ 
+We are subject to significant competition from large multinational companies.
+ 
+The business of making and distributing nutritional beverages is highly competitive. The principal areas of competition include pricing, packaging, distribution channel penetration, development of new products and line extensions and marketing campaigns. Our products compete with a wide range of nutritional beverages produced principally by very large multinational companies, which have substantially greater financial, marketing and distribution resources and brand name recognition than we do. 
+ 
+Our planned FIBER UP brand may be subject to significant competition from small companies and large companies.
+ 
+FIBER UP will likely compete with fiber infused healthier beverages which smaller companies appear to be developing and/or marketing. We have limited knowledge of their formulations (including form of dietary fiber), their brand awareness and marketing and their distribution success. This makes it difficult to assess the extent of these brands competitive threat, if any. While we believe the leading beverage companies are not currently developing fiber infused healthier beverages for North America, they do market and distribute such beverages overseas, and we may face significant competition which could negatively impact our business, if they choose to market these same beverages or other fiber infused beverages they develop in North America. 
+ 
+We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success and significant marketing and advertising will be needed to achieve and sustain brand recognition.
+ 
+The business of making and distributing nutritional beverages is substantially dependent upon brand awareness and market acceptance of our products by consumers. The development of brand awareness and market acceptance is likely to require significant marketing and advertising expenditures. Even if we are able to engage in such marketing and advertising efforts, there can be no assurance that we will achieve and maintain satisfactory levels of brand awareness and market acceptance by consumers. Any failure of our brands to achieve brand awareness and market acceptance would likely have a material adverse effect on business, financial condition, and results of operations.
+ 
+
+17
+
+Table of Contents
+ 
+We are dependent on a limited number of raw materials suppliers and a limited number of tolling and contract manufacturers, which may affect our ability to procure our inputs and produce our products in a timely manner. If we are not able to ensure timely product deliveries, our customers may not order our products, and our revenues may decrease.
+ 
+We rely on a limited number of specialized companies to supply certain of our raw materials, including Archer Daniels Midland/Matsutani, Jiaherb, DSM Fortitech ,Virginia Dare and AVT Tea, and a limited number of tolling and contract manufacturing companies, including Balchem, that have the necessary expertise to manufacture our products. Tolling means we ship primary ingredients to a third-party manufacturing facility for processing, in accordance with our master specifications, into a secondary ingredient, which is then shipped to another third-party manufacturing facility for assembly into a finished good, in accordance with our master specifications. Contract manufacturing means we ship primary and/or secondary ingredients, plus packaging, to a third-party manufacturing facility for assembly into a finished good, in accordance with our master specifications. These suppliers and tolling and contract manufacturers may be unable to satisfy our requirements, on a timely basis. 
+ 
+Because we cannot easily source our raw materials or our tolling/contract manufacturing to other providers, we are susceptible to delays, which can cause us to not have sufficient inventory to meet our customer s demands. Not only can this adversely affect our revenues, it may jeopardize our relationships with our customers. In the event any of our suppliers and tolling and contract manufacturers were to become unable or unwilling to continue to serve us, we would be required to identify and obtain acceptable alternatives. There is no assurance that we would be able to find such alternatives on a timely basis, or at all. An extended interruption in the supply of our products would result in decreased product sales and our revenues would likely decline.
+ 
+We depend upon our tolling and contract manufacturers to warehouse our raw materials
+ 
+We have no facilities of our own to warehouse our raw materials. Instead, we rely on our tolling and contract manufacturers to provide space to us and stage our raw materials for production. While we have negotiated favorable fees for this, there can be no certainty these costs won t rise and reduce our gross margins. If our tolling and contract manufacturers were to decide not to warehouse and stage our raw materials, this would have a very significant impact on our ability to manufacture any product at all in a cost-effective manner, and our business would materially suffer. 
+ 
+Some of the ingredients we use are only available from a single supplier or a limited group of suppliers. If the single supplier is unable to source raw materials, it could cause production delays and significantly disrupt our business.
+ 
+We depend upon single suppliers for some of our key ingredients such as our soluble fiber. Unforeseen discontinuation or unavailability of certain ingredients, each of which we currently primarily source from single supplier, could cause backorders. If we were to experience a significant or prolonged shortage of critical ingredients from any of our suppliers and could not procure the components from other sources, we would be unable to manufacture our products and ship them to our customers in a timely fashion, or at all, which would cause production delays and adversely affect our sales, margins and customer relations.
+ 
+If our sole source supplier was to go out of business or suspend services, we might be unable to find a replacement for such source in a timely manner or at all. Similarly, if any future sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to the Company in the future. Any inability to secure required supplies and services or to do so on appropriate terms could cause production delays and have a materially adverse impact on our business, financial condition and operating results.
+ 
+Increases in cost or shortages of raw materials could harm our business.
+ 
+Increases in costs of our raw materials produced by shortages or inflation will result in increased costs of production. We are uncertain whether we will be able to pass any of such increases on to our customers. We do not use hedging agreements or alternative instruments to manage the risks associated with securing our raw materials. In addition, some of our raw materials are only available from a single or a limited number of suppliers. As alternative sources of supply may not be available, any increase in costs or interruption in the supply of such raw materials might materially harm us.
+ 
+To mitigate the effect on our business of supply chain disruptions, we need to substantially increase inventory. 
+ 
+We believe that raw materials shipment and manufacturing delays are now effectively routine. To avoid product outages and loss of revenue, which are a consequence of these delays, we need hold substantially more finished goods inventory. We presently do not have available capital to substantially increase our finished goods inventory, which may impact our product availability and revenues for the remainder of the fiscal year.
+ 
+Our failure to accurately estimate demand for our products could adversely affect our business.
+ 
+We may not correctly estimate demand for our products. If we materially underestimate demand for our products and are unable to secure sufficient raw materials, we might not be able to satisfy consumer demand for our nutritional beverages, on a short-term basis, when we run out of inventory to sell, in which case our business, financial condition and results of operations could be adversely affected.
+ 
+We may not be able to develop successful new products, which could impede our growth and cause us to sustain future losses.
+ 
+Part of our business strategy is to increase our sales through the development of new products and line extensions. We cannot assure you that we will be able to develop, market, sell and distribute new products and line extensions that will enjoy consumer or retailer buyer acceptance. The failure to develop new products or line extensions that gain consumer or retailer buyer acceptance could have an adverse impact on our growth and materially adversely affect our financial condition.
+ 
+Our lack of product diversification and inability to timely introduce new or alternative products could cause us to cease operations. 
+ 
+Our business is focused on GLUCODOWN and our second brand FIBER UP is only in early development and not yet commercialized. The risks associated with focusing on such a limited product line are substantial. If consumers do not accept our products or if there is a general decline in market demand for, or any significant decrease in, the consumption of nutritional beverages, we are not financially or operationally capable of introducing alternative products within a short time frame. As a result, such lack of acceptance or market demand decline could cause us to cease operations.
+ 
+
+18
+
+Table of Contents
+ 
+Low demand for new products and the inability to develop and introduce new products at favorable margins could adversely impact our performance and prospects for future growth. 
+ 
+The uncertainties associated with developing and introducing new products, such as market demand and costs of development and production, may impede the successful development and introduction of new products on a consistent basis. Introduction of new technology may result in higher costs to us than that of the technology replaced. That increase in costs, which may continue indefinitely or until increased demand and greater availability in the sources of the new technology drive down its cost, could adversely affect our results of operations. Market acceptance of the new products introduced in recent years and scheduled for introduction in future years may not meet sales expectations due to various factors, such as the failure to accurately predict market demand, end-user preferences, evolving industry standards, or the emergence of new or disruptive technologies. Moreover, the ultimate success and profitability of the new products may depend on our ability to resolve technical and technological challenges in a timely and cost-effective manner. Our investments in productive capacity and commitments to fund advertising and product promotions in connection with these new products could erode profits if those expectations are not met.
+ 
+If we are unable to maintain good relationships with retailers and maintain good standing in online marketplaces, our business could suffer.
+ 
+Our access to the customers of retailers and our access to online marketplaces are both material to our success. If we are unable to maintain our good relationships with retailers and maintain our good standing in online marketplaces, our revenues could decline significantly. Unilateral decisions could be taken by the buyers at retailers, or by the policy-makers at our online marketplaces, to discontinue carrying any or all of our products, at any time, which could cause our business to suffer.
+ 
+Even if we maintain good relationships with retailers, they might not approve our cost increases.
+ 
+We are effectively limited to proposing annual price increases at our retailer customers, because we generally only meet annually with product buyers at our retailer customers. Buyers have not in the past and may not in the future, agree with our proposed price increases. As a result, we may earn less gross profit margin over time, the longer we serve a retailer customer. 
+ 
+We may incur material losses as a result of product recall and product liability.
+ 
+We may be liable if the consumption of any of our products causes injury, illness, or death. We also may be required to recall some of our products if they become contaminated or are damaged or mislabeled. A significant product liability judgment against us, or a widespread product recall, could have a material adverse effect on our business, financial condition, and results of operations. The amount of the insurance we carry is limited, and that insurance is subject to certain exclusions and may or may not be adequate.
+ 
+Litigation may adversely affect our business.
+ 
+From time to time in the normal course of our business operations, we may become subject to litigation involving intellectual property, data privacy and security, consumer protection, commercial disputes and other matters that may negatively affect our operating results if changes to our business operation are required. We may also be subject to a variety of claims including product liability, and consumer protection claims, among other litigation. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition, and results of operations. In addition, insurance may not cover existing or future claims, be sufficient to fully compensate us for one or more of such claims or continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting in a reduction in the trading price of our stock.
+ 
+We face risks related to Novel Coronavirus (COVID-19) which could significantly disrupt our business. 
+ 
+Our business has been and may continue to be adversely impacted by the effects of the Novel Coronavirus (COVID-19). In addition to global macroeconomic effects, the Novel Coronavirus (COVID-19) outbreak and any other related adverse public health developments has and may continue to cause disruption to our operations and sales activities. Our third-party vendors, third-party distributors, and our customers have been and will be disrupted by worker absenteeism, quarantines, and restrictions on employees ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, or other travel or health-related restrictions. Depending on the magnitude of such effects on our activities or the operations of our third-party vendors and third-party distributors, the supply of our products will be delayed, which could adversely affect our business, operations, and customer relationships. In addition, the Novel Coronavirus (COVID-19) or other disease outbreak will in the short-run and may over the longer term adversely affect the economies and financial markets of many countries, resulting in an economic downturn that will affect demand for our products and services and impact our operating results. There can be no assurance that any decrease in sales resulting from the Novel Coronavirus (COVID-19) will be offset by increased sales in subsequent periods. Although the magnitude of the impact of the Novel Coronavirus (COVID-19) outbreak on our business and operations remains uncertain, the continued spread of the Novel Coronavirus (COVID-19) or the occurrence of other epidemics and the imposition of related public health measures and travel and business restrictions will adversely impact our business, financial condition, operating results, and cash flows. In addition, we have experienced and will experience disruptions to our business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to develop and design our products and services in a timely manner or meet required milestones or customer commitments.
+ 
+
+19
+
+Table of Contents
+ 
+Prolonged economic downturn, particularly in light of the COVID-19 pandemic and international conflicts, could adversely affect our business.
+ 
+Uncertain global economic conditions, in particular in light of the COVID-19 pandemic and international conflicts, could adversely affect our business. Negative global and national economic trends, such as decreased consumer and business spending, high unemployment levels and declining consumer and business confidence, pose challenges to our business and could result in declining revenues, profitability, and cash flow. Although we continue to devote significant resources to support our brands, unfavorable economic conditions may negatively affect demand for our products. 
+ 
+Risks related to our Intellectual Property
+ 
+If we fail to protect our compositions and methods with patents, competitors may be able to use our compositions and methods, to weaken our competitive position, reduce our net revenue, and increase our costs.
+ 
+Our commercial success will depend in part on obtaining and maintaining patent protection to help prevent compositions and methods that we have developed, or may develop or acquire in the future, from being used by our competitors to weaken our competitive position. We have a patent pending before the United States Patent and Trademark Office ( USPTO ). But patent applications can take many years to issue, and there is no assurance that our current patent application, or any future patent applications, will be granted. If we are unable to obtain patent protection for our current or future applications, we may not be able to successfully prevent our competitors from imitating or copying our products or using some or all of the processes that are the subject of such patent application(s). Such imitation, or copying, may lead to increased competition within the finite market for products such as ours. Even if our patent application was granted, our intellectual property rights may not be sufficiently comprehensive to prevent our competitors from developing similar competitive products.
+ 
+There are multiple risks inherent in patent litigation. In patent litigation in the U.S., defendant counterclaims alleging invalidity and/or unenforceability are commonplace, as are validity challenges by the defendant against the subject patent or other patents before the USPTO. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement, failure to meet the written description requirement, indefiniteness, and/or failure to claim patent eligible subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent intentionally withheld material information from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before the USPTO even outside the context of litigation, in for example, post-grant review proceedings and inter partes review proceedings. The outcome is unpredictable following any legal assertions of invalidity and unenforceability. With respect to the validity question, for example, we cannot be certain that no invalidating prior art existed of which we and the patent examiner were unaware during prosecution. These assertions may also be based on information known to us or the USPTO. If a defendant or third party were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the claims of the challenged patent. Such a loss of patent protection would or could have a material adverse impact on our business.
+ 
+Even if the validity of our patent rights is upheld by a court, a court may not prevent the alleged infringement of our patent rights on the grounds that such activity is not covered by our patent claims. Although we may aggressively pursue anyone whom we reasonably believe is infringing upon our intellectual property rights, initiating, and maintaining suits against third parties that may infringe upon our intellectual property rights will require substantial financial resources. We may not have the financial resources to bring such suits, and if we do bring such suits, we may not prevail. Regardless of our success in any such actions, we could incur significant expenses in connection with such suits.
+ 
+
+20
+
+Table of Contents
+ 
+If our trademarks and brand names are not adequately protected, that could adversely impact our ability to build name recognition in certain markets.
+ 
+We rely on trademarks, service marks, trade names and brand names to distinguish our nutritional beverages from those of competitors and have registered these trademarks. Our registered or unregistered trademarks, service marks, trade names and brand names may be challenged, infringed, diluted, circumvented, or declared generic or determined to be infringing on other marks. Additionally, we cannot assure you that our future trademark applications will be approved. During trademark registration proceedings, we may receive rejections. Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in proceedings before the USPTO third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources towards advertising and marketing new brands. At times, competitors may adopt trade names or trademarks similar to ours, which could harm our brand identity and lead to market confusion. Certain of our current or future trademarks may become so well known by the public that their use becomes generic and they lose trademark protection. Over the long term, if we are unable to establish name recognition through our
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/GMBLZ_esports_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/GMBLZ_esports_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e7477a8a042c2412be44e27903cb5a1764ef3229
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/GMBLZ_esports_prospectus_summary.txt
@@ -0,0 +1,455 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+The
+following information is only a summary of more detailed information included elsewhere in this prospectus and should be read together
+with the information contained in other parts of this prospectus and adjoining materials, including our financial statements. This summary
+highlights selected information about us and this offering. This summary may not contain all of the information that may be important
+to you. Before making a decision to invest in our securities, you should read carefully all of the information contained in this prospectus,
+including the information set forth under the caption Risk Factors. 
+
+ 
+
+About
+Esports Entertainment Group, Inc.
+
+ 
+
+Overview
+
+ 
+
+Esports
+is a skill-based, competitive, and organized form of video gaming by professional players, playing individually or as teams. Esports
+typically takes the form of organized, multiplayer video games that include genres such as real-time strategy, fighting, first-person
+shooter and multiplayer online battle arena games. Most major professional esports events and a wide range of amateur esports events
+are broadcast live via streaming services including twitch.tv and youtube.com. The Company is developing a wagering platform
+where players and fans alike may engage in peer-to-peer skill-based betting, and gamers can bet on their ability to beat other gamers
+in a betting exchange environment and fans and spectators have the ability to bet on their favorite gamers to win real cash and prizes.
+
+ 
+
+Corporate
+History
+
+ 
+
+Esports Entertainment Group, Inc. was formed
+in the state of Nevada on July 22, 2008 under the name Virtual Closet, Inc., before changing its name to DK Sinopharma, Inc. on June
+6, 2010 and then to, VGambling, Inc. on August 12, 2014. On or about April 24, 2017, VGambling, Inc. changed its name to Esports Entertainment
+Group, Inc. The Company is a diversified operator of iGaming, traditional sports betting and esports businesses with a global footprint.
+The Company s strategy is to build and acquire iGaming and traditional sports betting platforms and use them to grow the esports
+business whereby customers have access to game centers, online tournaments and player-versus-player wagering. On July 31, 2020, the Company
+commenced revenue generating operations with the acquisition of LHE Enterprises Limited, a holding company for Argyll Entertainment ( Argyll ),
+an online sportsbook and casino operator. On January 21, 2021, the Company completed its acquisition of Phoenix Games Network Limited,
+the holding company for the Esports Gaming League ( EGL ), and provider of event management and team services, including
+live and online events and tournaments. On March 1, 2021, the Company completed the acquisition of the operating assets and specified
+liabilities that comprise the online gaming operations of Lucky Dino Gaming Limited, a company registered in Malta, and Hiidenkivi Estonia
+OU, its wholly owned subsidiary registered in Estonia (collectively referred to as Lucky Dino ). On June 1, 2021, the Company
+acquired ggCircuit, LLC ( GGC ) and Helix Holdings, LLC ( Helix ). GGC is a business-to-business software company
+that provides cloud-based management for gaming centers, a tournament platform and integrated wallet and point-of-sale solutions. Helix
+owned and operated esports centers. On July 13, 2021, the Company acquired Bethard Group Limited s business-to-consumer
+operations that included the online casino and sports book business operating under the brand of Bethard ( Bethard ).
+Bethard s operations provided sportsbook, casino, live casino and fantasy sport betting services.
+
+ 
+
+The Company has recently completed a series
+of independent transactions to streamline its operations to reduce operating losses and to increase its focus on core businesses. The
+Company closed its Argyll operations on December 8, 2022 by surrendering of its UK license and deconsolidated its Argyll operating entities
+during March and June 2023, and sold Bethard on February 24, 2023. The Company also disposed of Helix on June 10, 2022 and exited the
+EGL business as of June 30, 2023. Subsequent to these transactions, the core businesses of the Company include Lucky Dino of the EEG
+iGaming division, and GGC of the EEG Games division.
+
+ 
+
+ S-2
+
+ 
+
+ 
+
+ 
+
+Our
+Business
+
+ 
+
+EEG
+is an esports-focused iGaming and entertainment company with a global footprint. EEG s strategy is to build and acquire betting
+and related platforms, and lever them into the rapidly growing esports vertical. We operate the business in two verticals, EEG iGaming
+and EEG Games.
+
+ 
+
+EEG
+iGaming:
+
+ 
+
+EEG
+iGaming includes the esports betting platform with full casino and other functionality and services for iGaming customers. iDefix,
+proprietary technology acquired in connection with the acquisition of Lucky Dino, is a Maltese Gaming Authority ( MGA ) licensed
+iGaming platform with payments, payment automation manager, bonusing, loyalty, compliance and casino integrations that services all Lucky
+Dino sites.
+
+ 
+
+EEG s
+goal is to be a leader in the large and rapidly growing sector of esports real-money wagering, offering fans the ability to wager on
+approved esports events in a licensed and secure environment. Starting in February 2021, under the terms of our MGA license,
+we are now able to accept wagers from residents of over 180 jurisdictions including countries within the European Union, New Zealand
+and Latin America, on our platform.
+
+ 
+
+Alongside the esports focused platform, EEG
+owns and operates Lucky Dino, which is licensed by the MGA to offer five online casinos under its seven different brands on its in-house
+built iDefix casino-platform.
+
+ 
+
+We
+currently hold one Tier-1 gambling license in Malta. Our Lucky Dino operations
+provide a foothold in mature markets in Europe into which we believe we can cross-sell our esports offerings.
+
+ 
+
+EEG
+Games:
+
+ 
+
+EEG
+Games focus is on providing esports entertainment experiences to gamers through a combination of: (1) our proprietary infrastructure
+software, GGC, which underpins our focus on esports and is a leading provider of local area network ( LAN ) center management
+software and services, enabling us to seamlessly manage mission critical functions such as game licensing and payments, and (2)
+the creation of esports content for distribution to the betting industry. Currently, we operate our esports EEG Games business in the
+United States and Europe.
+
+ 
+
+We
+believe that as the size of the market and the number of esports enthusiasts continues to grow, so will the number of esports enthusiasts
+who gamble on events, which we believe will increase the demand for our platform and services.
+
+ 
+
+Competition
+
+ 
+
+The online gambling and wagering industry is increasingly competitive.
+With relatively low barriers to entry, new competitors are entering the esports wagering and video game tournament segments. In both of
+these segments, there currently exist several major competitors. Most of EEG s current competitors, including bet365, William Hill,
+Betway, Penn Entertainment, Inc. (NASDAQ:PENN), Pinnacle Sports, PointsBet Holdings Limited (OTC: PBTHF), DraftKings Inc. (NASDAQ:DKNG),
+Rush Street Interactive, Inc. (NYSE:RSI), Kindred Group plc, Flutter Entertainment plc, Betsson AB, Super Group (SGHC) Limited (NYSE:SGHC),
+888 Holdings plc, and Entain Plc, have far greater resources than us.
+
+ 
+
+However,
+we believe the following strengths position us for sustainable growth:
+
+ 
+
+Management
+Team and Key Personnel Experience:
+
+ 
+
+EEG s
+Board of Directors includes senior managers with extensive experience in online gambling, esports, information technology, compliance,
+regulation, accounting and finance.
+
+ 
+
+EEG s
+officers and management, including our recently hired Chief Executive Officer, include individuals with extensive experience in the
+regulation of online gambling, esports, information technology, marketing, business development, payment processing, compliance,
+regulation, accounting, finance, and customer service.
+
+ 
+
+Unique
+Positioning within online gaming:
+
+ 
+
+EEG
+was one of the first online gaming companies with an esports-first focus and a line of esports businesses; leading the effort to broaden
+legislation for betting on esports competitions. We are uniquely focused on connecting to customers across a broad set of retail and
+digital businesses to achieve greater revenue, scale, and profitability, as well as shaping esports infrastructure to facilitate omni-channel
+betting.
+
+ 
+
+ S-3
+
+ 
+
+ 
+
+ 
+
+Technology
+Assets:
+
+ 
+
+ 
+ 
+ 
+ EEG
+ has acquired businesses with state-of-the-art business-to-business/business-to-consumer technologies across esports competition infrastructure,
+ for in-person and internet-based competitions, for tournaments, esports wagering and skill-based betting.
+
+ 
+ 
+ 
+ GGC
+ Proprietary Platform: GGC s ggLeap is a cloud-based management software solution that enables Gaming Centers to run games through
+ the stat integrated client, reward gamers for playing the games they love, and allow gamers to run their own local tournaments. GGC
+ is currently used by over 800 LAN centers and connects with over 2 million gamers monthly. GGC has a presence on six continents,
+ primarily in North America and Europe.
+
+ 
+ 
+ 
+ Lucky
+ Dino s online casino platform iDefix, a modern online casino platform licensed in Malta, upon which the Lucky Dino s
+ online casino brands operate. iDefix provides a full technical solution for casino operations, with various management tools as well
+ as in-depth business intelligence reporting and analysis. The technology is built on a scalable event-driven micro-services-based
+ architecture offering advanced automation features including anti money laundering compliance and know your customer ( KYC )
+ handling, responsible gambling management and monitoring, fraud and bonus abuse detection, as well as gamification, customer relationship
+ management and bonus management.
+
+ 
+ 
+
+Growth
+Strategy
+
+ 
+
+In
+the future, we intend to:
+
+ 
+
+ 
+ 
+ 
+ Expand
+ our esports services into North America, including the 45 states where skill-based gambling is legal and the numerous other states
+ where esports gambling is permitted but has yet to be launched in a meaningful way, enhance our product offering, as well as create
+ relationships with players that will migrate into our real-money wagering platform.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Expand
+ our esports wagering platform and services into more jurisdictions, utilizing the MGA gaming license, which provides opportunity
+ for access into over 180 countries.
+
+ 
+ 
+
+Future
+Products and Services:
+
+ 
+
+Online
+Esports Tournament Play
+
+ 
+
+EEG
+intends to offer players from around the world, including the United States (unless prohibited in a state or international jurisdiction)
+the ability to enter and participate in online video game tournaments and win cash prizes, via our enhanced EGL tournament platform.
+Online esports tournament play consists of two or more people playing against each other in a game from their personal phones or computers,
+where such players do not necessarily have to be playing in real time. These events could be held over the course of a day, a week or
+even a month and the winner will be the one with the top score or the fastest time at the conclusion of the event. Cash-based tournaments
+involving games of skill are not considered gambling in most U.S. states because the generally accepted definition of gambling involves
+three specific things: (1) the award of a prize, (2) paid-in consideration (meaning entrants pay to compete) and (3) an outcome determined
+on the basis of chance. As a result, games of skill are not generally subject to the same laws and regulations as our esports event wagering
+service. We expect participants in our tournaments being able to enter and play against each other with prize money distributed to the
+last remaining competitors. We anticipate creating tournament content for sale and distribution to the betting industry while also
+sometimes collecting a tournament entry fee for our tournaments, as well as a percentage of total winnings that are paid to users (typically
+10% of the entry fees) and thus none of their money will be at risk or otherwise dependent on the outcome. We intend to offer users a
+wide selection of video games of skill to be played online for real money in groups, both large and small, or major tournaments. We believe
+using the tournament platform to penetrate the U.S. market will allow us to grow our brand within the esports community and create valuable
+content for sale to the betting and gambling industry.
+
+ 
+
+International
+Market Expansion
+
+ 
+
+EEG
+received a gaming service license for online betting from the MGA in April 2020, and in February 2021, established a brick-and-mortar
+office and commenced online gaming operations in Malta. In order to effectively penetrate international markets, we translated our website into several additional languages and offer customer
+service and technical support in the local language of key markets.
+
+ 
+
+ S-4
+
+ 
+
+ 
+
+ 
+
+EEG s
+Online Wagering Platform
+
+ 
+
+According
+to Zion Market Research s, the online gambling market represents one of the fastest growing segments of the gambling industry.
+Zion Market Research estimated the size of the global online gambling market in 2021 was in excess of $61.5 billion and is projected
+to reach $114.4 billion by 2028.
+
+ 
+
+iDefix,
+the Company s modern online casino platform that the Lucky Dino online casino brands operate on, is licensed in Malta. iDefix provides
+a full technical solution for casino operations, with various management tools as well as in-depth business intelligence reporting and
+analysis.
+
+ 
+
+On
+our esports-focused wagering platform, a player can place a bet on a team participating in any number of approved tournaments. The website also maintains a how to play section on the website which
+provides players with instructional videos on placing bets as well as other pieces of information that may be beneficial to an inexperienced
+player or a new user of our website. Additionally, the website includes a frequently asked questions section which provides
+customers with the ability to easily navigate general questions relating to the website, personal account information, payment processing
+and betting rules and procedures.
+
+ 
+
+Marketing
+and Sales Initiatives
+
+ 
+
+The
+Company has several sponsorship marketing agreements in place for its website.
+
+ 
+
+EEG is looking to expand into new geographic territories
+by obtaining licenses or by working with B2C operators under a new platform licensing arrangement to operate in those territories.
+The need for hands-on implementation in these territories and support will require investment in additional marketing activities, offices,
+and other overhead.
+
+ 
+
+We
+will also accelerate our expansion if we find complementary businesses that we are able to acquire in other markets. Marketing efforts
+to expand into new territories have included esports team and tournament sponsorship, affiliate marketing, social media advertising,
+content creation, and attendance at esports and gaming events in addition to personal contact with other industry leaders.
+
+ 
+
+We
+plan to increase our marketing efforts and awareness of our brands through our existing suite of websites, as well as future offerings
+by:
+
+ 
+
+ 
+ 
+ 
+ Educating
+ sports betting consumers and gamers to bet on esports;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Sponsoring
+ professional esports teams and tournaments that have a global reach and to generate content for sale;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Working
+ with sports and gaming celebrities and social media influencers who have an interest in video games and esports to generate new customers
+ and increasing our efforts in attracting esports players and other celebrities who have an interest in video game gambling
+ and esports;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Using
+ a multichannel approach focused on acquiring and retaining customers; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Utilizing
+ multiple social media platforms to promote our wagering business including, but not limited to, Facebook, Twitter, Instagram,
+ Snapchat, TikTok, YouTube, Twitch, Discord, WhatsApp, QQ, WeChat, email and SMS messages and using online advertisements,
+ paid search optimization, and various social media campaigns to increase our online presence and drive traffic to our website.
+
+ 
+ 
+
+Further,
+we intend to continue to invest in optimizing the Company s website in an effort to become the premier esports gaming and gambling
+website in the industry.
+
+ 
+
+Recent
+Developments
+
+ 
+
+Certain
+Estimated Unaudited Results for the Year Ended June 30, 2023
+
+ 
+
+Based
+on a preliminary review of our results for the year ended June 30, 2023, set forth below are certain preliminary estimates of
+unaudited selected financial data for the year ended June 30, 2023. Our audited consolidated financial statements for the year June
+30, 2023 are not yet available. The following information reflects our preliminary estimates based on currently available
+information, is not a comprehensive statement of our financial results, and is subject to change. We have provided ranges, rather
+than specific amounts, for the preliminary estimates of the unaudited financial data described below primarily because our financial
+closing procedures for the year ended June 30, 2023 are not yet complete. These estimates should not be viewed as a substitute for
+our full audited financial statements prepared in accordance with generally accepted accounting principles in the United States, or
+GAAP. Further, our preliminary estimated results are not necessarily indicative of the results to be expected for any future period.
+See the sections titled
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/GRNT_granite_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/GRNT_granite_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8d864e052daf244b9e0e4d9132a2ef6c38e4031d
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/GRNT_granite_prospectus_summary.txt
@@ -0,0 +1 @@
+SUMMARY OF THE PROSPECTUS 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/ICG_intchains_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ICG_intchains_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/ICG_intchains_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/INBS_intelligen_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/INBS_intelligen_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..5eb1f3109dd29f843ea43e9d9f52e13ca04779ec
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/INBS_intelligen_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary Conversion of Convertible Debt and Preferred Stock. II-5 IFP Acquisition In connection with the Company s acquisition of Intelligent Fingerprinting Limited on October 4, 2022, the Company entered into a Share Exchange Agreement with IFP, the holders of all of the issued shares in the capital of IFP (collectively, the IFP Sellers) and the IFP Sellers representative named therein. Pursuant to the Share Exchange Agreement, among other things, the Company acquired from the IFP Sellers all of the issued shares in the capital of IFP, and as consideration therefor the Company issued and sold to the IFP Sellers upon the closing of the IFP Acquisition an aggregate number of (i) 148,155 shares (2,963,091 shares pre-Reverse Stock Split) of the Company s common stock, and (ii) 2,363,003 shares of the Company s Series C Preferred Stock. An additional 1,649,273 shares of Series C Preferred Stock were reserved for potential future issuance by the Company, consisting of (i) 500,000 shares of Series C Preferred Stock, that are being held back from the IFP Sellers for one year after the closing of the IFP Acquisition to secure potential indemnification claims by the Company against the IFP Sellers and (ii) 1,149,273 shares of Series C Preferred Stock to certain lenders to IFP. Each share of Series C Preferred Stock is currently convertible into 0.15 shares of common stock (initially convertible into three shares of common stock pre-Reverse Stock Split) (subject to adjustment upon the occurrence of specified events), contingent upon approval by the Company s stockholders. At the Special Meeting of the Company s stockholders on May 8, 2023, the Company s stockholders approved the full conversion of all Series C Preferred Stock and subsequently, effective as of May 10, 2023, all 3,512,277 shares of outstanding Series C Preferred Stock (which included the 1,149,273 Lender Preferred Shares, but not the 500,000 Closing Holdback Shares) were converted into an aggregate of 526,818 shares of common stock. The issuances of the shares of common stock and Series C Preferred Stock pursuant to the Share Exchange Agreement were issued pursuant to the exemption from registration contained in Section4(a)(2) of the Securities Act, Rule 506 of Regulation D promulgated thereunder, and/or Rule 901 promulgated thereunder with respect to individuals who reside outside of the United States. For additional information regarding the IFP Acquisition and the Share Exchange Agreement, see Prospectus Summary IFP Acquisition - Series C Preferred Stock. For additional information regarding the conversion of the Convertible Debt into Series C Preferred Stock and the conversion of Series C Preferred Stock into common stock, see Prospectus Summary Conversion of Convertible Debt and Preferred Stock. Sales prior to the closing our IPO in December 2020: As of the date our IPO in December 2020, our subsidiary (98.96%-owned at the time), GBS Pty Ltd, had sold to various investors convertible notes for total outstanding aggregate principal and interest amount of $5,133,706. This amount automatically converted at the closing of the IPO into 710,548 (approximately 35,527 post-Reverse Stock Split) shares of common stock at a price per share equal to 85% of the public offering price in the IPO. As of the date our IPO in December 2020 we sold to various investors a total of 2,810,190 shares of Series A Convertible Preferred Stock, including 3,000 shares to Spiros Sakiris, our Chief Financial Officer, which converted into 2,810,190 (approximately 140,510 post-Reverse Stock Split) shares of our common stock upon listing. As of the date of this offering there are outstanding warrants to purchase 2,736,675 (approximately 136,824 post-Reverse Stock Split) shares of our common stock issued in connection with the Series A Convertible Preferred Stock, including warrants to purchase 3,000 shares (Approximately 150 post-Reverse Stock Split) held by Mr. Sakiris, having an exercise price $8.50 ($170 post-Reverse Stock Split). These warrants are exercisable only during the one-year period commencing on the second anniversary of the closing of the IPO. The securities described above were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder or pursuant to the exemption from registration contained in Regulation S under the Securities Act. II-6 Item 16. Exhibits (a) Exhibits Exhibit No. Description 1.1 Form of Underwriting Agreement between Intelligent Bio Solutions Inc. and Ladenburg Thalmann & Co. Inc. 2.1 Share Exchange Agreement, dated as of October 4, 2022, by and among GBS INC., Intelligent Fingerprinting Limited, the Sellers Listed on Schedule I thereto, Jason Isenberg (as the RFA Sellers Representative), and Philip Hand (as the other Sellers Representative) (incorporated by reference to Exhibit 2.1 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 3.1 Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.4 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020). 3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company s Current Report on Form 8-K filed with the Commission on October 27, 2022). 3.3 Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company s Current Report on Form 8-K filed with the Commission on February 9, 2023). 3.4 Amended and Restated Bylaws of Intelligent Bio Solutions Inc., as amended as of October 26, 2022 (incorporated by reference to Exhibit 3.2 to the Company s Current Report on Form 8-K filed with the Commission on October 27, 2022). 3.5 Certificate of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 3.3 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 20, 2020). 3.6 Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 3.7 Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company s Current Report on Form 8-K filed with the Commission on December 22, 2022). 3.8 Certificate of Elimination of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company s Current Report on Form 8-K filed with the Commission on July 26, 2023). 3.9 Certificate of Elimination of Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to the Company s Current Report on Form 8-K filed with the Commission on July 26, 2023). 3.10 Form of Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on September 19, 2019). II-7 4.2 Form of Series A Warrant (incorporated by reference to Exhibit 4.2 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 20, 2020). 4.3 Form of Series B Warrant (incorporated by reference to Exhibit 4.3 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 20, 2020). 4.4 Form of Warrant Agency Agreement (incorporated by reference to Exhibit 4.4 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 20, 2020). 4.5 Form LSBD Warrant (incorporated by reference to Exhibit 4.6 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020). 4.6 Form of Representative Warrant (incorporated by reference to Exhibit 4.1 to the Company s Current Report on Form 8-K filed with the Commission on March 10, 2023). 4.7 Form of Warrant (Series D) (incorporated by reference to Exhibit 4.1 to the Company s Current Report on Form 8-K filed with the Commission on December 22, 2022). 4.8 Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to the Company s Current Report on Form 8-K filed with the Commission on December 22, 2022). 4.9 Form of Warrant (incorporated by reference to Exhibit 4.2 to the Company s Current Report on Form 8-K filed with the Commission on March 10, 2023). 4.10 Form of Series E Warrant. 4.11 Form of Series F Warrant. 4.12 Form of Representative Warrant. 4.13 Description of Registrant s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.13 to the Company s Annual Report on Form 10-K filed with the Commission on August 23, 2023). 5.1 Opinion of ArentFox Schiff LLP 5.2 Opinion of Piper Alderman 10.1* Intelligent Bio Solutions Inc. 2019 Long Term Incentive Plan (as amended May 8, 2023) (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on May 12, 2023). 10.2 Amended and Restated License Agreement between the Company and Life Science Biosensor Diagnostics Pty Ltd. (incorporated by reference to Exhibit 10.2 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 13, 2020). 10.1* Employment Agreement between the Glucose Biosensor Systems (Greater China) Pty Ltd and Spiro Sakiris (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on September 15, 2022). 10.2* Employment Agreement between the Glucose Biosensor Systems (Greater China) Pty Ltd and Harry Simeonidis (incorporated by reference to Exhibit 10.2 to the Company s Current Report on Form 8-K filed with the Commission on September 15, 2022). II-8 10.3* Employment Agreement between the GBS (APAC) Pty Ltd and Steven Boyages (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on September 30, 2022). 10.4 Technology License Agreement between the Company and Life Science Biosensor Diagnostics Pty Ltd. (incorporated by reference to Exhibit 10.13 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on October 13, 2020). 10.5 Form of Exchange Agreement (incorporated by reference to Exhibit 10.15 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020). 10.6 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.16 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020). 10.7 Form of Purchase and Assignment Agreement (incorporated by reference to Exhibit 10.17 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on December 21, 2020). 10.8 Option Agreement (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on April 2, 2021). 10.9 Bridge Facility Agreement, dated as of June 16, 2022, between the Company and Intelligent Fingerprinting Limited (incorporated by reference to Exhibit 10.10 to the Company s Annual Report on Form 10-K filed with the Commission on September 22, 2022). 10.10 Form of Warrant Agency Agreement (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on March 10, 2023). 10.11 Investors Rights Agreement, dated as of October 4, 2022, by and among the Company, The Ma-Ran Foundation, The Gary W. Rollins Foundation and Jason Isenberg, as the RFA Sellers Representative (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.12 Registration Rights Agreement, dated as of October 4, 2022, by and among the Company and the stockholders of the Company named therein (incorporated by reference to Exhibit 10.2 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.13 Registration Rights Agreement, dated as of October 4, 2022, by and among the Company and the stockholders of the Company named therein (incorporated by reference to Exhibit 10.3 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.14 Voting Agreement, dated as of October 4, 2022, by and among the Company and the stockholders of the Company named therein (incorporated by reference to Exhibit 10.4 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.15 Form of Voting Agreement, dated as of October 4, 2022, by and among the Company, the Sellers Representatives named therein and each of Spiro Sakiris, Harry Simeonidis and Christopher Towers (incorporated by reference to Exhibit 10.5 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.16 Extension Agreement, dated as of October 4, 2022, to Bridge Facility Agreement, dated as of June 16, 2022, between the Company and Intelligent Fingerprinting Limited (incorporated by reference to Exhibit 10.6 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). II-9 10.17 Deed of Amendment and Restatement, dated October 4, 2022, between Intelligent Fingerprinting Limited, Karin Briden and the Company (incorporated by reference to Exhibit 10.7 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.18 Deed of Amendment and Restatement, dated October 4, 2022, between Intelligent Fingerprinting Limited, Debra Coffey and the Company (incorporated by reference to Exhibit 10.8 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.19 Deed of Amendment and Restatement, dated October 4, 2022, between Intelligent Fingerprinting Limited, Thomas Johnson and the Company (incorporated by reference to Exhibit 10.9 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.20 Deed of Amendment and Restatement, dated October 4, 2022, between Intelligent Fingerprinting Limited, The Ma-Ran Foundation, The Gary W. Rollins Foundation and the Company (incorporated by reference to Exhibit 10.10 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.21 Deed of Amendment and Restatement, dated October 4, 2022, between Intelligent Fingerprinting Limited, John Polden and the Company (incorporated by reference to Exhibit 10.11 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.22 Deed of Amendment and Restatement, dated October 4, 2022, between Intelligent Fingerprinting Limited, Sennett Kirk III and the Company (incorporated by reference to Exhibit 10.12 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.23 Deed of Amendment and Restatement, dated October 4, 2022, between Intelligent Fingerprinting Limited, Sennett Kirk III Exempt Trust and the Company (incorporated by reference to Exhibit 10.13 to the Company s Current Report on Form 8-K filed with the Commission on October 11, 2022). 10.24 Form of Securities Purchase Agreement dated as of December 21, 2022 (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on December 22, 2022). 10.25 Form of Registration Rights Agreement dated as of December 21, 2022 (incorporated by reference to Exhibit 10.2 to the Company s Current Report on Form 8-K filed with the Commission on December 22, 2022). 10.26 Form of Convertible Loan Conversion Agreement (incorporated by reference to Exhibit 10.1 to the Company s Current Report on Form 8-K filed with the Commission on May 17, 2023). 10.27 Form of Warrant Agency Agreement between Intelligent Bio Solutions Inc. and Continental Stock Transfer & Trust Company. 10.28 Form of Leak-Out Agreement. 10.29 Form of Voting Agreement. 10.30 Form of Lock-Up Agreement. 14.1 Code of Ethics (incorporated by reference to Exhibit 14.1 to the Company s Amended Registration Statement on Form S-1/A (File No. 333-232557) filed with the Commission on August 6, 2020). 16.1 Letter to Securities and Exchange Commission from BDO Audit Pty Ltd., dated July 27, 2023. 21.1 List of Subsidiaries 23.1 Consent of UHY LLP 23.2 Consent of BDO Audit Pty Ltd. 23.3 Consent of UHY Haines Norton 23.4 Consent of ArentFox Schiff LLP (included in Exhibit 5.1) 23.5 Consent of Piper Alderman (included in Exhibit 5.2) 24.1 Power of Attorney (included on signature page) 107 Filing Fee Table *Indicates management contract or compensatory plan. Previously Filed (b) Financial Statement Schedules: All schedules are omitted because the required information is inapplicable or the information is presented in the financial statements and the related notes. II-10 Item 17. Undertakings. (a) 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; (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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the Calculation of Filing Fee Tables 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 paragraphs (a)(1)(i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act, that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, 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
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+S-1/A 1 keemofashions1a5.htm S-1/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1/A AMENDMENT NO. 5 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT Keemo Fashion Group Limited (Exact name of registrant as specified in its charter) Date: May 12, 2023 Nevada 5130 32-0686375 (State or Other Jurisdiction of Incorporation) (Primary Standard Classification Code) (IRS Employer Identification No.) 69 Wanke Boyu, Xili Liuxin 1st Rd, Nanshan District, Shenzhen, Guangdong 518052, China Issuer's telephone number: (+86) 176-1282-2030 Company email: keemofashiongroup@gmail.com (Address, including zip code, and telephone number, including area code, of registrant s principal mailing address) Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. 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. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, 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(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |X| Smaller reporting company |X| Emerging growth company |X| If an emerging growth company, 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. |_| CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Offering Price Per Share (1) Underwriting Discounts and Commissions Maximum Net Proceeds Amount of Registration Fee (2) Common Stock, $0.001 par value $0.015 none 112,500 $10.42 (1) The offering price has been arbitrarily determined by the Company and bears no relationship to assets, earnings, or any other valuation criteria. No assurance can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price. (2) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933. The Registrant hereby amends this Registration Statement (the "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 the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale is not permitted. There is no minimum purchase requirement for the offering to proceed. PRELIMINARY PROSPECTUS Keemo Fashion Group Limited 7,500,000 SHARES OF COMMON STOCK $0.001 PAR VALUE PER SHARE Prior to this Offering, no public market has existed for the common stock of Keemo Fashion Group Limited. Upon completion of this Offering, we will attempt to have the shares quoted on the OTCQB operated by OTC Markets Group, Inc. There is no assurance that the Shares will ever be quoted on the OTCQB. To be quoted on the OTCQB, a market maker must apply to make a market in our common stock. As of the date of this Prospectus, we have not made any arrangement with any market makers to quote our shares. Additionally, there is the possibility a market maker may not apply to make a market in our common stock. If this were to occur, your investment may be negatively impacted as you may be unable to sell your shares. In this public offering we, "Keemo Fashion Group Limited" are offering 7,500,000 shares of our common. The shares offered by the Company will be sold on our behalf by our sole officer and Director, Ms. Liu Lu. There is uncertainty that we will be able to sell any of the 7,500,000 shares being offered herein by the Company. Ms. Liu Lu will not receive any commissions or proceeds for selling the shares on our behalf. All of the shares being registered for sale by the Company will be sold at a fixed price of $0.015 per share for the duration of the Offering. Assuming all of the 7,500,000 shares being offered by the Company are sold, the Company will receive $112,500 in net proceeds. Assuming 5,625,000 shares (75%) being offered by the Company are sold, the Company will receive $84,375 in net proceeds. Assuming 3,750,000 shares (50%) being offered by the Company are sold, the Company will receive $56,250 in net proceeds. Assuming 1,875,000 shares (25%) being offered by the Company are sold, the Company will receive $28,125 in net proceeds. There is no minimum amount we are required to raise from the shares being offered by the Company and any funds received will be immediately available to us. There is no guarantee that we will sell any of the securities being offered in this offering. Additionally, there is no guarantee that this Offering will successfully raise enough funds to further our Company's business plan going forward, and additional funding avenues may be necessary. The Company does not have any cash management policies which dictate how funds are transferred between the Company and investors, which is also stated in the Prospectus Summary section of this offering. This primary offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this Prospectus, unless extended by our director for an additional 90 days. We may however, at any time and for any reason terminate the offering. Currently, we have 3,600,000 shares of common stock, $0.001 par value, issued and outstanding. As of the date of this Registration Statement, Ms. Liu Lu is able to control 100% of the voting power of the Company. KEEMO Fashion Group Limited is a company that operates in the apparel and garment trade industry through wholesaling men s and women s apparel to retailers in China. At present, the Company has primarily focused its efforts on attracting small to medium apparel and garment retailers by wholesaling low to mid-range apparel and garments. To date we purchase inventory from two suppliers, YueShun Supply Co., Ltd. and NiSheng Clothing Co., Ltd., and we have sold products to only three customers. YueShun Supply Co., Ltd., NiSheng Clothing Co., Ltd. and our three customers, are not related parties to the Company or its sole officer and director. Our shares of common stock offered in this prospectus are shares of Keemo Fashion Group Limited, a Nevada company, which has operations conducted in the People s Republic of China. Our company structure involves unique risks to investors. Chinese regulatory authorities could disallow our operating structure, which would likely result in a material change in our operations and/or the value of our common stock, including that it could cause the value of such securities to significantly decline or become worthless. Further clarification of the associated risks may be found beginning on page 4, in the Risk Factor section of our prospectus. We face various legal and operational risks and uncertainties related to being based in and having all of our operations in China. The PRC government has significant authority to exert influence on the ability of a company with China-based operations, such as Keemo Fashion Group Limited, to conduct its business, accept foreign investments or list on U.S. or other foreign exchanges. For example, we face risks associated with regulatory approvals of offshore offerings, anti-monopoly regulatory actions, as well as oversight on cybersecurity and data privacy. Such risks could result in a material change in our operations and/or the value of our common stock or could significantly limit or completely hinder our ability to offer, or continue to offer, our common stock and/or other securities to investors and cause the value of such securities to significantly decline or be worthless. In addition, the PRC government has significant oversight and discretion over the conduct of our business and may intervene with or influence the operations of our business as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in companies with China-based operations like us. Any such action, once taken by the PRC government, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. Pursuant to the Holding Foreign Companies Accountable Act ("HFCAA"), the Public Company Accounting Oversight Board (United States) (the "PCAOB") issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB s report identified the specific registered public accounting firms which are subject to these determinations. Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting Oversight Board (United States) (the "PCAOB") determines that it cannot inspect or completely investigate our auditor. Our registered public accounting firm, JP Centurion & Partners PLT, is not headquartered in mainland China or Hong Kong and was not identified in this report as a firm subject to the PCAOB s determinations. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA. All shares being offered pursuant to this Registration Statement will be sold at a fixed price of $0.015 per share for the duration of the offering. The Company estimates the costs of this offering at about $34,000. Expenses incurred in this offering will be paid for by the Company with proceeds from this offering or a combination of proceeds from this offering, and funds loaned to or provided by our sole officer and Director, Ms. Liu. The proceeds from the sale of the securities sold on behalf of the Company will be placed directly into the Company s account; any investor who purchases shares will have no assurance that any monies, beside their own, will be subscribed to the prospectus. All proceeds from the sale of the securities are non-refundable, except as may be required by applicable laws. We believe that there are restrictions on sending money from the Republic of China ("ROC") to the US. Chinese citizens residing in China can make an international transfer up to a daily limit of UD$50,000. However, if such a transaction exceeds this amount, the Chinese citizen is required to present proof of current expenditures. Chinese citizens are subject to a cap of purchasing up to $50,000 US in foreign currency at financial institutions each year. Renminbi is not freely convertible into other currencies. As a result, we believe that any restriction on currency exchange may limit the ability of our Chinese customers or investors to remit payment to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability of our Chinese customers or investors to remit sufficient foreign currency to our Company. We believe that the Chinese government may continue to strengthen its capital controls, and additional restrictions and substantial vetting processes may be instituted by The State Administration of Foreign Exchange of the People's Republic of China ("SAFE") for cross-border transactions. Any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi. Aside from the constraints mentioned in the above paragraph, we do not believe there is any further limitation on the Company s ability to transfer cash between the Company and its investors. Further reference to this topic can be found in our summary, summary risk factors, and risk factor section. The Company qualifies as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, which became law in April 2012 and will be subject to reduced public company reporting requirements. THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS OF YOUR INVESTMENT. PLEASE REFER TO , ' ': RISK FACTORS BEGINNING ON PAGE 4. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely on it. The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus. TABLE OF CONTENTS PART I PROSPECTUS PAGE PROSPECTUS SUMMARY 1
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/LADX_ladrx-corp_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/LADX_ladrx-corp_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..17178e33f2883a2e44ee74bd08438b33acaf26fa
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@@ -0,0 +1,13 @@
+PROSPECTUS SUMMARY
+
+ 
+
+This summary highlights certain information
+contained elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should
+read and carefully consider the following summary together with the entire prospectus, especially the Risk Factors section
+of this prospectus and our financial statements and the notes thereto appearing elsewhere in this prospectus before deciding to invest
+in our Units. For more information on our business, refer to the Business and Management s Discussion and Analysis
+of Financial Condition and Results of Operation sections of this prospectus. Some of the statements in this prospectus constitute
+forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in
+such forward-looking statements as a result of certain factors, including those discussed in the Risk Factors and other
+sections of this prospectus. See
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diff --git a/parsed_sections/prospectus_summary/2023/LIPO_lipella_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/LIPO_lipella_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6f32946a06760cd7d5536f14bb25c2f2637f42e4
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus or incorporated by reference into this prospectus. This summary does not contain all of the information that you should consider before investing in our Common Stock. You should carefully read this entire prospectus, and our other filings with the SEC, including the following sections, which are either included herein and/or incorporated by reference herein, "Risk Factors," "Special Note Regarding Forward-Looking Statements," "Management s Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements incorporated by reference herein, before making a decision about whether to invest in our securities. Our Business Overview We are a clinical-stage biotechnology company focused on developing new drugs by reformulating the active agents in existing generic drugs and optimizing these reformulations for new applications. We believe that this strategy combines many of the cost efficiencies and risk abatements derived from using existing generic drugs with potential patent protections for our proprietary formulations; this strategy allows us to expedite, protect, and monetize our product candidates. Additionally, we maintain a therapeutic focus on diseases with significant, unaddressed morbidity and mortality where no approved drug therapy currently exists. We believe that this focus can potentially help reduce the cost, time and risk associated with obtaining marketing approval. Consistent with our strategy, the initial indication that we are currently addressing (via development of our product candidate, which we have designated as LP-10) is hemorrhagic cystitis ("HC"), which is chronic, uncontrolled urinary blood loss that results from certain chemotherapies (such as alkylating agents) or pelvic radiation therapy (also called "radiation cystitis"). Many radiation cystitis patients experience severe morbidity (and in some cases, mortality), and currently, there is no therapy for their condition approved by the U.S. Food and Drug Administration ("FDA"), or, to our knowledge, any other regulatory body. LP-10 is the development name of our reformulation of tacrolimus (an approved generic active agent) specifically optimized for topical deposition to the internal surface of the urinary bladder lumen using a proprietary drug delivery platform that we have developed and that we refer to as our metastable liposome drug delivery platform (our "Platform"). We are developing LP-10 and our Platform to be, to our knowledge, the first drug candidate and drug delivery technology that could be successful in treating cancer survivors who acquire HC. In a second program, we are developing a product candidate, which we have designated LP-310 and which employs a formulation similar to LP-10, for the treatment of oral lichen planus ("OLP"). OLP is a chronic, T-cell-mediated, autoimmune oral mucosal disease, and LP-310 contains tacrolimus which inhibits T-lymphocyte activation. Symptoms of OLP include painful burning sensations, bleeding and irritation with tooth brushing, painful, thickened patches on the tongue, and discomfort when speaking, chewing or swallowing. These symptoms frequently cause weight loss, nutritional deficiency, anxiety, depression, and scarring from erosive lesions. OLP can also be a precursor to cancer, predominately squamous cell carcinoma, with a malignant transformation rate of approximately one percent. LP-310 is the development name of our oral, liposomal formulation of tacrolimus (the same approved generic active agent in LP-10) specifically optimized for local delivery to oral mucosa. We believe that our approach of using metastable liposomal tacrolimus as a treatment for OLP is novel. To date, upon review of relevant FDA public data resources on approved drugs and biologics, we are not aware of any other liposomal products developed to treat such disease. We recently received FDA Investigational New Drug (IND) approval for a 12-subject, multicenter, phase-2a clinical trial with a dose escalation design. Our Platform includes proprietary drug delivery technologies optimized for use with epithelial tissues that coat lumenal surfaces, such as the colon, the various tissues lining the mouth and esophagus and the tissues lining the bladder and urethra. The Company has two issued patents in the United States that should exclude competitors from making, selling or using our LP-10 and LP-310 formulations in the United States until July 11, 2035. We also have issued patents in Australia, Canada, and Europe that do not expire until October 22, 2034. Corresponding patent applications are pending in the United States Patent Offices. We also have a pending United States patent application on an improvement to the technology. Since our inception in 2005, we have focused primarily on business planning and progressing our lead product candidates, including progressing LP-10 through clinical development, raising capital, organizing and staffing the Company. Corporate Information and Where You Can Find Us We were incorporated under the laws of the state of Delaware in February 2005. Our principal executive offices are located at 7800 Susquehanna Street, Suite 505, Pittsburgh, PA 15208, and our telephone number is (412) 894-1853. We have approximately 6,000 square feet of combined laboratory, office and warehouse space at our principal executive offices that we use in our research and development efforts, including a sterile pharmaceutical pilot plant for manufacturing liposomal and other formulations, as well as relevant analytical facilities. Our corporate website address is www.lipella.com. The information contained in, or accessible through, our website is not incorporated by reference into this prospectus or the registration of which it forms a part and is intended for informational purposes only. You should not consider such website information to be a part of the registration statement of which this prospectus forms a part. Implications of Being an Emerging Growth and Smaller Reporting Company We qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). An emerging growth company may take advantage of relief from certain reporting requirements and other burdens that are otherwise applicable generally to public companies. These provisions include: reduced obligations with respect to financial data; an exception from compliance with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"); reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements. We may take advantage of these provisions for up to five years following our December 2022 initial public offering (our "IPO") or such earlier time that we no longer qualify as an emerging growth company. We would cease to be an emerging growth company upon the earliest of: the last day of the fiscal year on which we have $1.235 billion or more in annual revenue, the date on which we become a "large accelerated filer" (i.e., as of our fiscal year end, the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30), the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period, or the last day of our fiscal year following the fifth anniversary of the date of the completion of our IPO. We may choose to take advantage of some but not all of these reduced reporting burdens. In addition, under the JOBS Act, emerging growth companies can take advantage of an extended transition period and delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies. If we were to subsequently elect instead to comply with public company effective dates, such election would be irrevocable pursuant to the JOBS Act. Also, we are a "smaller reporting company" (and may continue to qualify as such even after we no longer qualify as an emerging growth company). For as long as we qualify as a "smaller reporting company," we may provide reduced disclosure in the public filings that we make with the SEC than larger public companies, such as the inclusion of only two years of audited financial statements and only two years of management s discussion and analysis of financial condition and results of operations disclosure. As a result of qualifying as an emerging growth company and a smaller reporting company, to the extent we take advantage of the allowable reduced reporting burdens, the information that we provide to our stockholders may be different than what you might receive from other public reporting companies in which you hold equity interests.
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diff --git a/parsed_sections/prospectus_summary/2023/MLYS_mineralys_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/MLYS_mineralys_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..48cf2da93e62de89afa2b2dc1b7f1b096ccda80c
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/MLYS_mineralys_prospectus_summary.txt
@@ -0,0 +1 @@
+S-1/A 1 mineralys-sx1a1.htm S-1/A Document As filed with the Securities and Exchange Commission on February 2, 2023 Registration No. 333-269282 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 MINERALYS THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware283484-1966887 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) 150 N. Radnor Chester Road, Suite F200 Radnor, PA 19087 888-378-6240 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Jon Congleton Chief Executive Officer Mineralys Therapeutics, Inc. 150 N. Radnor Chester Road, Suite F200 Radnor, PA 19087 (888) 378-6240 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to Cheston J. Larson Matthew T. Bush Latham Watkins LLP 12670 High Bluff Drive San Diego, CA 92130 (858) 523-5400 Adam Levy Chief Financial Officer and Chief Business Officer Mineralys Therapeutics, Inc. 150 N. Radnor Chester Road, Suite F200 Radnor, PA 19087 (888) 378-6240 Ilir Mujalovic Shearman Sterling LLP 559 Lexington Avenue New York, NY 10022 (212) 848-4000 Approximate date of commencement of proposed sale to the public As soon as practicable after this Registration Statement is declared effective. 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, 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 post-effective amendment filed pursuant to Rule 462(d) 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. ___________ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, 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 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 the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to Completion Preliminary Prospectus dated February 2, 2023 P R O S P E C T U S 10,000,000 Shares Common Stock _________________ This is Mineralys Therapeutics, Inc. s initial public offering. We are selling 10,000,000 shares of our common stock. We expect the public offering price for our common stock to be between $14.00 and $16.00 per share. Currently, no public market exists for the shares of our common stock. We have applied for approval to list our common stock on the Nasdaq Global Market under the symbol MLYS, and this offering is contingent upon obtaining such approval. We are an emerging growth company and a smaller reporting company under the federal securities laws and are subject to reduced public company disclosure standards. See the section titled Prospectus Summary Implications of Being an Emerging Growth Company and a Smaller Reporting Company. Investing in our common stock involves risks that are described in the Risk Factors section beginning on page 12 of this prospectus. _________________ Per ShareTotal Public offering price$$ Underwriting discount(1) $$ Proceeds, before expenses, to us$$ (1)We refer you to Underwriting for additional information regarding underwriting compensation. The underwriters may also exercise their option to purchase up to an additional 1,500,000 shares of common stock from us, at the initial public offering price, less the underwriting discount, for 30 days after the date of this prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The shares will be ready for delivery on or about , 2023. _________________ BofA Securities Evercore ISI Stifel Guggenheim Securities Credit Suisse Wells Fargo Securities _________________ The date of this prospectus is , 2023. TABLE OF CONTENTS PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/MODD_modular_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/MODD_modular_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/MODD_modular_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/MTMV_motomova_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/MTMV_motomova_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..25c17791dc420c1e7b49f12a28d8ac92d44104c0
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/MTMV_motomova_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1 Direct Offering 5 Risk Factors 7 Special Note Regarding Forward-Looking Statements 16 Market and Industry Data 17 Use of Proceeds 18 Dilution 19 Description of Business 21 Management s Discussion and Analysis of Financial Condition and Results of Operations 24 Management 31 Executive Compensation 33 Principal Stockholders 37 Certain Relationships and Related Transactions, and Corporate Governance 39 Plan of Distribution 45 Determination of Offering Price 48 Description of Capital Stock 49 Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Common Stock 51 Disclosure of Commission Position on Indemnification for Securities Act Liabilities 55 Legal Matters 55 Experts 55 Additional Information 55 Financial Statements F-1 You should rely only on the information contained in this prospectus, and any supplement or amendment to this prospectus. We have not authorized anyone to provide you with additional or different information. We do not take responsibility for, nor can provide any assurance as to the reliability of, any other information that others may give you. We are not making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information contained in this prospectus is accurate only as of the date of this prospectus. No action is being taken in any jurisdiction outside the United States to permit a public offering of our shares or possession or distribution of this prospectus in any such jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to the Offering and the distribution of this prospectus applicable to that jurisdiction. i Table of Contents EXPLANATORY NOTE This Prospectus relates to two separate offerings. The first is a public offering of up to 44,160,114 shares of our common stock to be offered and sold directly by the Company at a fixed price of $___ per share (the Direct Offering ). The second is an offering by certain stockholders (the Selling Stockholders Offering ) of an aggregate of up to 83,831,209 shares of our common stock, consisting of (i) 51,874,436 shares issued and outstanding held by existing shareholders and (ii) 31,956,773 shares of common stock issuable upon the conversion of 183,018 issued and outstanding shares of Series A Preferred Stock held by the Selling Stockholders. Certain sections and disclosure in the prospectus relate specifically to either the Direct Offering or the Selling Stockholders Offering, as indicated in the prospectus. Investors should rely only on the information contained in this prospectus or contained in any prospectus supplement or free-writing prospectus to be filed with the Securities and Exchange Commission (the SEC ). The Company has not authorized anyone to provide you with additional information or information different from that contained in this prospectus filed with the SEC. The information contained in this prospectus is accurate only as of its date, regardless of the date of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, results of operations, and prospects may have changed since that date. As used in this prospectus, unless otherwise designated, the terms we, us, our, the Company, Motomova , and our company refer to Motomova Inc., formerly known as Petrocorp Inc., a Delaware corporation, and its subsidiary, M.E.A. Testing Systems Ltd., a company formed under the laws of the State of Israel ( MEA ), as well as Petrocorp Israel Ltd., a company formed under the laws of the State of Israel which is wholly owned by MEA. ii Table of Contents PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary provides an overview of selected information and does not contain all of the information you should consider before investing in our securities. You should read the entire prospectus carefully, especially the Risk Factors, and our financial statements and the accompanying notes to those statements, included elsewhere in this prospectus, before making an investment decision. Overview The Company develops, manufactures, and supplies an extensive array of testing solutions and instruments relating to the power of motors for various markets, including electric vehicles and their components, transportation, and the home appliance industries. We offer unique combined solutions and simulations that integrate our special unique dynamic and static capabilities with traditional dynamometer methods that measure force or power. Dynamometers are testing benches used to test the physical parameters of the motor-like speed, torque, efficiency and power of the motor. For the years ended December 31, 2022 and December 31, 2021, we had sales of $989,879 and $930,849, respectively. For the quarter ended March 31, 2023, we had sales of $41,198. Recent Developments On July 3, 2023, each of Amir Adibi and Menachem Shalom, officers and directors of the Company, lend the Company $32,500. The Company received an aggregate of $48,750 as a result of the 25% original discount on the loans. The loans bear interest at a rate of 1% per month. In addition, the Company agreed to issue a number of shares equal to approximately 0.25% of its fully-diluted then-outstanding share capital to each of Messrs. Adibi and Shalom for each calendar month that the loan remains outstanding. If the Company s common stock is listed on the NASDAQ Capital Market before July 4, 2024, the lenders have the right to convert the outstanding loan and accrued interest, into shares of the Company s common stock at a 40% discount to the public offering price, subject to certain limitations, provided, however that the Company s effective value to each lender shall not exceed $60,000,000. If the Company is not listed on Nasdaq by such date, the interest rate on the loan increases to 2% per annum and the loan is due on July 4, 2025. On July 3, 2023, the Company entered into a convertible loan agreement with Graziani Industries 1992 Ltd. ( Lender ), pursuant to which Lender agreed to lend $200,000 to the Company with interest at the rate of 8% a year. In the event of an uplist of the Company s common stock to NASDAQ Capital Market prior to July 4, 2024, Lender has the right to convert the outstanding loan balance into shares of the Company s common stock at a 40% discount to the public offering price, subject to certain limitations. If the Company fails to achieve an uplisting of its common stock before such date, the loan will bear interest at 8% per annum and must be repaid on or before July 4, 2025. If the loan is not converted to shares, the debt of the Company to Lender is then personally guaranteed by Messrs. Shalom and Adibi, two directors of the Company. On June 20, 2023, The Financial Industry Regulatory Authority notified the Company that the name change of the Company took effect on the over-the-counter market as of June 21, 2023, at which time, the ticker symbol for the Company s common stock officially changed to MTMV . On June 19, 2023, the Company and MEA entered into a convertible loan agreement with five shareholders and/or affiliates. Pursuant to the convertible loan agreement, the shareholders lend an aggregate of approximately $93,889. The loans bear interest at a rate of 1% per month. In addition, the Company agreed to issue a number of shares equal to approximately 0.25% of its fully-diluted then-outstanding share capital to each of the lending shareholder for each calendar month that the loan remains outstanding. If the Company s common stock is listed on the NASDAQ Capital Market before June 20, 2024, the shareholders have the right to convert the outstanding loan and accrued interest, into shares of the Company s common stock at a 40% discount to the public offering price, subject to certain limitations. If the Company is not listed on Nasdaq by such date, the interest rate on the loan increases to 2% per annum and the loan is due on June 20, 2025. 1 Table of Contents On June 15, 2023, MEA entered into a credit agreement with Bank Hapoalim, an Israeli bank, pursuant to which MEA received a 6-month loan of NIS 500,000. Interest on the line of credit accrued at the Israel Bank s Prime Rate (currently 6.25%) plus 2.25% per annum. The credit agreement is secured by a lien on all of MEA s assets and by unlimited personal guarantees of each of the Company s directors. Since the Company s directors (Menachem Shalom, Amir Adibi and Doron Yom Tov) were required to sign an unlimited personal guarantee to secure the loan from Bank Hapoalim and to secure all other, existing and future, loans and credit provided to the Company and/or to MEA, the Company agreed to issue to each director or his designee, per month, the number of shares equal to approximately 0.05% of the outstanding shares of the Company on a fully diluted basis, per each NIS100,000 of debt secured by that director. That applies to the debt provided by Grazaini Industries as mentioned above. On June 12, 2023, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation with the Delaware Secretary of State changing its name to Motomova Inc. During the end of 2022 through January 2023, warrants to purchase an aggregate of 304,878 shares of Series A Preferred Stock were exercised by affiliates of the Company, generating an aggregate of $1,000,000 gross proceeds to the Company. On December 23, 2022, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, changing the total number of its authorized capital stock to 501,000,000, which includes 500,000,000 shares of common stock, par value $0.0001 par value per share, and 1,000,000 shares of preferred stock, $0.0001 par value per share. On November 7, 2022, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, changing the voting and conversion rates of the 6% Convertible Series A Preferred Stock ( Series A Preferred Stock ) to be in accordance with the voting and conversion rates of the preferred shares of MEA which were exchanged for preferred shares of the Company. Each share of Series A Preferred Stock votes 174.61 shares of common stock and is convertible to 174.61 shares of common stock of the Company. On October 6, 2022, the Company consummated the transactions contemplated by the Share Exchange Agreement dated July 26, 2022, with MEA and shareholders representing approximately 90% of the issued and outstanding shares of MEA (the MEA Shareholders ), pursuant to which the MEA Shareholders agreed to exchange all of their shares in MEA for newly issued shares of the Company. In accordance with the Share Exchange Agreement, each outstanding ordinary share of MEA was exchanged for 34.92 shares of common stock, par value $0.0001 per share, of the Company, and every 5 outstanding preferred shares of MEA was exchanged for 1 newly issued share of Series A Preferred Stock of the Company. Each preferred share of MEA is convertible to 174.61 shares of common stock of MEA and has the other rights and designations identical to those held by the preferred shareholders of MEA immediately prior to the Closing. At the closing, all the outstanding warrants issued by MEA exercisable, for an aggregate of 305,848 warrants, were exchanged for an identical number of warrants exercisable for the identical number of preferred shares of Motomova, all of which warrants have since been exercised and are no longer outstanding. As a result of the transactions contemplated by the Share Exchange Agreement, MEA became a subsidiary of the Company. On September 28, 2022, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, authorizing 1,000,000 shares of blank check preferred stock and other corporate changes. The amended and restated certificate also authorized the issuance of 800,000 shares of Series A Preferred Stock. On March 15, 2022, Optima Fintech Management Ltd., a company formed under the laws of the State of Israel ( Optima ), which is beneficially owned and controlled by Menachem Shalom and Amir Adibi, two of our officers and directors, purchased 17,000,000 shares of our common stock from James Fitzsimons, former CEO of the Company, pursuant to the terms and conditions of the Stock Purchase Agreement dated February 23, 2022, among Optima, Mr. Fitzsimons, and the Company. As a result of the purchase, Optima controls the majority of the power of the Company s outstanding voting securities. 2 Table of Contents Risks Associated with Our Business Our business and ability to execute our business strategy are subject to a number of risks of which you should be aware before you decide to buy our common stock. In particular, you should consider the following risks, which are discussed more fully in the section entitled Risk Factors in this prospectus, as well as the other risks described in the section captioned Risk Factors. We have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future. We will need substantial additional funding to continue our operations, which could result in significant dilution or restrictions on our business activities. We may not be able to raise capital when needed, if at all, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts and could cause our business to fail. We have outstanding convertible notes and convertible preferred stock, which may result in substantial dilution to our shareholders if we are unable to repay such loans through cash flow from operations and the conversion rights are exercised. We will need to grow the size of our organization, and we may experience difficulties in managing any growth we may achieve. Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern. If our efforts to protect the proprietary nature of our technologies are not adequate, we may not be able to compete effectively in our market and our business would be harmed. The patent protection covering some of our product candidates has expired which may affect our differentiation and uniqueness in the market which, in return, has significantly negative effective on or business. If we are not able to attract and retain highly qualified personnel, we may not be able to successfully implement our business strategy. Our share price has been, is expected to continue to be volatile and may be influenced by numerous factors, some of which are beyond our control. Our offices are headquartered in Israel and, therefore, our results may be adversely affected by economic restrictions imposed on, and political and military instability in, Israel. There has been no public market for our common stock and an active trading market for our common stock may not develop or be sustained after this offering. The lack of a public market may impair the value of shares of our common stock and the ability to sell them at any time. Corporate Information Our principal executive offices are located at 353 West 48th St., 4th Floor, Unit #292, New York, NY 10036. We have signed a lease agreement at 36 East, 31st St, New York, NY. Our manufacturing and research and development officers are located in Netanya, Israel. Our telephone number is 646-257-4214. Our website address is www.meatesting.com. Information contained in, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus. 3 Table of Contents Emerging Growth Company We are an emerging growth company, as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable SEC rules. We expect that we will remain an emerging growth company for the foreseeable future but cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company as described above. References herein to emerging growth company have the meaning associated with it in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include: being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced Management s Discussion and Analysis of Financial Condition and Results of Operations disclosure; not being required to comply with the requirement of auditor attestation of our internal controls over financial reporting; not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation; and not being required to hold a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. For as long as we continue to be an emerging growth company, we expect that we will take advantage of the reduced disclosure obligations available to us as a result of that classification. We have taken advantage of certain of those reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the dates on which adoption of such standards is required for other public reporting companies. To the extent that we continue to qualify as a smaller reporting company, as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years. 4 Table of Contents DIRECT OFFERING Common
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/MYSZ_my-size_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/MYSZ_my-size_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..cd3cf46eb2bd255062c0690be1a4e8ed95978d28
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/MYSZ_my-size_prospectus_summary.txt
@@ -0,0 +1,880 @@
+Prospectus Summary January 2023 Financing above. We are registering the shares
+of common stock in order to permit the selling stockholders to offer the shares of common stock for resale from time to time. Other than
+with respect to Wainwright, which acted as our placement agent in each of the January 2023, October 2021, the January 2020, May 2020
+financings and our former at-the-market offering facility that was established in September 2019,
+except for the ownership of the Warrants and Placement Agent Warrants issued, and the shares of common stock issued and issuable pursuant
+to prior financings, the selling stockholders have not had any material relationship with us within the past three years.
+
+ 
+
+The
+table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock by
+each of the selling stockholders. The second column lists the number the shares of common stock beneficially owned by each selling stockholder,
+based on its ownership of the shares of common stock and Warrants or Placement Agent Warrants to purchase the shares of common stock,
+as of January 27, 2023, assuming exercise of the Warrants or Placement Agent Warrants held by the selling stockholders on that
+date, without regard to any limitations on conversions or exercises. The third column lists the maximum number of the shares of common
+stock being offered in this prospectus by the selling stockholders. The fourth and fifth columns list the amount of the shares of common
+stock owned after the offering, by number of the shares of common stock and percentage of outstanding the shares of common stock (assuming
+for the purpose of such percentage, 1,626,117 shares outstanding as of January 27, 2023) assuming in both cases the sale of all of the
+shares of common stock offered by the selling stockholders pursuant to this prospectus, and without regard to any limitations on conversions
+or exercises.
+
+ 
+
+Under
+the terms of the Warrants and Placement Agent Warrants issued in the Offerings, a selling stockholder may not exercise the warrants to
+the extent such exercise would cause such selling stockholder, together with its affiliates, to beneficially own a number of shares of
+common stock which would exceed 4.99% or 9.99%, as applicable, of our then outstanding shares of common stock following such exercise,
+excluding for purposes of such determination shares of common stock not yet issuable upon exercise of the warrants and placement agent
+warrants which have not been exercised. The number of shares does not reflect this limitation. The selling stockholders may sell all,
+some or none of their shares of common stock or warrants or placement agent warrants in this offering. See Plan of Distribution. 
+
+ 
+
+ 32
+
+ 
+
+ 
+
+ 
+
+ 
+ Selling Stockholder 
+ Number of Shares of Common Stock Owned Prior to Offering 
+ Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus 
+ Number of Shares of Common Stock Owned After the Offering 
+ Percentage of Shares of Common Stock Owned After the Offering
+
+ 
+ Armistice Capital Master Fund Ltd. (1) 
+ 2,991,966(2) 
+ 2,504,092(3) 
+ 487,874(4) 
+ *
+
+ 
+ Michael Vasinkevich (5) 
+ 63,155(6) 
+ 44,079(7) 
+ 19,076(8) 
+ *
+
+ 
+ Noam Rubinstein (5) 
+ 31,025(9) 
+ 21,654(10) 
+ 9,371(11) 
+ *
+
+ 
+ Craig Schwabe (5) 
+ 3,324(12) 
+ 2,320(13) 
+ 1,004(14) 
+ *
+
+ 
+ Charles Worthman (5) 
+ 984(15) 
+ 687(16) 
+ 297(17) 
+ *
+
+ 
+
+ 
+
+ 
+ *
+ Denotes less than 1%
+
+ 
+ 
+ 
+
+ 
+ (1)
+ The
+ shares of common stock are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (the Master
+ Fund ), and may be deemed to be indirectly beneficially owned by: (i) Armistice Capital, LLC, or Armistice Capital, as the
+ investment manager of the Master Fund; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. Armistice Capital and Steven
+ Boyd disclaim beneficial ownership of the securities except to the extent of their respective pecuniary interests therein. Of the
+ shares of common stock held by the Master Fund, 333,917 are issuable only upon the exercise of warrants, which are subject
+ to a beneficial ownership limitation preventing the Master Fund from exercising any portion of the warrants if such exercise would
+ result in the Master Fund owning greater than 4.99% or 9.99% (in the case of the Pre-funded Warrants) of our outstanding shares
+ of common stock following such exercise. The address of the Master Fund is c/o Armistice Capital, LLC, 510 Madison Ave, 7th Floor,
+ New York, NY 10022.
+
+ 
+ 
+ 
+
+ 
+ (2)
+ Represents
+ (i) 6,865 shares of common stock issuable upon exercise of warrants issued in our January 2020 private placement, (ii) 18,861 shares
+ of common stock issuable upon exercise of warrants issued in the October 2021 registered direct offering, (iii) 28,292 shares of
+ common stock issuable upon exercise of warrants issued in the October 2021 private placement, (iv) 153,957 shares issued in
+ the RD Offering, (v) 279,899 shares of common stock issuable upon exercise of Pre-funded Warrants issued in the RD Offering,
+ (vi) 441,899 shares of common stock issuable upon exercise of Class A Warrants issued in the RD Offering, (vii) 441,899 shares of
+ common stock issuable upon exercise of Class B Warrants issued in the RD Offering, (viii) 540,098 shares of common stock issuable
+ upon exercise of Pre-funded Warrants issued in the PIPE Offering, (ix) 540,098 shares of common stock issuable upon
+ exercise of Series A Warrants issued in the PIPE Offering, and (x) 540,098 shares of common stock issuable upon exercise of Series
+ B Warrants issued in the PIPE Offering.
+
+ 
+ 
+ 
+
+ 
+ (3)
+ Represents
+ (i) 441,899 shares of common stock issuable upon exercise of Series A Warrants issued in the RD Offering, (ii) 441,899 shares of
+ common stock issuable upon exercise of Series B Warrants issued in the RD Offering, (iii) 540,098 shares of common stock issuable
+ upon exercise of Pre-funded Warrants in the PIPE Offering, (iv) 540,098 shares of common stock issuable upon exercise of Series
+ A Warrants issued in the PIPE Offering, and (v) 540,098 shares of common stock issuable upon exercise of Series B Warrant issued
+ in the PIPE Offering.
+
+ 
+ 
+ 
+
+ 
+ (4)
+ Represents
+ (i) 6,865 shares of common stock issuable upon exercise of warrants issued in our January 2020 private placement, (ii) 18,861
+ shares of common stock issuable upon exercise of warrants issued in the October 2021 registered direct offering, (iii) 28,292 shares
+ of common stock issuable upon exercise of warrants issued in the October 2021 private placement, (iv) 153,957 shares issued in
+ the RD Offering, and (v) 279,899 shares of common stock issuable upon exercise of Pre-funded Warrants issued in the RD Offering.
+
+ 
+ 
+ 
+
+ 
+ (5)
+ Referenced person is affiliated
+ with Wainwright, a registered broker dealer. Wainwright is a registered broker-dealer and acted as our placement agent in the Offerings
+ and our January 2020, May 2020 and October 2021 financings and has acted as sales agent in our at-the-market equity offering.
+
+ 
+ 
+ 
+
+ 
+ (6)
+ Represents (i) 792 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 6,995 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, (iii) 11,288 shares of common
+ stock issuable upon exercise of placement agent warrants issued in our October 2021 offering, and (iv) 44,079 shares of common stock
+ issuable upon exercise of Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+ 
+ 
+
+ 
+ (7)
+ Represent 44,079 shares
+ of common stock issuable upon exercise of Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+ 
+ 
+
+ 
+ (8)
+ Represents (i) 792 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 6,995 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, and (iii) 11,288 shares of common
+ stock issuable upon exercise of placement agent warrants issued in our October 2021 offering.
+
+ 
+ 
+ 
+
+ 
+ (9)
+ Represents (i) 389 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 3,436 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, (iii) 5,545 shares of common
+ stock issuable upon exercise of placement agent warrants issued in our October 2021 offering, and (iv) 21,654 shares of common stock
+ issuable on exercise of Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+
+ 33
+
+ 
+
+ 
+
+ 
+
+ 
+ (10)
+ Represent 21,654 shares
+ of common stock issuable upon exercise of Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+ 
+ 
+
+ 
+ (11)
+ Represents (i) 389 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 3,436 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, and (iii) 5,545 shares of common
+ stock issuable upon exercise of placement agent warrants issued in our October 2021 offering.
+
+ 
+ 
+ 
+
+ 
+ (12)
+ Represents (i) 42 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 368 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, (iii) 594 shares of common stock
+ issuable upon exercise of placement agent warrants issued in our October 2021 offering, and (iv) 2,320 shares of common stock issuable
+ upon exercise of our Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+ 
+ 
+
+ 
+ (13)
+ Represent 2,320 shares
+ of common stock issuable upon exercise of Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+ 
+ 
+
+ 
+ (14)
+ Represents (i) 42 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 368 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, and (iii) 594 shares of common
+ stock issuable upon exercise of placement agent warrants issued in our October 2021 offering.
+
+ 
+ 
+ 
+
+ 
+ (15)
+ Represents (i) 12 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 109 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, (iii) 176 shares of common stock
+ issuable upon exercise of placement agent warrants issued in our October 2021 offering, and (iv) 687 shares of common stock issuable
+ upon exercise of Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+ 
+ 
+
+ 
+ (16)
+ Represent 687 shares of
+ common stock issuable upon exercise of Placement Agent Warrants issued in connection with the Offerings.
+
+ 
+ 
+ 
+
+ 
+ (17)
+ Represents (i) 12 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our January 2020 private placement, (ii) 109 shares
+ of common stock issuable upon exercise of placement agent warrants issued in our May 2020 offering, and (iii) 176 shares of common
+ stock issuable upon exercise of placement agent warrants issued in our October 2021 offering.
+
+ 
+ 
+
+ 34
+
+ 
+
+ 
+
+ 
+
+DESCRIPTION
+OF THE OFFERED SECURITIES
+
+ 
+
+The
+selling stockholders may, from time to time, sell, transfer, or otherwise dispose of any or all of their shares of common stock or interests
+in shares of common stock on any stock exchange, market, or trading facility on which the shares are traded or in private transactions
+at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices
+determined at the time of sale, or at negotiated prices. This prospectus provides you with a general description of the common stock
+the selling stockholders may offer.
+
+ 
+
+As
+of January 27, 2023, our authorized share capital consists of 250,000,000 shares of common stock, $0.001 par value per share, of which
+1,626,117 are outstanding. Our authorized but unissued shares of common stock will be available for future issuance without your approval.
+We may use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions
+and as employee compensation. The existence of authorized but unissued shares of common stock could render more difficult or discourage
+an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise. Unless approval of our stockholders
+is so required, our board of directors does not intend to seek stockholder approval for the issuance and sale of our common stock.
+
+ 
+
+The
+description below is intended as a summary, and is qualified in its entirety by reference to our amended and restated certificate of
+incorporation, or our Certificate of Incorporation, and amended and restated bylaws, or our Bylaws.
+
+ 
+
+We
+implemented a 1-for-25 reverse stock split of our outstanding shares of common stock that was effective for Nasdaq Capital Market purposes
+at the open of business on December 8, 2022. All share and related option and warrant information presented in this prospectus supplement
+have been retroactively adjusted to reflect the reduced number of shares and the increase in the share price which resulted from this
+action.
+
+ 
+
+Common
+Stock
+
+ 
+
+Holders
+of our common stock are entitled to one vote per share. Our Certificate of Incorporation does not provide for cumulative voting. Holders
+of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our board of directors out of legally
+available funds. However, the current policy of our board of directors is to retain earnings, if any, for the operation and expansion
+of our company. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all of
+our assets which are legally available for distribution, after payment of or provision for all liabilities. The holders of our common
+stock have no preemptive, subscription, redemption or conversion rights.
+
+ 
+
+Pre-Funded
+Warrants
+
+ 
+
+The
+following summary of certain terms and provisions of the pre-funded warrants is not complete and is subject
+to, and qualified in its entirety by, the provisions of the pre-funded warrants, the form of which was filed with the SEC by us as an
+exhibit to a Current Report on Form 8-K on January 12, 2023. Prospective investors should carefully review the terms and provisions of
+the form of Private Placement Pre-Funded Warrant for a complete description of the terms and conditions of the pre-funded warrants.
+
+ 
+
+Duration
+and Exercise Price. Each pre-funded warrant has an initial exercise price per share equal to $0.001. The pre-funded
+warrants are immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. The exercise
+price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends,
+stock splits, reorganizations, or similar events affecting our common stock and the exercise price. The pre-funded warrants will be issued
+separately and may be transferred separately immediately thereafter.
+
+ 
+
+Exercisability.
+The pre-funded warrants are exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
+notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of
+a cashless exercise as discussed below). The purchaser of the pre-funded warrants in this offering may elect to deliver its exercise
+notice following the pricing of the offering and prior to the issuance of the pre-funded warrants at closing to have its pre-funded warrants
+exercised immediately upon issuance and receive shares of common stock underlying the pre-funded warrants upon closing of this offering.
+A holder (together with its affiliates) may not exercise any portion of the pre-funded warrant to the extent that the holder would own
+more than 4.99% of the outstanding common stock immediately after exercise, which percentage may be changed at the holder s election
+to a lower percentage at any time or to a higher percentage not to exceed 9.99% upon 61 days notice to us. The purchaser of pre-funded
+warrants in this offering may also elect prior to the issuance of the pre-funded warrants to have the initial exercise limitation set
+at 9.99% of our outstanding common stock. No fractional shares of common stock will be issued in connection with the exercise of the
+pre-funded warrants. In lieu of fractional shares, at our election, we will either round up to the nearest whole number or we will pay
+a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price.
+
+ 
+
+ 35
+
+ 
+
+ 
+
+ 
+
+Cashless
+Exercise. A holder may elect to receive upon exercise of its pre-funded warrants (either in whole or in part) the net number of shares
+of common stock determined according to a formula set forth in the pre-funded warrants in lieu of making the cash payment otherwise contemplated
+to be made to us upon such exercise in payment of the aggregate exercise price.
+
+ 
+
+Transferability.
+Subject to certain transfer restrictions, a pre-funded warrant may be transferred at the option of the holder upon surrender of
+the pre-funded warrants to us together with the appropriate instruments of transfer.
+
+ 
+
+Exchange
+Listing. There is no trading market available for the pre-funded warrants on any securities exchange or nationally recognized trading
+system. We do not intend to list the pre-funded warrants on any securities exchange or nationally recognized trading system.
+
+ 
+
+Right
+as a Stockholder. Except as otherwise provided in the pre-funded warrants or by virtue of such holder s ownership of shares
+of our common stock, the holders of the pre-funded warrants do not have the rights or privileges of holders of our common stock, including
+any voting rights, until they exercise their pre-funded warrants.
+
+ 
+
+Fundamental
+Transaction. In the event of any fundamental transaction, as described in the pre-funded warrants and generally including any merger
+with or into another entity, sale of all or substantially all of our assets, tender offer or exchange offer, reclassification of our
+common stock, or purchase agreement or other business combination pursuant to which another person or group of persons acquires more
+than 50% of the outstanding shares of our common stock, then upon any subsequent exercise of a pre-funded warrant, the holder
+will have the right to receive as alternative consideration, for each share of our common stock that would have been issuable upon such
+exercise immediately prior to the occurrence of such fundamental transaction, the number of shares of common stock of the successor or
+acquiring corporation or of our company, if it is the surviving corporation, and any additional consideration receivable upon or as a
+result of such transaction by a holder of the number of shares of our common stock for which the pre-funded warrant is exercisable immediately
+prior to such event.
+
+ 
+
+Warrants
+
+ 
+
+The
+following summary of certain terms and provisions of the Series A and Series B warrants and placement agent warrants is not complete and is subject to, and qualified in its entirety by, the provisions of the Series A and Series B warrants and
+Placement Agent warrants, the form of which were filed with the SEC by us as an exhibit to a Current Report on Form 8-K on January 12,
+2023. Prospective investors should carefully review the terms and provisions of the form of Series A and Series B Warrant for a complete
+description of the terms and conditions of the Series A and Series B warrants and Placement Agent warrants.
+
+ 
+
+Duration
+and Exercise Price. Each Warrant Placement Agent Warrant is immediately exercisable and has an initial exercise price per
+share equal to $2.805 in the case of Warrants and $3.8188 in the case of Placement Agent Warrants. The Series A Warrants have
+a term of five and one-half years from the date of the issuance and the Series B Warrants have a term of 28 months from the date of issuance
+and the Placement Agent Warrants have a term of five years, expiring on January 10, 2028. The exercise price and number of shares
+of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations,
+or similar events affecting our common stock and the exercise price. 
+
+ 
+
+ 36
+
+ 
+
+ 
+
+ 
+
+Exercisability.
+The Warrants and Placement Agent Warrants are exercisable, at the option of each holder, in whole or in part, by delivering to us a duly
+executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except
+in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the Warrants
+to the extent that the holder would own more than 4.99% of the outstanding common stock immediately after exercise, which percentage
+may be changed at the holder s election to a lower percentage at any time or to a higher percentage not to exceed 9.99% upon 61
+days notice to us. No fractional shares of common stock will be issued in connection with the exercise of the Warrants. In lieu
+of fractional shares, at our election, we will either round up to the nearest whole number or we will pay a cash adjustment in respect
+of such final fraction in an amount equal to such fraction multiplied by the exercise price.
+
+ 
+
+Cashless
+Exercise. A holder may elect to receive upon exercise of its Warrants and Placement Agent Warrants (either in whole or in
+part) the net number of shares of common stock determined according to a formula set forth in the Warrants in lieu of making the cash
+payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price.
+
+ 
+
+Transferability.
+Subject to certain transfer restrictions, the Warrants and Placement Agent Warrants may be transferred at the option of
+the holder upon surrender of the Warrants and Placement Agent Warrants to us together with the appropriate instruments of transfer.
+
+ 
+
+Exchange
+Listing. There is no trading market available for the Warrants and Placement Agent Warrants on any securities exchange or
+nationally recognized trading system. We do not intend to list the Warrants and Placement Agent Warrants on any securities exchange
+or nationally recognized trading system.
+
+ 
+
+Right
+as a Stockholder. Except as otherwise provided in the Warrants and Placement Agent Warrants or by virtue of such holder s
+ownership of shares of our common stock, the holders of the Warrants and Placement Agent Warrants do not have the rights or privileges
+of holders of our common stock, including any voting rights, until they exercise their Warrants and Placement Agent Warrants.
+
+ 
+
+Fundamental
+Transaction. In the event of any fundamental transaction, as described in the Warrants and Placement Agent Warrants and generally
+including any merger with or into another entity, sale of all or substantially all of our assets, tender offer or exchange offer, reclassification
+of our common stock, or purchase agreement or other business combination pursuant to which another person or group of persons acquires
+more than 50% of the outstanding shares of our common stock, then upon any subsequent exercise of a Warrant, the holder will have the
+right to receive as alternative consideration, for each share of our common stock that would have been issuable upon such exercise immediately
+prior to the occurrence of such fundamental transaction, the number of shares of common stock of the successor or acquiring corporation
+or of our company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of such transaction
+by a holder of the number of shares of our common stock for which the Warrant or Placement Agent Warrant is exercisable immediately
+prior to such event. In the event of a fundamental transaction, upon the holder s option, our company or any successor entity
+will purchase the Warrant or Placement Agent Warrant from the holder by paying an amount of cash equal to the Black Scholes Value (as
+defined in the Warrants and Placement Agent Warrants) of the remaining unexercised portion of the Warrant or Placement Agent Warrant
+on the date of the consummation of such fundamental transaction. 
+
+ 
+
+Anti-Takeover
+Effects of Certain Provisions of our Certificate of Incorporation, Bylaws and the DGCL
+
+ 
+
+Certain
+provisions of our Certificate of Incorporation and our Bylaws, which are summarized in the following paragraphs, may have the effect
+of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes
+a stockholder might consider favorable. Such provisions may also prevent or frustrate attempts by our stockholders to replace or remove
+our management. In particular, our Certificate of Incorporation and our Bylaws and Delaware law, as applicable, among other things:
+
+ 
+
+ 
+ 
+ 
+ provide
+ the board of directors with the ability to alter the Bylaws without stockholder approval;
+
+ 
+ 
+ 
+
+ 
+ 
+ the
+ classification of our board of directors;
+
+ 
+ 
+ 
+
+ 
+ 
+ place
+ limitations on the removal of directors;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ provide
+ that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ require
+ that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written
+ consent;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ eliminate
+ the ability of stockholders to call a special meeting of stockholders; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ establish
+ advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon
+ at duly called stockholder meetings.
+
+ 
+ 
+
+ 37
+
+ 
+
+ 
+
+ 
+
+These
+provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons
+seeking to acquire control of us to first negotiate with its board. These provisions may delay or prevent someone from acquiring or merging
+with us, which may cause our market price of our common stock to decline.
+
+ 
+
+Advance
+Notice Bylaws. Our Bylaws contain an advance notice procedure for stockholder proposals to be brought before any meeting of stockholders,
+including proposed nominations of persons for election to our Board of Directors. Stockholders at any meeting will only be able to consider
+proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our Board of Directors
+or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who
+has given our corporate secretary timely written notice, in proper form, of the stockholder s intention to bring that business
+before the meeting. Although the Bylaws do not give our Board of Directors the power to approve or disapprove stockholder nominations
+of candidates or proposals regarding other business to be conducted at a special or annual meeting, the Bylaws may have the effect of
+precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential
+acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of us.
+
+ 
+
+Interested
+Stockholder Transactions. We are subject to Section 203 of the Delaware General Corporation Law, or DGCL, which, subject to certain
+exceptions, prohibits business combinations between a publicly-held Delaware corporation and an interested stockholder, 
+which is generally defined as a stockholder who becomes a beneficial owner of 15% or more of a Delaware corporation s voting stock
+for a three-year period following the date that such stockholder became an interested stockholder.
+
+ 
+
+Forum
+Selection
+
+ 
+
+Our
+Bylaws provide that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware
+(or, if the Court of Chancery does not have jurisdiction, another state court or a federal court located within the State of Delaware)
+will, to the fullest extent permitted by applicable law and subject to applicable jurisdictional requirements, be the sole and exclusive
+forum for any stockholder (including a beneficial owner) to bring claims, including claims in the right of the Company, (i) that are
+based upon a violation of a duty by a current or former director, officer, employee or stockholder in such capacity, or (ii) as to which
+the DGCL confers jurisdiction upon the Court of Chancery.
+
+ 
+
+Limitations
+on Liability, Indemnification of Officers and Directors and Insurance
+
+ 
+
+The
+DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary
+damages for breaches of directors fiduciary duties as directors and Certificate of Incorporation will include such an exculpation
+provision. Our Certificate of Incorporation and Bylaws will include provisions that indemnify, to the fullest extent allowable under
+the DGCL, the personal liability of directors or officers for monetary damages for actions taken as a director or officer of us, or for
+serving at our request as a director or officer or another position at another corporation or enterprise, as the case may be. Our Certificate
+of Incorporation and Bylaws will also provide that we must indemnify and advance reasonable expenses to our directors and officers, subject
+to our receipt of an undertaking from the indemnified party as may be required under the DGCL. Our Certificate of Incorporation will
+expressly authorize us to carry directors and officers insurance to protect us, our directors, officers and certain employees
+for some liabilities. The limitation of liability and indemnification provisions in our Certificate of Incorporation and Bylaws may discourage
+stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect
+of reducing the likelihood of derivative litigation against our directors and officers, even though such an action, if successful, might
+otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights, or those of any stockholder,
+to seek non-monetary relief such as injunction or rescission in the event of a breach of a director s duty of care. The provisions
+will not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to
+the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant
+to these indemnification provisions. There is currently no pending material litigation or proceeding against any of our directors, officers
+or employees for which indemnification is sought.
+
+ 
+
+Transfer
+Agent and Registrar
+
+ 
+
+The
+Transfer Agent and Registrar for our common stock is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598. The telephone
+number of VStock Transfer, LLC is (212) 828-8436.
+
+ 
+
+Listing
+
+ 
+
+Our
+common stock is listed on the Nasdaq Capital Market under the symbol MYSZ and on the TASE under the symbol MYSZ .
+
+ 
+
+ 38
+
+ 
+
+ 
+
+ 
+
+PLAN
+OF DISTRIBUTION
+
+ 
+
+Each
+selling stockholder, or the Selling Stockholders, of the securities and any of their pledgees, assignees and successors-in-interest may,
+from time to time, sell any or all of their securities covered hereby on the Nasdaq Capital Market or any other stock exchange, market
+or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices.
+A Selling Stockholder may use any one or more of the following methods when selling securities:
+
+ 
+
+ ordinary
+ brokerage transactions and transactions in which the broker-dealer solicits purchasers;
+
+ 
+
+ block
+ trades in which the broker dealer will attempt to sell the securities 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;
+
+ 
+
+ settlement
+ of short sales;
+
+ 
+
+ in
+ transactions through broker-dealers that agree with the Selling Stockholders to sell a specified
+ number of such securities at a stipulated price per security;
+
+ 
+
+ through
+ the writing or settlement of options or other hedging transactions, whether through an options
+ exchange or otherwise;
+
+ 
+
+ a
+ combination of any such methods of sale; or
+
+ 
+
+ any
+ other method permitted pursuant to applicable law.
+
+ 
+
+The
+Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act, if available,
+rather than under this prospectus.
+
+ 
+
+Broker-dealers
+engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
+or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
+in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in
+excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or
+markdown in compliance with FINRA Rule 2121.
+
+ 
+
+In
+connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
+or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
+assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan
+or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option
+or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the
+delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer
+or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
+
+ 
+
+The
+Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be underwriters 
+within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
+or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
+under the Securities Act. Each Selling Stockholder has informed us that it does not have any written or oral agreement or understanding,
+directly or indirectly, with any person to distribute the securities.
+
+ 
+
+ 39
+
+ 
+
+ 
+
+ 
+
+We
+are required to pay certain fees and expenses incurred
+by us incident to the registration of the securities. We have agreed to indemnify the Selling Stockholders against certain
+losses, claims, damages and liabilities, including liabilities under the Securities Act.
+
+ 
+
+We
+agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders
+without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
+us to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar
+effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
+of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable
+state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
+or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is
+complied with.
+
+ 
+
+Under
+applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
+engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M,
+prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the
+Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the
+common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders
+and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
+by compliance with Rule 172 under the Securities Act).
+
+ 
+
+ 
+
+ 40
+
+ 
+
+ 
+
+ 
+
+MANAGEMENT S
+DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
+
+ 
+
+The
+following discussion of our results of operations and financial condition should be read in conjunction with our consolidated financial
+statements and related notes included elsewhere in this prospectus. The discussion and analysis should also be read together with our
+unaudited pro forma financial information for the year ended December 31, 2021 and the nine months ended September 30, 2022. This discussion
+contains forward-looking statements based upon our current expectations, estimates and projections that involve risks and uncertainties.
+Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations,
+the matters discussed under
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/NAAS_naas_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/NAAS_naas_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/NAAS_naas_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/NAMSW_newamsterd_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/NAMSW_newamsterd_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..79a23f5339b38b38f878b6156fbf7a7e66ab7dfd
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/NAMSW_newamsterd_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained in more detail elsewhere in this prospectus. This summary may not contain all the information that may be important to you, and we urge you to read this entire prospectus carefully, including the sections entitled Special Note Regarding Forward-Looking Statements, Risk Factors, Business, Management s Discussion and Analysis of Financial Condition and Results of Operations, Unaudited Pro Forma Condensed Combined Financial Information and the consolidated audited financial statements, including the notes thereto, included elsewhere in the registration statement of which this prospectus forms a part, before making any investment decision. Business Summary Overview We are a clinical-stage biopharmaceutical company developing oral, non-statin medicines for patients at high risk of cardiovascular disease ( CVD ) with residual elevation of low-density lipoprotein cholesterol ( LDL-C or LDL ), for whom existing therapies are not sufficiently effective or well-tolerated. There exists a significant unmet need for a potent, cost-effective and convenient LDL-lowering therapy as an adjunct to statins, a class of lipid-lowering medications that are the current standard of care for high-risk CVD patients with high cholesterol. Our lead product candidate, obicetrapib, is a next-generation, oral, low-dose cholesteryl ester transfer protein ( CETP ) inhibitor, that is currently in four ongoing Phase 3 and Phase 2b clinical trials as both a monotherapy and a combination therapy with ezetimibe for lowering LDL-C and preventing major adverse cardiovascular events ( MACE ). CVD is a leading cause of death worldwide and the top cause of death in the United States. ASCVD is primarily caused by atherosclerosis, which involves the build-up of fatty material within the inner walls of the arteries. Atherosclerosis is the primary cause of heart attacks, strokes and peripheral vascular disease. One of the most important risk factors for ASCVD is hypercholesterolemia, which refers to elevated LDL-C levels within the body, commonly known as high cholesterol. A significant proportion of patients with high cholesterol do not achieve acceptable LDL-C levels using statins alone. We estimate that there are more than 30 million patients in the United Kingdom, Germany, France, Spain and Italy (collectively, EU5 ) and in the United States who are not achieving LDL-lowering goals on the current standard of care. Existing non-statin treatment options have been largely unable to address the needs of patients with high cholesterol due to modest efficacy, prohibitive pricing, or an inconvenient and painful injectable administration route. It is estimated that over 75% of ASCVD outpatients prefer oral drugs to injectable therapies. Our product candidate, obicetrapib, is a next-generation, oral, low-dose CETP inhibitor that we are developing to potentially overcome the limitations of current LDL-lowering treatments. We believe that obicetrapib has the potential to be a once-daily oral CETP inhibitor for lowering LDL-C, if approved. In our Phase 2b ROSE trial, obicetrapib demonstrated a 51% lowering of LDL-C from baseline at a 10 mg dose level on top of high-intensity statins. In all three of our Phase 2 trials, TULIP, ROSE and OCEAN, evaluating obicetrapib as a monotherapy or a combination therapy, we observed statistically significant LDL-lowering activity combined with generally moderate side effects and no drug-related, treatment-emergent serious adverse events ( AEs ). Obicetrapib has demonstrated strong tolerability in more than 600 patients with low or elevated lipid levels ( dyslipidemia ) in our clinical trials to date. Obicetrapib is also expected to be relatively low in cost to manufacture compared to most other branded LDL-lowering therapies on the market with high efficacy. We believe that the estimated low cost of goods for obicetrapib will enable favorable pricing and position it to significantly improve patient access to a high efficacy LDL-lowering therapy compared to existing non-statin treatments. Furthermore, we believe that obicetrapib s oral delivery, demonstrated activity in low doses, chemical properties and tolerability make it Table of Contents well-suited for combination approaches. We are developing a fixed dose combination of obicetrapib 10 mg and ezetimibe 10 mg, which we believe will demonstrate even greater potency. Closing of the Business Combination On November 22, 2022 (the Closing Date ), the Company consummated its previously announced business combination pursuant to the Business Combination Agreement, dated as of July 25, 2022 (the Business Combination Agreement ), by and among the Company, FLAC, NewAmsterdam Pharma, and NewAmsterdam Pharma Investment Corporation, a Cayman Islands exempted company and wholly owned subsidiary of the Company ( Merger Sub ). Beginning on the day immediately prior to the Closing Date and finishing on the day immediately after the Closing Date, the following transactions occurred pursuant to the terms of the Business Combination Agreement (collectively, the Business Combination ): The shareholders of NewAmsterdam Pharma ( Participating Shareholders ) contributed all outstanding shares in the capital of NewAmsterdam Pharma to the Company in exchange for the issuance of ordinary shares in the share capital of the Company ( Ordinary Shares ) (the Exchange ); Immediately after giving effect to the Exchange, the Company s legal form was converted from a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) to a public limited liability company (naamloze vennootschap) (the Holdco Reorganization ); After giving effect to the Exchange, Merger Sub merged with and into FLAC (the Merger ), with FLAC surviving the merger as a wholly owned subsidiary of the Company (the Surviving Company ); In connection with the Merger, each issued and outstanding ordinary share of FLAC was canceled and extinguished in exchange for a claim for an Ordinary Share, and such claim was then contributed into the Company against the issuance of a corresponding Ordinary Share; Immediately following the Merger, each outstanding warrant to purchase a Class A ordinary share, par value $0.0001 per share, of FLAC (the FLAC Class A Ordinary Shares ) became a warrant to purchase one Ordinary Share, on the same contractual terms; Each NewAmsterdam Pharma option that was outstanding and unexercised ( NewAmsterdam Pharma Options ) remained outstanding, and to the extent unvested, such option will continue to vest in accordance with its applicable terms, and at the time of the Exchange, such NewAmsterdam Pharma Options became options to purchase, and will when exercised be settled in Ordinary Shares; and On the day following the Closing Date, the Surviving Company changed its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and domesticated as a corporation incorporated under the laws of the State of Delaware (the Domestication ). Upon the closing of the Business Combination, the Company became the direct parent of NewAmsterdam Pharma. Upon the achievement of a certain clinical development milestone, we will issue to the Participating Shareholders (including Amgen and MTPC for this purpose) and holders of options to purchase shares of NewAmsterdam Pharma prior to the closing of the Business Combination, who were directors, officers, employees or consultants of NewAmsterdam Pharma as of the date of the Business Combination Agreement (the Participating Optionholders ) and who are at the time of achievement of such milestone still providing services to the Company or its subsidiaries, 1,886,137 additional Ordinary Shares (the Earnout Shares ), which in the case of the Participating Optionholders will take the form of awards of restricted stock units under our long-term Table of Contents incentive plan (the LTIP ). The development milestone consists of the achievement and public announcement of Positive Phase 3 Data (as defined in the Business Combination Agreement) for each of NewAmsterdam Pharma s BROADWAY clinical trial and BROOKLYN clinical trial at any time during the period beginning on date prior to the Closing Date and ending on the date that is five years after the Final Closing Date, or November 23, 2027. As a result, no Earnout Shares will be issuable if the applicable milestone is not achieved within five years of the Merger. PIPE Financing On July 25, 2022, concurrently with the execution of the Business Combination Agreement, FLAC and the Company also entered into subscription agreements with certain investors (each, a PIPE Investor ), pursuant to which the PIPE Investors agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to such PIPE Investors, an aggregate of 23,460,000 Ordinary Shares at $10.00 per share for gross proceeds of $234.6 million (the PIPE Financing ). The PIPE Financing closed substantially concurrently with the Business Combination. Based on the closing price of our Ordinary Shares on January 12, 2023, the PIPE Investors could earn a profit of approximately $1.20 per share upon the sale of their shares pursuant to this prospectus. Because the PIPE Investors purchased the PIPE Shares at a price lower than the current market price, they may experience a positive rate of return on their investment, even if our public securityholders experience a negative rate of return. The Ordinary Shares issued in the PIPE Financing have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. Implications of Being an Emerging Growth Company and a Foreign Private Issuer Emerging Growth Company The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 ( JOBS Act ). The Company will remain an emerging growth company until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Business Combination, (b) in which the Company has total annual gross revenue of at least $1.235 billion or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of Ordinary Shares held by non-affiliates exceeds $700 million as of the last business day of the Company s prior second fiscal quarter, and (ii) the date on which the Company issued more than $1.0 billion in non-convertible debt during the prior three-year period. The Company intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as emerging growth companies, including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that the Company s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation. Foreign Private Issuer As a foreign private issuer, the Company will be subject to different U.S. securities laws than domestic U.S. issuers. The rules governing the information that the Company must disclose differ from those governing U.S. corporations pursuant to the Exchange Act. The Company will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Those proxy statements are not expected to conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. As a foreign private issuer, the Company will be exempt from a number of rules under the U.S. securities laws and will be permitted to file less information with the SEC than a U.S. company. In addition, as a foreign private issuer, the Company s officers and directors and holders of more than 10% of the issued and outstanding Ordinary Shares, will be exempt from the rules under the Exchange Act requiring insiders to report purchases and sales of ordinary shares as well as from Section 16 short swing profit reporting and liability. Table of Contents Summary of Risk Factors Investing in our securities involves a high degree of risk. You should consider all the information contained in this prospectus before investing in our securities. These risks are discussed more fully in the section entitled Risk Factors. If any of these risks actually occur, our business, financial condition or results of operations would likely be materially adversely affected. These risks include, but are not limited to, the following: Risks Related to this Offering by the Selling Securityholders Sales of a substantial number of our securities in the public market by the Selling Securityholders and/or by our existing securityholders could cause the price of our Ordinary Shares and Warrants to decrease. Certain of the Selling Securityholders acquired their securities at a price that is less than the market price of our Ordinary Shares as of the date of this prospectus. As a result, such Selling Securityholders may earn a positive rate of return even if the price of our Ordinary Shares declines and may be willing to sell their shares at a price less than shareholders that acquired our shares in the public market. Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements We are a clinical-stage company with limited operating history, no approved products and no historical product revenues, which makes it difficult to assess our future prospects and financial results. We have incurred net losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future. We may never generate any product revenue or become profitable or, if we achieve profitability, may not be able to sustain it. Risks Related to Our Product Development, Regulatory Approval and Commercialization We are dependent on the success of our only product candidate, obicetrapib, and cannot guarantee that obicetrapib will successfully complete clinical development, receive regulatory approval or, if approved, be successfully commercialized. We have never obtained approval for any product candidate, and may be unable to do so successfully. Clinical drug development involves a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future trial results, and our clinical trials may fail to adequately demonstrate the safety and efficacy of obicetrapib. The regulatory approval processes of the U.S. Food and Drug Administration (the FDA ), the European Medicines Agency (the EMA ) and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for obicetrapib, our business will be substantially harmed. Obicetrapib may produce undesirable side effects that we may not have detected in our previous preclinical studies and clinical trials. This could prevent us from gaining approval or market acceptance, including broad physician adoption, for our product candidate if approved, or from maintaining such approval and acceptance, and could substantially increase commercialization costs and even force us to cease operations. Even if we receive regulatory approval for obicetrapib or our future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expenses, limit or withdraw regulatory approval and subject us to penalties if we fail to comply with applicable regulatory requirements. Table of Contents Obicetrapib, if approved, will face significant competition from competing therapies and our failure to compete effectively may prevent us from achieving significant market penetration. Risks Related to Ownership of Our Securities We do not intend to pay dividends for the foreseeable future. Accordingly, you may not receive any return on investment unless you sell your Ordinary Shares for a price greater than the price you paid for them. We are eligible to be treated as an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the Ordinary Shares less attractive to investors, which could have a material and adverse effect on the Company, including growth prospects, because we may rely on these reduced disclosure requirements. We are a foreign private issuer and, as a result, will not be subject to certain U.S. securities laws, including proxy rules, and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company, which may limit the information available to holders of the Ordinary Shares and Warrants. Corporate Information We were incorporated as a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) on June 10, 2022 to facilitate the consummation of the Business Combination. Prior to the closing of the Business Combination, we had not conducted any material activities other than those incident to our formation and the matters contemplated by the Business Combination and only had nominal assets consisting of cash and our interest in Merger Sub. Prior to the closing of the Business Combination, our corporate form was converted to a Dutch public limited liability company (naamloze vennootschap) and our name was changed to NewAmsterdam Pharma Company N.V. Following the Business Combination, we became the ultimate parent entity of NewAmsterdam Pharma and FLAC. Our Ordinary Shares and Public Warrants were registered under the Exchange Act and are listed on Nasdaq under the symbols NAMS and NAMSW, respectively. Our principal executive office is located at Gooimeer 2-35, 1411 DC Naarden, The Netherlands, and its telephone number is +31 (0) 35 206 2971. Table of Contents
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/NMRA_neumora_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/NMRA_neumora_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/NMRA_neumora_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/NPWR-WT_net-power_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/NPWR-WT_net-power_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8d864e052daf244b9e0e4d9132a2ef6c38e4031d
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/NPWR-WT_net-power_prospectus_summary.txt
@@ -0,0 +1 @@
+SUMMARY OF THE PROSPECTUS 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/NXNT_nexscient_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/NXNT_nexscient_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..f27ec9a44d6da3142823e72a80375bde94bb1ad9
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/NXNT_nexscient_prospectus_summary.txt
@@ -0,0 +1,25 @@
+PROSPECTUS SUMMARY
+ 
+ The following summary highlights material information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. Before making an investment decision, you should read the entire prospectus carefully, including the Risk Factors section, the Management s Discussion and Analysis of Financial Condition and Results of Operations section, the financial statements and the notes to the financial statements. You should also review the other available information referred to in the section entitled Where You Can Find More Information in this prospectus and any amendment or supplement hereto. Unless otherwise indicated, the terms the Company, Nexscient, we, us, and our refer and relate to Nexscient, Inc.
+ 
+ Corporate History and General Information about the Company
+ 
+ Nexscient, Inc. (the Company ) is an early-stage company, which was incorporated in the State of Delaware on March 14, 2023. Our fiscal year-end is June 30. We are a development stage enterprise. The Company is engaged in the business of developing and commercializing a Software as a Service platform that exploits Industrial Internet-of-Things (IIoT), Artificial Intelligence (AI), and Cloud-computing technologies to deliver an innovative solution for manufacturers and continuous production facilities in the industrial automation sector that helps reduce equipment failures, avoid unscheduled downtimes, decrease equipment maintenance costs, and improve overall equipment efficiencies.
+ 
+ The Company has not yet developed its software platform and generated no revenues to date. Most of management s time, and the Company s limited resources have been spent on research and development of the Company s condition monitoring and predictive analytics platform and developing its business strategy.
+ 
+ Our principal office is located at 2029 Century Park East, Suite 400, Los Angeles, CA 90067. Our telephone number is (310) 494-6620 and our e-mail contact is info@nexscient.com. Our website can be viewed at https://nexscient.com/. The Company has not filed for bankruptcy, receivership or any similar proceedings nor is in the process of filing for bankruptcy, receivership or any similar proceedings.
+ 
+ Company Overview
+ 
+ The Company was incorporated in the State of Delaware on March 14, 2023. We intend to offer of a continuous, remote condition-based monitoring solution for manufacturers and continuous production facilities seeking to implement a Predictive Maintenance (PdM) program. Our platform intends to leverage the latest IIoT technology with edge processing, machine-learning/AI algorithms, and Cloud computing infrastructure to collect, diagnose and transmit critical information about machine health and performance. Unlike other condition-monitoring programs on the market today, we plan to take a unique approach by offering a remote, continuous monitoring solution that is autonomous and machine agnostic with no equipment purchase requirement. Designed as a scalable, stand-alone solution, our solution does not depend on integration with any control or IT system for its data source. Our design plans to utilize a mesh network of data collection nodes that are externally-mounted to the outer casing of the equipment being monitored and data is collected via three on-board sensors, including acoustic, vibration and temperature. Compatible with virtually all rotating machinery, regardless of age, make, model or condition, the nodes collect and securely transmit pertinent data from the on-board sensors via a secure gateway to our Cloud-based analytics platform for processing and diagnosis. 
+ 
+ Nexscient Cloud software intends to use rule-based logic, which incorporates anomaly detection and domain-level expertise to analyze the data and deliver immediate actionable insights and corrective recommendations without the reliance upon a large historical data set. Our initial deployment of the system will rely primarily on rule-based anomaly detection. Critical information about the machine s health and performance are processed and analyzed in real-time. Advance-warning alerts of impending issues are generated and transmitted to select maintenance personnel with recommended corrective procedures delivered as work orders. 
+ 
+ Contemporaneously, the data collected from each Nexscient Node will be processed and stored in our data lake so that over time we will have aggregated sufficient amounts of data to train machine learning algorithms to build predictive models that can be used in the future releases as an enhancement to our service offering. Future enhancements to the Nexscient system will leverage our machine learning/AI models to perform long-term assessments, such as root cause analysis and estimate remaining useful life. 
+ 
+ An intuitive user interface displaying detailed information about alert conditions can be viewed for further investigation, via a Web browser or mobile device. Our distinct advantage is realized through our ability to rapidly deploy a continuous remote monitoring solution that produces actionable insights with highly accurate predictions of incipient failures well in advance of their occurrence.
+ 
+ We believe Nexscient will offer significant improvements and innovations to be brought to the growing market for predictive maintenance by substantially improving efficacy, safety and cost. We expect to drastically simplify the implementation of Predictive Maintenance programs by offering its machine health monitoring solution as a subscription-based service. We intend to generate revenues initially through our subscription service and may generate additional revenues from premium service offerings as well as consulting services that will be offered directly to customers. 
+ 
+ The proceeds of
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@@ -0,0 +1 @@
+Prospectus summary 1
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diff --git a/parsed_sections/prospectus_summary/2023/OPGN_opgen-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/OPGN_opgen-inc_prospectus_summary.txt
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+S-1 1 opgen_s1.htm FORM S-1 As filed with the Securities and Exchange Commission on July 14, 2023 Registration No. 333-______________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___________________ OPGEN, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 8071 (Primary Standard Industrial Classification Code Number) 06-1614015 (I.R.S. Employer Identification Number) 9717 Key West Avenue, Suite 100 Rockville, MD 20850 (301) 869-9683 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) ___________________ Oliver Schacht, Ph.D. Chief Executive Officer 9717 Key West Avenue, Suite 100 Rockville, MD 20850 (301) 869-9683 (Name, address, including zip code, and telephone number, including area code, of agent for service) ___________________ Copies to: Peter A. Jaslow, Esq. Ballard Spahr LLP 1735 Market Street 51st Floor Philadelphia, PA 19103 (215) 665-8500 ___________________ Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box. [X] 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 post-effective amendment filed pursuant to Rule 462(d) 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. [_] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large Accelerated Filer [_] Accelerated Filer [_] Non-Accelerated Filer [X] Smaller Reporting Company [X] Emerging Growth Company [_] If an emerging growth company, 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 to Section 7(a)(2)(B) of the Securities Act. [_] ___________________ 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 Commission, acting pursuant to said Section 8(a), may determine. The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to Completion: Dated July 14, 2023 Preliminary Prospectus Up to [_________] Shares of Common Stock Up to [_________] Common Warrants to Purchase Up to [_________] Shares of Common Stock Up to [_________] Pre-Funded Warrants to Purchase Up to [_________] Shares of Common Stock Up to [_________] Shares of Common Stock Underlying the Common Warrants and Pre-Funded Warrants ___________________ We are offering up to [_________] shares of our common stock together with warrants to purchase up to [_________] shares of common stock, or the common warrants. Each share of our common stock, or a pre-funded warrant in lieu thereof, is being sold together with a common warrant to purchase one share of our common stock. The shares of common stock and common warrants are immediately separable and will be issued separately in this offering, but must be purchased together in this offering. The assumed public offering price for each share of common stock and accompanying common warrant is $[____], which was the closing price of our common stock on The Nasdaq Capital Market on [__________], 2023. Each common warrant will have an exercise price per share of $[___] and will be immediately exercisable. The common warrants will expire on the 5 year anniversary of the original issuance date. We are also offering to certain purchasers whose purchase of shares of common stock in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants, in lieu of shares of common stock that would otherwise result in such purchaser s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock. The public offering price of each pre-funded warrant and accompanying common warrant will be equal to the price at which one share of common stock and accompanying common warrant is sold to the public in this offering, minus $0.01, and the exercise price of each pre-funded warrant will be $0.01 per share. The pre-funded warrants will be immediately exercisable and may be exercised at any time until all of the pre-funded warrants are exercised in full. The pre-funded warrants and common warrants are immediately separable and will be issued separately in this offering, but must be purchased together in this offering. For each pre-funded warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one basis. This offering will terminate on [_________], unless we decide to terminate the offering (which we may do at any time in our discretion) prior to that date. We will have one closing for all the securities purchased in this offering. The combined public offering price per share (or pre-funded warrant) and common warrant will be fixed for the duration of this offering. Our common stock is listed on The Nasdaq Capital Market under the symbol "OPGN". On [_________], 2023, the last reported sale price of our common stock on The Nasdaq Capital Market was $[_____] per share. The public offering price per share of common stock and accompanying common warrant and per pre-funded warrant and accompanying common warrant will be determined between us and investors based on market conditions at the time of pricing, and may be at a discount to the then current market price of our common stock. The recent market price used throughout this prospectus may not be indicative of the actual offering price. The actual public offering price may be based upon a number of factors, including our history and our prospects, the industry in which we operate, our past and present operating results, the previous experience of our executive officers and the general condition of the securities markets at the time of this offering. There is no established public trading market for the pre-funded warrants and the common warrants and we do not expect a market to develop. Without an active trading market, the liquidity of the pre-funded warrants and the common warrants will be limited. In addition, we do not intend to list the pre-funded warrants or the common warrants on The Nasdaq Capital Market, any other national securities exchange or any other trading system. TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2023/POCI_precision_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/POCI_precision_prospectus_summary.txt
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2023/QIND_quality_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/QIND_quality_prospectus_summary.txt
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1 THE OFFERING 4 RISK FACTORS 6 NOTE REGARDING FORWARD-LOOKING STATEMENTS 10 CAPITALIZATION 11 DILUTION 12 USE OF PROCEEDS 13 DIVIDEND POLICY 14 PLAN OF DISTRIBUTION 15 DESCRIPTION OF SHARE CAPITAL 17 DESCRIPTION OF THE OFFERED SECURITIES 21 MATERIAL TAX CONSIDERATIONS 22 LEGAL MATTERS 34 EXPERTS 34 EXPENSES 34 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 35 WHERE YOU CAN FIND ADDITIONAL INFORMATION 35 ENFORCEABILITY OF CIVIL LIABILITIES 36 i You should rely only on the information contained in this prospectus or in any related free-writing prospectus. We and the placement agent have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectus prepared by us or on our behalf or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the ordinary shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these ordinary shares in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is accurate only as of the date of the front cover of the prospectus. Our business, financial condition, operating results and prospects may have changed since that date. For investors outside of the United States: Neither we nor the placement agent have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. In this prospectus, "we," "us," "our," the "Company" and "Rail Vision" refer to Rail Vision Ltd., an Israeli corporation. Our reporting currency and functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to "dollars" or "$" mean U.S. dollars, and references to "NIS" are to New Israeli Shekels. All references to "shares" in this prospectus refer to ordinary shares of Rail Vision Ltd. par value NIS 0.08 per share. We are incorporated under Israeli law and, under the rules of the SEC, we are currently eligible for treatment as a "foreign private issuer." As a foreign private issuer, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act. On February 13, 2022, the Company effected a bonus shares issuances under Israeli law to reflect the effect of 44-for-1 forward share split of the Company s ordinary shares, and the customary adjustments to our outstanding options and warrants. In addition, on November 15, 2023, we effected a reverse share split of the Company s ordinary shares at the ratio of 8:1. Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein reflect the issuance of the foregoing bonus shares and the reverse stock split. INDUSTRY AND MARKET DATA This prospectus includes statistical, market and industry data and forecasts which we obtained from publicly available information and independent industry publications and reports that we believe to be reliable sources. These publicly available industry publications and reports generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy or completeness of the information. Although we are responsible for all of the disclosures contained in this prospectus, including such statistical, market and industry data, we have not independently verified any of the data from third-party sources, nor have we ascertained the underlying economic assumptions relied upon therein. In addition, while we believe the market opportunity information included in this prospectus is generally reliable and is based on reasonable assumptions, such data involves risks and uncertainties, including those discussed under the heading "Risk Factors." PRESENTATION OF FINANCIAL INFORMATION Our financial statements were prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. We present our consolidated financial statements in U.S. dollars. Our fiscal year ends on December 31 of each year. Certain figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. TRADEMARKS AND TRADENAMES We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to in this prospectus are listed without the and symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names. ii PROSPECTUS SUMMARY This summary highlights information contained elsewhere in or incorporated by reference into this prospectus that we consider important. This summary does not contain all of the information you should consider before investing in our securities. Before you decide to invest in our securities, you should read the entire prospectus carefully, including the "Risk Factors" section and the financial statements and related notes incorporated by reference into this prospectus and the other documents incorporated by reference into this prospectus, which are described under "Incorporation by Reference" before making an investment in our securities. Our Company We are a development stage technology company that is seeking to revolutionize railway safety and the data-related market. We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways, with investments from Knorr-Bremse AG, or Knorr-Bremse, a world-class rail system manufacturer. We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator. We believe that our technology will significantly increase railway safety around the world, while creating significant benefits and adding value for everyone who relies on the train ecosystem: from passengers using trains for transportation to companies that use railways to deliver goods and services. In addition, we believe that our technology has the potential to advance the revolutionary concept of autonomous trains into a practical reality. The increasing electrification and automation of railways and trains are two key factors that are driving growth in the transportation market. Autonomous trains are integrated with advanced systems to provide improved control over the train for stopping, departing and movement between train stations – for example the operators are aiming to increase the density on a given track that s to say more trains per kilometer. From everyday passengers to train operators, there is a rising demand for safe, secure, and efficient transport systems. Additionally, various technological advancements, such as the integration of the Internet of Things, or IoT, and artificial intelligence, or AI, solutions into railway detection systems, are market categories expected to grow in the coming years. These technologies aid in improving the overall operational efficiency and maintaining freight operations and systems. Autonomous trains operations (ATO), also known as driverless trains, are operated automatically without any human intervention, and are monitored from the control station when communication is available. In case of any obstacle incurred in the route, the obstacle detection system commands the train to stop and in parallel a message is sent to operational control center and to the attendant on the train if any, to further command the train. Owing to increase in traffic congestion on road network, the need for smart and frequent trains has boosted the growth of the global market. According to Global Market Insights, the autonomous train market was valued at $8.0 billion in 2022, and is projected to reach $15.1 billion by 2032, growing at a CAGR of 6.4% from 2023 to 2032. We believe that our advanced obstacle detection is a crucial component in ATO. Since our founding in April 2016, we have developed unique railway detection technology for railway safety, based on image processing and deep leaning technologies that provide early warnings to train driver of hazards on and around the railway track, including during severe weather and in all lighting conditions. Our unique system uses special high resolution cameras to identify objects up to 2,000 meters away for mainline application and up to 200m for switch yard application, along with a computer unit that uses AI machine learning algorithms to analyze the images, identify objects on or near the tracks, and warn the train driver of the obstacle and potential danger. Our railway detection system includes different types of cameras, including optics, visible light spectrum cameras (video) and thermal cameras that transmit data to a ruggedized on-board computer which is designed to be suitable for the rough environment of a train s locomotive. Our railway detection and classification system includes an image-processing and machine-learning algorithm that processes the data for identifying potential hazards on and around the track. These algorithms are designed to identify and classify objects such as people, animals, vehicles, signs, signals along the track, and anomalies. Our railway detection system actively classifies objects by severity to determine if an alarm should be signaled to the train driver. These data collection and classification capabilities can be extended to further use-cases such as predictive maintenance and big-data analyses. We believe that our technology demonstrates capabilities and results that are better than existing solutions. Most of the currently available safety solutions for the railway industry focus on stationary systems in dedicated hazardous locations, such as at level track crossings and passenger train stations, among others. At these dedicated locations, different technologies are used for detecting obstacles that are on the vicinity of level crossing tracks, and usually include different cameras and radars. The problem with this type of solution is that the train is only monitored at specific points in the railroad junction, leaving the vast majority of the railway unprotected. In addition, even when detected something on the level crossing tracks, the message has to be transmitted in a way that the driver would be able to react on time. In recognition of the limitations of existing solutions, we integrate a collision avoidance system using long-range real-time AI and electro-optics technologies on trains that is designed to address this unmet need. as well as providing solutions to most of the challenges train operators face during transit such as collisions, derailments and other accidents caused by obstacles on tracks, or poor infrastructure. 1 Recent Updates In February 2023, a leading U.S.-based rail and leasing services company purchased a Switch Yard System for $140,000 with support, to evaluate its performance during a six-month trial, which was successfully completed in September 2023. In October 2023, we received a $500,000 purchase order for a single MainLine system and related services from a leading Latin American (LATAM) mining company. This MainLine system is expected to be delivered to the new customer during the fourth quarter of 2023. The LATAM mining company will benefit from Rail Vision s robust MainLine Advance Driver Assistance System (ADAS) which uses high end electro-optical sensors, machine learning algorithms, and edge computing capabilities to improve safety of train operations, providing operators with accurate and timely information to make informed decisions. Rail Vision will also provide supervision, guidance, and training, services as part of the purchase order. This comprehensive approach ensures that the MainLine system is seamlessly integrated into the customer s existing infrastructure and operations, minimizing disruption and downtime during implementation. Recent Financings Registered Direct Offering and Concurrent Private Placement of Warrants On May 10, 2023, we entered into definitive securities purchase agreements with investors for the purchase and sale of 493,421 ordinary shares, at a purchase price of $6.08 per unit in a registered direct offering, or the Registered Direct Offering. In a concurrent private placement, or the Private Placement, we also agreed to issue to the same investors a total of warrants to purchase an aggregate of 493,421 ordinary shares, or the Concurrent Warrants, at an exercise price of $6.72 per share. The Concurrent Warrants will be exercisable upon issuance and will have a 5-year term from the initial issuance date. The transactions closed on May 11, 2023. Private Placement of Ordinary Shares and Warrants In an additional concurrent private placement with the Registered Direct Offering and Private Placement, or the KB Private Placement, we entered into a definitive securities purchase agreement for the purchase and sale of an aggregate of 493,421 ordinary shares and 5-year term common warrants to purchase an aggregate of 493,421 ordinary shares, or the KB Warrants, at a purchase price of $6.08 per unit, to Knorr-Bremse Rail Vehicle Systems, part of Knorr-Bremse, which is our largest shareholder. Knorr-Bremse is the global market leader for braking systems and a leading supplier of other mission-critical systems for rail and commercial vehicles. The KB Warrants, or, together with the Concurrent Warrants, the Warrants, are exercisable at $6.72 per ordinary share. The KB Private Placement closed on June 21, 2023, following approval of such transaction by our shareholders. In connection with the transactions mentioned above and pursuant to a registration rights agreement between the Company and the selling shareholders dated May 10, 2023, or the Registration Rights Agreement, we also granted registration right to the selling shareholders. Pursuant to the Registration Rights Agreement, we agreed to file a registration statement, or the Resale Registration Statement, as soon as reasonably practicable, but in any case prior to fifty days after the pricing date, or the Filing Date, to register the resale of the ordinary shares and the ordinary shares issuable upon exercise of the Warrants and to cause the Resale Registration Statement to be declared effective within thirty calendar days following the Filing Date, or, in the event of a full review by the SEC, sixty calendar days following the Filing Date, or the Resale Effectiveness Date. On June 26, 2023, we initially filed a registration statement in respect of (i) the ordinary shares and (ii) ordinary shares issuable upon exercise of the KB Warrants, that were issued and sold in connection with the KB Private Placement, which was ultimately declared effective by the SEC on July 17, 2023. On July 6, 2023, we initially filed a registration statement in respect of ordinary shares issuable upon exercise of the Concurrent Warrants, that were issued and sold in connection with the Private Placement, which was ultimately declared effective by the SEC on July 17, 2023. Reverse Share Split On November 15, 2023, we effected a reverse share split of our ordinary shares at the ratio of 1-for-8, such that each eight (8) ordinary shares, par value NIS 0.01 per share, were consolidated into one (1) ordinary share, par value NIS 0.08. The first date when our ordinary shares began trading on Nasdaq after implementation of the reverse split was November 15, 2023. Unless indicated otherwise by the context, all ordinary share, option, warrant and per share amounts as well as share prices appearing in this prospectus have been adjusted to give retroactive effect to the reverse share split for all periods presented. Corporate Information We are a corporation based in Ra anana and were incorporated in Israel. Our principal executive offices are located at 15 Hatidhar St. Ra anana, 4366517 Israel. Our telephone number in Israel is +972-9-957-7706. Our website address is http://www.railvision.io/. The information contained on, or that can be accessed through, our website is not part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. 2 Risks Associated with our Business Our business, and investing in our securities, are subject to numerous risks, as more fully described in the section entitled "Risk Factors" beginning on page 6 and other risk factors contained in the documents incorporated by reference herein. You should read these risks before making a decision to invest in our securities. If any of these risks actually occur, our business, financial condition or results of operations would likely be materially adversely affected. In each case, the trading price of our securities would likely decline, and you may lose all or part of your investment. The following is a summary of some of the principal risks we face: We depend entirely on the success of our current products in development, we may not be able to successfully introduce these products and commercialize them, and we may not be able to successfully manage our planned growth, and our operating results and financial condition may fluctuate. Our business may be adversely affected by changes in railway safety regulations. Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results. If we are unable to obtain and maintain effective patent rights for our products, we may not be able to compete effectively in our markets. If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us, affecting our ability to compete. Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel, including due to the current war in Gaza. The market price for our ordinary shares may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the public offering price. Implications of Being an "Emerging Growth Company" and a Foreign Private Issuer Emerging Growth Company We are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the JOBS Act. As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not "emerging growth companies" such as not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. We could remain an "emerging growth company" for up to five years, which will be December 31, 2027, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion, (b) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of the securities that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period. Foreign Private Issuer We are subject to the information reporting requirements of the Exchange Act that are applicable to "foreign private issuers," and under those requirements we will file reports with the SEC. As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, although we report our financial results on a quarterly basis, we will not be required to issue quarterly reports, proxy statements that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that is as detailed as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file our annual reports with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies. We also present financial statements pursuant to IFRS instead of pursuant to U.S. generally accepted accounting principles. Furthermore, our officers, directors and principal shareholders will be exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer, we are permitted, and follow certain home country corporate governance practices instead of those otherwise required under the listing rules of Nasdaq for domestic U.S. issuers. These exemptions and leniencies reduce the frequency and scope of information and protections available to you in comparison to those applicable to U.S. domestic reporting companies. We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (i) the majority of our executive officers or directors are U.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our business is administered principally in the United States. Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company, but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer. 3 THE OFFERING Ordinary shares currently outstanding 2,998,278 ordinary shares Ordinary shares offered by us Up to ordinary shares Pre-funded warrants We are also offering to certain purchasers whose purchase of ordinary shares in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of each purchaser, 9.99%) of our outstanding ordinary shares immediately following the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants, or the pre-funded warrants, in lieu of ordinary shares that would otherwise result in such purchaser s beneficial ownership exceeding 4.99% (or, at the election of each purchaser, 9.99%) of our outstanding ordinary shares. The purchase price of each pre-funded warrant is $ (which is equal to the assumed public offering price per ordinary share to be sold in this offering minus $ , the exercise price per ordinary share of each pre-funded warrant). The pre-funded warrants are immediately exercisable (subject to the beneficial ownership cap) and may be exercised at any time until all of the pre-funded warrants are exercised in full. For each pre-funded warrant we sell (without regard to any limitation on exercise set forth therein), the number of ordinary shares we are offering will be decreased on a one-for-one basis. We are also registering the ordinary shares issuable from time to time upon the exercise of the pre-funded warrants offered hereby. See "Description of the Offered Securities" for more information. Ordinary shares to be outstanding after this offering ordinary shares (assuming no sale of any pre-funded warrants) Use of proceeds: We expect to receive approximately $ million in net proceeds from the sale of ordinary shares and/or pre-funded warrants offered by us in this offering, after deducting the estimated placement agent fees and estimated offering expenses payable by us, based upon an assumed public offering price of $ per ordinary share, the last reported sale price of our ordinary shares traded on Nasdaq on , 2023. However, this is a best efforts offering with no minimum number of securities or amount of proceeds as a condition to closing, and we may not sell all or any of these securities offered pursuant to this prospectus; as a result, we may receive significantly less in net proceeds in this offering. For example, if we sell only 25%, 50% or 75% of the maximum amount offered, our net proceeds will be approximately $ , $ or $ , respectively, after deducting the estimated placement agent fees and estimated offering expenses payable by us, and assuming no issuance of any pre-funded warrants. See "Use of Proceeds." We currently expect to use the net proceeds from this offering for: approximately $ million for research and development, including completion of our existing systems and continued development of new products; approximately $ million for marketing, advertising and pre-commercialization activities; and the remainder for working capital and general corporate purposes, and possible in-licensing of additional intellectual property. Our management will have broad discretion in the application of the net proceeds of this offering. See "Use of Proceeds" for more information about the intended use of proceeds from this offering. 4 Lock-up agreements Our directors, officers and more than 10% shareholders have agreed not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our ordinary shares or securities convertible into ordinary shares for a period of days after the date of this prospectus (see "Plan of Distribution — Lock-Up Agreements"). Risk factors: You should read the "Risk Factors" section starting on page 6 of this prospectus, and "Item 3. - Key Information – D. Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2022, or the 2022 Annual Report, incorporated by reference herein, and other information included or incorporated by reference in this prospectus for a discussion of factors to consider carefully before deciding to invest in our securities. Best Efforts Offering We have agreed to offer and sell the securities offered hereby to the purchasers through the placement agent. The placement agent is not required to buy or sell any specific number or dollar amount of the securities offered hereby, but it will use its best efforts to solicit offers to purchase the securities offered by this prospectus. See "Plan of Distribution" on page 15 of this prospectus. Nasdaq symbol: "RVSN." Unless otherwise stated, all information in this prospectus, is based on 2,998,278 ordinary shares outstanding as of November 23, 2023, and does not include the following as of that date: 331,241 ordinary shares reserved for issuance under our Amended Share Option Plan, of which options to purchase 296,697 ordinary shares were outstanding as of such date at a weighted average exercise price of $16.22, of which 155,599 were vested as of such date; and 1,570,911 ordinary shares issuable upon the exercise of warrants, at a weighted average exercise price of $16.48 (including the Concurrent Warrants and the KB Warrants). Unless otherwise indicated, all information in this prospectus assumes or gives effect to: no exercise of the warrants or options, as described above; no sale of Pre-Funded Warrants in this offering; no exercise of the representative s warrants to be issued upon consummation of this offering; the issuance of 1,186,500 bonus shares under Israeli law to our ordinary shareholders on a basis of 43 bonus shares for each ordinary share outstanding, effected on February 13, 2022, and the customary adjustments to our outstanding options and warrants; and a reverse share split of the Company s ordinary shares at the ratio of 8:1 effected on November 15, 2023, and the customary adjustments to our outstanding options and warrants. 5 RISK FACTORS You should carefully consider the risks described below and the risks described in our 2022 Annual Report which are incorporated by reference herein, as well as the financial or other information included in this prospectus or incorporated by reference in this prospectus, including our consolidated financial statements and the related notes, before you decide to buy our securities. The risks and uncertainties described below are not the only risks facing us. We may face additional risks and uncertainties not currently known to us or that we currently deem to be immaterial. Any of the risks described below, and any such additional risks, could materially adversely affect our business, financial condition or results of operations. In such case, you may lose all or part of your original investment. Risks Related to this Offering and the Ownership of Our Securities Our principal shareholders, officers and directors beneficially own approximately 64.2% of our ordinary shares. They will therefore be able to exert significant control over matters submitted to our shareholders for approval, which could limit your ability to influence the outcome of key transactions, including a change of control, and which may result in conflicts with us or you in the future. Our principal shareholders, officers and directors beneficially own approximately 64.2% of our ordinary shares. This significant concentration of share ownership may adversely affect the trading price for our ordinary shares because investors often perceive disadvantages in owning shares in companies with controlling shareholders. As a result, these shareholders, if they acted together, could significantly influence or even unilaterally approve matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combination transactions. The interests of these shareholders may not always coincide with our interests or the interests of other shareholders, and which may result in conflicts with us or you in the future. Certain of our directors have relationships with our principal shareholders, which may cause conflicts of interest with respect to our business. Three of our current directors were appointed by Knorr-Bremse and one director was appointed by Foresight, our largest shareholders. In addition, pursuant to our amended and restated articles of association, shareholders are entitled to appoint a director to our board of directors for each 10% of our outstanding share capital that they own and in such case the appointment will be for an undefined period. As a result, these directors may face real or apparent conflicts of interest with respect to matters affecting both us and Knorr-Bremse or Foresight, whose interests may be adverse to ours in certain circumstances. We will need additional capital in the future. Raising additional capital by issuing securities may cause dilution to existing shareholders. We have incurred losses in each year since our inception. If we continue to use cash at our historical rates of use we will need significant additional financing, which we may seek through a combination of private and public equity offerings, debt financings and collaborations and strategic and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest will be diluted, and the terms of any such offerings may include liquidation or other preferences that may adversely affect the then existing shareholders rights. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring debt or making capital expenditures. If we raise additional funds through collaboration, strategic alliance or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates, or grant licenses on terms that are not favorable to us. You will experience immediate dilution in book value of any ordinary shares you purchase. Because the price per ordinary share being offered is substantially higher than our net tangible book value per ordinary share, you will suffer substantial dilution in the net tangible book value of any ordinary shares you purchase in this offering. After giving effect to the sale by us of ordinary shares in this offering, based on an assumed public offering price of $ per ordinary share, which is the last reported sale price of our ordinary shares on the Nasdaq on , 2023, and after deducting the placement agent fees and offering expenses payable by us, our as adjusted net tangible book value of our ordinary shares would be approximately $ million, or approximately $ per ordinary share, as of June 30, 2023. If you purchase ordinary shares in this offering, you will suffer immediate and substantial dilution of our as adjusted net tangible book value of approximately $ per ordinary share. To the extent outstanding options or warrants are exercised, you will incur further dilution. See "Dilution" on page 12 for a more detailed discussion of the dilution you will incur in connection with this offering. 6 Ordinary shares representing a substantial percentage of our outstanding shares may be sold in this offering, which could cause the price of our ordinary shares to decline. We may sell in this offering ordinary shares, or approximately %, of our outstanding ordinary shares, prior to this offering, as of , 2023. This sale and any future sales of a substantial number of ordinary shares in the public market, or the perception that such sales may occur, could materially adversely affect the price of our ordinary shares. We cannot predict the effect, if any, that market sales of those ordinary shares or the availability of those ordinary shares for sale will have on the market price of our ordinary shares. We do not know whether a market for the ordinary shares will be sustained or what the trading price of the ordinary shares will be and as a result it may be difficult for you to sell your ordinary shares. Although our ordinary shares trade on the Nasdaq, an active trading market for the ordinary shares may not be sustained. It may be difficult for you to sell your ordinary shares without depressing the market price for the ordinary shares. As a result of these and other factors, you may not be able to sell your ordinary shares. Further, an inactive market may also impair our ability to raise capital by selling ordinary shares and may impair our ability to enter into strategic partnerships or acquire companies or products by using our ordinary shares as consideration. Inflation could adversely affect our business and results of operations. While inflation in the United States and global markets has been relatively low in recent years, during 2021 and 2022, the economy in the United States and global markets encountered a material increase in the level of inflation. The impact of COVID-19, geopolitical developments such as the Russia-Ukraine conflict and global supply chain disruptions continue to increase uncertainty in the outlook of near-term and long-term economic activity, including whether inflation will continue and how long, and at what rate. Increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows. If we are unable for any reason to meet the continued listing requirements of Nasdaq, such action or inaction could result in a delisting of the ordinary shares. On June 9, 2023, we announced that we received an initial notification letter from Nasdaq s Listing Qualifications Department notifying us that we had 180 days to regain compliance with the minimum bid price requirement set forth in Nasdaq s continued listing rules. Nasdaq s continued listing rules require that listed securities maintain a minimum bid price of $1.00 per share, and that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days or more. We have until December 4, 2023, to regain compliance with the minimum bid price requirement in order to maintain the listing. To regain compliance with the minimum bid price requirement, the ordinary shares must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business days. In the event that we do not regain compliance by December 4, 2023, we may then be eligible for additional 180 days if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of our intention to cure the deficiency during the second compliance period. If we do not qualify for the second compliance period or fail to regain compliance during the second compliance period, then Nasdaq will notify us of its determination to delist our ordinary shares, at which point we will have an opportunity to appeal the delisting determination to a hearings panel. If we fail to satisfy the continued listing requirements of Nasdaq, such as the minimum closing bid price requirement, Nasdaq may take steps to delist the ordinary shares. Such a delisting would likely have a negative effect on the price of the ordinary shares and would impair your ability to sell or purchase the ordinary shares when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow the ordinary shares to become listed again, stabilize the market price or improve the liquidity of the ordinary shares, prevent the ordinary shares from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq s listing requirements. On November 15, 2023, we effected a reverse share split of the our ordinary shares at the ratio of 1-for-8, such that each eight (8) ordinary shares, par value NIS 0.01 per share, were consolidated into one (1) ordinary share, par value NIS 0.08. The first date when our ordinary shares began trading on Nasdaq after implementation of the reverse split was November 15, 2023. 7 There is no public market for the pre-funded warrants being offered in this offering. There is no established public trading market for the pre-funded warrants being offered in this offering, and we do not expect a market to develop. In addition, we do not intend to apply to list the pre-funded warrants on any securities exchange or nationally recognized trading system. Without an active market, the liquidity of the pre-funded warrants will be limited. Holders of our pre-funded warrants will have no rights as holders of ordinary shares until such warrants are exercised. Until you acquire ordinary shares upon exercise of your pre-funded warrants, you will have no rights with respect to ordinary shares issuable upon exercise of your pre-funded warrants. Upon exercise of your pre-funded warrants, you will be entitled to exercise the rights of a holder of ordinary shares only as to matters for which the record date occurs after the exercise date. The pre-funded warrants are speculative in nature. The pre-funded warrants offered hereby do not confer any rights of ownership of our ordinary shares on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire ordinary shares at a fixed price. Specifically, commencing on the date of issuance, holders of the pre-funded warrants may acquire ordinary shares issuable upon exercise of such warrants at an exercise price of $ per ordinary share. Moreover, following this offering, the market value of the pre-funded warrants is uncertain, and there can be no assurance that the market value of the pre-funded warrants will equal or exceed their public offering price. Provisions of the Pre-Funded Warrants offered by this prospectus could discourage an acquisition of us by a third party. Certain provisions of the Pre-Funded Warrants offered by this prospectus could make it more difficult or expensive for a third party to acquire us. The Pre-Funded Warrants prohibit us from engaging in certain transactions constituting "fundamental transactions" unless, among other things, the surviving entity assumes our obligations under the Pre-Funded Warrants. Further, the Pre-Funded Warrants provide that, in the event of certain transactions constituting "fundamental transactions," with some exceptions, holders of such warrants will have the right, at their option, to require us to repurchase such Pre-Funded Warrants at a price described in such warrants. These and other provisions of the pre-funded warrants offered by this prospectus could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to you. The exercise price of the Pre-Funded Warrants offered by this prospectus will not be adjusted for certain dilutive events. The exercise price of the Pre-Funded Warrants offered by this prospectus is subject to adjustment for certain events, including, but not limited to, certain issuances of share capital, options, convertible securities and other securities. However, the exercise prices will not be adjusted for dilutive issuances of securities considered "excluded securities" and there may be transactions or occurrences that may adversely affect the market price of our ordinary shares or the market value of such Pre-Funded Warrants without resulting in an adjustment of the exercise prices of such Pre-Funded Warrants. The best efforts structure of this offering may have an adverse effect on our business plan. The placement agent is offering the ordinary shares and Pre-Funded Warrants in this offering on a best efforts basis. The placement agent is not required to purchase any securities, but will use their best efforts to sell the securities offered. As a "best efforts" offering, there can be no assurance that the offering contemplated hereby will ultimately be consummated or will result in any proceeds being made available to us or if consummated the amount of proceeds to be received. The success of this offering will impact our ability to use the proceeds to execute our business plan. An adverse effect on the business may result from raising less than anticipated, and from the fact that there is no minimum raise. Purchasers who purchase our securities in this offering pursuant to a securities purchase agreement may have rights not available to purchasers that purchase without the benefit of a securities purchase agreement. In addition to rights and remedies available to all purchasers in this offering under federal securities and state law, the purchasers that enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue a claim for breach of contract provides those investors with the means to enforce the covenants uniquely available to them under the securities purchase agreement. 8 Risks Related to Our Incorporation and Our Operations in Israel Security, political and economic instability in the Middle East may harm our business. Our executive office is located in Ra anana, Israel. In addition, certain of our key employees, officers and directors are residents of Israel. Accordingly, political, economic and military conditions in the Middle East may affect our business directly. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries and terrorist organizations active in the region, including Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon). In particular, in October 2023, Hamas terrorists infiltrated Israel s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers. Following the attack, Israel s security cabinet declared war against Hamas and commenced a military campaign against Hamas and these terrorist organizations in parallel continued rocket and terror attacks. We cannot currently predict the intensity or duration of Israel s war against Hamas, nor can we predict how this war will ultimately affect our business and operations or Israel s economy in general. Additionally, political uprisings, social unrest and violence in various countries in the Middle East, including Israel s neighbor Syria, have affected the political stability of those countries. This instability may lead to deterioration of the political relationships that exist between Israel and certain countries and have raised concerns regarding security in the region and the potential for armed conflict. In addition, Iran has threatened to attack Israel. Iran is also believed to have a strong influence among the Syrian government, Hamas and Hezbollah. These situations may potentially escalate in the future into more violent events which may affect Israel and us. These situations, including conflicts which involved missile strikes against civilian targets in various parts of Israel have in the past negatively affected business conditions in Israel. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could have a material adverse effect on our business. The political and security situation in Israel may result in parties with whom we have contracts claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions. These or other Israeli political or economic factors could harm our operations and product development. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could adversely affect our operations and could make it more difficult for us to raise capital. We could experience disruptions if acts associated with such conflicts result in any serious damage to our facilities. Furthermore, several countries, as well as certain companies and organizations, continue to restrict business with Israel and Israeli companies, which could have an adverse effect on our business and financial condition. Our business interruption insurance may not adequately compensate us for losses, if at all, that may occur as a result of an event associated with a security situation in the Middle East, and any losses or damages incurred by us could have a material adverse effect on our business. 9 NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus and elsewhere, including in our 2022 Annual Report incorporated by reference herein, and other information included or incorporated by reference in this prospectus, contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "aim," "anticipate," "assume," "believe," "contemplate," "continue," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "predict," "potential," "positioned," "seek," "should," "target," "will," "would," and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about: our lack of operating history; our current and future capital requirements; our ability to manufacture, market and sell our products and to generate revenues; our ability to maintain our relationships with key partners and grow relationships with new partners; our ability to maintain or protect the validity of our U.S. and other patents and other intellectual property; our ability to launch and penetrate markets in new locations and new market segments; our ability to retain key executive members and hire additional personnel; our ability to maintain and expand intellectual property rights; interpretations of current laws and the passages of future laws; our ability to achieve greater regulatory compliance needed in existing and new markets; the overall demand for passenger and freight transport; our ability to achieve key performance milestones in our planned operational testing; our ability to establish adequate sales, marketing and distribution channels; acceptance of our business model by investors; security, political and economic instability in the Middle East that could harm our business, including due to the current war between Israel and Hamas; and those factors referred to in our 2022 Annual Report incorporated by reference herein in "Item 3. Key Information – D. Risk Factors," "Item 4. Information on the Company," and "Item 5. Operating and Financial Review and Prospects," as well as in our 2022 Annual Report generally, which is incorporated by reference into this prospectus. Forward-looking statements are based on our management s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management s beliefs and assumptions, and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this prospectus may turn out to be inaccurate. Important factors that may cause actual results to differ materially from current expectations include, among other things, those listed under "Risk Factors" and elsewhere in this prospectus. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included in this prospectus speak only as of the date of this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this prospectus. See "Where You Can Find More Information." 10 capitalization The following table sets forth our cash and cash equivalents and our capitalization as of June 30, 2023: on an actual basis; on an as adjusted basis to give further effect to the issuance of ordinary shares in this offering, at an assumed public offering price of $ per share, the last reported sale price of our ordinary shares traded on Nasdaq on , 2023, and assuming no sale of any pre-funded warrants, after deducting placement agent fees and estimated offering expenses, as if the sale of the securities had occurred on June 30, 2023. You should read this information in conjunction with our consolidated financial statements and the related notes appearing at the end of this prospectus and the "Management s Discussion and Analysis of Financial Condition and Results of Operations" section and other financial information contained in this prospectus. As of June 30, 2023 U.S. dollars in thousands Actual As Adjusted (1) Cash and cash equivalents $8,192 Shareholders equity: Ordinary shares 68 Additional paid in capital 68,571 Accumulated deficit (60,649) Total shareholders equity 7,990 Total capitalization 7,990 (1)Each $1.00 increase or decrease in the assumed public offering price of $ per ordinary share, would increase or decrease, respectively, the amount of cash, cash equivalents, total shareholders equity (deficit) and total capitalization by $ million, assuming the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated placement agent fees and estimated offering expenses payable by us. We may also increase or decrease the number of ordinary shares we are offering. An increase or decrease of 100,000 in the number of ordinary shares we are offering would increase or decrease, respectively, the amount of cash, cash equivalents, total shareholders equity (deficit) and total capitalization by $ million, assuming the assumed public offering price per ordinary share, as set forth on the cover page of this prospectus, remains the same. Except as otherwise noted, all information in this prospectus reflects and assumes no sale of pre-funded warrants in this offering, which, if sold, would reduce the number of ordinary shares that we are offering on a one-for-one basis. The number of the ordinary shares to be issued and outstanding immediately after this offering as shown above assumes that all of the ordinary shares offered hereby are sold, and is based on ordinary shares issued and outstanding as of the date of , 2023. This number excludes: 331,241 ordinary shares reserved for issuance under our Amended Share Option Plan, of which options to purchase 296,697 ordinary shares were outstanding as of such date at a weighted average exercise price of $16.22, of which 155,599 were vested as of such date; and 1,570,911 ordinary shares issuable upon the exercise of warrants, at a weighted average exercise price of $16.48 (including the Concurrent Warrants and the KB Warrants). 11 DILUTION If you invest in our ordinary shares in this offering, your interest will be immediately diluted to the extent of the difference between the public offering price per ordinary share in this offering and the as adjusted net tangible book value per ordinary share after this offering. Dilution results from the fact that the public offering price per ordinary share is substantially in excess of the net tangible book value per ordinary share. As of June 30, 2023, we had a historical positive net tangible book value of $7,990, or positive $2.66 per ordinary share. Our net tangible book value per share represents total tangible assets less total liabilities, divided by the number of ordinary shares outstanding on June 30, 2023. After giving effect to the sale of ordinary shares in this offering at an assumed public offering price of $ per ordinary share (assuming the sale of the maximum offering amount is sold in this offering), and after deducting estimated placement agent fees and estimated offering expenses payable by us, our as adjusted net tangible book value at June 30, 2023 would have been $ per share. This represents an immediate decease in as adjusted net tangible book value of $ per share to existing shareholders and immediate dilution of $ per ordinary share to new investors. The following table illustrates this dilution per ordinary share in this offering: Assumed public offering price per ordinary share $ Net positive tangible book value per ordinary share as of June 30, 2023 2.66 Decrease in net tangible book value per ordinary share attributable to new investors As adjusted net tangible book value per ordinary share after this offering Dilution per ordinary share to new investors To the extent that outstanding options are exercised, new options or warrants are issued or we issue additional ordinary shares in the future, there will be further dilution to new investors. We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our equity holders. If we sell only 75% of the securities offered in this offering, at an assumed public offering price of $ per share (which is the last reported sale price of our ordinary shares on Nasdaq on , 2023), assuming no sale of any pre-funded warrants in this offering and after deducting the estimated placement agent fees and the estimated expenses payable by us, our net tangible book value as of June 30, 2023 would have been approximately $ million, or $ per ordinary share. This represents an immediate increase in net book value of $ per share to our existing shareholders and an immediate dilution in net tangible book value of $ per share to new investors participating in this offering. If we sell only 50% of the securities offered in this offering, at an assumed public offering price of $ per share (which is the last reported sale price of our ordinary shares on Nasdaq on , 2023), assuming no sale of any pre-funded warrants in this offering and after deducting the estimated placement agent fees and the estimated expenses payable by us, our net tangible book value as of June 30, 2023 would have been approximately $ million, or $ per ordinary share. This represents an immediate increase in net book value of $ per share to our existing shareholders and an immediate dilution in net tangible book value of $ per share to new investors participating in this offering. If we sell only 25% of the securities offered in this offering, at an assumed public offering price of $ per share (which is the last reported sale price of our ordinary shares on Nasdaq on , 2023), assuming no sale of any pre-funded warrants in this offering and after deducting the estimated placement agent fees and the estimated expenses payable by us, our net tangible book value as of June 30, 2023 would have been approximately $ million, or $ per ordinary share. This represents an immediate increase in net book value of $ per share to our existing shareholders and an immediate dilution in net tangible book value of $ per share to new investors participating in this offering. Except as otherwise noted, all information in this prospectus reflects and assumes no sale of pre-funded warrants in this offering, which, if sold, would reduce the number of ordinary shares that we are offering on a one-for-one basis. The number of the ordinary shares to be issued and outstanding immediately after this offering as shown above assumes that all of the ordinary shares offered hereby are sold, and is based on 2,998,278 ordinary shares issued and outstanding as of the date of this prospectus. This number excludes: 331,241 ordinary shares reserved for issuance under our Amended Share Option Plan, of which options to purchase 296,697 ordinary shares were outstanding as of such date at a weighted average exercise price of $16.22, of which 155,599 were vested as of such date; and 1,570,911 ordinary shares issuable upon the exercise of warrants, at a weighted average exercise price of $16.48 (including the Concurrent Warrants and the KB Warrants). 12 USE OF PROCEEDS We currently expect to use the net proceeds from this offering for: approximately $ million for research and development, including completion of our existing systems and continued development of new products; approximately $ million for marketing, advertising and pre-commercialization activities; and the remainder for working capital and general corporate purposes, and possible in-licensing of additional intellectual property. However, because this is a reasonable best efforts offering with no minimum number of securities or amount of proceeds as a condition to closing, the actual offering amount, placement agent fees, and net proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth on the cover page of this prospectus, and we may not sell all or any of the securities we are offering. As a result, we may receive significantly less in net proceeds. Based on the assumed offering price set forth above, we estimate that our net proceeds from the sale of 75%, 50%, and 25% of the securities offered in this offering would be approximately $ million, $ million, and $ million, respectively, after deducting the estimated placement agent fees and estimated offering expenses payable by us, and assuming no issuance of any pre-funded warrants. The amounts and schedule of our actual expenditures will depend on multiple factors including the progress of our ongoing tests with train operators, the status and results of the tests, the pace of our partnering efforts in regards to manufacturing and commercialization and the overall regulatory environment. Therefore, our management will retain broad discretion over the use of the proceeds from this offering. We may ultimately use the proceeds for different purposes than what we currently intend. Pending any ultimate use of any portion of the proceeds from this offering, if the anticipated proceeds will not be sufficient to fund all the proposed purposes, our management will determine the order of priority for using the proceeds, as well as the amount and sources of other funds needed. Pending our use of the net proceeds from this offering, we may invest the net proceeds in a variety of capital preservation investments, including short-term, investment grade, interest bearing instruments and U.S. government securities. 13 DIVIDEND POLICY We have never declared or paid any cash dividends on our ordinary shares and do not anticipate paying any cash dividends in the foreseeable future. However, we may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the Israeli Companies Law 5759-1999, or the Companies Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company unless the company s articles of association provide otherwise. Our amended and restated articles of association to be effective upon the closing of this offering will not require shareholder approval of a dividend distribution and will provide that dividend distributions may be determined by our board of directors. Payment of cash dividends, if any, in the future will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. Pursuant to the Companies Law, the distribution of dividends is limited to the greater of retained earnings or earnings generated over the previous two years, according to our then last reviewed or audited financial statements, provided that the end of the period to which the financial statements relate is not more than six months prior to the date of the distribution. If we do not meet such criteria, we may only distribute dividends with court approval. In each case, we are only permitted to distribute a dividend if our board of directors and the court, if applicable, determines that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due. Payment of dividends may be subject to Israeli withholding taxes. See "Taxation—Israeli Tax Considerations and Government Programs" in our 2022 Annual Report incorporated by reference herein for additional information. 14 PLAN OF DISTRIBUTION A.G.P./Alliance Global Partners, which we refer to herein as the placement agent, has agreed to act as our exclusive placement agent in connection with this offering subject to the terms and conditions of the placement agency agreement dated , 2023. The placement agent is not purchasing or selling any of the ordinary shares and Pre-Funded Warrants offered by this prospectus, nor are they required to arrange the purchase or sale of any specific number or dollar amount of ordinary shares and Pre-Funded Warrants, but they have agreed to use their best efforts to arrange for the sale of all of the ordinary shares and Pre-Funded Warrants offered hereby. We will enter into a securities purchase agreement directly with certain institutional investors, at the investor s option, who purchase our ordinary shares and Pre-Funded Warrants in this offering. Investors who do not enter into a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our ordinary shares and Pre-Funded Warrants in this offering. We will deliver the ordinary shares and Pre-Funded Warrants being issued to the investors upon receipt of investor funds for the purchase of the ordinary shares and Pre-Funded Warrants offered pursuant to this prospectus. We expect to deliver the ordinary shares and Pre-Funded Warrants being offered pursuant to this prospectus on or about , 2023. We have agreed to indemnify the placement agent and specified other persons against specified liabilities, including liabilities under the Securities Act and to contribute to payments the placement agent may be required to make in respect thereof. Fees and Expenses This offering is being conducted on a "best efforts" basis and the placement agent has no obligation to buy any of the ordinary shares and Pre-Funded Warrants from us or to arrange for the purchase or sale of any specific number or dollar amount of ordinary shares and Pre-Funded Warrants. We have agreed to pay the placement agent the fees set forth in the table below. Per Ordinary Share Per Pre- Funded Warrant Total Public offering price $ $ $ Placement agent fees (1) $ $ $ Proceeds, before expenses, to us $ $ $ (1) We have agreed to pay to the placement agent a cash fee equal to 7.0% of the aggregate gross proceeds raised in this offering, provided, however, in the case of certain identified investors, the placement agent fee will be 3.0% of the gross proceeds in this offering. Because there is no minimum offering amount required as a condition to closing in this offering, the actual aggregate cash placement fee, if any, is not presently determinable and may be substantially less than the maximum amount set forth above. We estimate the total expenses payable by us for this offering to be approximately $ , which amount includes: (i) a placement agent fee of $ assuming the purchase of all of ordinary shares and Pre-Funded Warrants we are offering; (ii) a non-accountable expense allowance payable to the placement agent of $25,000; (iii) reimbursement of the accountable expenses of the placement agent of up to $75,000 related to the legal fees of the placement agent being paid by us (none of which has been paid in advance); and (iv) other estimated expenses of approximately $ which include our legal, accounting, and printing costs and various fees associated with the registration and listing of our ordinary shares. Regulation M The placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(ii) of the Securities Act and any commissions received by the placement agent and any profit realized on the resale of the shares sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the placement agent would be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of securities by the placement agent acting as principal. Under these rules and regulations, the placement agent: may not engage in any stabilization activity in connection with our securities; and may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution. 15 Lock-Up Agreements Our directors, officers, certain beneficial owners of 10% or more of our outstanding ordinary shares have entered into lock-up agreements. Under these agreements, these individuals have agreed, subject to specified exceptions, not to sell or transfer any shares of our capital stock or securities convertible into, or exchangeable or exercisable for, our capital stock during a period ending days after the date of this prospectus, without first obtaining the written consent of the placement agent, subject to certain exceptions. Specifically, these individuals have agreed, in part, not to: offer, pledge, sell, contract to sell or otherwise dispose of our capital stock or any securities convertible into or exercisable or exchangeable for our capital stock; enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction is to be settled by delivery of our securities or in cash; make any demand for or exercise any right registration of any of our capital stock; or publicly disclose the intention to make any offer, sale, pledge or disposition of, or to enter into any transaction, swap, hedge, or other arrangement relating to any of our capital stock. Notwithstanding these limitations, our capital stock may be transferred under limited circumstances, including, without limitation, by gift, will or intestate succession. We
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+PROSPECTUS SUMMARY This summary contains basic information about us and the offering contained elsewhere in this prospectus. Because it is a summary, it does not contain all the information that you should consider before investing in our common stock. You should read and carefully consider the entire prospectus before making an investment decision, especially the information presented under the headings Risk Factors, Cautionary Note Regarding Forward-Looking Statements, Management s Discussion and Analysis of Financial Condition and Results of Operations, our consolidated financial statements and the accompanying notes included elsewhere in this prospectus in its entirety before you decide whether to purchase any securities offered by this prospectus. Company Overview Our Company We are a purpose-driven payments company that is on a mission to financially empower the next generation. Launched in 2017, we have built a digital payments platform that allows merchants to offer their consumers a flexible alternative to traditional credit. As of December 31, 2022, our platform supports the business growth of 42 thousand Active Merchants while serving approximately 2.9 million Active Consumers. Through our products, we aim to enable consumers to take control over their spending, be more responsible, and gain access to financial freedom. Our vision is to create a digital ecosystem benefiting all of our stakeholders merchants, partners, consumers, employees, communities, and investors while continuing to drive ethical growth. We launched Sezzle amid a backdrop in which digitally-enabled shopping began to claim a larger share of the retail sector and younger generations (i.e., Gen Z and Millennials) started to demonstrate a need for credit. Gen Z and Millennial consumers, which we define as individuals currently between ages 18 26 and 27 45, respectively, use credit cards less frequently relative to other generations and, in many cases, lack access to traditional credit. These same consumers are tech-savvy, gravitating towards modern, streamlined commerce solutions whether online or in-person. We believe that our platform addresses the shortcomings in legacy payment offerings faced by consumers by providing a flexible, secure, omnichannel alternative, with the structural benefit of creditizing traditional debit products. The technology solutions we have designed specifically align with our ethos of helping the next generation pave their way forward financially. We believe our multi-stakeholder approach gives us a competitive advantage and positions our company for success. Stakeholders want to be affiliated with a purpose-driven partner and, to that extent, we elected to become a Delaware public benefit corporation in June 2020. Public benefit corporations are for-profit corporations intended to produce a public benefit and operate in a responsible and sustainable manner. Under Delaware law, public benefit corporations must identify in their certificate of incorporation the public benefit or benefits they will promote, and their directors have a duty to manage the affairs of the corporation in a manner that balances the pecuniary interests of the stockholders, the best interests of those materially affected by the corporation s conduct and the specific public benefit or public benefits identified in the public benefit corporation s certificate of incorporation. Being a public benefit corporation offers advantages, including: public benefit corporation status is a clear differentiator in an increasingly growing, and sometimes crowded, industry; we are more likely to become an employer of choice as the younger workforce increasingly seek employment from companies which align with their ethical values; further opportunities to conduct business with brands that also care about sustainability; the potential to expand our consumer base due to conscious consumers; added credibility to our mission statement and potential to grow capital through impact investing; and further opportunities for positive public relations and marketing. Additionally, on March 22, 2021, we became a certified B Corporation by B Lab, an independent non-profit organization, joining a movement of innovative, socially-conscious brands. In order to be designated as a Certified B Corporation, we were required to undertake a comprehensive and objective assessment of our environmental and social standards for transparency, accountability and commitment to improved performance. Our actions are part of a movement of innovative brands around the world intent on advancing environmental, social, and economic causes. To maintain our status as a certified B Corporation, we must satisfy re-certification requirements every three years. Our status as a B Corporation aligns with our mission to achieve growth, profitability, and returns for our investors while continuing to do right by our surrounding communities and our full set of stakeholders. We primarily operate in the United States and Canada, and are currently winding down and exiting operations in India, Brazil, and certain countries in Europe. 1 Recent Developments On May 11, 2023, the Company completed a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-38 shares, whereby every 38 shares of our issued and outstanding common stock were converted automatically into one issued and outstanding share of common stock without any change in the par value per share. All share and per share data in this registration statement reflects this reverse stock split. Our Products Sezzle Platform At its core, the Sezzle Platform is a payments solution that instantly extends credit at point-of-sale, allowing consumers to purchase and receive the ordered merchandise at the time of sale and effectively split the payment for the purchase over four equal, interest-free payments over six weeks. Our platform is integrated into merchants websites via our direct Application Programming Interface, and we provide technical support and onboarding services as part of the integration process. We are able to rapidly onboard merchants through an increasingly automated merchant underwriting process , and once integrated, merchants can immediately promote Sezzle to their shoppers on product and cart pages to start improving sales conversion. The Sezzle Platform is presented alongside other payment options on the merchant s Checkout page. Consumers then select Sezzle as their payment option and create an account if they are a first-time user with Sezzle in a streamlined process that keeps consumers engaged throughout checkout. The Sezzle Platform reviews the transaction and consumer profile in real-time and, if approved, quickly confirms the transaction for the merchant and consumer. Once approved, consumers are granted an initial spending limit. Further, our approval engine has a counteroffer function, which analyzes above-limit purchase attempts and provides alternative terms so that the consumer is not denied outright. Upon approval, the merchant ships the item(s) and receives payment, just as if the consumer had paid in cash or used a traditional credit or debit card, and the merchant pays us in the form of a merchant processing fee, which is subtracted from the sales price when we pay the merchant. The Sezzle Platform is completely free to consumers who pay on time and use a bank account to make their installment payments, excluding their first payment. In order to complete their installment payments, consumers will receive a notification via email, SMS, or the Sezzle iOS or Android app two days prior to the date the installment payment is automatically debited by the Sezzle Platform. The consumer is also able to review and manage their Sezzle account via the Sezzle Platform s online dashboard. From the dashboard, consumers are able to reschedule a payment without charge the first time, and can subsequently reschedule a payment up to two additional times for a small fee, subject to state jurisdiction. Consumers who fail to pay for their purchases on time may incur an account reactivation fee, which requires the settlement of an outstanding balance (including the reactivation fee) before they may use our platform again in the future. We typically do not report delinquent core Sezzle accounts to any credit bureaus or collection agencies, unless the consumer has elected to participate in Sezzle Up (as discussed below). As a result, consumer behavior on the core Sezzle Platform has no impact to a consumer s credit score. Consumers have the option to opt-in to our free Sezzle Rewards program, in which they earn reward points when making payments on their installments. These reward points can be used to redeem Sezzle Spend, which are credits issued to consumer accounts and can be applied to orders made on the Sezzle Platform. Sezzle Up We were an early, if not the first, mover among digital payments platforms that offer a credit-building solution to consumers. In partnership with TransUnion, we engineered Sezzle Up an upgraded version of the core Sezzle experience that supports consumers in building their credit scores by permitting us to report their payment histories to credit bureaus. As these consumers pay on time, their credit scores and spending limits on the Sezzle Platform can increase. In order to qualify for Sezzle Up, existing Sezzle users who elect to participate must connect a bank account and pay off one order on time. As a condition to joining Sezzle Up, consumers commit to complete installment payments over the Automated Clearing House ( ACH ) network instead of over a card network. Consumers initial down payments are still completed over a card network. Using the ACH network benefits us by typically reducing processing fees and, in turn, lowering our transaction costs. Subscription Products In June 2022, we launched the beta version of Sezzle Premium, a paid subscription service for our consumers to access large, non-integrated premium merchants through a gift card or an affiliate partnership for a fee. Besides being able to use Sezzle online or in-store at non-integrated merchants, consumers enrolled in Sezzle Premium also gain access to several other benefits, including one additional free reschedule per order and earning double the amount of rewards points on orders. In June 2023 we launched the beta version of Sezzle Anywhere, a paid subscription service with greater flexibility as it allows consumers to use a Sezzle Virtual Card at any merchant online or in-store for a fee. These subscription products had over 182,000 active subscribers as of July 23, 2023. Sezzle Virtual Card Other parts of our product suite and proprietary merchant interface are specifically designed to streamline the merchant experience. Our virtual card solution bolsters our omnichannel offering and provides a rapid-installation, point-of-sale option for brick-and-mortar retailers through its compatibility with Apple Pay and Google Pay. With our virtual card solution, consumers can enjoy in-store shopping with the convenience of immediately tapping into the Sezzle Platform with the tap of their virtual card at the point-of-sale. 2 Alternative Installment Options With a select number of enterprise merchants, we offer customized installment terms that differ from our traditional four payment, six week terms. Examples of these alternative terms include a four payment, three month product and a two payment, two week installment product. We offer these special products to merchants at our discretion in situations where alternative terms would provide additional value to the consumer and merchant. In addition, we began offering a pay-in-full option to consumers at certain merchants beginning in 2022. This option allows consumers to pay for the full value of their order up-front through the Sezzle Platform without the extension of credit. We believe this provides value for both new and existing consumers on the Sezzle Platform. For new consumers that apply for credit and may be denied, this allows them to complete their order through our platform without the need to re-enter any payment information. For existing consumers with payment information already saved, pay-in-full allows an express checkout option in instances where the consumer may not want to enter into a new installment plan. We continue to evaluate additional alternative installments options that may provide additional value to consumers and merchants. Long-Term Lending Through partnerships with third-party lenders, we offer our consumers at participating merchants access to interest-bearing monthly fixed-rate installment-loan products for larger-ticket items, which extend up to 60 months. We earn a fee from our lending partners for marketing and referring the potential consumers to them, and for processing applications and the use of our decision engine; however, we do not make final credit decisions or originate or hold the loans in our portfolio, which limits our capital needs and credit risk. We believe providing consumers access to long-term options has the potential to enhance our relationship with both merchants and consumers, while generating an attractive fee stream with no capital requirements or credit risk for us, and complementing our existing short-term, interest-free offering. Product Innovation Outside of our current suite of product offerings, we continuously strategize on new products that would complement our platform and current product offerings and add additional value for our stakeholders. As part of our next round of initiatives in product innovation, we are currently in the beta stages of developing a Sezzle Pay Anywhere Card program. Our Merchants We offer a unique and user-friendly platform to our merchants. Our easy integration and seamless onboarding allows most merchants to go live on our platform within one day of activation to quickly realize the benefits of partnering with Sezzle. Our merchants benefit from our platform s network effects through increased access to a deep and growing pool of consumers equipped with our flexible payment product, who would otherwise not be able to finance a transaction. Additionally, we believe that merchants benefit from associating with an innovative, B Corporation certified payments company which shares their consumers values across environmental, social, and economic causes. Our merchant segments are small-to-medium sized businesses ( SMBs ), mid-market merchants, and enterprise merchants, and span numerous categories with apparel and accessories; outdoors, sporting goods, and activities; and beauty and cosmetics representing the top three categories by UMS during 2022. We also provide our merchants with a toolkit to grow their businesses, which we believe is unmatched among digital payments platforms. Our merchants gain access to our marketing efforts that begin with a launch campaign to introduce new brands to Sezzle consumers, and then follow with bi-weekly promotional support, quarterly mega campaigns that promote participating merchants with added incentives, and initiatives that enable consumers to shop their values. In addition, we provide select merchants with incentives to grow their sales and introduce Sezzle into new merchant categories through initiatives such as Sezzle Spend and co-branded marketing. We offer a powerful value proposition to our merchant partners, evidenced by the fact that over 90% of our merchant additions are derived from inbound inquiries. The continued expansion of our platform should continue to enhance the benefits for our merchants. Our integration into scaled e-commerce platforms is expected to give more merchants the opportunity to seamlessly offer Sezzle as a payment option at checkout. Other products on the Sezzle Platform, such as long-term lending and alternative installment options, further adds to the value of our platform for merchants. This all occurs without any credit risk being transferred to the merchant. SMBs SMBs, which we define as merchants with UMS of less than $10 million per year, have historically comprised the largest segment of our merchant base. Our fast, easy application process makes onboarding simple, and our user-friendly merchant interface streamlines the integration process. Through Sezzle, these merchants are able to offer their consumers an optimized, effortless checkout process that enables them to complete sales. Mid-Market Merchants We are increasing our focus on mid-market merchants, which we define as merchants with UMS of between $10 million and $50 million per year. Mid-market merchants generally comprise a diverse array of growing direct-to consumer brands that are online-first and seek to connect with consumers without the use of secondary retailers, which naturally fits within our core offering. As we build out a larger consumer base, we believe we also enhance our value proposition to this segment by driving increased traffic toward brands that may not otherwise gain exposure through traditional retail channels by creating marketing campaigns designed to increase consumer exposure. 3 Enterprise Merchants An ongoing major initiative is greater engagement with enterprise merchants, which we define as merchants with over $50 million in UMS per year. The core Sezzle product helps these merchants to facilitate a sale by providing access to credit for a consumer who has limited-to-no credit history. Without our payments platform, the consumer that lacks credit history may be rejected after applying for the store s private label or co-brand credit card, which could tarnish the consumer s view of that retailer s brand. Importantly, we are not competing with a large retailer s card offering. Instead, we work collaboratively with these retailers to drive sales, and over time, serve as a lead generator to consumers who are ready to graduate to the retailer s card program. Our value proposition and engagement strategy have resonated with enterprise merchants. Merchant Concentration For the year ended December 31, 2022, approximately 14% of total income was driven by one merchant. For the year ended December 31, 2021, there were no merchants that exceeded 10% of total income. The concentration of a significant portion of our business and transaction volume with a limited number of scaled e-commerce platforms exposes us disproportionately to any of those partners choosing to no longer partner with us or choosing to partner with a competitor, and to any events, circumstances, or risks affecting such partners. In addition, a material modification in the financial operations of any significant scaled e-commerce partner could affect the results of our operations, financial condition, and future prospects. Our Consumers Sezzle focuses on a young consumer base that is tech-savvy, socially-minded, and expects brands to possess ethical and social principles. As of December 31, 2022, 76.4% of our consumers are comprised of members of the Gen Z (18-26) and Millennial (27-45) generations which are generally early in their credit journey. For many of these consumers, we believe Sezzle has provided a way to improve financial responsibility not only through enhanced budgeting and payments capabilities, but also through an opportunity to build credit history and develop a sense of financial empowerment with the Sezzle Up platform. Source: Internal data based on orders placed during 2022 (Gen Z (18-26), Millennials (27-45), Gen X (46-57), Baby Boomers (58-76), and Silent (77 and greater)). Gen Z and Millennial consumers use credit cards less frequently relative to other generations, and in many cases lack access to traditional credit. As a result, they tend to have fewer viable options for budgeting, achieving financial flexibility, and building credit history. Consumers in these generations also tend to transact frequently across e-commerce and brick-and-mortar retail, but spend less on average per transaction than older generations. In doing so, these consumers prefer to avoid loans that are not transparent or require payments that are not affordable. Sezzle s core product provides these younger generations, who are newer to credit and are likely to move up the FICO score spectrum as they grow older and transact more often, with a unique solution to these payment challenges. In addition, consumers benefit from our platform s network effects. As our platform grows and we establish more merchant partnerships, our consumers enjoy a wider variety of shopping options. Our Employees Our success to date would not be possible without our dedicated people, who we believe are our greatest asset. Bringing together a team of highly-skilled engineering, product, marketing and business development professionals is imperative to executing on our strategy. We do this by creating an inclusive, team-centric culture in which doing the right thing is celebrated. As of July 25, 2023, we had 284 employees (which includes approximately 252 full-time employees) working at Sezzle. 4 We are committed to fostering a diverse work environment of driven employees who believe in our mission. To this extent, our People Operations team works to create and execute sustainable hiring practices that span a diverse array of recruiting pipelines to find the best people for Sezzle. Additionally, our People Operations team continuously monitors and assesses key diversity, equity, and inclusion metrics to identify and refine processes. For existing employees, or Sezzlers , we focus on developing an inclusive and fun culture with many opportunities for career and personal development to reward and retain our talented people. We have a diversity, equity, and inclusion group to ensure communication throughout the organization on issues impacting minorities, which also offers leadership opportunities to Sezzlers at any level of the organization. Despite all our Sezzlers having the option to work remotely, we also hold various company and community activities throughout the year to continue building a fun, team-centric culture. Our Business Model Revenue We have built a sustainable, transparent business model in which our success is aligned with the financial success of our merchants and consumers. The Sezzle Platform is completely free to consumers who pay on time and use a bank account to make their installment payments, excluding their first payment. We make most of our revenue from merchant processing fees, which are based on a percentage of UMS plus a fixed fee per transaction. We pay our merchants for the transaction value upfront, net of the merchant fees owed to Sezzle, and assume all costs associated with consumer payments processing and credit risk. Merchant processing fees comprised 74% and 81% of our total revenues for the years ended December 31, 2022 and 2021, respectively, and 58% and 81% of our total revenues for the three-month periods ended March 31, 2023 and 2022. This decrease is primarily a result of the introduction of Sezzle Premium and other consumer related fees. A smaller portion of our revenue is derived from our consumers. We do not charge our consumers any interest, finance charges, or initiation fees, and are not incentivized to profit from our consumers errors or financial adversity. Any consumer-based revenue that we earn is either from fees that we charge to reactivate an account following a failed payment and when consumers elect to reschedule a payment, or subscription revenue when consumers enroll in Sezzle Premium. Consumers who correct a failed payment within 48 hours after the failed payment have their account reactivation fees waived, and are not allowed to make any new purchases with us until any past-due principal and fees are paid. Additionally, consumers are able to reschedule a payment without charge the first time, and can subsequently reschedule a payment up to two additional times for a small fee, subject to state jurisdiction. We allow qualifying consumers to have fees waived under our hardship and fee forgiveness program. Other sources of our revenue include partners and affiliates, including our long-term lending partners. For our long-term financing product where we take no balance sheet or credit risk, we charge a platform fee to our financial partners, which is a fixed percentage of UMS on a monthly basis. We also share a negotiated percentage of the merchant discount revenue with our financial partners. This amount may vary based on our partner and the volume of UMS. Our financial partners earns interest from consumers through this product, but we do not earn any interest or take any credit risk. Credit Risk A critical component of our business model is the ability to effectively manage the repayment risk inherent in allowing consumers to pay over time. To that end, a team of Sezzle engineers and risk specialists oversee our proprietary systems, identify transactions with elevated risk of fraud, assess the credit risk of the consumer and assign appropriate spending limits, and manage the ultimate receipt of funds. Further, we believe repayment risk is more limited relative to other traditional forms of unsecured consumer credit because consumers primarily settle 25% of the purchase value upfront. Additionally, ongoing user interactions allow us to continuously refine and enhance the effectiveness of these platform tools through machine learning. Funding Our Operations We have created an efficient funding strategy which has allowed us to scale our business and drive rapid growth. We have existing access to revolving credit facilities. Additionally, we pay merchants a fixed interest rate if they elect not to receive transaction proceeds upfront and instead leave their deposits in their merchant account. Our products are entirely funded through our $100 million revolving credit facility and merchant account payables. The high-velocity with which we are able to recycle capital due to the short-term nature of our products has a multiplier effect on our committed capital. We do not currently require equity to directly fund product growth. Our Competition We operate in a highly competitive and dynamic industry. Our product offerings face competition from a variety of players, including those who enable transactions and commerce via digital payments. The point-of-sale financing market in which we operate includes several types of products. For example, consumers may make purchases with credit cards that have revolving balances and some of these products offer promotional terms, such as an introductory rate or deferred interest. In addition to traditional credit card products, some revolving balance products do not issue plastic credit cards to consumers (e.g., PayPal Credit). BNPL products, such as the Sezzle Platform, facilitate consumer purchases from retail merchants on installment plans. Credit card providers also offer products that allow consumers to pay for purchases made with their credit cards in installments rather than as a revolving balance (e.g., American Express and J.P. Morgan Chase). Visa and Mastercard, the major payments networks, have also introduced technology that facilitates this functionality. 5 We consider our main competitors to be other BNPL service providers. In the U.S. market, this includes Affirm, Afterpay (a subsidary of Block), Klarna, PayPal s Pay in 4, Apple Pay Later, and Zip (formerly QuadPay). In addition, PayBright by Affirm and Afterpay operate in the Canadian market. We aim to differentiate our business to consumers by providing a product that is more simple, accessible, and consumer friendly than our competitors. This includes offering our product to consumers with little-to-no credit history, allowing consumers to shift their repayment schedule once per order for free, and waiving account reactivation fees when the consumer corrects a failed payment within 48 hours or qualifies for our hardship program. See Risks Related to Our Industry - We operate in a highly competitive industry, and our inability to compete successfully would materially and adversely affect our business, results of operations, financial condition, and prospects for further discussion about competition risks. We face intense competitive pressure on the fees we charge our merchants, particularly our enterprise merchants. To stay competitive, we may need to adjust our pricing, offer incentives, enter new market segments, adapt to regulatory changes, or expand the use and functionality of our platform all of which impact our growth and profitability. We have entered into merchant agreements that require us to make marketing, incentive or other payments to the merchant over the term of the agreement. If we are unable to fulfill our obligations under these merchant agreements, including any payments we have agreed to make with merchants, the merchant may terminate or not renew such agreement. Our Intellectual Property Our business depends on our ability to commercially exploit our technology and intellectual property rights, including our technological systems and data processing algorithms. We rely on laws in the United States, Canada and other countries relating to trade secrets, copyright, and trademarks to assist in protecting our proprietary rights. Our core intellectual property asset is the Sezzle Platform and the accumulation of transaction data, rules, and consumer insights generated from consumers using the Sezzle Platform, including the proprietary fraud and risk detection systems. We developed our proprietary fraud and risk detection systems by creating valuable intellectual property that enables us to improve our products. The Sezzle Fraud Detection System was developed by our data sciences team, which utilizes numerous data points from a transaction to identify the likelihood of a fraudulent attempt. Consumer interactions with the Sezzle Platform are recorded and analyzed along with data points on the consumer and order itself. This data passes through the Sezzle Fraud Detection System, which scores the likelihood of the transaction being fraudulent. The Sezzle Underwriting Engine then assigns a score to each new consumer that passes through the Sezzle Fraud Detection System. Based on data obtained from traditional and non-traditional sources, along with the order data and retailer data, we assign varying initial spending limits for our shoppers. As consumers use the Sezzle Platform, our system learns from the behavior of the individual consumers and adapts the consumer s limit to the appropriate level based on the consumer s success level within the Sezzle Platform. We do not currently have any issued patents, but continue to consider the most effective methods of protecting our intellectual property. We currently hold registered trademarks in the United States, the UK, the European Union, and India, and we have pending trademark applications in Canada and Brazil. However, continued operations within our existing markets and expansion into new markets risks conflicts with unrelated companies who may own registered trademarks for and/or otherwise use a similar name. See Other Risks Related to Our Business Our efforts to protect our intellectual property rights may not be sufficient. Our Regulatory Environment Overview Various aspects of our business and services are subject to U.S. federal, state, and local regulation, as well as regulation outside the United States including Canada. Certain of our services also are subject to rules promulgated by various card networks and other authorities, as more fully described below. These descriptions are not exhaustive, and these laws, regulations and rules frequently change and are increasing in number. BNPL and Consumer Protection Regulation The BNPL segment of the point-of-sale financing market in which we operate is a developing field. There has recently been an increased focus and scrutiny by regulators in various jurisdictions, including the United States and Canada, with respect to BNPL arrangements. We may become subject to additional legal or regulatory requirements if laws or regulations or the interpretation of such laws and regulations change in the future or industry standards for BNPL arrangements change in the future. 6 United States In the United States, we are required to comply with the applicable provisions of the Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to consumers regarding the terms and conditions of their loans and credit transactions and impose requirements on credit accessed through credit cards, Section 5 of the FTCA, which prohibits unfair and deceptive acts or practices ( UDAP ) in or affecting commerce, and analogous provisions in each state; the Consumer Financial Protections Act, which prohibits unfair, deceptive or abusive acts or practices ( UDAAP ) in connection with consumer financial products and services; the Equal Credit Opportunity Act and Regulation B promulgated thereunder, which prohibit creditors from discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant s income derives from any public assistance program, or the fact that the applicant has in good faith exercised any right under the Federal Consumer Credit Protection Act or applicable state law; the Fair Credit Reporting Act ( FCRA ), which promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies; the Fair Debt Collection Practices Act (the FDCPA ), which provides guidelines and limitations concerning the conduct of third-party debt collectors in connection with the collection of consumer debts; and the and the Telephone Consumer Protection Act (the TCPA ), which regulates the use of telephone and texting technology to contact customers. We are also subject to the Holder in Due Course Rule of the Federal Trade Commission ( FTC ), and equivalent state laws, which requires any holder of a consumer credit contract to include a required notice and become subject to all claims and defenses that a borrower could assert against the seller of goods or services; the Electronic Fund Transfer Act, which provides disclosure requirements, guidelines, and restrictions on the electronic transfer of funds from consumers bank accounts; the Electronic Signatures in Global and National Commerce Act and similar state laws, which authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures; the Military Lending Act and similar state laws, which provide obligations and prohibitions relating to loans made to servicemembers and their dependents; and the Servicemembers Civil Relief Act, which allows active duty military members to suspend or postpone certain civil obligations. We possess certain state lending licenses, and we continuously evaluate whether others are required, which subject us to supervisory oversight from these state license authorities and periodic examinations. The loans we may originate on our platform pursuant to these state licenses are subject to state licensing and interest rate fee restrictions, as well as numerous state requirements regarding consumer protection, interest rate, disclosure, prohibitions on certain activities, and loan term lengths. Our business may become subject to licensing requirements in states in which we currently do not hold licenses. For instance, in certain states we are currently not required to obtain a lending license because our extensions of credit in those states are structured as retail installment transactions. We continue to monitor state licensing regulations and how they may apply to our business, and may be required in the future to apply for additional state licenses, including states in which our loans are structured as retail installment transactions. Canada In Canada, we are required to comply with the Canada Anti-Spam Law, which regulates the transmittal of commercial email messages, the Canadian Personal Information Protection and Electronic Documents Act and equivalent provincial privacy laws in the provinces of Alberta, British Columbia and Quebec, each of which includes requirements surrounding the use, disclosure, and other processing of certain personal information about Canadian residents. In addition, we are required to comply with the Canadian federal and provincial human rights legislation which prohibits discriminatory practices to deny, deny access to, or to differentiate adversely in relation to any individual in respect of the provision of services customarily available to the general public on the basis of a certain prohibited grounds of discrimination. The Canadian provincial consumer protection and cost of credit disclosure laws prohibit late fees, impose limits on default charges, prohibit unfair practices, and include consumer contract disclosure and related process requirements, among other compliance requirements. We are also subject to Canadian provincial and territorial e-commerce laws. We believe that we are appropriately licensed as a lender and/or have structured our business activities to avoid a licensing requirement in each of the Canadian provinces that require such licenses. In connection with our business activities, we are also generally subject to consumer protection legislation and other laws and, on that basis, our business is also generally subject to regulatory oversight and supervision from federal and/or provincial regulators in respect of those activities, regardless of whether we have a license. These regulators and enforcement agencies generally act on a complaints-basis and may receive consumer complaints about us. Investigations or enforcement actions may be costly and time consuming. Enforcement actions by such regulators and enforcement agencies could lead to fines, penalties, consumer restitution, the cessation of our business activities in whole or in part, or the assertion of private claims and lawsuits against us. 7 Payment Regulations We are subject to the rules, codes of conduct and standards of Visa, Mastercard and other payment networks and their participants. In order to provide our payment processing services, we must be registered either indirectly or directly as service providers with the payment networks that we use. As such, we are subject to applicable card association and payment network rules, standards and regulations, which impose various requirements and could subject us to a variety of fines or penalties that may be levied by such associations or networks for certain acts or omissions. Card associations and payment networks and their member financial institutions regularly update and generally expand security expectations and requirements related to the security of consumer data and environments. Failure to comply with the networks requirements, or to pay the fees or fines they may impose, could result in the suspension or termination of our registration with the relevant payment networks and therefore require us to limit, suspend or cease providing the relevant payment processing services. We are also subject to the Payment Card Industry Data Security Standard ( PCI DSS ) with respect to the acceptance of payment cards, which provides for security standards relating to the processing of cardholder data and the systems that process such data. The failure of our products to comply with PCI DSS requirements may result in the loss of our status as a PCI DSS certified Service Provider and thereby impact our relationship with our merchant partners and their own ability to comply with PCI DSS. In Canada, we are required to comply with the Payments Canada Rule H1- Pre-Authorized Debit Rules in respect of the acceptance of payments from Canadian bank accounts and the Quebec Charter of French Language laws which regulates the language of communication in commerce and business and applies to entities carrying on business in Quebec. Data Privacy and Data Security Laws We are subject to a number of laws, rules, directives, and regulations relating to the collection, use, retention, security, processing, and transfer of personally identifiable information about our customers, our merchants, and employees in the geographies where we operate. Our business relies on the processing of personal data in several jurisdictions and, in some cases, the movement of data across national borders. As a result, much of the personal data that we process, which may include certain financial information associated with individuals, is subject to one or more privacy and data protection laws in one or more jurisdictions. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between or among us, our subsidiaries, and other parties with which we have commercial relationships. Regulatory scrutiny of privacy, data protection, cybersecurity practices, and the processing of personal data is increasing around the world. Regulatory authorities are continuously considering numerous legislative and regulatory proposals and interpretive guidelines that may contain additional privacy and data protection obligations. Many jurisdictions in which we operate have adopted, or are in the process of adopting, or amending data privacy legislation or regulation aimed at creating and enhancing individual privacy rights. In addition, the interpretation and application of these privacy and data protection laws in the U.S., Europe, and elsewhere are subject to change and may subject us to increased regulatory scrutiny and business costs. In the United States, we are subject to the Gramm-Leach-Bliley Act (the GLBA ) and implementing regulations and guidance thereunder, in addition to applicable privacy and data protection laws in the other jurisdictions in which we carry on business activities or process personal information. Among other requirements, the GLBA imposes certain limitations on the ability to share consumers nonpublic personal information with nonaffiliated third parties and requires certain disclosures to consumers about information collection, sharing, and security practices and their right to opt out of the institution s disclosure of their nonpublic personal information to nonaffiliated third parties. Privacy requirements, including notice and opt out requirements, under the GLBA and the FCRA are enforced by the FTC and by the Consumer Financial Protection Bureau ( CFPB ) through UDAAP claims, and are a standard component of CFPB examinations. State entities also may initiate actions for alleged violations of privacy or security compliance under state UDAAP claims, financial privacy, security and other laws. Most states have in place data security laws requiring companies to maintain certain safeguards with respect to the processing of personal information, and all states require companies to notify individuals or government regulators in the event of a data breach impacting such information. In addition, most industrialized countries have or are in the process of adopting similar privacy or data security laws enforced through data protection authorities. Other Applicable Regulations We are subject to regulations relating to our corporate conduct and the conduct of our business, including securities laws, trade regulations and anti-money laundering ( AML ) laws and anti-corruption legislation. The United States and certain foreign jurisdictions have taken aggressive stances with respect to such matters and have implemented new initiatives and reforms. 8 We are required to comply with the U.S. Foreign Corrupt Practices Act, the Foreign Public Officials Act (Canada), and similar anti-bribery laws in other jurisdictions, which prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in anti-bribery law enforcement activity with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and the SEC, increased enforcement activity by non-U.S. regulators and increases in criminal and civil proceedings brought against companies and individuals. AML laws and related KYC requirements generally require certain companies to conduct necessary due diligence to prevent and protect against money laundering. AML enforcement activity could result in criminal and civil proceedings brought against companies and individuals, which could have a material adverse effect on our business. Regulators and enforcement agencies may receive consumer complaints about us. In the United States, these regulators and agencies include the Financial Crimes Enforcement Network ( FinCEN ), which could subject us to burdensome rules and regulations that could increase costs and use of our resources in order to satisfy our compliance obligations. We are also subject to certain economic and trade sanctions programs including Canadian sanctions laws and the sanctions programs administered by the U.S. Department of the Treasury s Office of Foreign Assets Control ( OFAC ), which prohibit or restrict transactions or dealings with specified countries, individuals, and entities. Our Sustainability At our core, we are a stakeholder-centric company. Incorporated as a public benefit corporation ( PBC ) under Delaware law and certified as a B Corporation by B Lab, we pride ourself in our environmental, social, and governance ( ESG ) initiatives and are constantly striving to make an even greater impact across our stakeholder groups. To achieve a strong, transparent governance around ESG, we are in the process of incorporating material issues from a number of leading sustainability organizations into our own framework, including the IFRS Sustainability Accounting Standards Board (SASB) standards, the SEC s Climate-Related Disclosures ruling, and B Lab s Impact Assessment framework. Our stakeholder approach looks at five distinct stakeholders: consumers, merchants, employees, communities, and investors. We integrate our stakeholder and their concerns into all decisions made across our business to enhance sustainability, promote equity, and support our communities. Upon our initial B Corporation certification, we had a score of 80.7. We are currently evaluating initiatives to further improve our score and plan to implement them during 2023. Our B Corporation recertification will take place in 2024. Consumers We want to create an accessible, equitable, and sustainable product suite for consumers, many of which do not have access to traditional credit. Our management team and board of directors strongly believe that our commitment to providing alternative means for consumers to purchase items they need without incurring high-interest finance charges benefits our consumers. To create a sustainability product suite, we consider accessibility, data stewardship, responsible lending, and consumer feedback as critical areas of monitoring our product sustainability. In 2020, we launched Sezzle Up, an upgraded version of the core Sezzle experience which provides a credit-building solution for new-to-credit consumers, helping consumers adopt credit responsibly and build their credit history. Merchants We strive to create sustainable partnerships with an ethical, sustainable, and diverse merchant base. To that extent, we are focusing on developing sustainable relationships with a diverse array of merchants and partners, prioritizing working with ethical and socially-good merchants, and creating trust with our merchants and partners through stewardship, transparency, and engagement. Employees Our goal for our employees is to create an equitable, inclusive work environment with a strong culture built around ethical values and good governance. Critical areas that we monitor for our employees happiness and wellness are diversity, hiring, financial security, and culture. Refer to the Our Employees section above for additional discussion. Communities Through environmental and social initiatives, we want to create net positive value for communities we serve. This includes engaging with our communities through volunteerism and local partnerships, reinvesting in the communities that helped us grow our business, and minimizing our corporate environmental impact and promoting environmental stewardship in other stakeholders. 9 We have collaborated with the University of Minnesota to provide full-ride scholarships to underrepresented students pursing degrees in technology. Additionally, we continue to identify and partner with nonprofits on initiatives that align with our company s values and mission. Investors We want to create sustainable returns for our investors and have a strong, robust system of governance and controls. Management and the board of directors evaluate if we are meeting our overall mission, work towards fostering an ethical and transparent tone-at-the-top, and ensure that social responsibility remains a factor in our decision-making process. We maintain key performance indicators to measure and report to management and the board of directors on our sustainability efforts. These metrics are based on the frameworks noted above, but primarily relate to items reported in our B Lab Impact Assessment. Certain Relationships and Related Party Transactions Please see section Certain Relationships and Related Party Transactions in this prospectus for a summary of material agreements, other than material agreements entered into in the ordinary course of business, to which we are or have been a party. Summary of Risk Factors Our business is subject to a number of risks and uncertainties, as more fully described under Risk Factors in this prospectus. These risks could materially and adversely impact our business, financial condition, and results of operations, which could cause the trading price of our common stock to decline and could result in a loss of all or part of your investment. Additional risks, beyond those summarized below or discussed elsewhere in this prospectus, may apply to our business, activities, or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate. Some of these risks include: Risks Related to Our Industry The BNPL industry may become subject to increased regulatory scrutiny. We operate in a highly competitive industry. Our success is subject to macro-economic conditions that have an impact on consumer spending. Our industry may be subject to negative publicity. Risks Related to Our Strategy and Growth We are an early-stage financial technology company with a limited operating history and a history of operating losses. Our failure to maintain our relationships with existing consumers and merchant partners, or to attract a diverse mix of merchant partners or new consumers to our platform. Our ability to effectively manage growth. Our ability to maintain market share. We may not be able to sustain our growth rate. We may be unable to profitably manage our ongoing international operations. We may require additional capital. 10 Risks Related to Our Financing Program Consumers may not treat their BNPL product loans with the same significance as other financial obligations. Merchants may fail to fulfill their obligations to consumers or comply with applicable law. Internet-based loan origination processes may give rise to greater risks than paper-based processes. Exposure to consumer bad debts and insolvency of merchants may adversely impact our financial success. Our ability to comply with the applicable requirements of payment processors. Risks Related to Our Technology and the Sezzle Platform The integration, support and prominent presentation of our platform by our merchants. Unanticipated surges or increases in transaction volumes. The occurrence of data security breaches, cyberattacks, employee or other internal misconduct, malware, phishing or ransomware, physical security breaches, natural disasters, or similar disruptions. Real or perceived software failures or outages. Disruption in service on our platform that prevents us from processing transactions. Fraudulent activities occurring on our platform. Other Risks Related to Our Business The failure of key vendors or merchants to comply with legal or regulatory requirements or to provide various services that are important to our operations. The loss of key partners and merchant relationships. Potential inaccuracies in third-party data we use. Changes in market interest rates. We maintain our cash at financial institutions, often in balances that exceed federally insured limits. Exchange rate fluctuations between the United States and Canada. Our ability to use net operating loss carryforwards and tax attributes. Our ability to protect our intellectual property rights. The loss of licenses or any quality issues with third-party technologies that support our business operations or are integrated with our products or services. Our inability to retain employees or recruit additional employees, and risks of employee misconduct. Potential inadequate insurance to cover losses and liabilities. Risks Related to Our Regulatory Environment The costs of complying with various laws and regulations applicable to the BNPL industry in the United States and Canada. We are subject to various laws in the United States and Canada concerning lending programs, consumer finance and consumer protection. 11 Failure to operate without obtaining necessary licenses. Violating applicable federal, state and/or local lending or other laws. Litigation, regulatory actions, and compliance issues could subject us to increased costs. Stringent and changing laws and regulations relating to privacy and data protection could result in claims, harm our results of operations, financial condition, and prospects, or otherwise harm our business. Risks Related to Our Corporate Structure Our existing major stockholders own a large percentage of our stock and can exert significant influence over us. We are an emerging growth company, and the reduced U.S. public company reporting requirements applicable to emerging growth companies may make our shares of common stock less attractive to investors. We have and will continue to incur significant costs and are subject to additional regulations and requirements as a public company in both Australia and the United States. Failure to maintain effective internal control over financial reporting or disclosure controls may adversely affect our ability to report our financial results in a timely and accurate basis. Some provisions of our charter documents may have anti-takeover effects, and the exclusive forum designation may limit stockholders ability to obtain a favorable judicial forum for disputes with us. Risks Related to Shares of our Common Stock Our existing major stockholders own a large percentage of our stock and can exert significant influence over us. We are an emerging growth company, and the reduced U.S. public company reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors. We will incur significant costs and are subject to additional regulations and requirements as a public company in both Australia and the United States, including compliance with the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act and the listing standards of ASX and any U.S. securities exchange on which our shares may become listed for trading. In addition, key members of our management team have limited experience managing a public company If we discover a material weakness in our internal control over financial reporting that we are unable to remedy or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to report our financial results on a timely and accurate basis may be adversely affected. The different characteristics of the capital markets in Australia and the United States may negatively affect the trading prices of our CDIs and common stock, and may limit our ability to take certain actions typically performed by a U.S. company. Our ability to list our common stock on the Nasdaq Capital Market is subject to us meeting applicable initial listing criteria. Our common stock may trade on more than one stock exchange and this may result in price variations between the markets and volatility in our stock price. If we are not able to maintain sufficient cash funds, we may cease trading on the ASX and the Nasdaq Capital Market. An active, liquid, and orderly market for our common stock may not develop or be sustained. You may be unable to sell your shares of common stock at or above the price at which you purchased them. None of our stockholders are party to any contractual lock-up agreement or other contractual restrictions on transfer. Following our listing, sales of substantial amounts of our common stock in the public markets, or the perception that sales might occur, could cause the trading price of our common stock to decline. Some provisions of our charter documents may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management. Our charter designates the Court of Chancery of the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and the federal district courts as the exclusive forum for Securities Act claims, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us. We do not currently expect to pay any cash dividends. 12 Risks Related to Our Existence as a Public Benefit Corporation and a Certified B Corporation As a public benefit corporation, we cannot provide any assurance that we will achieve our public benefit purpose. As a public benefit corporation, our focus on a public benefit purpose may negatively impact our financial condition. Our directors have a fiduciary duty to consider not only our stockholders interests, but also our specific public purpose and the interests of other stakeholders affected by our actions. Increased derivative litigation concerning our duty to balance stockholder and public benefit interest. If our ability to maintain our certification as a B Corporation or our publicly reported B Corporation score declines, our reputation could be harmed and our business could be adversely affected. Implications of Being an Emerging Growth Company We qualify as an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies. These provisions include, but are not limited to: being permitted to have only two years of audited financial statements and management s discussion and analysis of financial condition and results of operations disclosure; being exempt from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (the PCAOB ) regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements; reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and being exempt from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved by stockholders. We have elected to take advantage of certain reduced disclosure obligations in this prospectus and may elect to take advantage of other reduced reporting requirements in future filings. In addition, the JOBS Act permits us, as an emerging growth company, to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As a result, the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests. We will remain an emerging growth company until the earliest of (i) the last day of our fiscal year following the fifth anniversary of the date of our first sale of our common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the Securities Act ), (ii) the first fiscal year after our annual gross revenues exceed $1.07 billion, (iii) the date on which we have, during the immediately preceding three-year period, issued more than $1.00 billion in non-convertible debt securities or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. Additionally, we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the second quarter of that fiscal year, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements and certain other disclosures with other public companies difficult or impossible. Corporate Information We were incorporated in the State of Delaware on January 4, 2016. Our principal executive offices are located at 700 Nicollet Mall, Suite 640, Minneapolis MN 55402. Our telephone number is (651) 504 5294 and our website address is www.sezzle.com. The information contained on, or that can be accessed through, our website is deemed not to be incorporated in this prospectus or to be part of this prospectus. You should not consider information contained on, or hyperlinked through, our website to be part of this prospectus in deciding whether to purchase shares of our common stock. 13
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+by the more detailed information included in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in Class A Ordinary Shares discussed under Risk Factors, Business, and information contained in Management s Discussion and Analysis of Financial Condition and Results of Operations before deciding whether to buy the Class A Ordinary Shares or Warrants. Our Company We were originally a blank check company incorporated on May 2, 2018 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more target businesses. On May 7, 2020, we consummated our Business Combination pursuant to the Share Exchange Agreement and acquired 100% issued and outstanding equity interests of Scienjoy Inc., which resulted in Scienjoy Inc. becoming our wholly-owned subsidiary. Following our Business Combination, we changed our name from Wealthbridge Acquisition Limited to Scienjoy Holding Corporation and continued the listing of our ordinary shares (which have been reclassified as Class A Ordinary Shares on November 10, 2021) on NASDAQ under the symbol SJ. The securities registered in this prospectus are securities of our British Virgin Islands holding company. As a holding company with no material operations of our own, we conduct our operations mainly through the VIEs in PRC, and to a lesser extent, through our PRC subsidiaries. Neither we nor our subsidiaries own any equity interest in the VIEs. Instead, we control and receive the economic benefits of the business operations of the VIEs through a series of contractual arrangements, which are referred as the VIE agreements in this prospectus. We have evaluated the guidance in FASB ASC 810 and concluded that we are the primary beneficiary of the VIEs because of these contractual arrangements. Accordingly, under U.S. GAAP, the financial statements of the VIEs are consolidated as part of our financial statements. Business Overview The VIEs are a leading provider of mobile live streaming platforms in China and focuses on interactive show live streaming from broadcasters to users. The VIEs traditionally operate on three primary platforms (Showself Live Streaming, Lehai Live Streaming, and Haixiu Live Streaming), each using our own mobile applications and providing live streaming entertainment from professional broadcasters to the end-user. In September 2020, we acquired two additional mobile live streaming platforms, namely the BeeLive Chinese (MiFeng) and the BeeLive International. BeeLive Chinese (MiFeng) became a subsidiary of the VIEs and BeeLive International became our wholly owned subsidiary. BeeLive International operates mobile live streaming platforms in the Middle East and Thailand. In December 2021, through an acquisition of Beijing Weiliantong Technology Co., Ltd. ( WLT ), we acquired one additional mobile live streaming platform, namely the Hongle.tv. Together with the acquisition of WLT, we also acquired Golden Shield Enterprises Limited ( Golden Shield ), which operates a NFT business. WLT became a subsidiary of the VIEs under Zhihui Qiyuan and Golden Shield became a subsidiary of Scienjoy, Inc. See Corporate Structure. In June 2022, we entered into a series of contracts with Sixiang Qiyuan VIEs, which has commenced its operations in Hangzhou. On the VIEs mobile live streaming platforms, users can interact directly with broadcasters and other users in the live streaming video room. Users can also play simple and fun games using virtual currencies within the video rooms while watching live streaming of a broadcaster. Although smaller in scale, BeeLive International operates its mobile live streaming platforms in similar manners. The mobile live streaming platforms of the VIEs had approximately over 300 million registered users by the end of June 30, 2023. For the six months ended June 30, 2023, the number of paying users was approximately 325,924, decreased 26.9% from 445,753 paying users for the six months ended June 30, 2022. For the year ended December 31, 2022, the number of paying users was approximately 702,372, decreased 16.4% from 840,640 paying users in fiscal 2021. 1 While users have free access to all real time video rooms, revenue is primarily generated through sales of virtual currency by the VIEs and PRC subsidiaries. Users can purchase virtual currency on the VIEs platforms or through agents of our PRC subsidiaries and can use such virtual currency to buy virtual items for broadcasters to show their support. The VIEs share revenues generated on the platforms with talents agencies, which in turn share revenues with broadcasters. Among other competitive strength, the VIEs and BeeLive International adopt a multi-platform live streaming strategy, use big data analysis to understand market trend and users preferences, and offer innovative product features designed to improve the user experience, such as a range of online games for users while watching live streaming. The business objective of the VIEs is to further strengthen its position in the mobile show live streaming industry and to leverage its existing position to expand its business into other related industries in China and overseas markets. Corporate Structure We are a British Virgin Islands holding company and conduct our operations in the People s Republic of China (the PRC ) through contractual arrangements with the VIEs, including Zhihui Qiyuan, Sixiang Qiyuan and their subsidiaries, and our WFOEs and the wholly owned subsidiaries of WFOEs. Through our Hong Kong subsidiary Scienjoy International Limited, we own a direct equity interest in WXBJ and WXZJ. WXBJ, Zhihui Qiyuan and Zhihui Qiyuan s registered shareholders are parties to certain VIE agreements, pursuant to which the profits of Zhihui Qiyuan and its subsidiaries, each such company formed under PRC Law, are directly or indirectly payable to WXBJ. WXZJ, Sixiang Qiyuan and Sixiang Qiyuan s registered shareholders are parties to certain VIE agreements, pursuant to which the profits of Sixiang Qiyuan and its subsidiaries, each such company formed under PRC Law, are directly or indirectly payable to WXZJ. Any failure by any of the VIEs or their respective shareholders to perform their obligations under these contractual arrangements, would have a material adverse effect on our business. See Risk Factors Risks Related to Our Corporate Structure in the section entitled Risk Factors in this prospectus. The following diagram depicts our current organizational structure. Unless otherwise indicated, equity interests depicted in this diagram are held 100%. The relationship between WXBJ, Zhihui Qiyuan, and the relationship between WXZJ and Sixiang Qiyuan is each governed by contractual arrangements and does not constitute equity ownership. The Company s current organizational structure and the VIEs current organizational structure are as follows: Contractual Arrangements among WFOEs, the VIEs and the Shareholders of the VIEs Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication services, and certain other business. We are a company registered in the British Virgin Islands. To comply with PRC laws and regulations, we primarily conduct our business in China through (i) our PRC subsidiaries and (ii) the VIEs based on a series of contractual arrangements by and among the WFOEs, the VIEs and the shareholders of the VIEs. We have evaluated the guidance in FASB ASC 810 and concluded that we are the primary beneficiary of the VIEs because of these contractual arrangements. Accordingly, under U.S. GAAP, the financial statements of the VIEs are consolidated as part of our financial statements. The following is a summary of all the VIE arrangements that enable us to receive substantially all of the economic benefits from the VIEs operations and be the primary beneficiary of the VIEs for accounting purposes. 2 Contracts between the Company and the Zhihui Qiyuan VIEs Exclusive Option Agreement. Pursuant to the exclusive option agreement (including its amendment or supplementary agreements, if any) amongst WXBJ, Zhihui Qiyuan and the registered shareholders who collectively owned all of Zhihui Qiyuan, the registered shareholders irrevocably granted WXBJ or its designated party, an exclusive option to purchase all or part of the equity interests held by the registered shareholders in Zhihui Qiyuan, when and to the extent permitted under PRC law, at an amount equal to the lowest permissible purchase price as set by PRC law. Zhihui Qiyuan cannot declare any profit distributions, or create any encumbrances in any form without the prior written consent of WXBJ. The registered shareholders must remit in full any funds received from Zhihui Qiyuan to WXBJ, in the event any distributions are made by the VIE pursuant to any written consents of WXBJ. The Exclusive Option Agreement shall remain effective for twenty (20) years and shall be automatically extended for an additional period of one (1) year. The additional period automatically enters the renewal extension of one (1) year at the end of each extended additional period. WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days prior termination notice. Power of Attorney Agreements. Each registered shareholders of Zhihui Qiyuan entered into a power of attorney agreement (including its amendment or supplementary agreements, if any) whereby such registered shareholders granted an irrevocable proxy of the voting rights underlying their respective equity interests in Zhihui Qiyuan to WXBJ, which includes, but are not limited to, all the shareholders rights and voting rights empowered to such registered shareholders by the PRC company law and Zhihui Qiyuan s Article of Association. The power of attorney remains irrevocable and continuously valid from the date of execution so long as each such shareholder remains as a shareholder of Zhihui Qiyuan. Share Pledge Agreement. Pursuant to the share pledge agreement (including its amendment or supplementary agreements, if any) among WXBJ, Zhihui Qiyuan and the registered shareholders of Zhihui Qiyuan, such registered shareholders have pledged all their equity interests in Zhihui Qiyuan to guarantee the respective performance of Zhihui Qiyuan and such shareholders obligations under the Exclusive Option Agreement, Exclusive Business Cooperation Agreement and Power of Attorney Agreement, as applicable. If Zhihui Qiyuan or any of its shareholders breaches its contractual obligations under any of other VIE agreements, WXBJ, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The registered shareholders of Zhihui Qiyuan agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their equity interests in Zhihui Qiyuan without the prior written consent of WXBJ. The Share Pledge Agreement shall be continuously valid until all obligations under the VIE agreements have been fulfilled, or the VIE agreements are terminated, or the secured debts has been fully executed. Contracts that enable us to receive substantially all of the economic benefits from the Zhihui Qiyuan VIEs Exclusive Business Cooperation Agreements Pursuant to the exclusive business cooperation agreement (including its amendment or supplementary agreements, if any) between WXBJ and Zhihui Qiyuan, WXBJ is to provide exclusive business support, technical and consulting services related to all technologies needed for its business in return for fees. The service fees may be adjusted by WXBJ based on the following factors: complexity and difficulty of the services pursuant to the business cooperation agreement to Zhihui Qiyuan during the month (the Monthly Services ); 3 the number of WXBJ s employees who provided the Monthly Services and the qualifications of the employees; the number of hours WXBJ s employees spent to provide the Monthly Services; nature and value of the Monthly Services; market reference price; and Zhihui Qiyuan operating conditions for the month. The term of the Exclusive Business Cooperation Agreement is twenty (20) years and shall be automatically extended for an additional period of one (1) year. The additional period automatically enters the renewal extension of one (1) year at the end of each extended additional period. Besides, WXBJ has the right to terminate this agreement at any time after giving a thirty (30) days prior termination notice. Based on the foregoing VIE arrangements, which obligate WXBJ to absorb all of the risk of loss from their activities and enable WXBJ to receive all of their expected residual returns, the Company accounts for Zhihui Qiyuan as a VIE. Accordingly, the Company consolidates the accounts of Zhihui Qiyuan for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission ( SEC ) and Accounting Standards Codification ( ASC ) 810-10, Consolidation. Contractual Arrangements among WXZJ, Sixiang Qiyuan, and the Shareholders of Sixiang Qiyuan. Exclusive Option Agreement. Pursuant to the exclusive option agreement (including any supplementary agreement thereto, if any) entered into by and among WXZJ, Sixiang Qiyuan and all the shareholders of Sixiang Qiyuan, the shareholders of Sixiang Qiyuan hereby irrevocably grant to WXZJ or its designee, to the extent permitted by the laws of the People s Republic of China, the exclusive right to purchase all or part of the equity interest held by such shareholders at the lowest purchase price permitted by the laws of the People s Republic of China. Without the written consent of WXZJ, Sixiang Qiyuan may not distribute any profits or create any encumbrance in any manner. If Sixiang Qiyuan makes the profit distribution with WXZJ s written consent, Sixiang Qiyuan s shareholders shall pay all of any funds received by them to WXZJ. The term of the exclusive option agreement is twenty years and will be automatically renewed for one year. Upon the expiration of each renewed term, the exclusive option agreement will be automatically renewed for one year. In the meantime, WXZJ shall have the right to terminate the exclusive option agreement at any time by giving a three days prior notice. Power of Attorney Agreements. WXZJ has entered into a power of attorney agreement (the Power of Attorney, including any supplementary agreements, if any) with each shareholder of Sixiang Qiyuan, pursuant to which each such shareholder grants the proxy rights to WXZJ in connection with his equity interest in Sixiang Qiyuan, including, without limitation, all the shareholders beneficial rights and voting rights conferred by the Company Law of the People s Republic of China and the Articles of Association of Sixiang Qiyuan. Each power of attorney agreement shall be irrevocable from the date of execution and shall continue to be valid until the relevant shareholder no longer holds Sixiang Qiyuan s equity interest. Share Pledge Agreement. Pursuant to the share pledge contract (including any supplementary agreement thereto, if any) entered into by and among WXZJ, Sixiang Qiyuan and each of the shareholders of Sixiang Qiyuan, each shareholder of Sixiang Qiyuan has pledged all of Sixiang Qiyuan s equity interest held by such shareholder to guarantee the respective performance of Sixiang Qiyuan and such shareholder under the exclusive option contract, the exclusive business cooperation agreement and the power of attorney agreement, as applicable. 4 If Sixiang Qiyuan or any of its shareholders breaches its contractual obligations under any VIE agreements, WXZJ, as the pledgee, will have certain rights, including the sale of the pledged equity interest. The shareholders agree that, without the prior written consent of WXZJ, they shall not transfer, sell, pledge, dispose of or in any other manner create any new encumbrance upon their equity interest in Sixiang Qiyuan. The share pledge agreement shall remain effective until all obligations under the VIE agreements have been performed, or the VIE agreements have been terminated, or all obligations under the VIE agreements have been fully performed. Contracts that enable us to receive substantially all of the economic benefits from the Sixiang Qiyuan VIEs Exclusive Business Cooperation Agreement In accordance with the exclusive business cooperation agreement between WXZJ and Sixiang Qiyuan (including supplementary agreements thereto, if any), WXZJ will provide Sixiang Qiyuan with exclusive business support and all business-related technologies and consulting services in order to obtain the fees equal to the consolidated net income of Xiuli (Zhejiang) Culture Tech Co., Ltd., Leku (Zhejiang) Culture Tech Co., Ltd., Haifan (Zhejiang) Culture Tech Co., Ltd., Xiangfeng (Zhejiang) Culture Tech Co., Ltd. and Hongren (Zhejiang) Culture Tech Co., Ltd. after deducting losses of the previous year (if any). WXZJ may adjust the service fees according to the following factors: Quarterly based on the complexity and difficulty of the services provided pursuant to the exclusive business cooperation agreement during such quarter ( Quarterly Services ); the number of WXZJ s employees who provided the Quarterly Services and the qualifications of these employees; The number of hours WXZJ s employees spent to provide the Quarterly Services; The nature and value of the Quarterly Services; market reference price; and Sixiang Qiyuan s operating conditions. The term of the exclusive business cooperation agreement is twenty years and is automatically renewable for one year. Upon the expiration of each renewal term, the agreement can be automatically renewed for one year. In addition, WXZJ shall have the right to terminate this agreement at any time by giving a three-day notice on the termination of this Agreement. We have been advised by Beijing Feng Yu Law Firm ( ) ( Feng Yu Law Firm ), our PRC legal counsel: based on its understanding of the relevant laws and regulations, is of the opinion that, subject to the judicial interpretations of the PRC laws or legislative interpretation of the PRC laws by PRC government authority, each of the VIE contracts among WXBJ, Zhihui Qiyuan and its registered shareholders is valid, binding and enforceable in accordance with its terms and does not violate current effective applicable PRC Laws. based on its understanding of the relevant laws and regulations, is of the opinion that, subject to the judicial interpretations of the PRC laws or legislative interpretation of the PRC laws by PRC government authority, each of the VIE contracts among WXZJ, Sixiang Qiyuan and its registered shareholders is valid, binding and enforceable in accordance with its terms and does not violate current effective applicable PRC Laws. However, our PRC legal counsel has advised that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, rules and regulations. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to the opinion of our PRC legal counsel. Our PRC legal counsel has further advised that if the PRC government finds that the agreements that establish the structure for operating our Internet related value-added business do not comply with PRC government restrictions on foreign investment in the aforesaid business we and the VIEs engage in, we and the VIEs could be subject to severe penalties including being prohibited from continuing operations. See Risk Factors Risks Factors Related to Our Corporate Structure and Risk Factors Risk Factors Related to Doing Business in China in the section entitled Risk Factors in this prospectus. 5 Summary of Risk Factors An investment in our securities involves significant risks. Below is a summary of material risks that we face, organized under relevant headings. These risks are discussed fully in the section entitled Risk Factors in this prospectus. Risks Factors Relating to Our Business and Industry We may fail to retain our existing users, keep them engaged or further grow our user base. (page 22) Our revenue growth is primarily dependent on paying users and revenue per paying user. If we fail to continue to grow or maintain our paying user base or fail to continue to increase revenue per paying user, our live streaming revenue may not increase, which may materially and adversely affect our results of operations and financial condition. (page 23) We rely on a single monetization model. (page 23) We may fail to offer attractive content on our platforms. (page 23) Failure to attract, cultivate, and retain top broadcasters may materially and negatively affect our user engagement and thus our business and operations. (page 23) If we fail to implement an effective revenue sharing fee policy, we may lose our broadcasters and our results of operations and financial condition may be materially and negatively affected. (page 24) We partner with various talent agencies to manage our broadcasters. If we are not able to maintain our relationship with talent agencies, our operations may be materially and adversely affected. (page 24) We may fail to successfully implement our monetization strategies. (page 25) Our business depends on a strong brand, and any failure to maintain, protect, and enhance our brand would hurt our ability to retain or expand our user base, or our ability to increase their level of engagement. (page 27) Our core values of focusing on user experience and user satisfaction first and acting for the long-term may conflict with the short-term operating results of our business. (page 28) If we fail to obtain or maintain the required licenses and approvals or if we fail to comply with laws and regulations applicable to our industry, our business, results of operations, and financial condition may be materially and adversely affected. (page 28) We may be subject to intellectual property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked to our platforms, or distributed to our users, or for proprietary information appropriated by former employees, which may materially and adversely affect our business, financial condition and prospects. (page 28) Unauthorized use of our intellectual property and the expenses incurred in protecting our intellectual property rights may materially and adversely affect our business. (page 29) Our content monitoring system may not be effective in preventing misconduct by our users and misuse of our platforms. (page 30) We may be held liable for information or content displayed on, retrieved from or linked to our platforms, or distributed to our users if such content is deemed to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on us. (page 30) The complexity, uncertainties, and changes in PRC regulation of the Internet industry and companies may materially and adversely affect our business and financial condition. (page 31) 6 Concerns about the collection, use, and disclosure of personal data and other privacy-related and security matters could deter customers and users from using our services and adversely affect our reputation and business. (page 33) Continuing efforts of our executive officers, key employees, and qualified personnel are essential to our business and the loss of their services may adversely and negatively impact our business and results of operations. (page 35) We are subject to risks relating to litigation. (page 35) The appointed Temporary Receiver of Link Motion Inc. (f/k/a NQ Mobile Inc.) may bring an action to restore Link Motion Inc. s senior position in the Showself businesses, which may result in claims against us. (page 36) Contractual disputes with our talent agencies may harm our reputation, and may be costly or time-consuming to resolve. (page 36) Key performance metrics used by us, such as QAUs, paying users, ARPPU and paying ratio, may overstate the number of our active and paying users, which may lead to an inaccurate interpretation of our revenue metrics and our business operations by our management and by investors, and may even misleadingly affect management s business judgment of our operations. (page 37) Restrictions on virtual currency may adversely affect our revenues. (page 38) Our results of operations are subject to quarterly fluctuations due to seasonality. (page 38) We do not currently have business insurance to cover our main assets and business. Any uninsured occurrence of business disruption, litigation, or natural disaster could expose us to significant costs, which could have an adverse effect on our results of operations. (page 38) Failure to achieve and maintain effective internal and disclosure controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and share price. (page 39) COVID-19 pandemic may have an adverse impact on our results of operations and financial condition for the fiscal year 2023. (page 41) Risks Related to Our Corporate Structure We and the VIEs are also subject to risks and uncertainties related to our corporate structure, including, but not limited to, the following: We conduct our business through the VIEs by means of contractual arrangements. PRC laws and regulations governing our businesses and the validity of certain of our contractual arrangements are uncertain. If the PRC courts or administrative authorities determine that these contractual arrangements do not comply with applicable regulations, we could be subject to severe penalties and our business could be adversely affected. In addition, changes in such PRC laws and regulations may materially and adversely affect our business. (page 42) Substantial uncertainties exist with respect to whether the foreign investor s controlling PRC onshore variable interest entities via contractual arrangements will be recognized as foreign investment and how it may impact the viability of our current corporate structure and operations. Also, our VIE structure may be inquired or challenged by relevant PRC governmental authorities when SHC issues additional securities for future financing in a public market under certain PRC laws and rules. (page 43) 7 We depend upon the contractual arrangements in conducting our business in China, which may not be as effective as direct ownership in providing operational control. (page 44) We may lose the ability to use and enjoy assets held by the VIEs that are important to our business if the VIEs declare bankruptcy or become subject to a dissolution or liquidation proceeding. (page 46) Contractual arrangements may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment. (page 46) We may rely on dividends paid by our PRC subsidiaries to fund cash and financing requirements. Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our Class A Ordinary Shares. (page 46) Risks Related to Doing Business in China Our WFOEs and the VIEs are based in China and have the majority of the operations in China, so we and the VIEs face risks and uncertainties related to doing business in China in general, including, but not limited to, the following: Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us. (page 47) Regulation and censorship of information disseminated over the mobile and Internet in China may adversely affect our business and subject us to liability for streaming content or content posted on our platforms. (page 47) Adverse changes in global or China s economic, political or social conditions or government policies could have a material adverse effect on our business, results of operations and financial condition. (page 48) The PRC government s significant oversight over our business operation could result in a material adverse change in the operations of the VIEs and our company as a whole and the value of our Class A Ordinary Shares. (page 48) Rules and regulations in China can change quickly with little or no advance notice and their interpretation and the implementation involve uncertainty, which could materially and adversely affect the operations of the VIEs and our company as a whole and the value of our securities. (page 49) Our shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors for two consecutive years. The delisting and the cessation of trading of our shares, or the threat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. (page 49) The filling of the CSRC will be required and approval and/or other requirements from other PRC governmental authorities may be required in connection with an offering under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will be able to complete such filing or obtain such approval. (page 51) The VIEs may be subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on the business, financial condition and results of operations of the VIEs and our company, and future offerings in a public market as a whole. (page 53) It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China. (page 54) 8 Failure to comply with laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause us to lose customers or otherwise harm our business. (page 55) We may rely on dividends and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business. (page 56) Uncertainties exist with respect to the interpretation and implementation of Anti-Monopoly Guidelines for Internet Platforms and how it may impact the business operations of the VIEs. (page 57) The recent joint statement by the SEC, proposed rule changes submitted by NASDAQ, and an act passed by the U.S. Senate and the U.S. House of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our future offerings, business operations share price and reputation. (page 58) Currently, there is no law or regulation specifically governing virtual asset property rights and therefore it is not clear what liabilities, if any, live streaming platform operators may have for virtual assets. (page 59) Under the PRC enterprise income tax law, we may be classified as a PRC resident enterprise, which could result in unfavorable tax consequences to us and our shareholders and have a material adverse effect on our results of operations and the value of your investment. (page 59) PRC regulations relating to offshore investment activities by PRC residents may limit the ability of WXBJ and WXZJ (our indirect wholly-owned subsidiaries in China) to increase our registered capital or distribute profits to us or otherwise expose us to liability and penalties under PRC law. (page 62) Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment. (page 63) Risks related to Investment in our Class A Ordinary Shares NASDAQ may apply additional and more stringent criteria for our continued listing. (page 65) We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our securities less attractive to investors. (page 65) Heshine will control the outcome of our shareholder actions. (page 66) We are a controlled company within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies. (page 66) Our dual-class share structure with different voting rights and conversion of certain ordinary shares will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of ordinary shares may view as beneficial. (page 66) Fluctuations in exchange rates could have a material adverse effect on our results of operations and the value of your investment. (page 67) Certain provisions of the Fourth Amended and Restated Memorandum and Articles of Association may be deemed to have an antitakeover effect. (page 68) 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. (page 68) 9 CSRC Filing Requirements On February 17, 2023, the China Securities Regulatory Commission, or the CSRC, as approved by the State Council, released the Trial Measures for Administration of Overseas Securities Offerings and Listings by Domestic Companies and five interpretive guidelines (collectively, the Trial Measures ), which came into effect on March 31, 2023. Under the Trial Measures, a filing-based regulatory system shall be applied to indirect overseas offerings and listings of PRC domestic companies, which refers to securities offerings and listings in an overseas market made under the name of an offshore entity but based on the underlying equity, assets, earnings or other similar rights of a domestic company that operates its main business domestically. The Trial Measures state that, any post-listing follow-on offering by an issuer in the same overseas market, including issuance of shares, convertible notes and other similar securities, shall be subject to filing requirement within three business days after the completion of the offering. Therefore, any of our future offering and listing of our securities in an overseas market shall be subject to the filing requirements under the Trial Measures. As this secondary offering is conducted by the Selling Securityholders, rather than by us, we have been advised by our PRC legal counsel, that this secondary offering is not subject to the filing requirements under the Trial Measures. If we fail to obtain required approval or complete other review or filing procedures, under the Trial Measures or otherwise, for any future overseas securities offering or listing, or if the CSRC disagrees with our view on the applicability of the Trial Measures to this secondary offering by the Selling Securityholders, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include fines and penalties on our operations in China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, restrictions on or delays to our future financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of the Class A Ordinary Shares. See Risk Factors Risk Factors Relating to Doing Business in China The filling of the CSRC will be required and approval and/or other requirements from other PRC governmental authorities may be required in connection with an offering under PRC rules, regulations or policies, and, if required, we cannot predict whether or how soon we will be able to complete such filing or obtain such approval. Dividend Distribution and Transfer of Cash Under our current corporate structure, Scienjoy Holding Corporation, the British Virgin Islands holding company, may rely on dividend payments from our PRC subsidiaries for cash and financing requirements we may have, including the funds necessary to pay dividends and other cash distributions to our shareholders or to service any debt we may incur. Our WFOEs receive payments from the VIEs pursuant to the VIE agreements. WFOEs also receives payments from its PRC operating subsidiaries. WFOEs may make distribution of such payments to Scienjoy International Limited, our Hong Kong subsidiary, then further distribute the funds to Scienjoy Holding Corporation through its fully owned subsidiary, Scienjoy Inc. Cashflow between us and the VIEs primarily consists of transfers from us to the VIEs for short-term working capital loan, which is mainly used in payment of operating expenses and investments. For the years ended December 31, 2020, 2021 and 2022, cash transferred from WFOEs and its Subsidiaries to the VIEs was RMB318.0 million, RMB296.0 million and RMB273.2 million, respectively. Cash transferred from the VIEs to WFOEs and its Subsidiaries mainly consisted of repayment of the working capital loans. For the years ended December 31, 2020, 2021 and 2022, cash transferred from the VIEs to WFOEs and its Subsidiaries was RMB227.5 million, RMB253.1 million and RMB201.3 million, respectively. For the years ended December 31, 2020, 2021 and 2022, cash transferred from Scienjoy Holding Corporation to the offshore subsidiaries was nil, RMB562,000 and RMB1.6 million, respectively. For the years ended December 31, 2020, 2021 and 2022, cash transferred from offshore subsidiaries to Scienjoy Holding Corporation was RMB467,000, RMB260,000 and RMB36.2 million, respectively. For the year ended December 31, 2021, cash transferred from offshore subsidiaries to WFOEs and its Subsidiaries was capital contribution of RMB6.4 million. For the year ended December 31, 2021, cash transferred from WFOEs and its Subsidiaries to offshore subsidiaries was dividend of RMB7.0 million. For the year ended December 31, 2022, cash transferred from WFOEs and its Subsidiaries to offshore subsidiaries mainly consisted of repayment of working capital loans of RMB2.1 million and dividend of RMB6.3 million. For the six months ended June 30, 2023, cash transferred from WFOEs and its Subsidiaries to the VIEs was RMB17.8 million. Cash transferred from the VIEs to WFOEs and its Subsidiaries mainly consisted of repayment of the working capital loans. For the six months ended June 30, 2023, cash transferred from the VIEs to WFOEs and its Subsidiaries was RMB84.5 million, For the six months ended June 30, 2023, cash transferred from offshore subsidiaries to VIEs was working capital loans of RMB19,000. For the six months ended June 30, 2023, cash transferred from Scienjoy Holding Corporation to the offshore subsidiaries was RMB363,000. For the six months ended June 30, 2023, cash transferred from offshore subsidiaries to Scienjoy Holding Corporation was RMB10.2 million. For the six months ended June 30, 2023, cash transferred from WFOEs and its Subsidiaries to offshore subsidiaries was working capital loan of RMB24.2 million. The source of funds is the capital retained from the Business Combination transaction and revenues generated by our PRC subsidiaries, and there is no tax consequence on the intercompany s short-term working capital loans. In the future, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to our PRC subsidiaries and the VIEs via capital contribution or shareholder loans, as the case may be. The source of funds is the capital retained from the Business Combination transaction and revenues generated by our PRC subsidiaries, and there is no tax consequence on the intercompany s short-term working capital loans. In the future, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to our PRC subsidiaries and the VIEs via capital contribution or shareholder loans, as the case may be. 10 To date, except for the above cash transferred between us and the VIEs, there are no other assets transferred between us and the VIEs. To date, the VIEs have not made any dividends or distributions to our WFOEs and our WFOEs have not made any dividends or distributions to its shareholders or Scienjoy Holding Corporation. As of the date of this prospectus, Scienjoy Holding Corporation has not paid dividends or made distributions to our investors of Class A Ordinary Shares. Under the British Virgin Islands law, a British Virgin Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business. We intend to keep any future earnings to re-invest in and finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. According to the Foreign Investment Law of the People s Republic of China and its implementing rules, which jointly established the legal framework for the administration of foreign-invested companies, a foreign investor may, in accordance with other applicable laws, freely transfer into or out of China its contributions, profits, capital earnings, income from asset disposal, intellectual property rights, royalties acquired, compensation or indemnity legally obtained, and income from liquidation, made or derived within the territory of China in RMB or any foreign currency, and any entity or individual shall not illegally restrict such transfer in terms of the currency, amount and frequency. According to the Company Law of the People s Republic of China and other Chinese laws and regulations, our PRC subsidiaries may pay dividends only out of their respective accumulated profits as determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax profits, if any, each year to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Where the statutory reserve fund is insufficient to cover any loss a PRC subsidiary incurred in the previous financial year, its current financial year s accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund is drawn therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be distributed to us as dividends. At their discretion, our PRC subsidiaries may allocate a portion of their after-tax profits based on Chinese accounting standards to a discretionary reserve fund. Our PRC subsidiaries and the VIEs receive substantially all of their revenue in Renminbi. Renminbi is not freely convertible into other currencies. As result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use their potential future Renminbi revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under the current account, which includes dividends, trade and service-related foreign exchange transactions, but not under the capital account, which includes foreign direct investment and foreign currency debt. Currently, our PRC subsidiaries may purchase foreign currency for settlement of current account transactions, including payment of dividends to us, without the approval of the State Administration of Foreign Exchange of China ( SAFE ) by complying with certain procedural requirements. However, the relevant Chinese governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. The Chinese government may continue to strengthen its capital controls, and additional restrictions and substantial vetting processes may be instituted by SAFE for cross-border transactions falling under both the current account and the capital account. Any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to fund our business activities outside of China or pay dividends in foreign currencies to holders of our securities. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration with, SAFE and other relevant Chinese governmental authorities. This could affect our ability to obtain foreign currency through debt or equity financing for our subsidiaries. See Risks Related to Doing Business in China and Our International Operations We may rely on dividends and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business in the section entitled Risk Factors in this prospectus for a detailed discussion of the Chinese legal restrictions on the payment of dividends and our ability to transfer cash within our group. In addition, shareholders may potentially be subject to Chinese taxes on dividends paid by us in the event we are deemed a Chinese resident enterprise for Chinese tax purposes. 11 Cash dividends, if any, on our capital shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. The 5% withholding tax rate, however, does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to any dividends paid by WFOEs to its immediate holding company, Scienjoy International Limited. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Scienjoy International Limited intends to apply for the tax resident certificate if and when WFOEs plan to declare and pay dividends to Scienjoy International Limited. Select Condensed Financial Statements on Consolidating VIEs The following tables present selected condensed consolidating financial data of Scienjoy Holding Corporation and its subsidiaries and VIEs for the fiscal years ended December 31, 2020, 2021 and 2022, and balance sheet data as of December 31, 2021 and 2022, which have been derived from our audited consolidated financial statements for those periods. Neither Scienjoy Holding Corporation nor its subsidiaries own any shares in VIEs. Instead, for accounting purpose, Scienjoy Holding Corporation controls and accrues the economic benefits of VIEs business operations through the contractual agreements between its Wholly Foreign-Owned Enterprises (WFOEs) and the VIEs, which satisfied all the conditions required by U.S. GAAP to consolidate the financial results of VIEs. The contractual agreements are designed to provide WFOEs with the power, rights, and obligations equivalent in all material respects to those they would possess as the principal equity holder of the VIEs, but not equivalent to equity ownership in the business of VIEs. Based on the contractual arrangements, which grant WFOEs effective control of the VIEs and accrue substantially all of the benefits and losses resulting from the business operations of the VIEs. Scienjoy Holding Corporation consolidates the accounts of VIEs in accordance with Accounting Standards Codification ( ASC ) 810-10, Consolidation. As a result, Scienjoy Holding Corporation accounts its investments in its subsidiaries and VIEs using the equity method of accounting. Such investments are presented in the selected condensed consolidating balance sheets of Scienjoy Holding Corporation as Investments in subsidiaries and VIEs and the profit of the subsidiaries is presented as Income for equity method investment in the selected condensed consolidating statements of income and comprehensive income. SELECTED CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) For the Year Ended December 31, 2020 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Revenues - 16,239 269,393 940,783 (4,232) 1,222,183 Cost of revenues - 20,047 142,047 802,077 (4,232) 959,939 Gross profit (loss) - (3,808) 127,346 138,706 - 262,244 Operating expenses 1,445 1,436 920 63,736 - 67,537 Income (loss) from operations (1,445) (5,244) 126,426 74,970 - 194,707 Income from VIE and its subsidiaries 184,869 195,692 45,722 - (426,283) - Net income 176,100 184,869 195,692 45,722 (426,283) 176,100 Comprehensive income 190,902 185,233 195,692 45,722 (426,647) 190,902 12 For the Year Ended December 31, 2021 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Revenues - 46,113 464,920 1,198,273 (39,948) 1,669,358 Cost of revenues 6,230 46,681 315,186 1,030,762 (33,957) 1,364,902 Gross profit (loss) (6,230) (568) 149,734 167,511 (5,991) 304,456 Operating expenses 41,189 2,715 39,395 61,179 (5,991) 138,487 Income (loss) from operations (47,419) (3,283) 110,339 106,332 - 165,969 Income from VIE and its subsidiaries 267,436 370,675 102,042 - (740,153) - Net income 170,012 399,219 370,675 102,042 (871,936) 170,012 Comprehensive income 172,325 399,379 370,675 102,042 (872,096) 172,325 For the Year Ended December 31, 2022 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Revenues - 46,811 638,051 1,291,602 (23,207) 1,953,257 Cost of revenues (2,649) (38,475) (522,532) (1,106,412) - (1,670,068) Gross profit (loss) (2,649) 8,336 115,519 185,190 (23,207) 283,189 Operating expenses 25,250 4,997 44,242 82,127 (23,207) 133,409 Income (loss) from operations (27,899) 3,339 71,277 103,063 - 149,780 Income from VIE and its subsidiaries 198,340 206,814 141,759 - (546,913) - Net income 194,288 219,370 206,814 143,651 (568,898) 195,225 Comprehensive income 195,243 218,932 206,814 143,651 (568,460) 196,180 Comprehensive income attributable to the Company s shareholders 195,243 218,932 206,814 141,759 (568,460) 194,288 SELECTED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2020 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Net cash provided by (used in) operating activities 1,003 11,938 (128,427) 270,927 - 155,441 Net cash provided by (used in) investing activities - - 282,736 (323,670) - (40,934) Net cash provided by (used in) financing activities (855) (8,426) (94,298) 80,247 - (23,332) Inter-company cash transfers: Transfer from Offshore Subsidiaries to Scienjoy Holding Corporation 467 (467) - - - - Transfer from WFOE and its Subsidiaries to VIEs - - (318,000) 318,000 - - Transfer from VIEs to WFOE and its Subsidiaries - - 227,500 (227,500) - - 13 For the Year Ended December 31, 2021 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Net cash provided by (used in) operating activities (14,073) (2,721) 62,840 70,255 - 116,301 Net cash provided by (used in) investing activities - 559 135,590 (250,714) (559) (115,124) Net cash provided by (used in) financing activities 14,263 - (179,123) 179,585 559 15,284 Inter-company cash transfers: Transfer from Scienjoy Holding Corporation to Offshore Subsidiaries (562) 562 - - - - Transfer from Offshore Subsidiaries to Scienjoy Holding Corporation 260 (260) - - - - Transfer from Offshore Subsidiaries and to WFOE and its Subsidiaries - (6,441) 6,441 - - - Transfer from WFOE and its Subsidiaries to Offshore Subsidiaries - 7,000 (7,000) - - - Transfer from WFOE and its Subsidiaries to VIEs - - (296,000) 296,000 - - Transfer from VIEs to WFOE and its Subsidiaries - - 253,100 (253,100) - - For the Year Ended December 31, 2022 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Net cash provided by (used in) operating activities (16,535) (9,587) (72,224) 155,897 - 57,551 Net cash provided by (used in) investing activities - 6,340 8,990 (122,236) (6,340) (113,246) Net cash provided by (used in) financing activities 19,289 - (36,913) (198) 6,340 (11,482) Inter-company cash transfers: Transfer from Scienjoy Holding Corporation to Offshore Subsidiaries (1,591) 1,591 - - - - Transfer from Offshore Subsidiaries to Scienjoy Holding Corporation 36,183 (36,183) - - - - Transfer from Offshore Subsidiaries and to WFOE and its Subsidiaries - - - - - - Transfer from WFOE and its Subsidiaries to Offshore Subsidiaries - 7,811 (7,811) - - - Transfer from WFOE and its Subsidiaries to VIEs - - (273,245) 273,245 - - Transfer from VIEs to WFOE and its Subsidiaries - - 201,330 (201,330) - - 14 SELECTED CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2021 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Total current assets 27,685 95,939 734,019 492,186 (697,318) 652,511 Investments in subsidiaries and VIEs 805,136 950,754 577,862 - (2,333,752) - Total non-current assets 805,136 957,955 588,483 585,562 (2,500,292) 436,844 Total assets 832,821 1,053,894 1,322,502 1,077,748 (3,197,610) 1,089,355 Total current liabilities 23,376 88,918 371,748 441,140 (704,018) 221,164 Total non-current liabilities - - - 58,746 - 58,746 Total liabilities 23,376 88,918 371,748 499,886 (704,018) 279,910 Total shareholders equity (deficit) 809,445 964,976 950,754 577,862 (2,493,592) 809,445 Total liabilities and shareholders equity 832,821 1,053,894 1,322,502 1,077,748 (3,197,610) 1,089,355 As of December 31, 2021 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total Inter-company balances (in thousands RMB) Balances between Offshore Subsidiaries WFOE and its Subsidiaries - (700) 700 - - Balances between Offshore Subsidiaries and VIEs - 1,900 - (1,900) - - Balances between WFOE and its Subsidiaries and VIEs - - 300,000 (300,000) - - Balances between Scienjoy Holding Corporation and Offshore Subsidiaries 32,138 (32,138) - - - - Balances between Scienjoy Holding Corporation and WFOE and its Subsidiaries (3,153) - 3,153 - - - Balances between Scienjoy Holding Corporation and VIEs (40) - - 40 - - Total 28,945 (30,938) 303,853 (301,860) - - As of December 31, 2022 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total (in thousands RMB) Total current assets (3,387) 117,895 968,047 526,600 (960,373) 648,782 Investments in subsidiaries and VIEs 1,170,235 1,311,328 877,721 - (3,359,284) - Total non-current assets 1,170,235 1,318,456 890,827 998,557 (3,524,829) 853,246 Total assets 1,166,848 1,436,351 1,858,874 1,525,157 (4,485,202) 1,502,028 Total current liabilities 6,254 98,683 547,546 571,535 (958,485) 265,533 Total non-current liabilities - - - 74,009 - 74,009 Total liabilities 6,254 98,683 547,546 645,544 (958,485) 339,542 Total shareholders equity (deficit) 1,160,594 1,337,668 1,311,328 879,613 (3,526,717) 1,162,486 Total liabilities and shareholders equity 1,166,848 1,436,351 1,858,874 1,525,157 (4,485,202) 1,502,028 15 As of December 31, 2022 Scienjoy Holding Corporation Offshore Subsidiaries WFOEs and its Subsidiaries VIEs Eliminations Consolidated Total Inter-company balances (in thousands RMB) Balances between Offshore Subsidiaries WFOE and its Subsidiaries - (26,164) 26,164 - - Balances between Offshore Subsidiaries and VIEs - (10,742) - 10,742 - - Balances between WFOE and its Subsidiaries and VIEs - - 376,900 (376,900) - - Balances between Scienjoy Holding Corporation and Offshore Subsidiaries (3,838) 3,838 - - - - Balances between Scienjoy Holding Corporation and WFOE and its Subsidiaries (3,153) - 3,153 - - - Balances between Scienjoy Holding Corporation and VIEs (67) - - 67 - - Total (7,058) (33,068) 406,217 (366,091) - - Recent Development On September 6, 2023, the Company announced its strategic investment of US$3 million to acquire a 30% equity interest in DVCC TECHNOLOGY L.L.C, a Dubai-based metaverse company dedicated to transforming entertainment through innovation. This pivotal move signifies Scienjoy s unwavering commitment to metamorphosing its business transformation strategy from mobile entertainment to metaverse lifestyle, catalyzed by global expansion starting from the dynamic Middle East and North Africa (MENA) region. 16
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+PROSPECTUS SUMMARY This summary highlights certain information about us and selected information contained elsewhere in or incorporated by reference into this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our ordinary shares. For a more complete understanding, we encourage you to read and consider carefully the more detailed information in this prospectus, including the information incorporated by reference in this prospectus, including the information under the heading Risk Factors in this prospectus and in the documents incorporated by reference into this prospectus. Our Company We are a dermatology company focused on identifying, developing and commercializing branded and generic topical drug products for the treatment of skin diseases. Our FDA-approved product, Twyneo, is a novel, once-daily, non-antibiotic topical cream containing a fixed-dose combination of encapsulated benzoyl peroxide, or BPO, and encapsulated tretinoin, developed for the treatment of acne vulgaris, or acne. Our FDA-approved product, Epsolay, is a novel, once-daily topical cream containing encapsulated BPO that we have developed for the treatment of inflammatory lesions of rosacea. In addition to Twyneo and Epsolay, our current product candidate pipeline includes topical drug candidate SGT-210 under investigation for the treatment of pachyonychia congenita and other rare skin indications, and the newly acquired SGT-610, topically-applied patidegib, a new chemical entity hedgehog signaling pathway blocker, for the treatment of Gorlin syndrome as described below. See SGT-610. We designed our proprietary, silica-based microencapsulation technology platform to enhance the tolerability and stability of topical drugs while maintaining their efficacy. Topical drugs often struggle to balance achieving both high efficacy and high tolerability. Our technology platform entraps active ingredients in an inert, inorganic silica shell, which creates an unnoticeable barrier between the active ingredient and the skin. The resulting microcapsules are designed to allow the entrapped active ingredients to gradually migrate through the pores of the shell and deliver active ingredient doses onto the skin in a controlled manner, resulting in improved tolerability and stability without sacrificing efficacy. By separately encapsulating active ingredients within protective silica shells, our technology platform also enables the production of novel fixed-dose active ingredient combinations that otherwise would not be stable. We believe that our microencapsulation technology has the potential to be used for topical drug products to treat a variety of skin diseases. Products and Pipeline The following chart represents our current branded products and candidate pipeline. No underwriter or other person has been engaged to facilitate the sale of the ordinary shares in this offering. We will bear all costs, expenses and fees in connection with the registration of the ordinary shares. The selling shareholders will bear all commissions and discounts, if any, attributable to their respective sales of our ordinary shares. Our ordinary shares are traded on The Nasdaq Global Market under the symbol SLGL. On March 9, 2023, the last reported sales price of our ordinary shares on The Nasdaq Global Market was $3.80 per share. Investment in our ordinary shares involves a high degree of risk. See Risk Factors beginning on page 10, in our periodic reports filed from time to time with the Securities and Exchange Commission (which are incorporated by reference in this prospectus) and in any applicable prospectus. You should carefully read this prospectus, together with the documents we incorporate by reference, before you invest in our ordinary shares. Neither the Securities and Exchange Commission, the Israel Securities Authority, nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or the accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2023. Our Branded Products Twyneo for Acne Twyneo is a novel, once-daily, non-antibiotic topical cream containing a fixed-dose combination of encapsulated benzoyl peroxide, or E- BPO and encapsulated tretinoin, for the treatment of acne. Acne is one of the three most prevalent skin diseases in the world and is the most commonly treated skin disease in the United States. According to the American Academy of Dermatology, acne affects approximately 40 to 50 million people in the United States, of which approximately 10% are treated with prescription medications. Tretinoin and benzoyl peroxide, the two active components in Twyneo, are both widely-used therapies for the treatment of acne that historically have not been conveniently co-administered due to stability concerns. On December 30, 2019, we announced top-line results from two pivotal Phase 3 clinical trials evaluating Twyneo for the treatment of acne. Twyneo met all co-primary endpoints in both Phase 3 trials. The Phase 3 program enrolled an aggregate of 858 patients aged nine and older in two multicenter, randomized, double-blind, parallel group, vehicle-controlled trials at 63 sites across the United States. Twyneo demonstrated statistically significant improvement in each of the co-primary endpoints of (1) the proportion of patients who succeeded in achieving at least a two grade reduction from baseline and Clear (grade 0) or Almost Clear (grade 1) at Week 12 on a 5-point Investigator Global Assessment, or IGA, scale, (2) an absolute change from baseline in inflammatory lesion count at Week 12, and (3) and an absolute change from baseline in non-inflammatory lesion count at Week 12. In addition, Twyneo was found to be well-tolerated. Twyneo was approved for marketing by the FDA in July 2021 and was licensed to Galderma Holding SA, or Galderma, exclusively in the United States in June 2021. Epsolay for Inflammatory Lesions of Rosacea Epsolay is a once-daily topical cream containing 5% encapsulated BPO that we have developed for the treatment of inflammatory lesions of rosacea in adults. Rosacea is a chronic skin disease characterized by facial redness, inflammatory lesions, burning and stinging. According to the U.S. National Rosacea Society, approximately 16 million people in the United States are affected by rosacea. Furthermore, approximately 4.8 million people in the United States experience inflammatory lesions of rosacea (subtype II symptoms), according to a study we commissioned in 2017. Rosacea is characterized by small, dome-shaped erythematous papules, tiny surmounting pustules on the central aspects of the face, solid facial erythema and edema, and thickening/overgrowth of skin. Rosacea resembles acne, except that comedowns are absent, and patients may report associated burning and stinging sensations. Current topical therapies of inflammatory lesions of rosacea are limited due to tolerability concerns. As encapsulated BPO, Epsolay is designed to redefine the standard of care for the treatment of inflammatory lesions of rosacea. Epsolay, which was approved for marketing by the FDA in April 2022, is the first product containing BPO approved for the treatment of inflammatory lesions of rosacea in adults. The approval of Epsolay was supported by data from two positive, identical Phase 3 randomized, double-blind, multicenter, 12-week, clinical trials that evaluated the safety and efficacy of Epsolay in people with inflammatory lesions of rosacea. Epsolay demonstrated statistically significant improvement in both co-primary endpoints of (1) the number of patients achieving clear or almost clear in the IGA scale, relative to baseline at week 12 and (2) absolute mean reduction from baseline in inflammatory lesion count at week 12. In an additional analysis, Epsolay demonstrated rapid efficacy, achieving statistically significant improvements on both co-primary endpoints compared with vehicle as early as Week 2. In addition, Epsolay was found to be well-tolerated. On February 12, 2020, we announced positive top-line results from our open-label, long-term safety study, evaluating Epsolay for a treatment duration up to 52 weeks. Epsolay was approved for marketing by the FDA in April 2022 and was licensed to Galderma exclusively in the United States in June 2021. License Agreements with Galderma In June 2021, we entered into two exclusive license agreements with Galderma, pursuant to which Galderma has the exclusive right to, and is responsible for, all United States commercial activities for Twyneo and Epsolay, including promotion and distribution, and we were responsible for obtaining all regulatory approvals for the products in the United States, which we completed in July 2021 and April 2022, respectively. Each of the license agreements has a term of five years from the date of Galderma s first commercial sale of the applicable product in the United States. The license agreements provide that Galderma is responsible for all filings and communications with regulatory authorities in the U.S. until expiration of the applicable license agreement. In connection with the licenses, we and Galderma have entered into a three party supply agreement with Douglas Manufacturing Limited, which will supply Galderma the Twyneo product, and Galderma is responsible for entering into a supply agreement with a third party for the supply of the Epsolay product. In consideration for the grant of such rights, Galderma has paid us $11 million in upfront payments and regulatory approval milestone payments. We are also eligible to receive tiered double-digit royalties ranging from mid-teen to high-teen percentage of net sales as well as up to $9 million in sales milestone payments. SGT-610 On January 30, 2023, we purchased the topically-applied patidegib, a hedgehog signaling pathway blocker, for the treatment of Gorlin syndrome pursuant to an asset purchase agreement with PellePharm, Inc., dated January 23, 2023. We broadened our pipeline with this new chemical entity, designated as investigational compound SGT-610, which, if approved by the FDA, has the potential to be the first-ever treatment for Gorlin syndrome, and has the potential to generate, at peak, annual net sales in excess of $300 million.* SGT-610 has been granted Orphan Drug Designation by the FDA and the European Medical Association, or EMA, as well as Breakthrough Designation by the FDA. Each of the FDA and EMA has agreed that approval may be supported by a single pivotal Phase 3 study. We plan to conduct a Phase 3 trial, with the objective of providing Gorlin syndrome patients with the first drug that could prevent new basal cell carcinomas, or BCCs. Under the terms of the agreement, we paid an upfront payment of $4 million. We will make an additional $0.7 million payment 15 months following the date of the agreement.. We are also required to pay: up to $6 million in total development and NDA acceptance milestone payments; up to $64 million in commercial milestone payments, which amount increases to $89 million when sales exceed $500 million; and single digit royalties, which increase to double digit royalties when sales exceed $500 million. * Net sales opportunity is based on good faith estimates derived from our knowledge and based in part on independent sources. Although we believe such data and estimates to be reliable, it involves a number of assumptions and limitations and you are cautioned not to give undue weight to such information. Gorlin Syndrome Gorlin syndrome is a rare disease with no therapies currently approved by the FDA or EMA. Gorlin syndrome affects approximately 1 in 31,000 people and is an autosomal dominant genetic disorder, mostly caused by inheritance of one defective copy of the tumor suppressor gene PTCH1. The PTCH1 gene blocks the SMO gene, turning off the hedgehog signaling pathway when it is not needed. However, mutations in PTCH1 may cause loss of PTCH1 function, release of SMO, and may allow BCC tumor cells to divide uncontrollably. Patidegib, the active substance in SGT-610, is designed to block the SMO signal, thus allowing cells to function normally and reduce production of new tumors. Gorlin syndrome is also called nevoid BCC syndrome because approximately 90% of individuals with this syndrome develop multiple BCCs, ranging from a few to many thousands of lesions during a patient s lifetime. We estimate that there are approximately 17,000 Gorlin syndrome patients with multiple BCCs worldwide. Painful surgical excision is currently the treatment of choice for BCCs. However, as multiple BCCs continue to evolve, repeated surgical intervention becomes practically impossible, which makes the prevention of the development of new BCCs a critical treatment consideration. SGT-610 is a topical product intended to prevent new BCC formation in adults with Gorlin syndrome without the risk of accompanying systemic adverse events observed with oral BCC therapies. Planned Clinical Trial The planned Phase 3 study of SGT-610 will include well-defined modifications to an earlier Phase 3 study in which the SGT-610 arm was found to be as tolerable as the vehicle, with no significant adverse events associated with oral hedgehog inhibitors observed. The modifications to the earlier study will include selecting patients positive for the PTCH1 mutation (in contrast to the previous study which included symptomatic patients without testing them for the mutation), as well as a requirement for a higher minimum number of BCCs at baseline than in the previous study. The Phase 3 study is planned to be powered at 90%, with approximately 100 participating subjects and is expected to begin in the second half of 2023 with results expected by the end of 2025. SGT-210 SGT-210 is a topical erlotinib drug candidate that we are developing for the treatment of pachyonychia congenita and other hyperkeratosis indications. Erlotinib is a tyrosine kinase receptor inhibitor which is designed to act on the EGFR a protein expressed on the surface of cells which facilitates the growth and division of the cells. Published clinical research has shown that orally administered erlotinib improved the quality of life of pachyonychia congenita patients but was associated with significant adverse events, while topically applied erlotinib, 0.2%, failed to display significant improvement. Our scientists have worked to overcome erlotinib formulation limitations to develop a topical product with a significantly higher concentration of erlotinib than that which was reported to be inefficient. SGT-210 is expected to treat pachyonychia congenita without the adverse events caused by oral erlotinib. Our Phase-1 study was initiated in December 2022. Generic Drug Product Candidates In addition to our investigational product candidates, we are also currently developing a portfolio of two generic programs related to four generic drug candidates in collaboration with Padagis by assignment from Perrigo UK Finco Limited Partnership, or Perrigo. Padagis has significant experience in the development of generic drugs. Pursuant to our collaboration agreements with Padagis, Padagis will conduct the regulatory (if relevant), scientific, clinical and technical activities necessary to develop the generic product candidates and seek regulatory approval with the FDA. If approved by the FDA, Padagis has agreed to commercialize the generic product candidates in the United States. We and Padagis will share the development costs and the gross profits generated from the sales of the generic product candidates, if approved by the FDA. Registered Direct and Concurrent Private Placements On January 27, 2023, we entered into the Securities Purchase Agreement with Armistice, relating to the issuance by us to Armistice of (i) 2,560,000 ordinary shares in a registered direct offering, or the Registered Direct Offering, at a price of $5.00 per ordinary share, or the Investor Shares, and (ii) in a concurrent private placement, or the Warrant Private Placement and, together with the Registered Direct Offering, the January 2023 Offering, the unregistered Investor Warrants to purchase up to 2,560,000 ordinary shares. Each of the Investor Warrants are exercisable for one ordinary share, has an initial exercise price of $5.85 per share, is exercisable beginning six months from the date of issuance and will expire on January 27, 2028. We agreed to file this registration statement to cover the resale by Armistice of the Investor Warrant Shares and to keep such registration statement effective at all times until Armistice no longer owns any Investor Warrants or Investor Warrant Shares. The sale of the ordinary shares in the Registered Direct Offering was made by means of a shelf registration statement on Form F-3 (File No. 333-264190) previously filed with the SEC and declared effective on April 13, 2022, and the prospectus contained therein, as supplemented by the prospectus supplement, dated January 27, 2023. The January 2023 Offering closed on January 31, 2023. The gross proceeds to us from the Registered Direct Offering were approximately $12.8 million. Concurrently with the signing of the Securities Purchase Agreement, we entered into the Subscription Agreement with Arkin pursuant to which Arkin agreed to purchase the 2,000,000 unregistered Affiliate Shares and the unregistered Affiliate Warrants to purchase up to 2,000,000 Affiliate Warrants Shares, or the Affiliate Private Placement. The Affiliate Private Placement is conditioned on obtaining the approval of holders of a majority of the shares held by shareholders who have no personal interest in approval of the proposal. We have scheduled an extraordinary shareholder meeting for March 30, 2023 to approve the Affiliate Private Placement. Our audit committee and board of directors approved that the terms of the issuance of the Affiliate Shares and the Affiliate Warrants to Arkin would be on the same terms as the terms of the issuance of the Investor Shares and Investor Warrants to Armistice, including the registration under the Securities Act of the Affiliate Shares and the Affiliate Warrant Shares issuable upon exercise of the Affiliate Warrants. The Affiliate Warrants have the same terms as the Investor Warrants. The Warrants are subject to adjustment in the event of certain share dividends and distributions, share splits, share combinations, reclassifications or similar events affecting the ordinary shares. In the event of a Fundamental Transaction (as such term is defined in the Warrants), the holders of the Warrants are entitled to receive from the Company, or any successor entity, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the warrants, that is being offered and paid to the holders of ordinary shares of the Company in connection with the Fundamental Transaction. The Warrants do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of ordinary shares are entitled. The net proceeds to us from the January 2023 Offering and the Affiliate Private Placement are approximately $21.7 million, after deducting placement agent fees and offering expenses payable by us. We have used a portion of the net proceeds from the Registered Direct Offering to fund the acquisition of SGT-610 and intend to use the balance of the net proceeds for research and development activities for SGT-610 through its planned clinical trial and the remainder for working capital and other general corporate purposes. Corporate Information Our legal and commercial name is Sol-Gel Technologies Ltd. We were incorporated on October 28, 1997, and were registered as a company with limited liability under the laws of the State of Israel. Our principal executive offices are located at 7 Golda Meir St., Weizmann Science Park, Ness Ziona, 7403650 Israel, and our telephone number is +972-8-931-3433. Our website address is http://www.sol-gel.com. The information on our website does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. Our agent for service of process in the United States is Sol-Gel Technologies, Inc., c/o The Corporation Trust Company, located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. Implications of Being an Emerging Growth Company and a Foreign Private Issuer We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, and therefore we may take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes Oxley Act of 2002, or the Sarbanes-Oxley Act, and reduced financial reporting requirements. We may take advantage of these exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of: (1) the end of the fiscal year in which the market value of our ordinary shares that are held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter, (2) the end of the fiscal year in which we have total annual gross revenues of $1.235 billion or more during such fiscal year, (3) the date on which we have issued more than $1 billion in non-convertible debt in a three-year period, and (4) December 31, 2023, the last day of the fiscal year following the fifth anniversary of the closing of our initial public offering. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Securities Exchange Act of 1934, or the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the rules under the Exchange Act requiring filing with the SEC of quarterly periodic reports on Form 10-Q containing unaudited financial and other specific information, or current reports on Form 8-K, upon the occurrence of specified significant events. Both foreign private issuers and emerging growth companies also are exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/SMKG_smartcard_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/SMKG_smartcard_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6211f21d96881810eff5c10e589f793e1cebf9cc
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@@ -0,0 +1,1403 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+You
+should read the following summary together with the more detailed information and the financial statements appearing elsewhere in this
+Prospectus. This Prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results could differ
+materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under
+"Risk Factors" and elsewhere in this Prospectus. Unless the context indicates or suggests otherwise, references to "we",
+"our", "us", the "Company", "SmartCard Marketing Systems, "SMKG", or, the "Registrant"
+refer to SmartCard Marketing Systems, Inc., a Delaware corporation, together with its subsidiary.
+
+ 
+
+Overview
+
+ 
+
+SmartCard
+Marketing Systems, Inc. ("SmartCard Marketing Systems" and the "Company") is an innovative Fintech and Paytech
+accelerator company operating as an E-Commerce, Cloud, and Mobility software solutions and applications provider to the global payments
+industry. We believe in super-apps and deliver a suite of proprietary cloud-based business solutions, applications and marketplaces to
+our payment industry business customers to assist with the deployment of their merchant portfolios. By providing Business Intelligence
+and Digital Transformation strategies through our proprietary portfolio of specialized cloud and mobility software solutions and applications
+with embedded payments technology to our customers within the Banking, Business Enterprise, Retail Point-of-Sale with e-Wallet / m-Wallet,
+Cross-border Payments, Blockchain, Crypto, Non-Fungible Tokens or "NFTs", Token, Digital ID, Video eKYC and Payments industries
+with a focus on Digital Retail shops, Events Tech, Ed-tech, Tele-medicine, Digital Vault, and Transit Booking.
+
+ 
+
+We
+have a methodical approach to the payments acceptance industry. Our proprietary business applications are developed as a cloud-SaaS model
+for web and mobility, offering flexibility, security and scalability to our customers. The Company s proprietary cloud and mobility
+applications are licensed as white-label solutions to our customers and partners. We develop business process applications for B2B, B2C,
+B2B2C and P2P with integrated payment networks and embedded third party tools to expedite the go-to-market for our customers. This merchant
+on-boarding strategy allows for easy adoption and ready-to-market products for our customers. Further, we seek to identify vendors with
+unique technologies which we may seamlessly integrate with as part of a pay-per-use model by tier volume pricing embedded within our
+applications, a process also known as "API s". This strategy amplifies both merchant and customer engagement while
+increasing revenues. We believe that API s are the backbone of our strategy.
+
+ 
+
+The
+rise in demand for cross-border payments to support international trade has become a major opportunity for SmartCard Marketing Systems
+to offer both digital payment rails combined with digital card payments services as Payments as a Service ("PaaS"). The Company
+uses its own payment rails as an embedded payment services strategy to accelerate its portfolio of commercial deployments for its customers.
+
+ 
+
+The
+Company has positioned itself to be a key services and applications provider in the Paytech, Fintech and Blockchain industries with its
+unique strategy of licensing its technology with embedded payment rails, blockchain protocols, and utilities within the Company s
+portfolio of applications. This unique agnostic ecosystem provides business intelligent processes, embedded utilities and payment technology
+resources in a digital strategy for faster deployments. This ecosystem and digital strategy technology is offered in markets that are
+either regulated or in the process of developing and/or implementing their regulatory framework to allow for mass adoption.
+
+ 
+
+SmartCard
+Marketing Systems has an IP portfolio of 20+ proprietary solutions. All of the Company s proprietary platforms are designed with
+at least three tier levels via Partner, Merchant and Individual users. These users are interlinked through a permission-based structure
+on each platform through a registration and approval process ensuring compliance and safety.
+
+ 
+
+Our
+continuing strategy is to develop a seamless portfolio of specialized industry payment technology wireframes, marketplaces and to allow
+our customers to "Brand As Their Own" for e-commerce and E-POS semi-integrated solutions on the cloud and mobile infrastructures
+to market and enable their portfolios of merchants and consumers. The result is a robust performing lineup of middleware s that
+integrate easily with various types of payment industry financial institutions and processors creating a powerful gateway. We target
+banks and Third Party Processors for host issuing, acquiring and local payment industry businesses with an existing merchant portfolio
+mix that is ready for a breadth of trending technologies which incorporate everything from payments, blockchain to social-media advantages
+for their customers with an integrated price matrix to their gateways to provide seamless activations and revenues.
+
+ 
+
+We currently rely on
+a small number of customers for the majority of our revenue. As reflected in our accompanying consolidated financial statements,
+for the nine months ended September 30, 2022, our revenue was $440,487, and for the year ended December 31, 2021, our revenue
+was $405,412. We have not generated profits since inception, have sustained net losses of $988,941 for the year ended December
+31, 2021 and $357,723 for the nine months ended September 30, 2022, and have incurred negative cash flows from operations for
+the years ended December 31, 2021 and 2020. As of December 31, 2021, we had an accumulated deficit of $8,417,539. Accordingly,
+our accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
+Our ability to continue as a going concern for the next twelve months is dependent upon our ability to generate sufficient cash
+flows from operations to meet our obligations, which we have not been able to accomplish to date, and/or to obtain additional
+working capital from related and third-parties. Through the date our consolidated financial statements were available to be issued,
+we have been financed by our primary shareholder and third-party investors. We have suffered recurring losses from operations,
+have a significant accumulated deficit, continue to experience negative cash flows from operations, and our financial statements
+do not include any adjustments that might result from the outcome of this uncertainty. For the foregoing reasons, our independent
+auditor raised substantial doubt regarding our ability to continue as a going concern in its accompanying opinion to our financial
+statements.
+
+ 
+
+The Company
+currently generates revenues through the white-label licensing of its cloud and mobility applications and through our processing of recurring
+payments transactions. In addition, the Company also has a strategic financial model in fintech which is driven by an exchange of value
+through the licensing our technologies to clients and partners in consideration for equity in their respective companies combined with
+a revenue share model. The Company s business lines which are currently generating revenue include: Remote Deposit Capture, Cross-border
+Payments, Fintech Accelerator, Genorocity, Granularchain, OriginatorX, NFT Limited Series, and Qr.guru. The Company s business
+lines which are not currently generating revenues include: Menu.events, Mytravel.menu, Phaces.io, Profiler.us, Onroute.tech, ijobs.shop,
+articul8te, Mtickets.events, Abotslife, and Doctor-vid. 
+
+ 6 
+
+ 
+
+ 
+
+ 
+
+Our
+IP Portfolio Introduction Timeline 
+
+ 
+
+The
+below timeline represents the Company s conception and initial development of each industry application in the Company s
+intellectual property portfolio.
+
+ 
+
+ 
+
+Principal
+Products and Services
+
+ 
+
+The
+Company maintains an extensive IP portfolio which can be licensed within multiple industries. The below table demonstrates that the growth
+in each industry creates a direct channel opportunity for the Company. The primary challenge that we currently face is our inability
+to pursue multiple industries simultaneously due to our undercapitalization. We also face fierce global competition. However, in connection
+with our strategic alliances with Compuage Infocom India, PWC India, and XPAY Worldwide Corporation in the Philippines, we hope to be
+able to enter additional markets as each of these business relationships provides us with the ability to integrate through the local
+reselling of the Company's technologies by their respective networks and partners, which could in turn enable the Company to provide
+embedded payments using our technologies through local financial institutions and payments services partners. The added advantage of
+this strategy may reduce market-entry friction.
+
+ 
+
+Our
+in-house design concept and development technology lab develops our proprietary software solutions and applications which we offer to
+our customers as white-label "Brand as your Own" licensing opportunities through our own internet business marketplace, www.emphasispay.com.
+Our e-commerce, cloud and mobility architecture includes: Payments with QR & Wallet, Remote Deposit Capture, Blockchain, Crypto,
+NFTs, EKYC by Video, E-commerce, Cross Border FX, Events Management, Transit and Tracking, Documents Vaulting, Digital ID Key, E-Gaming,
+E-Sports, Card Issuing Management & Media Publishing. These target industries combined represent more than $22.8 Trillion in opportunities
+between 2022 – 2025 (as referenced herein, in "Market Opportunities"). Our proprietary software portfolio, which
+we offer to our customers for white-label licensing through our Emphasispay.com marketplace, currently includes the following applications:
+
+ 
+
+ 
+
+ 7 
+
+ 
+
+ 
+
+ 
+
+Intellectual
+Digital Property Assets Portfolio 
+
+ 
+
+ 
+ Platform
+ 
+ Description
+ Life
+ Cycle
+
+ 
+ Genorocity 
+
+ www.genorocity.com
+
+ 
+
+ 
+
+ 
+ A
+ Digital Retail Platform & Wallet with a suite of features for Malls, Hotel & Entertainment Property, Theme Parks, Enterprises,
+ Franchisers and more. Coupons, Cards, Loyalty points, Social-media, Offer Showcase, Promoted offers, Proximity, Beacon Tech for both
+ Web & Mobile Applications with payment gateways.
+ In
+ Use
+
+ 
+ Mtickets.events 
+
+ www.mtickets.events 
+
+ www.mobile.events 
+
+ 
+
+ 
+ A
+ digital events and mobile Ticketing management platform with an events portal for planners, associations, retailers and networking
+ groups. A full digital suite of features includes: creating of events, conferences, exhibitors, collaborators, partner suppliers,
+ ticketing and registrations. Both web and mobile applications with payment gateways embedded.
+ Marketable
+
+ 
+ Check21SaaS
+
+ www.check21saas.com 
+
+ www.checkvalet.com 
+
+ 
+
+ 
+ Remote
+ Deposit Capture technology. Cloud-based with multi-scanner options, seamlessly integrated, working remotely from branch or client
+ locations. Also with processing functionality and x9 clearing files for settlement. 
+ In
+ Use
+
+ 
+ Articul8te 
+
+ www.articul8te.com 
+
+ 
+
+ 
+ Our
+ more recent release Digital Data-Room for Sales, Content & Task management application both Web & Mobile. The suite of features
+ includes: Private or Public mode with Group set-up, To-do Lists, Social-media & Articles publishing, Creating Tasks and Invites,
+ with tracking and calendar functionality.
+ Marketable
+
+ 
+ Mytravel.menu 
+
+ www.mytravel.menu
+
+ 
+ Designed
+ to capture the Consumer & Business pre-order food market and onboard or inflight menu sales. The application allows transport
+ operators to easily integrate and import menu options.
+ Marketable
+
+ 
+ iJobs.shop 
+
+ www.ijobs.shop
+
+ 
+ A
+ digital job seeker solution for both merchant and job seeker. This innovative solution is QR Code based and allows the job seeker
+ to simply upload their CV and Profile within seconds. It offers the merchant a web portal to publish job opportunities and promote
+ content through popular social media channels. 
+ Marketable
+
+ 
+ Emphasispay 
+
+ www.emphasispay.com 
+
+ 
+
+ 
+ A
+ proprietary CRM & CSM solution Products and Services Portal.
+
+ Marketing
+ & Communications
+
+ Marketing
+ PDF s & Onboarding PDF s
+
+ Partners,
+ ISV & Reseller Portals
+
+ Client
+ Prospect forms
+
+ Webinars,
+ Training, Maintenance & Support
+
+ Portal
+ Banners
+
+ In
+ Use
+
+ 
+
+ 
+
+ 8 
+
+ 
+
+ 
+
+ 
+
+ 
+ QR.guru 
+
+ http://www.qr.guru 
+
+ http://myshopping.guru 
+
+ http://www.prizescan.guru
+
+ 
+ A
+ digital e-Commerce shopping platform; a lead generator and capturing solution for sales events, MLM and affiliate marketing. Generates
+ automated unique URL and QR codes by event or business type. Includes a user- friendly product selection list, as well as exportable
+ leads and data. Includes a Prize Scan solution to capture data and set prizes on products.
+ In
+ Use
+
+ 
+ Menu.events 
+
+ http://menu.events
+
+ 
+ Made
+ for event facilities, conference centers and catering companies. Offers a fully digital catering order application for both web and
+ mobile. Includes dashboards for customers, merchants, and administrators, with a customizable interface.
+ Marketable
+
+ 
+ Granularchain 
+
+ http://granularchain.com
+
+ 
+ A
+ digital ID Key with a permission-based onboarding and EKYC by Video Biometric solution with two-level authenticate solution on a
+ permission-based transaction architecture for Digital ID with Documents Vault 
+ In
+ Use
+
+ 
+ Profilr.social 
+
+ http://profilr.social
+
+ 
+ A
+ search engine and booking tracking solution with eKYC that organizes public records and social network information into simple profiles
+ to help you safely find and learn about people. The ability to build a case file on an individual is now a simple task with Profilr.social.
+ Marketable
+
+ 
+ Onroute.Tech
+ 
+
+ http://www.onroute.tech
+
+ 
+ Designed
+ to manage Booking Ride and Tracking solutions for individuals, limousine, courier, shuttle and bus services for the transit industry.
+ Marketable
+
+ 
+ Distributer.Email
+ 
+
+ https://distributer.email
+
+ 
+ An
+ email campaign and analytics solution for enterprises and agencies to distribute and manage email campaigns with analytics. 
+ In
+ Use
+
+ 
+ Atelier.Social
+ 
+
+ https://atelier.social
+
+ 
+ A
+ publishing and managing tool for Social Media Content, Marketing and Networking. A critical tool to collect data, analytics and reporting
+ to improve opportunity and conversion.
+ Marketable
+
+ 
+ ABotsLife
+ 
+
+ https://abotslife.com
+
+ 
+ Connects
+ your business with buyers through real-time conversations on your business site, social media, WhatsApp, and other platforms and
+ captures the data for call to action. With Features such as Machine Learning, AI ChatBot is a preferred mode of conversation with
+ businesses, supporting customers with queries, task walk through and management, and lead generation, sales support. Preferred by
+ Educational Institutions, Banks, FI s, Insurance companies, Pharmaceuticals, Hospitals, Real Estate, Logistics, Tele-Medicine
+ and SME s across industries.
+ In
+ Use
+
+ 
+
+ 
+
+ 9 
+
+ 
+
+ 
+
+ 
+
+ 
+ Eschool System 
+
+ https://eschool.systems
+
+ 
+ School
+ Management System platform enables schools to operate on a cloud environment enabling them to manage the complete array of educational
+ and administrative operations.
+ Marketable
+
+ 
+ Doctor Vid 
+
+ http://doctor-vid.com
+
+ 
+ The
+ Platform provides Medical Clinics and Doctors with the Tele-Medicine communications needed to facilitate both scheduling and E-Video
+ sessions. Enabling doctors, hospitals, and pharmacies to register on the platform and customers can access and book appointments
+ seamlessly and contactless, and integrated with payment gateways. 
+ In
+ Development
+
+ 
+ Phaces.io 
+
+ http://phaces.io
+
+ 
+ A
+ SaaS solution for Organizations to enable Facial Recognition for security verification and to authenticate users for online meetings,
+ webinars, conferences and onsite meetings or events.
+ In
+ Development
+
+ 
+ OriginatorX 
+
+ http://originatorx.com
+
+ 
+ The platform underwrites the entire issuing,
+ publishing and auditing process of the Digitization of Debt, Equity or Patents into Tokens or Crypto Coins. Delivers a powerful management
+ and audit application to Issue ERC20 Tokens and streamlines them into the new global economy by way of SmartContract Auctions.
+
+ 
+
+ "Underwriting" refers to the process
+ of compiling all company data, (e.g. corporate, legal, and management information, etc.) required to be collected and verified, and
+ authorized for approval. This is the equivalent of a banking institution s "KYC" process for a guaranteed debt
+ note, whereby the issuer of the note must submit the data and structure of the product to be tokenized into a digital token. The
+ offering of the token or digital debt / asset and valuation including the maximum supply and rules of engagement, also known as Tokenomics,
+ must all be included as part of the underwriting process.
+
+ In
+ Use
+
+ 
+ NFT Limited Series 
+
+ http://nftlimitedseries.com
+
+ 
+ NFT Limited series offers the unique ability
+ to curate in sequence multiple NFTs, thus creating a limited series. NFT Limited Series is a new addition to the Company s
+ Ecoverse – designed to Mint your NFTs
+
+ 
+
+ The platform also offers a virtual tour of
+ the NFT marketplace allowing individuals to browse through the options, choose from the store and purchase. Artists, businesses and
+ individuals can mint and display their products / services and NFTs in the marketplace and place a bid option within a specified
+ timeframe.
+
+ In
+ Use
+
+ 
+ Axepay.com 
+
+ https://axepay.com
+
+ 
+ The
+ platform is an end-to-end fully automated cloud-based, cross-border, enterprise grade payments infrastructure that seamlessly processes
+ multiple transaction payment types (B2B,B2C, B2B2C, C2B,P2P) and methods (e-commerce /e-billing /e-escrow/MPOS and POS/ single or
+ bulk pay-in and pay-out, prepaid cards top up/send) with risk management and a global compliance ecosystem all accessible by an Axepay
+ API and a user interface. Axepay provides a portal for cross-border FX payments as a service by allowing access to our network of
+ financial services partners and specializes in offering cross-border payment rails for more than 180 countries and onboarding in
+ more than 42 Countries including China. 
+ In
+ Use
+
+ 
+
+ 
+
+ 10 
+
+ 
+
+ 
+
+ 
+
+Operational
+History
+
+ 
+
+Since
+the beginning of 2015, the Company has focused on two distinct channels of business development:
+
+ 
+
+ 
+1)
+The development and commercialization of its proprietary software platform solutions and applications for the payments, incentives and events industries; and
+
+ 
+
+ 
+2)
+Strategic partnerships to develop alterative payments solutions for payment industry businesses, including banks, telecoms, acquirers / issuers of credit cards (e.g. credit, debit and loyalty cards) as an acceptance point for emulating payment and rewarding transactions, processing and settlement. 
+
+ 
+
+The
+Company s first partnership entered into with Contact Innovation in North America in late 2014 and early 2015 resulted in the technology
+development for our Check21 Act software platform, servicing the need for Remote Deposit Capture (RDC), which was commercially deployed
+in trial stages in late May 2015 with the Company s first joint client, ICICI Bank of India (its Canadian subsidiary across 14
+branches and select corporate clients). The platform solution as a cloud-based host was ultimately branded as Check21saas.com, and its
+successful deployment is now allowing us to market the platform to customers internationally. Concurrently with the development success
+of Check21Saas.com, the Company commenced the design and development of its Genorocity.com platform, and shortly thereafter, its Mtickets.events
+platform.
+
+ 
+
+Throughout
+2016 and 2017, the Company ambitiously sought to expand its technology portfolio to meet the new changes in global markets for payment
+business processing applications and the foreseeable demand in the financial, workforce and retail markets for intelligent business applications
+ready to deploy.
+
+ 
+
+Throughout 2017 and 2018, the Company
+continued to develop its payment technology infrastructure and worked with our existing customers to commercialize software solutions,
+strengthening its position in the financial services segment. We also began transitioning the Company from a direct merchant services
+provider to enabling a channel of portfolio merchants for banks and telecom businesses. This transition allows us to position ourselves
+as a technology host to support processors and industry consultants while further building relationships with banks and credit unions
+and partnering with payment providers globally. A series of successful industry channel partners in Airlines, Events Management, and Shopping
+Centers, opened up opportunities for the Company to leverage a definitive strategy to design, develop and license its technology portfolio.
+The introduction of Menu.events, Mytravel.menu, Onroute.tech became part of the Company s expanding offering.
+
+ 
+
+In
+2018, the Company invested in executive management in India to open a new channel of business opportunities to accelerate our technology
+offerings in a new robust economy of scale. We have been strategizing avenues for working with financial institutions in India and educating
+them on our technology portfolio, so that we might enter the Indian market as a vibrant technology company and leader in the Electronic
+Know Your Client ("EKYC") marketplace for digital solutions. We are actively working with the Mumbai FinTech Hub (established
+by the Government of Maharashtra for implementing Maharashtra State FinTech Policy), VISA, the India Institute for Development and Research
+in Banking Technology or "IDRBT" (the Certifying Authority for the Indian Banking and
+Financial Sector, licensed by the Controller of Certifying Authority, Government of India, for issuing Digital Certificates), and more
+recently the PWC India s International Financial Service Centre or "IFSC" (set-up to undertake financial services transactions
+that are currently carried on outside India by overseas financial institutions and overseas branches / subsidiaries of Indian financial
+institutions), in connection with embedded financial services products and embedding domestic payment schemes utilizing the Company s
+technologies. In addition, the Company is in continual engagement with financial institutions and enterprises in the India region to
+provide access the Company s product portfolio, and with respect to integrations with Visa CyberSource and Visa Direct, which provides
+potential significant value as it would allow us to service or license to any Visa member bank or enterprise worldwide that is enabled
+with the Visa Payment Facilitator. Visa Payment Facilitator acquiring is a payment processing service licensed to member banks through
+major card schemes such as Visa, MasterCard, Amex, and Discover.
+
+The
+Company s 2018 launch of Granularchain.com created an important opportunity for the Company, as these solutions cater to larger
+enterprises required to meet the EKYC requirements. Granularchain.com is a multi-link relationship management solution for Signature
+capture EKYC for the financial industry, which allows financial institutions and enterprises to create, issue and manage securely a QR
+engine-exchange for permission-based "invitation only" access of client profiles, documents, digital signatures, for corporate
+or individual users. Granularchain.com uses a blockchain token to create tamper-resistant encryption of data within the system, but neither
+Granularchain.com nor the Company logs or maintains any client data. Neither Granularchain.com nor the Company are involved in the issuance
+or management of any cryptocurrency issuances or offerings. Please see our "Risk Factors" for additional information regarding
+the use of blockchain elements. One of the more widely known inherent risks associated with the
+blockchain relates to the 51% vulnerability, which can permit an attacker to break down the consensus mechanism and assume control over
+the blockchain.
+
+ 
+
+The
+Company s expansion in India has led to our establishment of various strategic alliances, including:
+
+ 
+
+ Mumbai
+ Fintech Hub - A Government of Maharashtra Initiative for implementation and promotion
+ of Fintech in the State, located Mumbia, in the Financial and Economic capital of India.
+
+ 
+
+ Compuage
+ Infocomm India Ltd. - A major distributer in India with roughly 12500+ online and
+ offline retailers, resellers and system integrators in SAARC Region
+
+ 
+
+ 11 
+
+ 
+
+ 
+
+ 
+
+ Wipro
+ Ltd. - An IT & ITES service company and integration company with a market cap
+ of $8B USD. Wipro caters to the EU, Middle East and Africa regions, giving the Company access
+ to with Banks, Financial Institutions, Organizations and Governments in the regions.
+
+ 
+
+ Redington
+ India Ltd. - An in-principal approval to access their distribution channel of 37,500
+ Channel Partners and Resellers in the India and SAARC regions, Middle East, Africa, and South
+ East Asia.
+
+ 
+
+ IDBRT
+ (Institute for Development and Research in Banking Technology) - Established by the
+ Reserve Bank of India, is a unique institution focused exclusively on Banking Technology.
+ The Company works closely with the organization to assist them with innovative technology
+ for Indian banks
+
+ 
+
+In
+2020, the Company released three additional SaaS platforms to meet the needs of concerns raised by the COVID-19 Pandemic, which created
+further opportunities in education technology ("Edtech"), Telemedicine, and pre-screening security technologies. Our response
+to this was our release of our Eschool.systems, Phaces.io, and Doctor-Vid software platforms, which are having success with opportunities
+in cloud products distribution in the India and the SARC regions. During this time, the Company began planning its expansion plan into
+Blockchain, Non-Fungible Token (NFT), Digital Token issuances, and Smart Contracts as an alternative payments scheme.
+
+ 
+
+Recent
+Developments
+
+ 
+
+In
+2021, the Company focused on several business engagements for the development of its distributor sales channel, including our engagement
+with ITD Cloud, a US based distribution company with over 30 resellers in technology VoIP services in the US. we also engaged a major
+distributer, Compuage Infocomm India, which has over 10,000 resellers throughout India, and the SARC and EMEA regions. Compuage Infocomm
+India s primary customers are banks and telecoms. This engagement became a strategic entry point for promoting through experiences
+in the field networks. This engagement provided the Company with a wider reach to approach and offer clients with the technology suite
+through this partnership. In addition, throughout 2021 – 2022, the Company engaged with various payment partners worldwide, including:
+
+ 
+
+ 
+ 
+XCoop. A company which provides services to Latin America expanding the reach of our payment rails in LATAM.
+
+ 
+ 
+Unified Signal. A company with over 44 Million Wallet Clients.
+
+ 
+ 
+FacilitaPay. This integration provides Payment and a Bank as a Service (BaaS) platforms for companies around the world that needs to connect to the LATAM financial ecosystem and infrastructure.
+
+ 
+ 
+FISERV: This offering provides PCI Compliant PoS and MPoS devices giving Card present options to our clients in North America
+
+ 
+ 
+XE: This engagement provides a comprehensive range of currency services and products, including our Currency Converter, Market Analysis, Currency Data API and quick, easy, secure Money Transfers for individuals and businesses.
+
+ 
+ 
+Cambioreal. This engagement facilitates international money remittance in Brazil and the US.
+
+ 
+ 
+AnyPay: A new way of accepting payments in the Philippines. The Anypay platform was built by the Company and is an ecommerce payment cart and wallet for merchants and individuals in the Philippines through our minority stake in XPay World. The platform is backed by the PF license that was granted to Xpay World from Paymaya, which is a subsidiary of the largest telecom companies in the Philippines.
+
+ 
+ 
+Cellulant: The engagement expands our reach in the African sub-continent in approximately 26+ countries.
+
+ 
+
+The
+Company also expanded various products in connection with our intellectual property portfolio, keeping abreast of market requirements,
+including.
+
+ 
+
+ NFT
+ Limited Series: A NFT minting, issuing, publishing and trading platform.
+
+ 
+
+ A
+ Bots Life: An AI-driven chat bot for organizations to engage with clients on aspects
+ including sales inquiry, support, product walk through, regtech analysis and more.
+
+ 
+
+Our
+continuing strategy is to develop a seamless portfolio of specialized industry payment technology wireframes, marketplaces and to allow
+our customers to "Brand As Their Own" for e-commerce and E-POS semi-integrated solutions on the cloud and mobile infrastructures
+to market and enable their portfolios of merchants and consumers. The result is a robust performing lineup of middleware s that
+integrate easily with various types of payment industry financial institutions and processors creating a powerful gateway. We target
+banks and Third Party Processors for host issuing, acquiring and local payment industry businesses with an existing merchant portfolio
+mix that is ready for a breadth of trending technologies which incorporate everything from payments, blockchain to social-media advantages
+for their customers with an integrated price matrix to their gateways to provide seamless activations and revenues.
+
+ 
+
+On
+September 20, 2019, the Company entered into an agreement to license its technology to XPAY World Corporation ("XPay") in
+the Philippines in exchange for seven percent of XPay s outstanding shares of common stock. Pursuant to this agreement, the Company
+and XPay worked in collaboration to develop and bring to market a payments industry certification PCI in the Philippines, and to introduce
+the Company s entire technology portfolio into the India market. In addition, the Company developed the Anypay.ph platform for
+Xpay to deliver to market a payment solution for onboarding micro merchant accounts through the payment facilitator and third party processors
+licenses. Xpay was sponsored by PayMaya the subsidiary of Smart Telecom and KKR Group Investments.
+
+ 
+
+On
+June 25, 2021, the Company entered into a purchase of source code agreement with Acquisition Botberries Inc. in India to acquire a copy
+of its source code with embedded artificial intelligence for the Company to fast-track the technology in its own platforms for an enhanced
+virtual assistant and customer experience. The Company s "Abotslife" technology in its IP portfolio and its Chat Bot
+Ai technology source library allows the Company to advance production of virtual customer relationship management and develop a virtual
+assistant solution for businesses to service customers with Artificial Intelligence and self -service automation techniques.
+
+ 
+
+A
+new virtual market is becoming more favorable to the concept of Metaverse and embracing Crypto, NFT and Blockchain. The Company has strategically
+developed a series of platforms which enable organizations and communities to deploy faster in order to meet the expectations and preferred
+engagement environments of today s customers. Not only can an individual now launch a coin in the virtual market, but individuals
+can ensure that these coins provide the user with an added value purpose which becomes the driving force to engage all the community
+members at large.
+
+ 
+
+ 12 
+
+ 
+
+ 
+
+ 
+
+In
+early 2022, we began the development and deployment of three new platforms in the Blockchain sector, as follows:
+
+ 
+
+ 
+1.
+NFT Limited Series (http://www.nftlimitedseries.com). A platform which offers the unique ability to curate in sequence multiple NFTs, thus creating a limited series. NFT Limited Series is a new addition to the Company s Ecoverse, designed to "Mint your NFTs".
+
+ 
+
+This
+platform also offers a virtual tour of the NFT marketplace allowing individuals to browse through their options, choose from the store
+and purchase. Artists, businesses and individuals can mint & display their products / services and NFT in the marketplace and place
+a bid option within a specified timeframe.
+
+ 
+
+ 
+ 
+ 2.
+ OriginatorX (http://originatorx.com).
+ A platform which "underwrites" the entire issuing, publishing and auditing process of the Digitization of Debt, Equity
+ or Patents into Tokens or Crypto Coins. The platform delivers a powerful management and audit application to Issue ERC20 Tokens and
+ streamlines them into the new global economy by way of SmartContract Auctions. "Underwriting" refers to the process of
+ compiling all company data, (e.g. corporate, legal, and management information, etc.) required to be collected and verified, and
+ authorized for approval. This is the equivalent of a banking institution s "KYC" process for a guaranteed debt
+ note, whereby the issuer of the note must submit the data and structure of the product to be tokenized into a digital token. The
+ offering of the token or digital debt / asset and valuation including the maximum supply and rules of engagement, also known as Tokenomics,
+ must all be included as part of the underwriting process.
+
+ 
+ 
+
+3.MetaRealm.agency
+ (https://metarealm.agency). An agency platform for VR and AR viewing with an enhanced
+ service creator studio for virtual shops.
+
+ 
+
+The
+design of these combined strategies for the coins launched by an enterprise incorporates a multi-tenant multi-industry solution, "Tokenomics"
+- allowing onboarding merchants a marketplace where they upload their products, services and offers. The community members use their
+coins to trade, exchange or redeem to purchase or remit. Further, the merchant engages with the customers through various methods of
+engagement i.e., Loyalty Rewards programs, Retail, E-gaming and Esports.
+
+ 
+
+Our
+combination of platforms enable an organization or a community to create a self-sustaining eco-system to launch their own coins and marketplace,
+for individuals and merchants, with an engagement tool to ensure a faster go to market strategy.
+
+ 
+
+One
+example of our live business use case application is our client, Shekel Coin. This coin is launched for a community creating an ecosystem
+to engage individuals and merchants and ensuring that all the necessity of a given household is fulfilled with in the Metaverse of their
+own making. We refer to this as, "Metaverse in Action, as unlike most Metaverses, our strategy provides all that a user may have
+imagined with a hands-on life application and usage.
+
+ 
+
+It
+is evident that with the mass adoption of Virtual and Augmented Reality, and the popularity of Metaverses and Digital Realms, the next
+phase for enterprises and financial institutions will likely represent the necessity to enter these new market segments and channels.
+Our role is to provide the utilities and tooling required to deliver the customer journey for b2b, b2c, b2b2c and p2p channels. The Company
+has opened its design studio for AR & VR design under the marketable domain, Metarealm.agency, to offer our customers the ability
+for digital collaborations.
+
+ 
+
+XPay
+Worldwide Overview
+
+ 
+
+XPAY
+Worldwide Corporation ("XPay") is Philippines-based and globally deployed boutique technology solutions provider that delivers
+the newest Digital Transition and Financial technologies available today. The Company holds a seven percent minority stake in XPay. The
+Company s partnership with XPay provides for a payment technology known as a Terminal Management Solution (TMS), which allows for
+technology applications that require Android Point of Sale terminals to accelerate services to the Company s South East Asia clients
+for their Digital Transformation and Payment initiatives. Xpay works closely with clients from inception (prototyping, planning), through
+designing and building phase, to the completion of the supply chain (deploying, managing) and fills any gaps in digital operations and
+payment strategy with a customized solution. XPay provides all required resources to elevate a company s Digital Payment and Marketplace
+and White-labels their certified payment infrastructure to elevate clients to a premier payment provider to their consumer and institutional
+market.
+
+ 
+
+Services
+offered by XPay: 
+
+ 
+
+ 
+ 
+PCI Compliant Remote TMS Host, which includes a Merchant Management Platform, Payment Switch and e-Commerce gateways
+
+ 
+ 
+AWS Hosting
+
+ 
+ 
+EMV PoS Android Device Certification
+
+ 
+ 
+MPoS integrated and certified
+
+ 
+ 
+E-Commerce Cart
+
+ 
+ 
+Virtual Terminal
+
+ 
+ 
+Blockchain AI
+
+ 
+ 
+Payment Facilitation License (Philippines): VISA, MasterCard, JCB, AMEX (USD &PHP)
+
+ 
+ 
+Third Party processor License in progress: : VISA, MasterCard, JCB, AMEX (USD &PHP)
+
+ 
+ 
+Aggregator for Gcash & Maya Super wallets Philippines
+
+ 
+
+ 13 
+
+ 
+
+ 
+
+ 
+
+The below table demonstrates
+the Personal Card Information, or, "PCI", and methods of contact for card payment flows, utilizing the XPay Terminal Management
+Host Switch for EMV POS (Euro MasterCard Visa chip and pin compliant payment terminals) devices and card acceptance for Card Present
+Transactions by Xpay. "Terminal Management Host Switch" or "TMS" is a payment card acceptance platform for point-of-sale
+terminals and e-commerce carts. The column on the left specifies the license or certification requirement as part of the PCI which Xpay
+has completed and maintains as an industry standard. "PCI" is an industry standard requirement for "Personal Card Information"
+security. The column on the right describes usage under specific licenses or certifications granted by the sponsor acquiror of record
+in the respective country.
+
+ 
+
+ Payment Processing 
+
+License/ Certification
+Description
+
+PCI-DSS L3.2.1 Certified 
+One of the first smart Cloud Payment Processing switches to be built and PCI certified on AWS Cloud servers across the full spectrum of the payment universe, allowing plug-and-play white-labeling at a fraction of the cost and time for Enterprises and Financial Institutions. 
+
+Payment Facilitator and Third-Party Processor Licenses
+The
+only payment facilitator and third-party processor License issued by PayMaya to XPay in the Philippines (previously the subsidiary of
+Smart Telecom and now independent through investments by KKR Group Investments).
+
+Card types accepted: Visa, Mastercard, JCB, AMEX,
+WeChatpay, Alipay, PayMaya, Gcash, GrabPay*, and BancNet*
+
+Processing in USD and PHP and settlement of funds.
+
+Built
+specifically for infinite plug-ins of payment methods, including but not limited to: Fiat, E-Cash, Loyalty, and Cryptocurrencies 
+
+Online Payment System (OPS) Registration
+Regulated by the Central Bank of the Philippines (Bangko Sentral Ng Pilipinas)
+
+AML Certified
+Regulated by Philippines Anti-Money Laundering Council 
+
+Visa Direct
+Interconnectivity for Card-to-Card Transfer as part of the Visa Everywhere Initiative 
+
+ 
+
+Xpay
+World Architecture 
+
+ 
+
+ 
+
+Philippines
+Commercial Expansion
+
+ 
+
+XPay
+Philippines flagship client is Packworks Ventures, Inc., which provides enterprise resource planning ("ERP") and other
+enterprise software solutions to more than 150,000 sari-sari stores throughout the Philippines. Packworks solution is deployed
+as a technology layer that covers the full sari-sari value chain, including inventory ordering from the Brand Principals selling to resellers,
+or, "mega sari sari stores", and the reselling activity to the smaller retailers, or, "micro sari sari stores".
+
+ 
+
+Packworks,
+using software integrations with XPay s payment platform and the Company s proprietary technologies will deliver value added
+financial services. The initial stages are underway and include payment acceptance, loyalty, and wallet issuing. Later stages will include
+loan, insurance, and bank account origination, among others.
+
+ 
+
+Upcoming
+Licensing Opportunities
+
+ 
+
+XPay
+Philippines is engaged in advanced negotiations for the acquisition of a target company holding Philippine Central Bank licenses for
+Electronic Money Issuing, Virtual Asset Service Provider (crypto currency), and Remittance Transfer Company.
+
+ 
+
+ 14 
+
+ 
+
+ 
+
+ 
+
+Potential
+Acquisition of Additional XPay Singapore Equity 
+
+ 
+
+The
+Company and XPay Singapore have entered discussions for the Company s acquisition of additional shares of XPay Singapore as a result
+of XPay Philippines delivery of the commercial engagement with Packworks, which is due to successful collaboration and integration
+of the Company and the XPay Payment Platform.
+
+ 
+
+Axepay
+Inc. 
+
+ 
+
+The
+Company s partnership with Axepay Inc., a Canadian corporation ("Axepay"), commenced in 2016 to allow for cross-border
+payments including China. Axepay.com is a direct service to market platform for cross-border payments. The business model is based on
+embedded partnerships with financial service providers (financial institutions, MSBs, PSPs, EMIs and other payment service and foreign
+exchange providers that are regulated in the funds transfer, remittance, and foreign exchange trade desk industries. Our financial service
+partners have an important role in the Axepay infrastructure as Axepay.com is a technology solution and the platform provides the digital
+signature confirmation of instructions to our financial services partners on behalf of our clients and ultimate end-users. Any funds
+transferred payments or payments made using the Axepay platform are transferred by one or more of our financial services partners, depending
+on the type and method of payment. We currently have a large roster of financial service partners ready to deploy and we continue to
+explore and finalize additional providers to expand the financial service ecosystem of Axepay.
+
+ 
+
+ 
+
+2022
+Private Placement
+
+ 
+
+On March 10, 2022 (the "Issuance
+Date"), the Company entered into a Securities Purchase Agreement with Leonite Fund I, LP, an accredited investor (the "March
+2022 Investor"), to provide for the sale by the Company to the March 2022 Investor of a Senior Secured Promissory Note in the aggregate
+principal amount of $568,181.82 (the "March 2022 Note", and, the "Financing"), to be paid by the March 2022 Investor
+to the Company in two tranches (each, a "Tranche"). The first Tranche consists of a payment by the March 2022 Investor to
+the Company on the Issuance Date of $250,000, from which the March 2022 Investor retained $10,000 to cover its legal fees. A second Tranche
+consisting of $250,000 will be paid by the March 2022 Investor to the Company upon the Company achieving net earnings in excess of $45,000
+in two (2) consecutive calendar quarters during the 12 month period following the Issuance Date, less $5,000 which the March 2022 Investor
+will retain to cover its legal fees, resulting in an aggregate amount of up to $500,000 in total proceeds to be received by the Company
+in the Financing. The principal amount of the March 2022 Note includes an Original Issue Discount of $68,181.82 (the "OID"),
+resulting in an aggregate of up to $500,000 in total proceeds received by the Company in the Financing. The OID will be earned upon each
+Tranche on a pro-rata basis. (For example: upon the advance of the first Tranche, $34,090.91 will be added to the principal amount of
+the outstanding Note in addition to the amount advanced, and the total amount owed, or the total principal amount, will be $284,090.91.)
+In addition to the March 2022 Note, the March 2022 Investor also received (i) 3,000,000 shares of common stock of the Company (the "Shares"),
+and (ii) a common share purchase warrant (the "Warrant", and together with the March 2022 Note and the Shares, the "Securities")
+to acquire 5,000,000 shares of common stock of the Company. The Warrant is exercisable for five(5) years at an exercise price of $0.12
+per share. The closing of the Financing in the amount of $250,000 occurred on March 10, 2022.
+
+ 
+
+The
+maturity date (the "Maturity Date") for each Tranche is at the end of the period that begins on the date each Tranche is
+advanced and ends twelve (12) months thereafter, and interest associated with the March 2022 Note will reset daily and accrue at a rate
+equal to the greater of 14% per annum or WSJ Prime plus 6%, which is payable monthly by the Company. The March 2022 Note may be prepaid
+by the Company in whole or in part at any time, at 110% of the outstanding principal and accrued interest. In the event of default by
+the Company of the March 2022 Note, any amount of principal plus interest due will bear interest at the lesser of the rate of 24% per
+annum or the maximum legal amount permitted by law. The March 2022 Note and the Warrant carry standard anti-dilution provisions. In addition,
+pursuant to the March 2022 Note we agreed to file a Form S-1 Registration Statement to register the Securities. The March 2022 Note might
+be accelerated if an event of default occurs under the terms of the March 2022 Note, including, but not limited to, the Company s
+failure to pay principal and interest when due, certain bankruptcy events or if the Company is delinquent in its SEC filings. The Warrant
+may not be exercised by the March 2022 Investor into more than 4.99% of the Company s outstanding common stock at any point in
+time.
+
+ 
+
+ 15 
+
+ 
+
+ 
+
+ 
+
+If
+prior to the Maturity Date, the Company enters a subsequent financing on terms that are more favorable to the investor(s) in the subsequent
+financing than the terms of the Financing, the terms of the Financing will be amended to include such better terms so long as the March
+2022 Note is outstanding. In addition, the March 2022 Investor has the right of first refusal on any financing so long as the March 2022
+Note is outstanding. Additionally, the March 2022 Investor has the right to be repaid 100% of the remaining balance of principal and
+interest under the March 2022 Note from the net cash proceeds of any future financing or asset sale closed on by the Company, provided,
+however, that the repayment obligation will only be applicable to up to 50% of the first $500,000 in the aggregate generated by the Company
+from any future financing proceeds. Further, the March 2022 Investor has the right to participate in any future offering by the Company
+for a period of eighteen (18) months from the Issuance Date for an amount up to the Financing amount in strict accordance with the terms
+of such future offering. In addition, the Company is required to file a Registration Statement on Form S-1 with the SEC to register the
+Shares, and the shares of common stock issuable upon exercise of the Warrant.
+
+ 
+
+The
+obligations of the Company under the March 2022 Note constitute a first priority security interest and rank senior with respect to any
+and all indebtedness of the Company existing prior to or incurred as of or following the initial Issuance Date. The obligations of the
+Company under the March 2022 Note are secured pursuant to the Security and Pledge Agreement entered into between the Company and the
+March 2022 Investor on the Issuance Date. So long as the Company has any obligation under the March 2022 Note, the Company will not incur
+or suffer to exist or guarantee any indebtedness that is senior to or pari passu with the Company s obligations under the March
+2022 Note. The March 2022 Note is secured by the assets of the Company.
+
+ 
+
+The
+Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act")
+for the private placement of the Securities pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated
+under the Securities Act. The March 2022 Investor is an accredited investor as defined in Rule 501 of Regulation D promulgated under
+the Securities Act. The March 2022 Note is a debt obligation arising other than in the ordinary course of business which constitutes
+a direct financial obligation of the Company.
+
+ 
+
+The
+foregoing information is a summary of each of the agreements involved in the transactions described above, is not complete, and is qualified
+in its entirety by reference to the full text of those agreements, each of which is attached an exhibit to this prospectus. Readers should
+review those agreements for a complete understanding of the terms and conditions associated with this transaction.
+
+ 
+
+Corporate
+History
+
+ 
+
+The
+Company was incorporated in the State of California on July 19, 1983, as Quality Associates, Inc., and changed its name to ComputerMarketplace,
+Inc. in June 1987. In March 1993, ComputerMarketplace, Inc. (i) changed its name to Computer Marketplace(R), Inc. ("Computer Marketplace(R)")
+and (ii) changed its state of incorporation from California to Delaware. On August 27, 1999, the Company changed its trading symbol on
+the OTC Bulletin Board from "MKPL" to "EMKT" in contemplation of its name change to eMarketplace Inc., which
+such name change was effectuated on September 17, 1999.
+
+ 
+
+On
+February 10, 2006, the Company filed a Certificate of Incorporation with the State of Delaware to redomicile the Company in the State
+of Delaware with 100,000,000 authorized shares of common stock $0.001 par value per share.
+
+ 
+
+On
+March 3, 2006, the Company filed a Certificate of Amendment of Certificate of Incorporation to (i) change the name of the Company from
+eMarketplace Inc. to Smart Card Marketing Systems, Inc., and (ii) effect a reverse stock split of its issued and outstanding shares of
+common stock at a ratio of 1000:1, while maintaining its number of authorized shares of common stock at 100,000,000 shares. Additionally,
+on March 3, 2006, the Company changed its stock symbol from "EMKT" to "SMKG".
+
+ 
+
+On
+March 15, 2006, the Company entered into a definitive share exchange agreement (the "Share Exchange Agreement") with the
+shareholders (the "Smart Card Canada Shareholders") of Smart Card Marketing Systems Inc., a Canadian corporation ("Smart
+Card Canada"), pursuant to which the Company agreed to acquire from the Smart Card Canada Shareholders all of the issued and outstanding
+shares of common stock of Smart Card Canada held by the Smart Card Canada Shareholders in exchange for 53,999,999 restricted shares of
+common stock of the Company (the "Share Exchange Transaction). The Share Exchange Transaction closed on March 15, 2006 (the "Closing
+Date"). As a result of the consummated Share Exchange Transaction, our operations and management shifted to that of Smart Card
+Canada.
+
+ 
+
+On
+January 8, 2008, the Company filed a Form 15 with the Securities and Exchange Commission to deregister the Company s shares of
+common stock and suspend its reporting obligations under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
+
+ 
+
+On
+October 26, 2012, the Company filed a Certificate of Amendment of Certificate of Incorporation with the State of Delaware to increase
+its number of authorized shares of common stock from 100,000,000 to 300,000,000 shares.
+
+ 
+
+On
+February 22, 2018, the Company filed a Certificate of Amendment of Certificate of Incorporation with the State of Delaware to increase
+its number of authorized shares of common stock from 300,000,000 to 500,000,000 shares.
+
+ 
+
+ 16 
+
+ 
+
+ 
+
+ 
+
+Corporate
+Information
+
+ 
+
+The
+Company was incorporated in the State of California on July 19, 1983, subsequently changed its state of incorporation to Delaware in
+March 1993, and redomiciled in the State of Delaware on February 10, 2006. The Company changed its name to Smartcard Marketing Systems,
+Inc. on March 3, 2006.
+
+ 
+
+Our
+corporate headquarters is located at 20C Trolley Square, Wilmington, DE 19806. Our corporate telephone number is 844-843-7296. Our website
+address is www.smartcardmarketingsystems.com. We have not incorporated by reference into this prospectus the information on our website,
+and you should not consider it to be a part of this prospectus or any prospectus supplement.
+
+ 
+
+Risks
+Factor Summary
+
+ 
+
+The
+following is a summary of the more significant risks relating to our Company. A more detailed description of each of the risks can be
+found below in this prospectus under the caption "Risk Factors." Our business and ability to execute our business strategy
+are subject to a number of risks of which you should be aware before you decide to buy our common stock. In particular, you should consider
+the following risks, which are discussed more fully in the section entitled "Risk Factors" in this prospectus, as well as
+the other risks described in the section captioned "Risk Factors."
+
+ 
+
+Risks
+Related to our Business
+
+ 
+
+ 
+ 
+We have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future.
+
+ 
+ 
+We have not generated a significant amount of net income and may not be able to sustain profitability or positive cash flow.
+
+ 
+ 
+We will need substantial additional funding to continue our operations, which could result in significant dilution or restrictions on our business activities. We may not be able to raise capital when needed, if at all, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts and could cause our business to fail.
+
+ 
+ 
+We are heavily dependent on the success of our lead product candidates (which are in various stages of development), which will require significant additional efforts to develop and may prove not to be viable for commercialization.
+
+ 
+ 
+We will need to grow the size of our organization, and we may experience difficulties in managing any growth we may achieve.
+
+ 
+ 
+If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our market and our business would be harmed.
+
+ 
+ 
+If we are not able to attract and retain highly qualified personnel, we may not be able to successfully implement our business strategy.
+
+ 
+ 
+We have identified weaknesses in our internal controls and there can be no assurance that these weaknesses will be effectively remediated or that additional weaknesses will not occur in the future.
+
+ 
+ 
+Our share price is expected to be volatile and may be influenced by numerous factors, some of which are beyond our control.
+
+ 
+
+ Risks
+Related to our Industry
+
+ 
+
+ 
+ 
+The market for cloud solutions and mobility applications is highly competitive and we may be unable to compete effectively.
+
+ 
+ 
+We may be unable to respond to rapid technological changes with new solutions in a timely and cost-effective manner.
+
+ 
+ 
+Any significant disruption in service on our computer systems or caused by our third-party storage and system providers could damage our reputation and result in a loss of customers.
+
+ 
+ 
+If a cyber-attack was able to breach our security protocols and disrupt our data protection platform and solutions, and any such disruption could increase our expenses, damage our reputation, harm our business and adversely affect our stock price.
+
+ 
+ 
+The extent to which the COVID-19 pandemic could disrupt or adversely impact our future business, financial condition and results of operations is highly uncertain and cannot be predicted.
+
+ 
+ 
+Our services are dependent on our customers continued access to high-speed internet and the continued reliability of the internet infrastructure.
+
+ 
+ 
+We may not be able to retain our existing customers.
+
+ 
+ 
+A decline in demand for our services would cause our revenue to decline.
+
+ 
+ 
+We are partially dependent on third-party distributors to generate new customers and such relationships may be terminated or may not continue to generate new customers.
+
+ 
+ 
+We may be unable to sustain market recognition or brand loyalty and we may lose customers or fail to increase the number of our customers.
+
+ 
+ 
+We are subject to governmental regulation and other legal obligations related to privacy and any actual or perceived failure to comply with such obligations would harm our business.
+
+ 
+ 
+Errors, failures, bugs in or unavailability of our solutions released by us could result in negative publicity, damage to our brand, returns, loss of or delay in market acceptance of our solutions, loss of competitive position, or claims by customers or others.
+
+ 
+ 
+We face many risks associated with our growth and expansion plans, including relating to our intended international expansion.
+
+ 
+ 
+Challenges faced by our partner banks may also have a direct impact on our business and create harm.
+
+ 
+ 
+The loss of one or more of our key personnel, or our failure to attract, integrate, and retain other highly qualified personnel, could harm our business and growth prospects.
+
+ 
+
+ 17 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ Risks
+ Related to Intellectual Property
+
+ 
+
+ Assertions
+ by a third party that our solutions infringe its intellectual property, whether or not correct, could subject us to costly and time-consuming
+ litigation or expensive licenses.
+
+ 
+
+ Risks
+ Relating to our Common Stock and Securities
+
+ 
+
+ Our
+ stock price has fluctuated in the past, has recently been volatile and may be affected by limited trading volume and price fluctuations.
+
+ 
+
+ We
+ may be subject to the SEC s penny stock regulations.
+
+ 
+
+ Upon
+ exercise of our outstanding warrants we will be obligated to issue a substantial number of additional shares of common stock which
+ will dilute our present shareholders and may cause our stock price to decline.
+
+ 
+
+ We
+ may issue preferred stock without approval of our shareholders and have other antitakeover defenses which may make it more difficult
+ for a third party to acquire us and could depress our stock price.
+
+ 
+
+ We
+ do not intend to pay cash dividends for the foreseeable future.
+
+ 
+
+ Please
+see "Risk Factors" beginning on page 20 of this prospectus for a more detailed
+discussion of these risks. Additional risks, beyond those summarized above or discussed under the caption "Risk Factors"
+or described elsewhere in this prospectus may also materially and adversely impact our business, operations or financial results.
+
+ 
+
+ 
+
+ 
+
+ 18
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diff --git a/parsed_sections/prospectus_summary/2023/STEK_stemtech_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/STEK_stemtech_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/STEK_stemtech_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/SUGP_su-group_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/SUGP_su-group_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/SUGP_su-group_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/SWISF_sekur_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/SWISF_sekur_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/SWISF_sekur_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/SYBX_synlogic_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/SYBX_synlogic_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/SYBX_synlogic_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/TAOP_taoping_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/TAOP_taoping_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/TAOP_taoping_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/TCRG_cannaisseu_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/TCRG_cannaisseu_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..252e2e5c3493817b8f482fa48ed7780a380feab4
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/TCRG_cannaisseu_prospectus_summary.txt
@@ -0,0 +1 @@
+II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the State of Georgia on November 1 , 2023. The Cannaisseur Group, Inc. Date: November 1, 2023 By: /s/ Floretta Gogo Floretta Gogo Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated and, on the dates, indicated: Signature Title Date /s/ Xavier Carter Chief Operating Officer/Interim Chief Financial Officer November 1, 2023 Xavier Carter (Principal Executive Officer) /s/ Valarie M. Grant Corporate Secretary November 1, 2023 Valarie M. Grant /s/ Jamie Brown Board Member November 1, 2023 Jamie Brown /s/ Keijiro Valera Board Member November 1, 2023 Keijiro Valera /s/ Harold Woolfolk Board Member November 1, 2023 Harold Woolfolk
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/TXO_txo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/TXO_txo_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/TXO_txo_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2023/TYGO_tigo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/TYGO_tigo_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..24a511359f41cbcfdbbc03589a033064b99d96e5
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/TYGO_tigo_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights selected information appearing elsewhere in this prospectus or the documents incorporated by reference herein. Because it is a summary, it may not contain all of the information that may be important to you. To understand this offering fully, you should read this entire prospectus, the registration statement of which this prospectus is a part and the documents incorporated by reference herein carefully, including the information set forth under the heading Risk Factors and our financial statements. Overview of the Company We believe we are a worldwide leader in the development and manufacture of smart hardware and software solutions that enhance safety, increase energy yield, and lower operating costs of residential, commercial, and utility-scale solar energy systems. Our mission is to deliver products and solutions that are flexible and dependable, increase the energy generation of solar energy systems and address the need for change. The solar optimizer and inverter space is predominately serviced by two major suppliers. We expect to attract new customers and gain market share by expanding sales of our Module Level Power Electronics ( MLPE ), which provide solar panel power optimization, rapid shutdown and monitoring capabilities, and our Energy Intelligence solution ( EI solution ), which provides solar energy storage management capabilities. We have served the solar energy industry with advanced power and electronics, including the manufacturing and development of our MLPEs, since our inception in 2007, and we introduced our EI solution in 2021. We combine our MLPE and EI technology with intelligent, cloud-based software capabilities for advanced energy monitoring and control. We have focused to date on MLPEs, which are devices that reside under the solar panel and improve safety features and energy production for the installer and system owner. Our MLPEs are designed to be highly flexible solutions that work with other inverters and modules, providing the installer with an open system solution and a variety of choices when designing a system for the consumer. In the fourth quarter of 2021 and the third quarter of 2022, we began to offer our EI solution to residential customers in the U.S. and Europe, respectively. Our products power everything from single-digit kilowatt residential systems to commercial and industrial, and utility systems, scaling to hundreds of megawatts on rooftop, ground-mounted, and floating applications. The Business Combination and Related Transactions On December 5, 2022, ROCG, Roth IV Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of ROCG ( Merger Sub ), and Legacy Tigo, entered into an Agreement and Plan of Merger, as amended on April 6, 2023 (the Merger Agreement ), pursuant to which, among other transactions, on May 23, 2023 (the Closing Date ), Merger Sub merged with and into Legacy Tigo (the Merger ), with Legacy Tigo surviving the Merger as a wholly-owned subsidiary of ROCG (the Merger, together with the other transactions described in the Merger Agreement, the Business Combination ). In connection with the closing of the Business Combination, ROCG changed its name to Tigo Energy, Inc. Under the terms of the Merger Agreement, immediately prior to the effective time of the Business Combination (the Effective Time ), Legacy Tigo (i) caused each share of Legacy Tigo preferred stock issued and outstanding to be automatically converted into a number of shares of Legacy Tigo common stock (the Legacy Tigo common stock ) in accordance with Legacy Tigo s charter (the preferred stock conversion ) and (ii) used reasonable best efforts to cause the cashless exercise of Legacy Tigo warrants (each, a Legacy Tigo warrant ), in accordance with their terms, for Legacy Tigo common stock (the warrant exercise ). As of the Closing Date, all holders of Legacy Tigo have exercised such warrants for shares of Legacy Tigo common stock. Pursuant to the Merger Agreement, at the Effective Time, each share of Legacy Tigo common stock issued and outstanding immediately prior to the Closing (including shares of Legacy Tigo common stock issued in the preferred stock conversion and warrant exercise prior to the Closing but excluding shares owned by Legacy Tigo or any direct or indirect wholly owned subsidiary of Legacy Tigo as treasury stock, shares owned by ROCG, and shares of Legacy Tigo common stock issued and outstanding immediately prior to the Effective Time held by a holder who has not voted in favor of adoption of the Merger Agreement or consented thereto in writing and who is entitled to demand and has properly exercised appraisal rights of such shares in accordance with Section 262 of the DGCL 1 Table of Contents and otherwise complied with all of the provisions of the DGCL relevant to the exercise and perfection of dissenters rights (such shares (the dissenting shares )) were cancelled and converted into the right to receive 0.233335 shares of Common Stock. At the Effective Time, each outstanding Legacy Tigo stock option (each, a Legacy Tigo stock option ), whether vested or unvested, converted into an option to purchase a number of shares of Common Stock equal to the product of (x) the number of shares of Legacy Tigo common stock underlying such Legacy Tigo stock option immediately prior to the Closing and (y) 0.233335, at an exercise price per share equal to (A) the exercise price per share of Legacy Tigo common stock underlying such Legacy Tigo stock option immediately prior to the Closing divided by (B) 0.233335. At the Effective Time, after giving effect to the warrant exercise, each outstanding Legacy Tigo warrant to purchase Legacy Tigo common stock, whether or not exercisable, will be converted into a warrant to purchase a number of shares of Common Stock equal to the product of (x) the number of shares of Legacy Tigo common stock underlying such Legacy Tigo warrant immediately prior to the Closing and (y) 0.233335. Immediately after giving effect to the Business Combination, there were 58,144,543 issued and outstanding shares of Common Stock. ROCG s public units separated into their component securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security and were delisted from Nasdaq. The Common Stock and Warrants commenced trading on Nasdaq under the symbols TYGO and TYGOW , respectively, on May 24, 2023. The rights of holders of our Common Stock and Warrants are governed by our Charter, Bylaws, and the DGCL, and, in the case of the Warrants, the Warrant Agreement, dated as of August 5, 2021, by and between ROCG and Continental Stock Transfer & Trust Company, as warrant agent (the Warrant Agreement ). For additional information, see the section entitled Description of Securities. Convertible Note On January 9, 2023, Legacy Tigo entered into a convertible promissory note purchase agreement ( Note Purchase Agreement ) with L1 Energy Capital Management S. .r.l., the energy investment division of LetterOne ( L1 Energy ). Pursuant to the Note Purchase Agreement, Legacy Tigo issued, in a private placement, a convertible promissory note (the Convertible Note ) in an aggregate principal amount of $50.0 million. The Convertible Note bears an interest rate of 5.00% per annum and matures on January 9, 2026, unless earlier converted, exchanged or repaid in full. The Convertible Note is convertible into shares of common stock, at a conversion price of $9.17 per share, at any time on or prior to the maturity date, at the election of L1 Energy. Legacy Tigo may not voluntarily repay or redeem the Convertible Note prior to the maturity date without the express written consent of L1 Energy, at L1 Energy s sole discretion. For additional information regarding the Convertible Note, please refer to the section entitled The Convertible Promissory Note. Lock-Up Provisions On May 23, 2023, in connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, the Sponsors, certain holders of ROCG founder shares and the Requisite Company Stockholders entered into separate lock-up agreements (each, a Lock-Up Agreement ) with the Company. Pursuant to the Lock-up Agreements, the Requisite Company Stockholders agreed, among other things, that their shares received as merger consideration may not be transferred until November 23, 2023, the date that is six months following the Closing Date. Pursuant to the Lock-up Agreements, the Sponsors and other holders of founder shares agreed, among other things, that their founder shares acquired prior to ROCG s initial public offering may not be transferred until November 23, 2023, the date that is six months following the Closing Date. However, the aforementioned parties may transfer, subject to restrictions under applicable securities laws, (i) up to 5% of their common stock held immediately after Closing, or such common stock otherwise issued or issuable in connection with the Business Combination, until August 1, 2023, the date that is 90 days after Closing, and (ii), from August 22, 2023, the 91st day after Closing, through November 23, 2023, up to an additional 5% (for a total of up to 10% 2 Table of Contents during such periods) of common stock held by the holder immediately after Closing; provided, that, for the avoidance of doubt, the remaining 90% of the common stock held by the holders immediately after Closing may be transferred beginning on November 23, 2023. In addition to the Lock-Up Agreements, the Bylaws contain a provision that also prohibits the transfer of shares of Common Stock of the Company held immediately following the Closing, or such shares of Common Stock otherwise issued or issuable in connection with the transactions contemplated by the Merger Agreement, until November 23, 2023. The Bylaws, similar to the Lock-Up Agreements, permit the transfer, subject to restrictions under applicable securities laws, (i) up to 5% of Common Stock held immediately after Closing, or such common stock otherwise issued or issuable in connection with the Business Combination, until August 1, 2023, the date that is 90 days after Closing, and (ii), from August 22, 2023, the 91st day after Closing, through November 23, 2023, up to an additional 5% (for a total of up to 10% during such periods) of Common Stock held by the holder immediately after Closing. The Bylaw provision applies to all shareholders of the Company that were issued shares of Common Stock of the Company in accordance with, and pursuant to, the Merger Agreement. In connection with the consummation of the Business Combination, the Board released from the transfer restrictions contained in the Lock-Up Agreements and Bylaws, as applicable, an additional 3% of shares subject to such restrictions. As a result, the holders of shares subject to the transfer restrictions contained in the Lock-Up Agreements and Bylaws, as applicable, may transfer, subject to restrictions under applicable securities laws, up to 8% of their shares subject to such agreements immediately after the Closing. Summary Risk Factors Investments in our securities involve substantial risk. The occurrence of one or more of the events or circumstances described in the section of this prospectus entitled Risk Factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, cash flows, financial condition and results of operations. Important factors and risks that could cause actual results to differ materially from those in the forward-looking statements include, among others, the following: Risks Related to Tigo s Business and Industry If we are unable to achieve adequate revenue growth while our expenses increase, we may not achieve or maintain profitability in the future. Demand for our solar energy solutions may not grow or may grow at a slower rate than we anticipate. Developments in alternative technologies or improvements in other forms of distributed solar energy generation may have a material adverse effect on demand for our offerings. The solar industry has historically been cyclical and experienced periodic downturns. Our MLPEs may not achieve broader market acceptance. We have in the past, and may in the future, face product liability lawsuits which, regardless of outcome, can be expensive to defend, divert the attention of management, and lead to reputational harm. If we fail to retain our key personnel or if we fail to attract additional qualified personnel, we may not be able to achieve our anticipated level of growth and our business could suffer. We anticipate substantial growth in revenue from our Energy Intelligence solution ( EI Solution ). Should a market fail to develop for our EI solution, our actual operating results may differ materially from the forecasted results. Risks Related to Legal, Compliance and Regulations Our business could be harmed by a reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity applications. Our management has limited experience in operating a public company. 3 Table of Contents Our significant international operations subject us to additional risks compared to those of domestic companies, including trade tariffs or other trade barriers, and the interpretation and enforcement of laws and regulations in various jurisdictions. Current or future litigation or administrative proceedings could have a material adverse effect on our business, financial condition and results of operations. Operating Risks Our financial condition and results of operations and other key metrics are likely to be affected by seasonal trends and construction cycles. Defects, recalls, or performance problems in our products or delays, disruptions, or quality control problems in our manufacturing operations could result in loss of customers, reputational damage, and decreased revenue, and we may be the subject of numerous claims, including warranty, indemnity, and product liability claims arising from defective products. If our estimates of useful life for our energy storage systems and related hardware and software-enabled services are inaccurate, our business and financial results could be adversely affected. We expect to incur research and development costs and devote resources to identifying and commercializing new products and services, which may never result in revenue to us. The loss of one or more of our major customers could have an adverse effect on our business, financial condition and results of operations. Our hardware and software-enabled services involve a lengthy sales and installation cycle, and if we fail to close sales on a regular and timely basis it could adversely affect our business, financial condition and results of operations. The growth of our business depends on customers renewing their monitoring services subscriptions. Competition Risks We currently face and will continue to face significant competition. We face supply chain competition, including competition from businesses in other industries, which could result in insufficient inventory and negatively affect our results of operations. The rapidly evolving and competitive nature of the solar industry makes it difficult to evaluate our future prospects. Risks Related to Intellectual Property and Technology Our patent applications may not result in issued patents, and our issued patents may not provide adequate protection. Our failure to protect our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights may be costly. Any unauthorized access to, disclosure, or theft of personal information we gather, store, or use could harm our reputation and subject us to claims or litigation. Risks Related to Our Financial Condition and Liquidity We are under continuous pressure to reduce the prices of our products, which has adversely affected, and may continue to adversely affect, our gross margins. If we do not forecast demand for our products accurately, we may experience product shortages, delays in product shipment, excess product inventory, difficulties in planning expenses or disputes with suppliers, any of which will adversely affect our business and financial condition. 4 Table of Contents Risks Related to Ownership of Our Securities The price of the Company s Common Stock and Warrants may be volatile. Sales of our Common Stock, including those registered in this registration statement, may cause the market price of the Company s securities to drop significantly, even if the Company s business is doing well. If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our Common Stock may decline. The Company may not be able to comply with the continued listing standards of Nasdaq, which could limit investors ability to make transactions in the Company s securities and subject the Company to additional trading restrictions. If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our common stock could decline. Future sales, or the perception of future sales, of our Common Stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline. Warrants are exercisable for shares of our Common Stock, which would increase the number of shares eligible for resale in the public market and result in dilution to our stockholders. The Warrants may not remain in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding warrants approve of such amendment. Your unexpired warrants may be redeemed prior to their exercise at a time that may be disadvantageous to you, thereby making your warrants worthless. Emerging Growth Company As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the JOBS Act ). An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to: the option to present only two years of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition and Results of Operations in this prospectus; not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act ); not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and exemptions from the requirements of holding a nonbinding advisory vote of stockholders on executive compensation, stockholder approval of any golden parachute payments not previously approved and having to disclose the ratio of the compensation of our chief executive officer to the median compensation of our employees. 5 Table of Contents We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the completion of the initial public offering of our securities. However, if (i) our annual gross revenue exceeds $1.235 billion, (ii) we issue more than $1.0 billion of non-convertible debt in any three-year period or (iii) we become a large accelerated filer (as defined in Rule 12b-2 under the Exchange Act) prior to the end of such five-year period, we will cease to be an emerging growth company. We will be deemed to be a large accelerated filer at such time that we (a) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700.0 million or more as of the last business day of our most recently completed second fiscal quarter, (b) have been required to file annual and quarterly reports under the Exchange Act, for a period of at least 12 months and (c) have filed at least one annual report pursuant to the Exchange Act. We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. Exercise of Warrants The exercise price of our Warrants is $11.50 per share of Common Stock. We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price of our Common Stock is less than $11.50 per share, we believe holders of our Warrants are unlikely to exercise their Warrants. Conversely, the Warrant holders are more likely to exercise their Warrants the higher the price of our Common Stock is above $11.50 per share. The closing price of our Common Stock on the Nasdaq on July 24, 2023 was $26.01, which is above the $11.50 exercise price of the Warrants. The Warrants are exercisable on a cashless basis under certain circumstances specified in the Warrant Agreement. To the extent that any Warrants are exercised on a cashless basis, the aggregate amount of cash we would receive from the exercise of the Warrants will decrease. Corporate Information We were incorporated in Delaware on February 13, 2019, under the name Roth CH Acquisition IV Co., in order to effectuate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. ROCG completed its initial public offering on August 10, 2021. On May 23, 2023, ROCG and Legacy Tigo consummated the transactions contemplated by the Merger Agreement. On the Closing Date, ROCG changed its name to Tigo Energy, Inc. The mailing address of our principal executive office is 655 Campbell Technology Parkway, Suite 150, Campbell, California 95008, and our telephone number is (408) 402-0802. 6 Table of Contents
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diff --git a/parsed_sections/prospectus_summary/2023/VCNX_vaccinex_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/VCNX_vaccinex_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..b233797562d531acb079a9474c863fa42781260f
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2023/VCNX_vaccinex_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained in other parts of this prospectus and in the documents we incorporate by reference. It does not contain all of the information that you should consider before investing in our securities and it is qualified by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus and the documents incorporated by reference herein. You should read the following summary together with the more detailed information regarding our Company and the securities being sold in this offering, including Risk Factors and other information incorporated by reference herein. Company Overview We are a clinical-stage biotechnology company engaged in the discovery and development of targeted biotherapeutics to treat serious diseases and conditions with unmet medical needs, including neurodegenerative diseases, cancer, and autoimmune disorders. We believe we are the leader in the field of semaphorin 4D ( SEMA4D ), biology and that we are currently the only company targeting SEMA4D as a potential treatment for neurodegenerative diseases, cancer, and autoimmune disorders. SEMA4D is an extracellular signaling molecule that regulates the migration of immune and inflammatory cells to sites of injury, cancer, or infection. We are leveraging our SEMA4D antibody platform and our extensive knowledge of SEMA4D biology to develop our lead product candidate, pepinemab, an antibody that we believe utilizes novel mechanisms of action. We are focused on developing pepinemab for the treatment of Alzheimer s disease, Huntington s disease, head and neck cancer, and pancreatic cancer. Additionally, third-party investigators are studying pepinemab in clinical trials in breast cancer, as well as in window of opportunity studies in other indications, including head and neck cancer and melanoma. We have developed multiple proprietary platform technologies and are developing product candidates to address serious diseases or conditions that have a substantial impact on day-to-day functioning and for which treatment is not addressed adequately by available therapies. We employ our proprietary platform technologies, including through our work with our academic collaborators, to identify potential product candidates for sustained expansion of our internal product pipeline, and to facilitate strategic development and commercial partnerships. Our lead platform technologies include our SEMA4D antibody platform and our ActivMAb antibody discovery platform. Our lead product candidate pepinemab is currently in clinical development for the treatment of Alzheimer s disease and head and neck, pancreatic, and breast cancer through our efforts or through investigator-sponsored trials. Our additional product candidate VX5 is in an earlier stage of development and was selected using our ActivMAb platform. We believe our multiple platform technologies position us well for continued pipeline expansion and partnership opportunities going forward. Our current research and development activities primarily relate to clinical development in the following indications: Huntington s Disease. We evaluated pepinemab for the treatment of Huntington s disease in our Phase 2 SIGNAL trial. Topline data for this trial, consisting of 265 subjects, was reported in late September 2020. Although the study did not meet its prespecified primary endpoints, it provided important new information, including evidence of cognitive benefit and a reduction in brain atrophy and increase in brain metabolic activity in patients with manifest disease symptoms. An improved trial design would focus on patients with early signs of cognitive or functional deficits because they appeared to derive the greatest treatment benefit. We are evaluating our development strategy in terms of business opportunities and other near-term clinical activities. In August 2023, we received written responses from the U.S. Food and Drug Administration to questions we posed related to potential endpoints for a Phase 3 trial of pepinemab in Huntington s disease. We believe these responses provide the necessary guidance for trial design. Cancer Studies. We and others have shown that SEMA4D, the target of pepinemab, is highly expressed in head and neck cancer where it impedes recruitment and activation of dendritic cells and cytotoxic T cells that can attack the tumor while also inducing differentiation of myeloid derived suppressor cells that inhibit tumoricidal immune activity. Head and neck cancer is, therefore, a cancer in which we believe immunotherapy with pepinemab in combination with a checkpoint inhibitor such as KEYTRUDA (pembrolizumab) could have a significant therapeutic impact. We have entered into a collaboration with Merck Sharp & Dohme, which is supplying KEYTRUDA, for first-line treatment of up to 65 head and neck cancer patients in a Phase 1b/2 trial. Interim trial data indicate an approximate doubling of objective response rate and progression free survival relative to historical results with checkpoint monotherapy in patients with hard-to-treat tumors that express low levels of PD-L1. Biopsy data suggest treatment-induced formation of lymphoid structures in tumors that are known to be associated with improved outcomes in head and neck cancer. In a similar arrangement, we are collaborating with Merck KgaA (EMD Serono in the U.S.), which is supplying Bavencio (avelumab), another checkpoint inhibitor, for evaluation in a Phase 1b/2 trial in combination with pepinemab in pancreatic cancer. Pepinemab is also being evaluated by third parties in investigator-sponsored trials for breast cancer, and in multiple window of opportunity studies in additional cancer indications. Alzheimer s Disease. In April 2023, we reached our enrollment target of 40 participants for the Phase 1b/2 SIGNAL-AD study evaluating pepinemab as a potential treatment for people with mild dementia due to Alzheimer s disease. SIGNAL-AD topline data is expected in mid-2024, after all the participants have received 12 months of treatment. Table of Contents The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED SEPTEMBER 26, 2023 PRELIMINARY PROSPECTUS Up to 3,229,974 Shares of Common Stock Up to 3,229,974 Pre-Funded Warrants to Purchase up to 3,229,974 Shares of Common Stock Up to 3,229,974 Common Warrants to Purchase up to 3,229,974 Shares of Common Stock Up to 3,229,974 Shares of Common Stock Underlying such Pre-Funded Warrants Up to 3,229,974 Shares of Common Stock Underlying such Common Warrants We are offering on a reasonable best efforts basis up to 3,229,974 shares of our common stock, par value $0.0001 per share (the common stock ) together with warrants (each, a common warrant ) to purchase up to 3,229,974 shares of our common stock, based on an assumed public offering price of $2.322 per share and accompanying common warrant (the last reported sale price of our common stock on The Nasdaq Capital Market ( Nasdaq ) on September 22, 2023). Each common warrant will be exercisable for one share of our common stock and have an assumed exercise price of $2.322 per share. The common warrants will be exercisable immediately and will expire five years from the date of issuance. The shares of common stock and common warrants will be issued separately and will be immediately separable upon issuance but will be purchased together in this offering. This prospectus also relates to the shares of common stock issuable upon exercise of the common warrants sold in this offering. We are also offering pre-funded warrants (the pre-funded warrants and together with the common warrants, the warrants ) to purchase up to 3,229,974 shares of common stock to those investors whose purchase of shares of common stock in this offering would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock immediately following the consummation of this offering, in lieu of shares of common stock that would result in beneficial ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock. Each pre-funded warrant is exercisable for one share of common stock and has an exercise price of $0.0001 per share. The combined purchase price per pre-funded warrant and accompanying common warrant is equal to $2.3219, which is equal to the combined purchase price per share of common stock and accompanying common warrant less $0.0001. Each pre-funded warrant will be exercisable immediately upon issuance and will expire when exercised in full. The pre-funded warrants and common warrants will be issued separately and will be immediately separable upon issuance but will be purchased together in this offering. For each pre-funded warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one basis. This prospectus also relates to the shares of common stock issuable upon exercise of the pre-funded warrants sold in this offering. We refer to the common stock and warrants to be sold in this offering collectively as the securities. The securities are expected to be issued in a single closing and the combined public offering price per share of common stock or pre-funded warrant and accompanying common warrant will be fixed for the duration of this offering. We will deliver all securities to be issued in connection with this offering delivery versus payment or receipt versus payment, as the case may be, upon receipt of investor funds received by us. Our common stock is listed on the Nasdaq Capital Market under the symbol VCNX. On September 22, 2023, the last reported sale price of our common stock on Nasdaq was $2.322 per share. The actual number of securities, the combined offering price per share of common stock or pre-funded warrant and accompanying common warrant and the exercise price per share of common stock for the accompanying common warrant will be as determined between us, the placement agent and the investors in this offering based on market conditions at the time of pricing. Therefore, the recent market price used throughout this prospectus may not be indicative of the actual public offering price for the securities. There is no established public trading market for the warrants and we do not expect a market to develop. In addition, we do not intend to apply for a listing of the warrants on any national securities exchange or other trading system. Table of Contents Our Corporate Information We were incorporated under the laws of the State of Delaware in April 2001. Our principal executive offices are located at 1895 Mount Hope Avenue, Rochester, New York 14620, and our telephone number is (585) 271-2700. Our website address is www.vaccinex.com. Our website and the information contained on or accessible through our website are not incorporated by reference in, and are not considered part of, this prospectus, and any reference to our website is intended to be an inactive textual reference only. You should not rely on any such information in making your decision to purchase our common stock. Implications of Being an Emerging Growth Company and a Smaller Reporting Company We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). Section 107(b) of the JOBS Act provides that an emerging growth company can leverage the extended transition period, provided in Section 102(b) of the JOBS Act, for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. We have elected to use this extended transition period and, as a result, our condensed consolidated financial statements may not be comparable to companies that comply with public company effective dates of such accounting standards. We will no longer be an emerging growth company after December 30, 2023 and will be unable to take advantage of the exemptions from various requirements applicable to public companies including those discussed above. We are also a smaller reporting company and will remain a smaller reporting company while we have determined that either (i) the market value of our stock held by non-affiliates was less than $250 million as of the last business day of our most recently completed second fiscal quarter or (ii) our annual revenue was less than $100 million during our most recently completed fiscal year and the market value of our stock held by non-affiliates was less than $700 million as of the last business day of our most recently completed second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies, including many of the same exemptions from disclosure obligations that are available to emerging growth companies, such as reduced disclosure obligations regarding executive compensation. We may take advantage of one or more of these reporting exemptions until we are no longer a smaller reporting company. Table of Contents We have engaged A.G.P./Alliance Global Partners to act as our exclusive placement agent (the placement agent ) in connection with this offering. The placement agent has agreed to use its reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The placement agent is not purchasing or selling any of the securities we are offering and the placement agent is not required to arrange the purchase or sale of any specific number of securities or dollar amount. We have agreed to compensate the placement agent as set forth in the table below, which assumes that we sell all of the securities offered by this prospectus. There is no arrangement for funds to be received in escrow, trust or similar arrangement. There is no minimum offering requirement as a condition of closing of this offering. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us. This offering will end no later than October 31, 2023 except that the shares of common stock underlying the warrants will be offered on a continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the Securities Act ). Investing in our common stock involves a high degree of risk. See Risk Factors beginning on page 5 of this prospectus and under similar headings in the documents incorporated by reference into this prospectus. Per Share and Common Warrant Per Pre-Funded Warrant and Common Warrant Total Offering price $ $ $ Placement agent fees(1) $ $ $ Proceeds, before expenses, to us(2) (3) $ $ $ (1) We have agreed to pay the placement agent a cash fee equal to 7.0% of the aggregate proceeds of this offering and to reimburse the placement agent for certain of its offering-related expenses. See Plan of Distribution beginning on page 21 of this prospectus for a description of the compensation to be received by the placement agent. (2) The amount of the proceeds to us presented in this table does not give effect to any exercise of the warrants. (3) The Chairman of our Board of Directors has indicated that he or entities with which he is affiliated are interested in purchasing up to $3.0 million of securities in this offering at the same price and on the same terms as the other purchasers in this offering, except that the placement agent will receive 2.0% of the aggregate proceeds of such sales, and will not be paid for non-accountable fees and expenses with respect to such sales. Because indications of interest are not binding agreements or commitments to purchase, the placement agent may determine to sell more, fewer or no securities to any of these stockholders, or any such stockholders may determine to purchase more, fewer or no securities. This table assumes no sales to the Chairman or his affiliated entities. Neither the Securities and Exchange Commission (the SEC ) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Delivery of the shares and warrants is expected to be made on or about __________, 2023, subject to satisfaction of customary closing conditions. Sole Placement Agent A.G.P. The date of this prospectus is __________, 2023 Table of Contents
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+II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Suwanee, State of Georgia, on June 30, 2023. VICAPSYS LIFE SCIENCES, INC. By: /s/ Federico Pier Federico Pier Chief Executive Officer (Principal Executive Officer) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Federico Pier, his or her true and lawful attorney-in-fact and agent with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities to sign any or all amendments (including, without limitation, post-effective amendments) to this Registration Statement, any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and any or all pre- or post-effective amendments thereto, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that said attorney-in-fact and agent, or any substitute or substitutes for him, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Federico Pier Chief Executive Officer and Executive Chairman June 30, 2023 Federico Pier (Principal Executive Officer) /s/ Jeffrey Wright Chief Financial Officer Jeffrey Wright (Principal Accounting Officer) June 30, 2023 /s/ Colleen Delaney Director Colleen Delaney June 30, 2023 /s/ Richard Rosenblum Director June 30, 2023 Richard Rosenblum /s/ Dorothy Jordan June 30, 2023 Dorothy Jordan Director /s/ Charlie Farrahar June 30, 2023 Charlie Farrahar Director II-6
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+PROSPECTUS SUMMARY This summary provides an overview of selected information contained elsewhere or incorporated by reference in this prospectus and does not contain all of the information you should consider before investing in our securities. You should carefully read the prospectus, the information incorporated by reference and the registration statement of which this prospectus is a part in their entirety before investing in our securities, including the information discussed under Risk Factors in this prospectus and the documents incorporated by reference and our financial statements and related notes that are incorporated by reference in this prospectus. In this prospectus, unless the context indicates otherwise, Virax, the Company, the registrant, we, us, our, or ours refer to Virax Biolabs Group Limited and its subsidiaries. Overview Virax Cayman is a holding company incorporated as an exempted company under the laws of the Cayman Islands. As a holding company with no material operations of our own, Virax Cayman conducts our operations through its operating subsidiaries in Singapore, Hong Kong, China and British Virgin Islands and has been operating since 2013. Prior to the introduction of Virax branded products in 2020, the Group was engaged in the fast moving consumer goods ( FMCG ) importation business into Asia. Virax Cayman is a global innovative biotechnology group that primarily engages in sales, distribution and marketing of diagnostics test kits and medical technology for the prevention, detection, diagnosis and risk management of viral diseases with a particular interest in the field of immunology. Our mission is to minimize the risks of viruses throughout the world via our products offerings. Our product portfolio includes: (i) diagnostics test kits sold through our ViraxClear brand; and (ii) sourced brands of third party suppliers, independent of our own brands ( Sourced Brands ). Currently, our Group does not manufacture or develop any product that we sell in our product portfolio and we act as a distributor of third-party suppliers products. We expect to develop and launch an upcoming brand Virax Immune , with the intention of providing an immunology profiling platform that assesses each individual s immune risk profile against major global viral diseases. We believe that the T-Cell in-vitro diagnostic ( IVD ) Tests and immunology platform we are developing under the Virax Immune brand will be particularly useful in the diagnosis and threat analysis of the major viruses faced globally. As of the date of the prospectus, we have developed a functioning prototype of our T-Cell IVD Test under the Virax Immune brand but we are still in the process of conducting further tests and we have not submitted any T-Cell IVD Test to any regulatory agency for approval. Currently, our clinical trials and research activities for our T-Cell IVD Test under the Virax Immune brand are conducted by independent third party science companies, namely ICON Clinical Research Limited and Charles River Laboratories, respectively, in the Netherlands and the United Kingdom. Prior to the sale of our T-Cell IVD Test under the Virax Immune brand in our targeted jurisdictions, namely, Canada, United Kingdom, the European Union and the United States, we must apply with the relevant authority for the regulatory approvals. In Canada, our T-Cell IVD Test will fall under Class I devices, which we will apply for the Health Canada Medical Device Establishment License. In the European Union, we intend to apply our T-Cell IVD Test under the self-certified Class A risk-based class route. Class A IVDs include specimen receptacles, laboratory instruments, and buffer solutions. Under the self-certified Class A risk-based class route, we do not require the involvement of a notified body to obtain the CE Marking to our T-Cell IVD Test. In the United Kingdom, as part of the transition due to the United Kingdom withdrawal from the European Union, we intend to use the recognized CE marks that we will apply with the European Union for our T-Cell IVD Test until June 30, 2023 (the Transitional Arrangement ), after which, we will to conform with the UK IVD regime rather than relying on Transitional Arrangement and apply with the UK Medicine and Healthcare Products Regulatory Agency for a UK Conformity Assessed mark before we can sell our T-Cell IVD Test in the UK post June 30, 2023. In the United States, we intend to apply our T-Cell IVD Test under the Virax Immune brand under Class III devices (highest risk), which are subject to most of the requirements under Class I and Class II devices as well as to pre-market approval before they can be sold in the United States. For more detailed information on the Regulatory Approval on Medical Device Products with respect to our T-Cell IVD test under our Virax Immune brand, refer to Regulations Summary of Regulatory Approval on Medical Device Products (Relevant Jurisdictions). Currently, our Group does not develop or manufacture any product that we sell under the ViraxClear brand and Sourced Brands as we act as a distributor of third-party suppliers products. To facilitate the sales and distribution of our ViraxClear products, we predominately rely on our key third-party suppliers, Nanjing Vazyme Medical day after such election. The exercise price of the Preferred Options and Placement Warrants is subject to appropriate adjustment in the event of certain share dividends and distributions, share splits, reclassifications or similar events affecting our Ordinary Shares and also upon any distributions of assets, including cash, stock or other property to our shareholders. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under the Preferred Options, Pre-Funded Warrants, and Placement Warratns with the same effect as if such successor entity had been named in the Preferred Options, the Pre-Funded Warrants, and PLacement Warrants itself. Our registration of the Ordinary Shares covered by this prospectus does not mean that the selling shareholder will offer or sell any of such Ordinary Shares. The selling shareholders named in this prospectus, or their donees, pledgees, transferees or other successors-in-interest, may resell the Ordinary Shares covered by this prospectus through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. For additional information on the possible methods of sale that may be used by the selling shareholder, you should refer to the section of this prospectus entitled Plan of Distribution. We will not receive any of the proceeds from the sale of Ordinary Shares by the selling shareholders. However, we will receive proceeds from the exercise of the Preferred Options, Pre-Funded Warrants, and Placement Warrants, if such securities are exercised for cash. We intend to use those proceeds, if any, for general corporate purposes. Any Ordinary Shares subject to resale hereunder will have been issued by us and acquired by the selling shareholders prior to any resale of such shares pursuant to this prospectus. No underwriter or other person has been engaged to facilitate the sale of the Ordinary Shares in this offering. We will bear all costs, expenses and fees in connection with the registration of the Ordinary Shares. The selling shareholders will bear all commissions and discounts, if any, attributable to their respective sales of our ordinary shares. Our Ordinary Shares is traded on The Nasdaq Capital Market under the symbol VRAX. On March 16, 2023, the reported sales price of our Ordinary Shares on The Nasdaq Capital Market was $0.70 per share. Investment in our Ordinary Shares involves a high degree of risk. See Risk Factors beginning on page 16, in our periodic reports filed from time to time with the Securities and Exchange Commission, which are incorporated by reference in this prospectus and in any applicable prospectus supplement. You should carefully read this prospectus and the accompanying prospectus supplement, together with the documents we incorporate by reference, before you invest in our ordinary shares. We are both an emerging growth company and a foreign private issuer as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for this and future filings. See Prospectus Summary Implications of Being an Emerging Growth Company and a Foreign Private Issuer for additional information. Investors are cautioned that you are buying shares of a shell company issuer incorporated in the Cayman Islands with operating subsidiaries in Singapore, China, Hong Kong and British Virgin Islands, investors will not hold direct equity investments in our China and Hong Kong operating subsidiaries. Our ordinary shares offered in this prospectus are shares of our Cayman Islands holding company. Investing in our Ordinary Shares is highly speculative and involves a significant degree of risk. Virax Biolabs Group Limited, which we refer to as Virax Cayman , is a holding company incorporated as an exempted company under the laws of the Cayman Islands. As a holding company with no material operations of our own, Virax Cayman conduct a substantial majority of our sales and trading activities through our operating entity established in Singapore, Virax Biolabs Pte. Limited, which we refer to as SingaporeCo. Currently, Virax Cayman indirectly owns 95.65% of the equity interests in SingaporeCo. However, some of Virax Cayman s operations are currently conducted through our operating entities established in the British Virgin Islands, Hong Kong and Shanghai, primarily, Logico Bioproducts Corp., Virax Immune T-Cell Medical Device Company Limited and Shanghai Xitu Consulting Co., Limited, which we refer to as Logico BVI, Virax Immune T-Cell and Shanghai Xitu, respectively. Our ordinary shares offered in this prospectus are shares of our Cayman Islands holding company. Technology Co., Ltd in China for diagnostics test kits. After we receive our ViraxClear and Sourced Brands products from our suppliers, we utilize third party logistic companies for the distribution of our products to our end-users and strategic partners overseas. However, we believe our products, in particular diagnostic test kits, provide significant value for consumers, through improved detection of diseases, improvements in health, wellness and productivity as well as by reducing other healthcare costs, such as emergency visits and hospitalizations. Our Group also seeks to maximize consumers access to our products and services through competitive pricing and regular evaluations of our pricing arrangements and contracts with our distributors. Historically, the end-users of our distribution partners under our ViraxClear brand and Sourced Brands include but not limited to, clinics, pharmacies, laboratories, hospitals, and other relevant groups on an international basis, covering 4 regions, including but not limited to Europe, South America, Asia Pacific, and Sub-Saharan Africa, and Our Group expects to extend our geographical reach to North America in 2023. Currently, as stated above, clinical trials and research activities for our T-Cell IVD Test under the upcoming Virax Immune brand are conducted by independent third party science companies in the Netherlands and United Kingdom together with our United Kingdom subsidiary, Virax Biolabs (UK) Limited. As our Group does not manufacture or develop any product that we sell under the ViraxClear brand and Sourced Brands because we act as a distributor of third-party suppliers products, the trading and sales of these products are primarily conducted through our SingaporeCo with some trading and sales of these products through our Logico BVI which are located in Singapore and British Virgin Islands, respectively. Shanghai Xitu is located in the PRC and is primarily engaged in procurement. Further, the majority of our executive officers and directors are located outside of the United States and are nationals or residents of jurisdictions other than the United States, and all or a substantial portion of their assets are located outside of the United States. Mr. James Foster, our Chief Executive Officer, chairman of the board of directors, holds a British Passport and currently resides in Shanghai, China; Mr. Jason Davis, our Chief Financial Officer, is located in the United States and holds a United States passport; Mr. Mark Ternouth, our Chief Technical Officer, holds a British Passport and currently resides in Shanghai, China; Mr. Tomasz George, our Chief Scientific Officer, holds a British passport and currently resides in the United Kingdom; Mr. Cameron Shaw, our Chief Operating Officer and director, holds a British passport and currently resides in the Malta; Mr. Yair Erez, our independent director, holds a British passport and currently resides in the United Kingdom; Mr. Evan Norton, our independent director, holds a United States passport and currently resides in the United States; and Mr. Nelson Haight, our independent director, holds a United States passport and currently resides in the United States. Recent Developments Initial Public Offering On July 20, 2022, Virax entered into an underwriting agreement with Boustead Securities, LLC, as representatives of the several underwriters, in connection with its initial public offering ( IPO ) of 1,350,000 Ordinary Shares, at a price of $5.00 per share, before deducting underwriting discounts, commissions, and other related expenses. The shares began trading on the Nasdaq Capital Market on July 21, 2022. The Company issued Representative s Warrant to purchase up to 108,675 ordinary shares at $6.00 per share, dated July 20, 2022, to Boustead Securities, LLC. On July 25, 2022, the Company consummated its IPO generating gross proceeds to the Company of $7,762,500, before deducting underwriting discounts and other related expenses. 2022 PIPE Financing On November 3, 2022, Virax entered into a Securities Purchase Agreement (the November SPA ) with an accredited investor for a private placement offering ( 2022 Private Placement ), pursuant to which the Company received gross proceeds of approximately $3,844,500, before deducting placement agent fees and other offering expenses, in consideration of (i)1,165,000 Ordinary Shares; (b) pre-funded warrants to purchase 1,165,000 Ordinary Shares, and (iii) warrants to purchase 3,495,000 Ordinary Shares at a combined purchase price of $1.65 per Ordinary Share and one and a half Ordinary Warrant, or approximately $1.65 per Pre-Funded Warrant and one and a half Ordinary Warrant if purchasing the Pre-Funded Warrants. The warrants have an exercise price of $1.73 per share, will become exercisable six months after their date of issuance and will expire five and a half years from their initial date of exercise. The November SPA contains customary representations and warranties and agreements of the Company and the purchaser and customary indemnification rights and obligations of the parties. The 2021 Private Placement Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China based issuers. Any future action by the Chinese government expanding the categories of industries and companies whose foreign securities offerings are subject to government review could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless. Recently, the PRC government initiated a series of regulatory actions and made a number of public statements on the regulation of business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. We are not subject to these regulatory actions or statements, as we do not have a variable interest entity structure and our business does not involve the collection of user data, implicate cybersecurity, or involve any other type of restricted industry. Because these statements and regulatory actions are new, however, it is highly uncertain how soon legislative or administrative regulation making bodies in China will respond to them, or what existing or new laws or regulations will be modified or promulgated, if any, or the potential impact such modified or new laws and regulations will have on our daily business operations or our ability to accept foreign investments and list on an U.S. exchange. The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. In accordance with the HFCA Act, trading in securities of any registrant on a national securities exchange or in the over-the-counter trading market in the United States may be prohibited if the Public Company Accounting Oversight Board (the PCAOB ) determines that it cannot inspect or fully investigate the registrant s auditor for three consecutive years beginning in 2021, and, as a result, an exchange may determine to delist the securities of such registrant. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period before our securities may be prohibited from trading or delisted if our auditor is unable to meet the PCAOB inspection requirement. Pursuant to the HFCA Act, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB s report identified the specific registered public accounting firms which are subject to these determinations. On August 26, 2022, the PCAOB entered into a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the PRC and, as summarized in the Statement on Agreement Governing Inspections and Investigations of Audit Firms Based in China and Hong Kong published on the U.S. Securities and Exchange Commission s official website, the parties agreed to the following: (i) in accordance with the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation; (ii) the PCAOB shall have direct access to interview or take testimony from all personnel of the audit firms whose issuer engagements are being inspected or investigated; (iii) the PCAOB shall have the unfettered ability to transfer information to the SEC, in accordance with the Sarbanes-Oxley Act; and (iv) the PCAOB inspectors shall have access to complete audit work papers without any redactions, with view-only procedures for certain targeted pieces of information such as personally identifiable information. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor s, control. The PCAOB is continuing to demand complete access in mainland China and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. In the future, if there is any regulatory change or step taken by PRC regulators that does not permit our auditor to provide audit documentations located in China or Hong Kong to the PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination so that we are subject to the HFCA Act, as the same may be amended, you may be deprived of the benefits of such inspection which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities, including trading on the national exchange and trading on over-the-counter markets, may be prohibited under the HFCA Act. On December 29, 2022, a legislation entitled Consolidated Appropriations Act, 2023 (the Consolidated Appropriations Act ), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two. Our registered public accounting firm, BF Borgers CPA PC, is not headquartered in mainland China or Hong Kong and was not closed on November 8, 2022. Concurrently with the signing of the November SPA, we entered into a registration rights agreement to file with the Securities and Exchange Commission a registration statement covering the resale of all of the registrable securities under the registration rights agreement. 2023 PIPE Financing On March 8, 2023, Virax entered into a Securities Purchase Agreement (the PIPE Securities Purchase Agreement ) with an accredited investor for a private placement offering ( 2023 Private Placement ), pursuant to which the Company received gross proceeds of approximately $4,00,000, before deducting placement agent fees and other offering expenses, in consideration of (i) 1,500,000 Ordinary Shares; (b) Pre-Funded Warrants to purchase 2,343,309 Ordinary Shares, (iii) Series A Options to purchase 3,497,412 Ordinary Shares, and (iv) Series B Options to purchase 3,843,309 Ordinary Shares at a purchase price of $1.04077 per Ordinary Share and associated Preferred Options and a purchase price of $1.04067 per Pre-Funded Warrant and associated Preferred Options (the PIPE Offering ). The Preferred Options have an exercise price of $0.80202 per share, will become exercisable after their date of issuance and will expire five and a half years from their initial date of exercise. In addition, the Company issued warrants to purchase up to 269,032 Ordinary Shares at $1.3010 per share to certain designees of H.C. Wainwright & Co., placement agent of the Offering. The PIPE Securities Purchase Agreement contains customary representations and warranties and agreements of the Company and the purchaser and customary indemnification rights and obligations of the parties. The 2023 Private Placement closed on March 10, 2023. Concurrently with the signing of the PIPE Securities Purchase Agreement, we entered into a registration rights agreement to file with the Securities and Exchange Commission a registration statement covering the resale of all of the registrable securities under the registration rights agreement. Corporate History and Structure Structural Overview Virax Cayman is a holding company incorporated as an exempted company under the laws of the Cayman Islands that owns all of the outstanding capital stock of Virax Biolabs (UK) Limited and Virax Biolabs USA Management, Inc., our wholly-owned subsidiaries. Virax Biolabs (UK) Limited, in turn, owns all of the outstanding capital stock of Virax Biolabs Limited, our wholly-owned Hong Kong subsidiary. Virax Biolabs Limited owns all of the outstanding capital stock of Virax Immune T-Cell Medical Device Company Limited, our wholly-owned Hong Kong subsidiary, and 95.65% of the outstanding capital stock of Virax Biolabs Pte. Limited, our operating subsidiary incorporated in Singapore. Virax Biolabs Pte. Limited owns all of the outstanding capital stock of Logico Bioproducts Corp., a wholly-owned British Virgin Islands and a subsidiary of Virax Biolabs Pte. Limited. Logico Bioproducts Corp., in turn, owns all of the outstanding capital stock of Shanghai Xitu, a wholly-owned subsidiary of Logico Bioproducts Corp. and a wholly foreign owned enterprise based in China. We completed a reorganization and share exchange of our company in September 2021 (the Reorganization ). Pursuant to the Reorganization, all shareholders of Virax Biolabs Limited (HK) transferred their shares, 102,478,548 ordinary shares in total, to Virax Biolabs (UK) Limited, in exchange for an aggregate of (i) 2,549,028 newly issued Class A Ordinary Shares and (ii) 7,034,306 newly issued Class B Ordinary Shares of Virax Biolabs Group Limited. On June 19, 2022, Virax Cayman underwent a shareholding restructuring whereby the Company s authorized share capital became a single class of shares of Ordinary Shares and all of the then issued shares were re-designated as Ordinary Shares. Organization Structure and Purpose Virax Biolabs Group Limited ( Virax Cayman ) Virax Biolabs Group Limited is a Cayman Islands exempted company incorporated on September 2, 2021, previously named as Virax Biolabs (Cayman) Limited and effected a name change to Virax Biolabs Group Limited on January 19, 2022. Structured as a holding company with no material operations, Virax Cayman conducts our operations through its operating subsidiaries in the Hong Kong, Singapore, British Virgin Islands and China. Virax Biolabs (UK) Limited Virax Biolabs (UK) Limited was incorporated on August 19, 2021 under the laws of the United Kingdom, a wholly-owned subsidiary of Virax Cayman and structured as a holding company with no material operations. identified in this report as a firm subject to the PCAOB s determination. Notwithstanding the foregoing, if the PCAOB is not able to fully conduct inspections of our auditor s work papers in China, you may be deprived of the benefits of such inspection which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities may be prohibited under the HFCA Act. Within the organization, investor cash inflows have all been received by Virax Cayman. Cash to fund Virax Cayman s operations is transferred from Virax Cayman down through our Singapore, Hong Kong, BVI entities and then into our Chinese entity through capital contributions and loans. However, the PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China, and investment in Chinese companies, which are governed by the Foreign Investment Law and Company Law, and the dividends and distributions from Shanghai Xitu is subject to relevant regulations and restrictions on dividends and payment to parties outside of China. Transfers among our Singapore and Hong Kong entities are not restricted under Singapore and Hong Kong Laws. No dividends or distribution have been made by our subsidiaries or by Virax Cayman to date and we intend to reinvest all cash into our subsidiaries for the foreseeable future. For the years ended March 31, 2022 and 2021 and for the six months ended September 30, 2022, there was no transfer between Virax Cayman and its subsidiaries. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or the accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2023. Virax Biolabs USA Management, Inc. Virax Biolabs USA Management, Inc. was incorporated on August 1, 2022 under the laws of the United States, a wholly-owned subsidiary of Virax Cayman and structured as a management company for operations within the United States. Virax Biolabs Limited ( HKco ) Virax Biolabs Limited, incorporated on April 14, 2020 under the laws of Hong Kong, was previously named as Shanghai Biotechnology Devices Limited and effected a name change to Virax Biolabs Limited on July 12, 2021. Virax Biolabs Limited, our wholly-owned Hong Kong subsidiary, serves as a holding company. Virax Immune T-Cell Medical Device Company Limited ( Virax Immune T-Cell ) Virax Immune T-Cell Medical Device Company Limited, a wholly-owned subsidiary of HKco, incorporated on January 16, 2017 under the laws of Hong Kong, was previously named as Stork Nutrition Asia Limited and effected a name change to Virax Immune T-Cell Medical Device Company Limited on September 10, 2021. It is primarily engaged in the research and development of T-Cell blood analysis. Virax Biolabs Pte. Limited ( SingaporeCo ) Virax Biolabs Pte. Limited, incorporated on May 4, 2013 under the laws of Singapore, was previously named as Natural Source Group Pte. Limited and effected a name change to Virax Biolabs Pte. Limited on July 2, 2021. 95.65% of its capital stock is owned by Virax Biolabs Limited and the remaining 4.35% is owned by independent third party shareholders. It is our operating company, primarily engaged in the trading and sales of our products and running primarily day to day operations. Logico Bioproducts Corp. ( Logico BVI ) Logico Bioproducts Corp., a wholly-owned subsidiary of SingaporeCo, is a limited liability company incorporated in the British Virgin Islands on January 21, 2011, and is primarily engaged in the trading and sales of our products. Shanghai Xitu Consulting Co., Limited ( Shanghai Xitu ) Shanghai Xitu, a wholly-owned subsidiary of Logico BVI and a wholly foreign owned enterprise, is a limited liability company incorporated on October 27, 2017 in China. Shanghai Xitu is primarily engaged in procurement. The following diagram illustrates our corporate structure: Government Regulations and Approvals for the PIPE Offerings As some of our operations are currently conducted through our operating entities established in Hong Kong and Shanghai, namely, HKco, Virax Immune T-Cell, Shanghai Xitu, we are potentially subject to significant regulations by various agencies of the Chinese government. The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the CSRC and Ministry of Commerce of the PRC ( MOFCOM ), prior to the listing and trading of such special purpose vehicle s securities on an overseas stock exchange. Substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. As of the closing date of the PIPE Offering, that CSRC s approval under the M&A Rules is not required for the listing and trading of our Ordinary Shares on Nasdaq in the context of this offering given that we are an exempted company with limited liability incorporated under the laws of the Cayman Islands with some operations located in Hong Kong and the PRC controlled by non-PRC citizens. As such, we do not fit into the definition of overseas special purpose vehicle under the M&A Regulations and we have never conducted any merger or acquisitions of any PRC domestic companies with a related party relationship. MOFCOM s approval under the M&A Rules is also not required as we have never conducted any merger or acquisitions of any PRC domestic companies with a related party relationship. We cannot assure you that relevant PRC governmental agencies, including the CSRC, would reach the same conclusion as we do. If we or our subsidiaries inadvertently conclude that such approval is not required, our ability to offer or continue to offer our Ordinary Shares to investors could be significantly limited or completed hindered, which could cause the value of our Ordinary Shares to significantly decline or become worthless. Our Group or Shanghai Xitu may also face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities According to Law (the Opinions ), which called for strengthened regulation over illegal securities activities and supervision on overseas listings by China-based companies and propose to take effective measures. As of the closing date of the PIPE Offering, no official guidance or related implementation rules have been issued in relation to the Opinions, and the interpretation and implementation of the Opinions also remain unclear to some extent at this stage. Based on our understanding of the current PRC laws and regulations in effect at the time of this prospectus, no prior permission is required under the M&A Rules or the Opinions from any PRC governmental authorities (including the CSRC) for consummating this offering by our company. However, there can be no assurance that the relevant PRC governmental authorities, including the CSRC, would reach the same conclusion as us, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or new interpretation of current rules (with retrospective effect) to require us to obtain CSRC or other PRC governmental approvals for this offering. If we or our subsidiaries inadvertently conclude that such permission is not required, our ability to offer or continue to offer our Ordinary Shares to investors could be significantly limited or completed hindered, which could cause the value of our Ordinary Shares to significantly decline or become worthless. Our Group or Shanghai Xitu may also face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. On December 28, 2021, the Cyberspace Administration of China (the CAC ), published the Measures for Cybersecurity Review which became effective on February 15, 2022, which required that any network platform operator controlling personal information of no less than one million users which seeks to list on a foreign stock exchange should also be subject to cybersecurity review. The PRC Data Security Law, which took effect on September 1, 2021, imposes data security and privacy obligations on entities and individuals that carry out data activities, provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data and information. On August 20, 2021, the Standing Committee of the People s Congress promulgated the PRC Personal Information Protection Law (the PIPL ), which took effect on November 1, 2021. The PIPL sets out the regulatory framework for handling and protection of personal information and transmission of personal information to overseas. Shanghai Xitu is not a network platform operator, nor do we conduct data activities that may affect national security or hold personal information of more than one million users. In addition, we do not conduct any cross border transfer of personal information from the PRC to other jurisdictions. As such, we do not believe the Virax Group falls in the operators of critical information infrastructure as mentioned above and we are not subject to PRC cybersecurity review. However, the Measures for Cybersecurity Review (2021 version), the Data Security Law and the PIPL were recently adopted and remain unclear on how they will be interpreted, amended and implemented by the relevant PRC governmental authorities. The CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the Overseas Listing Trial Measures ) and five relevant guidelines on February 17, 2023, which will become effective on March 31, 2023. The Overseas Listing Trial Measures regulate both direct and indirect overseas offering and listing by PRC domestic company by adopting a filing-based regulatory regime. The Overseas Listing Trial Measures also provide that if the issuer both meets the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering subject to the filing procedure set forth under the Overseas Listing Trial Measures: (i) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (ii) the issuer s business activities are substantially conducted in mainland China, or its principal place of business are located in mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in Mainland China. Where an issuer submits an application for an initial public offering to competent overseas regulators, such issuer must file with the CSRC within three business days after such application is submitted. The Overseas Listing Trial Measures also require subsequent reports to be filed with the CSRC on material events, such as change of control or voluntary or forced delisting of the issuer who have completed overseas offerings and listings. Pursuant to the Overseas Listing Trial Measures, domestic enterprises that directly or indirectly offer or list securities on an overseas stock exchange shall file with the CSRC. We are not directly offering securities overseas (as Shanghai Xitu is not the issuer of the listed securities on an overseas stock exchange). According to the Overseas Listing Trial Measures, if the issuer meets the following conditions, it shall be deemed as an indirect overseas offering and listing of a domestic enterprise: (i) 50% or more of the issuer s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (ii) the issuer s business activities are substantially conducted in mainland China, or its principal place of business are located in mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in Mainland China Based on the above mentioned, given that the operating income, total profit, total assets or net assets of the Shanghai Xitu for the last financial year accounted for less than 50% of the Virax Group s audited consolidated financial statements and none of Shanghai Xitu s senior management personnel is a PRC Citizen and only two (2) out of seven (7) have an ordinary residence located in the PRC, this offering shall not be deemed as a domestic enterprise that indirectly offer or list securities on an overseas stock exchange, nor does it requires filing or approvals from the CSRC. However, there can be no assurance that the relevant PRC governmental authorities, including the CSRC, would reach the same conclusion as us, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or new interpretation of current rules (with retrospective effect) to require us to obtain CSRC or other PRC governmental approvals for this offering. If we or our subsidiaries inadvertently conclude that such approvals are not required, our ability to offer or continue to offer our Ordinary Shares to investors could be significantly limited or completed hindered, which could cause the value of our Ordinary Shares to significantly decline or become worthless. Our Group or Shanghai Xitu may also face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings, including this offering. Our business may be subject to various government regulations and regulatory interference. As of the date of this prospectus, (i) Shanghai Xitu has obtained all necessary permissions or approvals and authorizations in the PRC in all material aspects in relation to conducting its business operations in China; and (ii) we are not required to obtain any permission or approval from any PRC authority to issue securities to foreign investors (by Virax Cayman) or in connection with this offering under PRC laws or regulations in effect. Except for the business license issued by the local branch of the State Administration for Market Regulation, which Shanghai Xitu s have obtained and are in full force and effect as of the date of this prospectus, Shanghai Xitu is not required to obtain any other licenses, approvals or permits to conduct its business operations in China. To the best of our knowledge, as of the date of this prospectus, there are no laws or regulations that are or will be adopted in the near future by PRC government authorities that would prevent Shanghai Xitu from maintaining the business license it has obtained or would require it to obtain additional licenses or qualifications in order to operate its current business operations. Further, there are no PRC laws and regulations (including the CSRC, the CAC, or any other government entity) in force explicitly requiring that our Group or Shanghai Xitu to obtain permission from PRC authorities for this offering or to issue securities to foreign investors (by Virax Cayman) and we are not required to obtain additional permission or approval from Chinese authorities, including the CSRC and the CAC, to either approve our PRC subsidiaries operation or to offer the securities (of Virax Cayman) being registered to foreign investors. Nevertheless, we may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Furthermore, given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas, although as of the date of this prospectus, our Group or Shanghai Xitu have not been involved in any investigations initiated by the applicable governmental regulatory authorities, nor have we received any inquiry, notice, warning, or sanction in such respect, there remains uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. If it is determined in the future that the approval of the CSRC, the CAC or any other regulatory authority is required for this offering, our Group or Shanghai Xitu may face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from the PIPE Offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery of the Ordinary Shares that we are offering, you do so at the risk that settlement and delivery may not occur. In addition, if the CSRC, the CAC or other regulatory PRC agencies later promulgate new rules requiring that our Group or Shanghai Xitu obtain their approvals for this PIPE Offering, our Group or Shanghai Xitu may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect on our ability to complete this offering or any follow-on offering of our securities or the market for and market price of our ordinary shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. Transfer of Cash Through our Organization Currently, Virax Cayman is incorporated in Cayman Islands to be the ultimate parent company of the Group. As a holding company with no material operations of our own, Virax Cayman conduct our operations through our operating subsidiaries established in Singapore, Hong Kong, China, and the British Virgin Islands. Currently, Virax Cayman indirectly owns 95.65% of the equity interests in SingaporeCo. However, some of our operations are currently conducted through our operating entities established in Hong Kong and Shanghai, primarily, Virax Immune T-Cell Medical Device Company Limited and Shanghai Xitu Consulting Co., Limited, which we refer to as Virax Immune T-Cell and Shanghai Xitu, respectively. Virax Cayman is permitted under the laws of Cayman Islands to provide funding to our subsidiaries in Singapore, British Virgin Islands, Hong Kong and Shanghai through loans or capital contributions on the amount of the funds. Virax Cayman can distribute earnings from its businesses, including subsidiaries, to the U.S. investors as well as the ability to settle amounts owed under intercompany agreements. Our operations in Singapore, British Virgin Islands, Hong Kong and Shanghai were in loss position since 2020, and the Group has raised capital through financing transactions and provided funding to our operations. Our operating subsidiaries are permitted under the laws of Singapore, British Virgin Islands, PRC and Hong Kong, respectively, to provide funding to Virax Cayman, the holding company incorporated in the Cayman Islands through dividend distributions. Our Group currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. We currently do not have any dividend policy, and we do not anticipate declaring or paying dividends in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. If our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us. As of the date of this prospectus, there have been cash flows between our subsidiaries, and cash flows between our Virax Cayman and our subsidiaries to fund operations in the normal course of business. Currently, some of our operations are currently conducted through our operating entities established in Hong Kong and Shanghai. We did not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a VIE structure with any entity in China. Since Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, providing Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of one country, two systems . Under Hong Kong law, dividends could only be paid out of distributable profits (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves. Dividends cannot be paid out of share capital. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. Further, the PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. The dividends and distributions from Shanghai Xitu is subject to relevant regulations and restrictions on dividends and payment to parties outside of China. Investment in Chinese companies, which are governed by the Foreign Investment Law and Company Law, and the dividends and distributions from Shanghai Xitu is subject to relevant regulations and restrictions on dividends and payment to parties outside of China. Applicable PRC law permits payment of dividends to Virax Cayman by Shanghai Xitu only out of its net income, if any, determined in accordance with PRC accounting standards and regulations. Shanghai Xitu is required to set aside a portion of its net income, if any, each year to fund general reserves for appropriations until such reserves have reached 50% of the relevant entity s registered capital. These reserves are not distributable as cash dividends. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. In addition, registered share capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each operating subsidiary. Within the organization, investor cash inflows have all been received by Virax Cayman. Cash to fund Virax Cayman s operations is transferred from Virax Cayman down through our Singapore, Hong Kong, BVI entities and then into our Chinese entity through capital contributions and loans. Transfers among our Singapore and Hong Kong entities are not restricted. Furthermore, subject to payment of withholding taxes, there are no restrictions and limitations on our ability to distribute earnings from our subsidiaries to Virax Cayman and U.S. investors as well as the ability to settle amounts owed under any agreements. No dividends or distribution have been made by our subsidiaries or by Virax Cayman to date and we intend to reinvest all cash into our subsidiaries for the foreseeable future. For the years ended March 31, 2022 and 2021 and for the six months ended September 30, 2022, there was no transfer of funds between Virax Cayman and its subsidiaries. Further, subject to the Companies Act and our Second Amended and Restated Memorandum and Articles of Association, our board of directors may authorize and declare a dividend to shareholders from time to time out of the profits from Virax Cayman, realized or unrealized, or out of the share premium account, provided that Virax Cayman will remain solvent, meaning Virax Cayman is able to pay its debts as they come due in the ordinary course of business. There is no further Cayman Islands statutory restriction on the amount of funds which may be distributed by us in the form of dividends. There are no restrictions or limitations under the laws of Singapore imposed on the conversion of Singapore dollars into foreign currencies and the remittance of currencies out of Singapore, nor is there any restriction on any foreign exchange to transfer cash between Virax Cayman and its subsidiaries, across borders and to foreign investors outside of Singapore, nor is there any restrictions and limitations to distribute earnings from the subsidiaries, to Virax Cayman and investors outside of Singapore and amounts owed as well as the ability to settle amounts owed under intercompany agreements. There are no foreign exchange controls in Singapore. For the years ended March 31, 2022 and 2021, and for the six months ended September 30, 2022, there was no transfer between Virax Cayman and its subsidiaries. As of the date of this prospectus and for the years ended March 31, 2022 and 2021, and for the six months ended September 30, 2022, we have not declared any dividend. If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our operating subsidiaries in Singapore, British Virgin Islands and Hong Kong. Under the current practice of the Inland Revenue Authority of Singapore, no tax is payable in Singapore, in respect of dividends paid by us, and under the current laws of the Cayman Islands, we are also not subject to tax on income or capital gains and withholding tax is not imposed upon payments of dividends from Virax Cayman to its shareholders. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. Further, we do not have specific cash management policies and procedures in place that dictate how funds are transferred through our organization, however, we have been closely monitoring our transfer of funds and will adopt relevant policies and procedures if necessary. Implications of Being an Emerging Growth Company and a Foreign Private Issuer Emerging Growth Company As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012, and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to: being permitted to present only two years of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition and Results of Operations in our filings with the SEC; not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting; reduced disclosure obligations regarding executive compensation in periodic reports, proxy statements and registration statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our Ordinary Shares pursuant to this offering. However, if certain events occur before the end of such five-year period, including if we become a large accelerated filer, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end of such five-year period. In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. We have elected to take advantage of the extended transition period for complying with new or revised accounting standards and acknowledge such election is irrevocable pursuant to Section 107 of the JOBS Act. Foreign Private Issuer We are a foreign private issuer, as defined by the SEC. As a result, in accordance with the rules and regulations of The Nasdaq Stock Market LLC, or Nasdaq, we may comply with home country governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards. We may choose to take advantage of the following exemptions afforded to foreign private issuers: Exemption from filing quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four (4) days of their occurrence. Exemption from Section 16 rules regarding sales of Ordinary Shares by insiders, which will provide less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act. Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four (4) business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers. Although we will require board approval of any such waiver, we may choose not to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private issuer exemption. Exemption from the requirement that our board of directors have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee s purpose and responsibilities. Exemption from the requirements that director nominees are selected, or recommended for selection by our board of directors, either by (i) independent directors constituting a majority of our board of directors independent directors in a vote in which only independent directors participate, or (ii) a committee comprised solely of independent directors, and that a formal written charter or board resolution, as applicable, addressing the nominations process is adopted. Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on our home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq s Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). If we rely on our home country corporate governance practices in lieu of certain of the rules of Nasdaq, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. If we choose to do so, we may utilize these exemptions for as long as we continue to qualify as a foreign private issuer. Although we are permitted to follow certain corporate governance rules that conform to Cayman Islands requirements in lieu of many of the Nasdaq corporate governance rules, we intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers. Corporate Information Our principal executive office is located at 20 North Audley Street London, W1K 6LX, United Kingdom. Our telephone number is +44 020 7788 7414. Our registered office in the Cayman Islands is located at the office of Ogier Global (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9009, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168. Our principal website is located at https://viraxbiolabs.com/. Information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus.
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+PROSPECTUS SUMMARY 1 THE OFFERING 18 SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA 20 RISK FACTORS 24 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 67 USE OF PROCEEDS 68 DIVIDEND POLICY 69 EXCHANGE RATE INFORMATION 70 CAPITALIZATION 71 DILUTION 72 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 74 CORPORATE HISTORY AND STRUCTURE 92 BUSINESS 93 INDUSTRY 104 PRC REGULATION 117 MANAGEMENT 125 PRINCIPAL SHAREHOLDERS 131 RELATED PARTY TRANSACTIONS 132 DESCRIPTION OF SHARE CAPITAL 134 SHARES ELIGIBLE FOR FUTURE SALE 142 TAXATION 143 SERVICE OF PROCESS AND ENFORCEABILITY OF CIVIL LIABILITIES 150 UNDERWRITING 152 EXPENSES RELATING TO THIS OFFERING 161 LEGAL MATTERS 161 EXPERTS 161 WHERE YOU CAN FIND ADDITIONAL INFORMATION 162 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F-1 You should rely only on the information contained in this prospectus or in any related free-writing prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus or in any related free-writing prospectus. We are offering to sell, and seeking offers to buy, the Class A Ordinary Shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is current only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the Class A Ordinary Shares. We have not taken any action to permit a public offering of the Class A Ordinary Shares outside the United States or to permit the possession or distribution of this prospectus or any filed free writing prospectus outside the United States. Persons outside the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about and observe any restrictions relating to the offering of the Class A Ordinary Shares and the distribution of this prospectus or any filed free writing prospectus outside the United States. This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, you are cautioned not to give undue weight to this information. Until [__________], 2023 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade Class A Ordinary Shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. i COMMONLY USED DEFINED TERMS "AHFCAA" refers to the Accelerating Holding Foreign Companies Accountable Act; "China" or the "PRC" refers to the People s Republic of China. When used in the case of laws, regulations and rules, "China" or "the PRC" refers to only such laws, regulations and rules of mainland China. When used in the case of government, governmental authorities, regulatory agencies, courts, jurisdictions, tax, entities, enterprises, individuals and residents of "China" or "the PRC" or "Chinese", it refers to only such government, governmental authorities, regulatory agencies, courts, jurisdictions, tax, entities, enterprises, individuals and residents of mainland China; Depending on the context, "we", "us", "our company", "our", the "Company" and "KingWin" refer to Top KingWin Ltd, a Cayman Islands company, and its subsidiaries, Sky KingWin Ltd, Sky Kingwin (HK) Limited, and Guangdong Tiancheng Jinhui Enterprise Development Co., Ltd., unless the context otherwise indicates; "CAC" refers to the Cyberspace Administration of China; "CSRC" refers to the China Securities Regulatory Commission; "HFCA Act" refers to the Holding Foreign Companies Accountable Act; "M&A Rules" refers to the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors of China; "MOFCOM" refers to the Ministry of Commerce of China; "Negative List" refers to the Special Administrative Measures for the Access of Foreign Investment (Negative List); "NDRC" refers to the National Development and Reform Commission of China; "NPC" refers to the National People s Congress of China; "RMB" or "yuan" refers to the legal currency of China; "SAFE" refers to the State Administration of Foreign Exchange in China; "SAIC" refers to the State Administration for Industry and Commerce in China and is currently known as State Administration for Market Regulation; "SAT" refers to the PRC State Administration of Taxation; "SAMR" refers to the former State of Administration of Industry and Commerce of China, which has been merged into the State Administration for Market Regulation; "SCNPC" refers to the Standing Committee of the National People s Congress of China; "KingWin BVI" refers to Sky KingWin Ltd, a company organized under the laws of British Virgin Islands, which is wholly-owned by KingWin; "KingWin HK" refers to SKY KINGWIN (HK) LIMITED, a company organized under the laws of Hong Kong, which is wholly-owned by KingWin BVI; "Tiancheng Jinhui" refers to Guangdong Tiancheng Jinhui Enterprise Development Co., Ltd., a limited liability company organized under the laws of China, which is wholly-owned by KingWin HK; "U.S. GAAP" refers to generally accepted accounting principles in the United States; and "USD" or "$" refers to the legal currency of the United States. KingWin s reporting currency is USD. However, substantially all of our consolidated revenues, costs, expenses and assets are denominated in RMB. This prospectus contains translations of certain foreign currency amounts into USD for the convenience of the reader. All translations of RMB are calculated at the rate of $1.00=RMB6.3726 as of the year ended December 31, 2021 and $1.00=RMB6.4508 for the year ended December 31, 2021, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 31, 2021. All translations of RMB are calculated at the rate of $1.00=RMB7.1135 as of September 30, 2022 and $1.00=RMB6.6054 for the nine months ended September 30, 2022 representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on September 30, 2022. All translations of RMB are calculated at the rate of $1.00=RMB6.8972 as of December 31, 2022 and $1.00=RMB6.7290 for the year ended December 31, 2022. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at such rate, or at any other rate. We are exposed to foreign exchange risk. See "Risk Factors — Risks Related to Doing Business in China — Fluctuations in exchange rates could have a material adverse effect on our results of operations and the price of our Class A Ordinary Shares." at page 47. ii PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our Class A Ordinary Shares discussed under "Risk Factors," before deciding whether to buy our Class A Ordinary Shares. Overview of Our Business Services We provide a number of important business services in China to young and emerging companies including (i) corporate business training services, which mainly focus on advanced knowledge and new perspectives on the capital markets, (ii) corporate consulting services, which mainly focus on various aspects of fundraising, and (iii) advisory and transaction services. Our main clients are entrepreneurs and executives in small and medium enterprises ("SMEs") in China. Corporate business training, corporate consulting, and advisory and transaction services constituted approximately 7%, 23% and 70% of our business, respectively, during the nine months ended September 30, 2022. Supported by the rapid economic growth and friendly business policies in China, the number of SMEs in China has significantly increased from 2016 to 2021. According to Frost & Sullivan, an independent market research firm, from 2016 to 2021, the number of SMEs in China increased from 13.9 million to 26.8 million with a compound annual growth rate ("CAGR") of 14.0%. Frost & Sullivan expects the number of SMEs in China will steadily increase at 9.8% CAGR from 2021 to 2026. We believe that the increasing number of SMEs provide a solid foundation for the future development of our business. With the increase in number of companies entering the China market, most industries in China are becoming more competitive. Therefore founders, senior management teams and key employees of companies have an increasing awareness for professional business education in order to enhance their professional knowledge, boost their company s strategic growth and allow the company to stay competitive in today s economy. China s economy is shifting from traditional real estate investment and manufacturing to new economy industries such as internet-driven or technology-driven industries. Currently, the new economy industry has been a vital driving force in the growth of the economy in China. According to Frost & Sullivan, from 2016 to 2021, the market size of new economy industries by revenue in China experienced significant growth with 28.2% CAGR, which was much higher than the synchronized growth rate of 8.9% in China s nominal GDP, attaining $4.0 trillion (RMB25.2 trillion) by the end of 2021. We believe that the rapid growth of new economy industries benefits the development of our business. Our mission is to provide comprehensive services to address client s needs throughout all phases of their development and growth. Certain Risks and Limitations Related to Doing Business in China Because all of our operations are in mainland China, our business is subject to the complex and rapidly evolving laws and regulations. The PRC government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at anytime, which could result in a material change in our operations and/or the value of our Class A Ordinary Shares. PRC laws and regulations governing our current business operations are sometimes vague and uncertain. Uncertainties with respect to the PRC legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations in China with little advance notice could have a material adverse effect on us and limit the legal protections available to us and our investors. See "Risk Factors — Risks Related to Doing Business in China — Because all of our operations are in China, our business is subject to the complex and rapidly evolving laws and regulations there. The PRC government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our Class A Ordinary Shares." on page 40, "PRC laws and regulations governing our current business operations are sometimes vague and uncertain. Uncertainties with respect to the PRC legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations in China with little advance notice could have a material adverse effect on us and limit the legal protections available to you and us." on page 43, "If the PRC government were to impose new requirements for approval from the PRC authorities to issue our Class A Ordinary Shares to foreign investors or list on a foreign exchange, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless." on page 45, "With the promulgation of the new filing-based administrative rules for overseas offering and listing by domestic companies in China, the PRC government may exert more oversight and control over overseas public offerings conducted by China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares to investors and could cause the value of our Class A Ordinary Shares to significantly decline or become worthless." on page 46, and "Changes in China s economic, political or social conditions or government policies, which could occur quickly with little advance notice, could have a material adverse effect on our business and operations." on page 48 of this prospectus. There are significant enforcement risks related to our Class A Ordinary Shares. It may be difficult for you to effect service of process or the U.S. courts judgments obtained in U.S. courts upon us or our directors and officers, many of whom are not residents in the United States, and whose significant part of assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC, respectively, would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state. In addition, it is uncertain whether such Cayman Islands or PRC courts would entertain original actions brought in the courts of the Cayman Islands or the PRC against us or such persons predicated upon the securities laws of the United States or any state. See "Prospectus Summary — Summary of Significant Risk Factors — Risks Related to Doing Business in China — You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the prospectus." on page 52, and "Risk Factors — Risks Related to Doing Business in China — You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the prospectus." on page 52 of this prospectus. 1 There are significant liquidity risks related to our Class A Ordinary Shares and certain limitations on our ability to transfer cash between us or our subsidiaries. In order for us to pay dividends to our shareholders, we may rely on the distribution of profits of the PRC operating entity to the Hong Kong subsidiary. PRC regulations currently permit the payment of dividends only out of accumulated profits, as determined in accordance with accounting standards and PRC regulations. To the extent any funds or assets in the business is in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong, due to the interventions in or the imposition of restrictions and limitations by PRC governments which may limit our ability to transfer funds, pay dividends or make distribution. See "Prospectus Summary — Summary of Significant Risk Factors — Risks Related to Doing Business in China — To the extent any funds or assets in the business is in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong." on page 13 of this prospectus, and "Risk Factors — Risks Related to Doing Business in China —To the extent any funds or assets in the business is in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong." on page 49 of this prospectus. Furthermore, if our subsidiary in mainland China incurs debt on its own in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments. 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 companies in mainland China to enterprises outside of mainland China unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the enterprises outside of mainland China are tax resident. See "Prospectus Summary — Dividend Distributions or Assets Transfer among the Holding Company and Subsidiaries." on page 7 of this prospectus, "Prospectus Summary — Summary of Significant Risk Factors — Risks Related to Doing Business in China — The transfer of funds, dividends and other distributions between us and our subsidiaries is subject to restriction." on page 48, "Prospectus Summary
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+Prospectus Summary
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+ Risks Related to Our Common Stock
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+ The Offering
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+ Selling Stockholders
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+ Description of Securities
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+ Experts and Counsel
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+ Interest of Named Experts and Counsel
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+ Information with respect to Our Company
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+ Description of Business
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+ Description of Property
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+ Legal Proceedings
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+ Market Price of and Dividends on Our Common Equity and Related Stockholder Matters
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+ Management s Discussion and Analysis of Financial Condition and Results of Operations
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+ Directors and Executive Officers
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+ Executive Compensation
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+ Security Ownership of Certain Beneficial Owners and Management
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+ Transactions with Related Persons, Promoters and Certain Control Persons and Corporate Governance
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+ Where You Can Find More Information
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diff --git a/parsed_sections/prospectus_summary/2023/ZIVOW_zivo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2023/ZIVOW_zivo_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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+Prospectus Summary Our Business We are an early-stage, Ontario-based clean technology company that has developed a highly flexible chemical recycling platform featuring three unique technologies: Hydrochemolytic Plastics Upcycling, Hydrochemolytic Bitumen Upgrading, and Hydrochemolytic Renewables Upgrading. As of today, through acquisition and development, we own eight US-based patents, seven granted and one pending. Our future business model is based principally on licensing, royalties, and research and development. However, we are still investigating different business models that may be a better fit to our operations and bring greater value to our stakeholders. Monetization of our platform through a licensing model reduces our need for capital while enabling a pathway to commercialization that management of our company believes is relatively straightforward, timely, and capital efficient. We intend to develop commercial partnerships by means of demonstration projects. Management believes this strategy will be very effective for building a pipeline of customer interests and agreements. Deliverables include reports that detail: the technology; its performance; the key parameters and operational variables; economic considerations; operational considerations, and environmental considerations including greenhouse gases ( GHG ) footprint and life cycle analysis. Among the intended business benefits are developing long-term customer and partner relationships, a better understanding of geographical territories, behaviors, and characteristics and the potential impact of the technology from environmental, social, and governance (ESG) criteria. For our founders, Ofer Vicus, Chief Executive Officer ( CEO ), and W. Marcus Trygstad, Principal Scientist, the impetus for our formation was the vision to develop hydrothermal upgrading technology for upgrading heavy oils. But through scientific research and development efforts, our management found that hydrothermal upgrading technology also could be applied beneficially in the seemingly unrelated fields of plastic and rubber tire upcycling and renewable oil upgrading. Moreover, discoveries made while pursuing those new applications provided management with deeper insights into fundamental chemistry, including operating in connection with the original work on heavy oil. From this work, we developed our current and versatile intellectual property, including our Hydrochemolytic Technology platform, as well as developing eight patents (7 granted and one pending). With support from industry participants as early as 2015, our technology demonstration projects have provided validation of Hydrochemolytic Technology in key applications to support pre-commercial, pilot-scale demonstrations. We currently direct our Hydrochemolytic Technology platform toward Hydrochemolytic Plastics Upcycling, Hydrochemolytic Bitumen Upgrading, and Hydrochemolytic Renewables Upgrading. Our technology transforms lower-value feedstocks into useful, higher- value chemical feedstocks and fuels. Although our technology can be implemented in stand-alone operations, management believes its greatest economic relevance and impact is achieved through integration into thermal operation infrastructure at existing plants. Accordingly, we will aim to create strategic partnerships to demonstrate and implement the technology through licensing arrangements. We have developed our technology platform to address different applications and market sectors. We are currently in the stage of scaling up our technology to a commercial process for our plastic and bitumen applications. Our first significant scale-up step is the development of a semi commercial process which will be designed, built and tested on a pilot scale and subsequently scaled up further to demonstrate on a commercial scale. We have incurred recurring losses since inception and our technology platform has not yet been tested in a commercial setting. Commercializing our technology platform presents several challenges, including that the technology may not perform as expected under real-world conditions, rapid advancements in chemical recycling technology may result in new, more efficient technologies emerging, potentially rendering parts of our technology platform as less efficient, and securing funding may be difficult given the substantial investment required to scale up the technology platform on a commercial scale. We do not have a definitive timeline for scaling up our technology to a commercial process for our plastic and bitumen applications. In the meantime, we are continuing to engage with prospective customers through technology evaluation projects to guide ongoing development. We face a number of challenges since our technology is different from existing approaches in our industry. In particular, we are a new and different concept from the existing approaches in our industry and our technology is not yet tested in a commercial setting. We also face many of the common challenges in upscaling of chemical processes, including challenges related to mass- and heat transfer, and equipment design. Some particular challenges include the handling of solid or semi-solid feedstock (plastic waste, bitumen), and the high degree of contamination (especially in waste plastic). In addition, our industry has a significant amount of unsettled regulation and many different approaches and strategies. To deal with these various challenges, we have adopted an early stage approach to connecting with our prospective customers and potential partners on our path towards the commercial development of our technology. The primary objective of these connections, which we describe as customer engagements, is to provide us with guidance for the development of our technology and business. Apart from the invaluable guidance in our technological development, we regard the connections in our "Customer Engagement Program" as an endorsement of our efforts by reputable and established organizations. While we have been successful with these engagements for the evaluation of our technology so far, and we are currently in discussions with a number of prospective customers and potential partners for possible collaboration, we currently do not have any definitive partnership agreements in place. Corporate Information Our company was incorporated under the Business Corporations Act (British Columbia) in British Columbia, Canada under the name "Aduro Clean Technologies Inc." Our principal place of business is located at 542 Newbold St., London, Ontario, N6E 2S5, Canada and our telephone number is 226-784-8889. Our registered records office is located at Suite 2300, Bentall 5, 550 Burrard Street, Vancouver, British Columbia, Canada V6C 2B5 and its telephone number is 604-683-6498. On April 23, 2021, we previously consolidated our issued and outstanding common shares on the basis of one (1) new common share for every three (3) old common shares resulting in a reduction in our issued and outstanding capital (the Previous Consolidation ). The common shares reserved under our equity and incentive plans were adjusted to reflect the Previous Consolidation. All common share and per share data presented in this registration statement have been retroactively adjusted to reflect the Previous Consolidation unless otherwise noted. Reverse Stock Split On August 20, 2024, we completed a consolidation, or a reverse stock split, of our issued and outstanding common shares on the basis of one (1) new common share for three and a quarter (3.25) old common shares. Unless otherwise stated, the share and per share information in our financial statements and the notes thereto do not reflect such consolidation or reverse stock split. Unless otherwise stated as Pre-Split , the share and per share information in the rest of this prospectus reflect such consolidation or reverse stock split. Risks Associated with Our Business Our business is subject to a number of risks which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under "Risk Factors" in deciding whether to invest in our shares. These risks include but are not limited to the following: You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future. Management will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively. We may need to raise additional funds to support our business operations or to finance future acquisitions, including through the issuance of equity or debt securities, which could have a material adverse effect on our ability to grow our business. We will incur increased costs as a result of operating as a U.S. public reporting company and maintaining a dual listing on the Nasdaq Capital Market and the Canadian Securities Exchange (the CSE ), and our management is required to devote substantial time to new compliance initiatives. Our inability to comply with the Nasdaq Capital Market continued listing requirements could result in our common shares being delisted, which could affect the market price and liquidity of our common shares and reduce our ability to raise capital. We have not reached profitability and currently have negative operating cash flows and we have a negative net tangible book value. We operate in a capital-intensive industry and will require a significant amount of capital to continue operations. We depend on certain key personnel who hold substantial knowledge and know-how related to our technology, and our success will depend on our continued ability to retain and attract such qualified personnel. We may be involved in litigation or legal proceedings that are deemed to be material and may require recognition as a provision or a contingent liability on our financial statements. It may be difficult for non-Canadian investors to obtain and enforce judgments against us because of our Canadian incorporation and presence. We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common shares less attractive to investors. As a foreign private issuer, we are not subject to certain United States securities law disclosure requirements that apply to a domestic United States issuer, which may limit the information that would be publicly available to our shareholders. As a foreign private issuer whose shares may be listed on the Nasdaq Capital Market, we may follow certain home country corporate governance practices instead of certain Nasdaq requirements. The market price of our common shares may be volatile and may fluctuate in a way that is disproportionate to our operating performance. Volatility in our common share price may subject us to securities litigation. A prolonged and substantial decline in the price of our common shares could affect our ability to raise further working capital, thereby adversely impacting our ability to continue operations. The Financial Industry Regulatory Authority sales practice requirements may also limit a shareholder's ability to buy and sell our common shares. Issues arising from supply chain disruptions and significantly delayed lead times to obtain components and projects. Implications of Being an Emerging Growth Company As a company with less than US$1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the "JOBS Act." An "emerging growth company" may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we: may present only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations; are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as "compensation discussion and analysis"; are not required to obtain an attestation and report from our auditors on our management's assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the "say-on-pay," "say-on frequency," and "say-on-golden-parachute" votes); are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and chief executive officer pay ratio disclosure; and will not be required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form 20-F following the effectiveness of our initial public offering. We intend to take advantage of all of these reduced reporting requirements and exemptions. Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an "emerging growth company" at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended, occurred, if we have more than US$1.235 billion in annual revenue, have more than US$700 million in market value of our common shares held by non-affiliates, or issue more than US$1 billion in principal amount of non-convertible debt over a three-year period. Foreign Private Issuer Status We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example: we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; for interim reporting, we are permitted to comply solely with our home country requirements, which may be less rigorous than the rules that apply to domestic public companies in certain aspects; we are not required to provide the same level of disclosure on certain issues, such as executive compensation; we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction. We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. Press releases relating to financial results and material events will also be furnished to the U.S. Securities and Exchange Commission ("SEC") on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
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diff --git a/parsed_sections/prospectus_summary/2024/ALLR_allarity_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/ALLR_allarity_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/BDSX_biodesix_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/BDSX_biodesix_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in the securities covered by this prospectus. For a more complete understanding, we encourage you to read and consider carefully the more detailed information in this prospectus, including the information referred to under the headings Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, and our consolidated financial statements and the related notes thereto. Overview Biodesix, Inc. ( Biodesix , we, us, our or the Company ) is a leading diagnostic solutions company with a focus in lung disease. By combining a multi-omic approach with a holistic view of the patient s disease state, we believe our testing solutions provide physicians with greater insights to help personalize their patients care and meaningfully improve disease detection, evaluation, and treatment. Our unique approach to precision medicine provides timely and actionable clinical information, which we believe helps improve overall patient outcomes and lowers the overall healthcare cost by reducing the use of ineffective and unnecessary treatments and procedures. In addition to our diagnostic tests, we provide biopharmaceutical companies with services that include diagnostic research, clinical trial testing, and the discovery, development, and commercialization of companion diagnostics. We also recognize revenue from other services, including amounts derived from licensing our technologies. Our core belief is that no single technology will answer all clinical questions that we encounter. Therefore, we employ multiple technologies, including genomics, transcriptomics, proteomics, radiomics, and artificial intelligence ( AI ) enabled informatics, to discover innovative diagnostic tests for potential clinical use. Our multi-omic approach is designed to enable us to discover diagnostic tests that answer critical clinical questions faced by physicians, researchers, and biopharmaceutical companies. We have commercialized five diagnostic tests which are currently on market and we perform more than 30 assays for clinical and research use as part of our laboratory services that have been used by over 65 biopharmaceutical customers and academic partners. Blood-Based Lung Tests We have five diagnostic blood-based lung cancer tests across the lung cancer continuum of care. Diagnosis Nodify CDT and Nodify XL2 tests, together marketed as our Nodify Lung Nodule Risk Assessment testing, assess a suspicious lung nodule s risk of lung cancer to help identify the most appropriate treatment pathway. The Nodify CDT and XL2 tests have an established average turnaround time of one and five business days, respectively, from receipt of the blood sample, providing physicians with timely results to guide diagnostic planning. We believe we are the only company to offer two commercial blood-based tests to help physicians reclassify risk of malignancy in patients with suspicious lung nodules. Treatment & Monitoring GeneStrat ddPCR, GeneStratNGS and VeriStrat tests, marketed as part of our IQLung testing strategy, are used following diagnosis of lung cancer to detect the presence of mutations in the tumor and the state of the patient s immune system to help guide treatment decisions. The Table of Contents GeneStrat ddPCR tumor genomic profiling test and the VeriStrat immune profiling test have an established average turnaround time of two business days from receipt of the blood sample, and the GeneStrat NGS test has an established average turnaround time of three business days from receipt of the blood sample, providing physicians with timely results to facilitate rapid treatment decisions. The GeneStrat ddPCR test evaluates the presence of actionable mutations in lung cancer. The test is covered independent of stage and can be used multiple times per patient to monitor changes in mutation status. The GeneStrat NGS test is a broad 52 gene panel, including guideline recommended mutations that help identify advanced stage patients eligible for targeted therapy or clinical trial enrollment. The VeriStrat test is a blood-based proteomic test that provides a personalized view of each patient s immune response to their lung cancer. Implications of Being an Emerging Growth Company and Smaller Reporting Company We are an emerging growth company within the meaning of the Jumpstart Our Business Startups Act (the JOBS Act ). As an emerging growth company, we may take advantage of certain exemptions from various public company reporting requirements, including the requirement that our internal control over financial reporting be audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, certain requirements related to the disclosure of executive compensation in our periodic reports and proxy statements, the requirement that we hold a nonbinding advisory vote on executive compensation and any golden parachute payments, and we have taken advantage of the ability to provide reduced disclosure of financial information in this prospectus, such as being permitted to include only two years of audited financial information and two years of selected financial information in addition to any required unaudited interim financial statements, with correspondingly reduced Management s Discussion and Analysis of Financial Condition and Results of Operations disclosure. We may take advantage of these exemptions until we are no longer an emerging growth company. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the Securities Act ), for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies, which may make comparison of our financials to those of other public companies more difficult. Additionally, because we have taken advantage of certain reduced reporting requirements, the information contained herein may be different from the information you receive from other public companies in which you hold stock. We will remain an emerging growth company until the earliest to occur of (i) the last day of the fiscal year in which we have more than $1.24 billion in annual revenue; (ii) the date we qualify as a large accelerated filer, with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; and (iv) until December 31, 2025 (the last day of the fiscal year ending after the fifth anniversary of the completion of our initial public offering). Additionally, we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our Common Stock held by non-affiliates exceeds $250 million as of the end of that year s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our Common Stock held by non-affiliates Table of Contents exceeds $700 million as of the end of that year s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. Corporate Information We were incorporated in Delaware in 2005 as Elston Technologies, Inc. Our principal executive offices are located at 919 West Dillon Rd., Louisville, Colorado 80027, and our telephone number is (303) 417-0500. On June 20, 2006, we changed our name to Biodesix, Inc. Our website address is www.biodesix.com. Information contained on, or accessible from, or hyperlinked to, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus, or in deciding whether to purchase our Common Stock. Our filings with the SEC are posted on our website at www.biodesix.com. Other than the specifically incorporated SEC filings, the information found on or accessible through our website is not part of this prospectus or any other report we file with or furnish to the SEC. The public can also obtain copies of these filings by accessing the SEC s website at http://www.sec.gov. Recent Developments April 2024 Underwritten Offering On April 5, 2024, we entered into an underwriting agreement (the Underwriting Agreement ) with TD Securities (USA) LLC, William Blair & Company, LLC and Canaccord Genuity LLC, as representatives of the underwriters, for the sale and issuance of an aggregate 17,391,832 shares of Common Stock for aggregate gross proceeds of $18.4 million (the Underwritten Offering ). The Underwritten Offering was conducted pursuant to a shelf registration statement on Form S-3. Pursuant to the Underwriting Agreement, we agreed to issue and sell our Common Stock at a price of $1.15 per share. April 2024 Concurrent Private Placement On April 5, 2024, we entered into definitive agreements (the April 2024 SPAs ) for the Concurrent Private Placement (together with the Underwritten Offering, the April 2024 Transactions ) with various investors, including certain members of management, certain of our directors and funds affiliated with these directors, for 760,857 shares of Series A Preferred Stock (convertible on a 40 to 1 basis) at a price of $46.00 per share. Following receipt of stockholder approval of the conversion of Series A Preferred Stock, each share of Series A Preferred Stock will automatically convert into 40 shares of Common Stock, subject to certain beneficial ownership limitations set by each holder. Except as otherwise required by law, the Series A Preferred Stock does not have voting rights. Concurrently and in connection with the execution of the Underwriting Agreement, certain of Biodesix s directors and officers entered into lockup agreements with Biodesix, pursuant to which each such stockholder was subject to a 90-day lockup on the sale or transfer of shares of Common Stock held by each such stockholder at the pricing of the April 2024 Transactions, including those shares received by such stockholders in the Concurrent Private Placement. Table of Contents
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+PROSPECTUS SUMMARY 1 THE OFFERING 10 RISK FACTORS 13 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 19 SELECTED FINANCIAL DATA 20 USE OF PROCEEDS 21 DIVIDEND POLICY 21 DESCRIPTION OF CAPITAL STOCK 22 DESCRIPTION OF SECURITIES WE ARE OFFERING 26 UNDERWRITING 29 LEGAL MATTERS 33 EXPERTS 33 INFORMATION INCORPORATED BY REFERENCE 33 WHERE YOU CAN FIND ADDITIONAL INFORMATION 34 i ABOUT THIS PROSPECTUS The registration statement of which this prospectus forms a part that we filed with the Securities and Exchange Commission (the "SEC") includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC, together with the additional information described under the headings "Where You Can Find Additional Information" and "Information Incorporated by Reference" before making your investment decision. You should rely only on the information provided in or incorporated by reference in this prospectus, in any prospectus supplement or in a related free writing prospectus, or documents to which we otherwise refer you. In addition, this prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. This prospectus includes important information about us, the securities being offered and other information you should know before investing in our securities. You should not assume that the information contained in this prospectus is accurate on any date subsequent to the date set forth on the front cover of this prospectus, even though this prospectus is delivered or securities are sold or otherwise disposed of on a later date. It is important for you to read and consider all information contained in this prospectus in making your investment decision. All of the summaries in this prospectus are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the heading "Where You Can Find Additional Information." We have not, and the underwriter has not, authorized anyone to provide any information or to make any representations other than those contained or incorporated by reference in this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The information contained in this prospectus or incorporated by reference in this prospectus or contained in any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date. For investors outside the United States: We have not, and the underwriter has not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities and the distribution of this prospectus outside the United States. Unless otherwise indicated, information contained in this prospectus or incorporated by reference in this prospectus concerning our industry, including our general expectations and market opportunity, is based on information from our own management estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. In addition, assumptions and estimates of our and our industry s future performance are necessarily uncertain due to a variety of factors, including those described in "Risk Factors" beginning on page 13 of this prospectus. These and other factors could cause our future performance to differ materially from our assumptions and estimates. ii This prospectus is an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. We are not, and the underwriter is not, making an offer to sell these securities in any state or jurisdiction where the offer or sale is not permitted. Industry and Market Data This prospectus and the documents incorporated by reference contain estimates, projections and other information concerning our industry, our business, the science of our products and the markets for our products, including data regarding the incidence of certain medical conditions and the scientific basis of our products. We obtained the industry, science, market and similar data set forth in this prospectus from our internal estimates and research and from academic and industry research, publications, surveys, and studies conducted by third parties. While we believe that these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data and we do not make any representation as to the accuracy of the information. The content of the above sources, except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated herein. Information that is based on estimates, forecasts, projections, market research, scientific research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Note Regarding Trademarks Unless the context otherwise requires, references in this prospectus to "Bluejay," "the Company," "we," "us" and "our" refer to Bluejay Diagnostics, Inc. Our logo and all product names are our common law trademarks. Solely for convenience, trademarks and tradenames referred to in this prospectus may appear without the or symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert its rights, to these trademarks and tradenames. We do not intend the use or display of other companies trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies, products or services. Basis of Presentation On June 17, 2024, 2024, we filed a Certificate of Amendment to our restated certificate of incorporation with the Secretary of State of the State of Delaware to effect a 1-for-8 reverse stock split of our issued and outstanding shares of common stock, par value $0.0001 per share (the "2024 Reverse Stock Split"), which became effective on June 20, 2024. All historical share and per share amounts reflected throughout this prospectus have been adjusted to reflect the 2024 Reverse Stock Split. However, our periodic and current reports, and all other documents incorporated by reference into this prospectus that were filed prior to June 20, 2024, do not give effect to the 2024 Reverse Stock Split. On July 21, 2023, we filed a Certificate of Amendment to our restated certificate of incorporation with the Secretary of State of the State of Delaware to effect a 1-for-20 reverse stock split of our issued and outstanding shares of common stock, par value $0.0001 per share (the "2023 Reverse Stock Split"), which became effective on July 24, 2023. All historical share and per share amounts reflected throughout this prospectus have been adjusted to reflect the 2023 Reverse Stock Split. However, our periodic and current reports, and all other documents incorporated by reference into this prospectus that were filed prior to July 24, 2023, do not give effect to the 2023 Reverse Stock Split. iii PROSPECTUS SUMMARY This summary highlights information contained in greater detail elsewhere in this prospectus or incorporated by reference into this prospectus from our filings with the SEC. This summary is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus and the information incorporated by reference herein carefully before making an investment in our securities. You should carefully consider, among other things, our financial statements and the related notes and the sections entitled "Risk Factors" and "Management s Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in, or incorporated by reference into, this prospectus. When we use the terms "Bluejay," "the Company," "us," "we" and "our," we refer to Bluejay Diagnostics, Inc., and its wholly owned subsidiary Bluejay SpinCo, LLC, taken as a whole. Overview We are a medical diagnostics company developing rapid tests using whole blood, plasma, and serum on our Symphony technology platform, ("Symphony"), to improve patient outcomes in critical care settings. Our Symphony platform is a combination of our intellectual property ("IP"), and exclusively licensed and patented IP that consists of a mobile analyzer and single-use test cartridges that if cleared, authorized, or approved by the U.S. Food and Drug Administration (the "FDA"), can provide a solution to a significant market need in the United States. Clinical trials indicate the Symphony analyzer produces laboratory-quality results in less than 20 minutes, important in intensive care units (ICUs) and emergency rooms (ERs) where rapid and reliable results are required. Our first product, the Symphony IL-6 test, is for the monitoring of disease progression in critical care settings. IL-6 is a clinically established biomarker, and is considered a , ' ': first-responder biomarker in the inflammatory cascade which can be used for the assessment of patient prognosis for many diseases and conditions, including sepsis. The Symphony IL-6 test has the ability to consistently monitor this important and clinically informative biomarker with rapid results. In the future we plan to develop additional tests for Symphony including two cardiac biomarkers (hsTNT and NT pro-BNP), as well as other tests using the Symphony platform. We do not yet have regulatory clearance for our Symphony products, and our Symphony products will need to receive regulatory authorization from the FDA in order to be marketed as a diagnostic product in the United States. Our operations to date have been funded primarily through the proceeds of (i) our initial public offering in November 2021, (ii) the registered direct offering of common stock and concurrent private placement of warrants that we completed on August 28, 2023, which is described further below and (iii) the public offering of common stock and warrants that we completed on January 2, 2024, which is described further below. Our Market The Symphony platform and our initial biomarker test, Symphony IL-6 test, is well suited to address a subset of the global in vitro diagnostics devices ("IVDs") market, including sepsis, cardio-metabolic diseases, cancer and other diseases that require rapid tests. Symphony targets critical care markets where physicians must quickly determine patient acuity to identify optimal treatment regimens. Our Business Model Our goal is to become the first provider of rapid tests for infectious, inflammatory, and metabolic diseases by leveraging the strengths of our Symphony platform. We intend to target sales and marketing of Symphony to large critical care facilities in the United States. Our business model includes the following: Attractive Financing Model. We intend to offer various financing options for the analyzer itself. As such, our business model should not require customers to incur a significant capital outlay. Recurring Revenue. We intend to sell single-use diagnostic test cartridges. We believe that our cartridges can create a growing and recurring revenue stream, as adoption and utilization increases, and as we develop tests for additional indications. We expect the sale of our test cartridges will generate the majority of our revenue and gross profit. Expand our Menu of Diagnostic Products. As adoption increases, the customer use of the Symphony platform should also increase. As we expand our test menu to include more biomarkers, we hope to be able to increase our annual revenue per customer through the resulting increase in utilization. 1 The Symphony Platform The Symphony platform is an innovative and proprietary technology platform that provides rapid and accurate measurements of key diagnostic biomarkers found in biological fluids, such as whole blood. Symphony is compact and can be deployed mobile as compared to current laboratory diagnostic platforms. Symphony incorporates a user-friendly interface where all sample preparation and reagents are integrated into disposable Symphony cartridges. Symphony a very small amount of blood (0.15cc or 0.15mL) to provide a measurement in less than 20 minutes. The Symphony analyzer orchestrates whole blood processing, biomarker isolation, and immunoassay preparation using non-contact centrifugal force. All necessary reagents and components are integrated into the Symphony cartridges. Utilizing precision microchannel technology and high-specificity antibodies, whole blood is processed, and the biomarkers are isolated within the Symphony cartridge. Intermitted centrifugation cycles enable complex fluid movements, allowing sequential reagent additions and independent reaction steps inside the sealed Symphony cartridge. At the conclusion of the test, the Symphony analyzer measures the fluorescence signature correlating to a highly sensitive quantitation of the biomarker. To perform a Symphony test, the test operator adds approximately three drops of blood to the Symphony cartridge. After scanning in the patient ID, the Symphony cartridge is inserted into the Symphony analyzer and the test runs automatically. Each analyzer can run up to six cartridges simultaneously, either with six different patient samples or six different tests, in less than 20 minutes, providing quantitative measurements used for improved patient management and clinical decision-making. Manufacturing We plan to manufacture both our analyzers and cartridges through Contract Manufacturing Organizations ("CMOs"). We have contracts with Toray Industries, Inc ("Toray"), to license the intellectual property rights needed to manufacture our cartridges and Sanyoseiko Co. Ltd. ("Sanyoseiko"), to manufacture both our analyzers and cartridges. Each of our partners are well-established global manufacturing companies with capabilities to scale up, re-design and supply our analyzers and cartridges. Sanyoseiko had been selected as our CMO, though in the near-term Toray will continue to manufacture certain product intermediary components for use in cartridges being manufactured for the Company by Sanyoseiko. These cartridges made using Toray intermediates are for the purpose of obtaining FDA approval and not for commercial sale. We expect to meet the demands of our global market. Both Toray s and Sanyoseiko s facilities are located in Japan. We license the technology for the Symphony cartridges from Toray. Our license grants us exclusive global use, with the exception of Japan. FDA Regulatory Strategy and Status of Clinical Trials Our current regulatory strategy is designed to support commercialization of Symphony in the United States pending marketing authorization from the FDA. Previously, our regulatory strategy involved clinical studies involving COVID-19 patients. However, we have shifted our focus away from COVID-19 patients due to a significant decline in the number of COVID-19 related hospitalizations. Pursuant to this revised strategy, we have completed a pilot clinical study (SYMON-I) and plan to begin a second clinical study (SYMON-II) to validate the results of the pilot study to support an FDA regulatory submission with an initial indication for risk stratification of hospitalized sepsis patients. We submitted a pre-submission application to the FDA presenting the new study design in May 2023 and participated in a pre-submission meeting on August 11, 2023. At the meeting, the FDA provided feedback on the new study design, determined that the submission of a 510(k) is the appropriate premarket submission pathway, and requested that certain data be provided in the 510(k). Based on this feedback, we determined to proceed on this basis, which considers the FDA s feedback. 2 In the first quarter of 2024, we initiated multicenter Symphony IL-6 MONitoring Sepsis ("SYMON") clinical studies investigating the role of interleukin-6 (IL-6) in patients diagnosed with sepsis and septic shock. This prospective study aims to assess the performance of IL-6 upon initial presentation to the intensive care unit (ICU). The primary analysis of the SYMON-I study (registered clinical trial number NCT06181604) highlighted that IL-6 levels within 24 hours of sepsis or septic shock diagnosis and admission to the ICU may predict patient mortality out to 28 days. These findings will be validated in the SYMON-II pivotal study. A secondary outcome of the SYMON-I study showed that IL-6 levels within 24 hours of sepsis or septic shock diagnosis and admission to the ICU is a predictor of patient mortality during their hospitalization. Other secondary outcomes showed that lactate and Sequential Organ Failure Assessment (SOFA), standard clinical tests used for sepsis and septic shock patients, were not predictors of patient mortality out to 28 days. We believe that the findings underscore the potential importance of IL-6 as a predictor and provide new insights into the potential pathways for improving sepsis outcomes. We are planning to initiate the SYMON-II pivotal clinical study in the third quarter of 2024. If the results are positive, the Company intends to use SYMON-II as support in a 510(k) application to the FDA in 2025 for the following intended use: "Symphony IL-6 is intended for use to determine the IL-6 concentration as an aid in assessing the cumulative 28-day risk of all-cause mortality in conjunction with other laboratory findings and clinical assessments for patients diagnosed with sepsis or septic shock in the ICU." The Company intends to present the SYMON-I and SYMON-II results at future national scientific meetings and publish them in peer-reviewed publications. The Company s ability to engage in and complete these activities will be contingent upon it raising additional capital to continue funding its operations and remain a going concern. Sales and Marketing Until Symphony products are authorized by the FDA, we expect to focus our sales and marketing efforts on brand awareness and market education to potential customers, emphasizing the value of monitoring a critical care patient s IL-6 levels to improve decision making and patient outcomes. If cleared or approved by the FDA, we intend to target sales to ERs and ICUs at United States hospitals, as well as to long-term acute care facilities. We plan to establish a market presence by selling Symphony analyzers and tests both directly and through various distribution channels to maximize sales volume and market penetration. License Agreement On October 6, 2020, we entered into a License and Supply Agreement, as amended (the "License Agreement"), with Toray, providing us with an exclusive global license with Toray, excluding Japan, to use their patents and know-how related to the Symphony detection cartridges for the manufacturing, marketing and sale of the products (as defined in the License Agreement). On October 23, 2023, we entered into an Amended and Restated License Agreement (the "New Toray License Agreement") and a Master Supply Agreement (the "New Toray Supply Agreement" and together, the "Toray Agreements") with Toray. Under the New Toray License Agreement, we continue to license from Toray intellectual property rights needed to manufacture single-use test cartridges, and we have received the right to sublicense certain Toray intellectual property to Sanyoseiko in connection with our ongoing agreement with Sanyoseiko to manufacture our Symphony analyzers and cartridges. In addition, the New Toray License Agreement provides for the transfer of certain technology related to the cartridges to Sanyoseiko. The royalty payments we are required to pay Toray have been reduced under the New Toray License Agreement from 15% to 7.5% (or less in certain circumstances) of net sales of certain cartridges for a term of 10 years. A 50% reduction in the royalty rate applies upon expiry of applicable Toray patents on a product-by-product and country-by-country basis. The New Toray License Agreement contemplates that applicable royalty payment obligations from us to Toray for other products will be determined separately in the future. Under the New Toray Supply Agreement, Toray is manufacturing (through its wholly owned subsidiary Kamakura Techno-Science, Inc.) certain product intermediary components for use in cartridges being manufactured for the Company by Sanyoseiko. These cartridges made using Toray intermediates are for the purpose of obtaining FDA approval and not for commercial sale. The New Toray Supply Agreement has a term ending on the earlier of October 23, 2025 or the date that we obtain FDA approval for our product, and may be extended for up to six months by mutual agreement. If FDA approval is obtained, Sanyoseiko will be required to manufacture the intermediates and cartridges under a separate supply agreement between us and Sanyoseiko. The FDA may not clear or approve these product submissions or applications on a timely basis or at all. Such delays or refusals could have a material adverse effect on our business, financial condition, and results of operations. 3 Intellectual Property, Proprietary Technology We do not currently hold any patents directly. We rely on a combination either directly or through the New Toray License Agreement with Toray of patent, copyright, trade secret, trademark, confidentiality agreements, and contractual protection to establish and protect our proprietary rights. Competition Our primary competition in the IL-6 market is laboratory size equipment including the Roche Cobas , Siemens ADVIA Centaur and Beckman Coulter Access 2 , which require pre-processing of whole blood prior to performing their test. We believe that our technology, which uses whole blood, provides us with a substantial competitive advantage over our existing competition that will sustain through commercialization, despite the major life science companies and consistent entry of innovative start-ups that define our competitive landscape. Employees As of June 21, 2024, we have 9 full-time employees. We also contract with several consultants and contractors performing accounting, finance, regulatory advisory, investor relations and manufacturing scale-up support. None of our employees are represented by labor unions or covered by collective bargaining agreements. Nasdaq Deficiency Our common stock currently is listed for quotation on the Nasdaq Capital Market. We are required to meet specified financial requirements in order to maintain such listing, including a requirement that the bid price for our common stock remain above $1.00, and that the market value of our publicly held securities be at least $1 million. On February 28, 2024, we received a notification letter from the Nasdaq s Listing Qualifications Staff notifying us that the closing bid price for our common stock had been below $1.00 for the previous 30 consecutive business days and that we therefore are not in compliance with the minimum bid price requirement for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). The notification has no immediate effect on the listing of our common stock on the Nasdaq Capital Market. Under the Nasdaq Listing Rules, we have a period of 180 calendar days to regain compliance. To regain compliance, the closing bid price of our common stock must be at least $1.00 or higher for a minimum of ten consecutive business days, and in such case, Nasdaq will provide us with written confirmation of compliance. If we do not regain compliance by August 26, 2024, we may be eligible for an additional 180 calendar days, provided that we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, except the bid price requirement. If we are not eligible or it appears to Nasdaq that we will not be able to cure the deficiency during the second compliance period, Nasdaq will provide written notice to us that our common stock will be subject to delisting. In the event of such notification, we may appeal Nasdaq s determination to delist its securities, but there can be no assurance that Nasdaq would grant our request for continued listing. We intend to take all reasonable measures available to us to achieve compliance to allow for continued listing on the Nasdaq Capital Market. However, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing criteria. 4 As of the close of business on June 21, 2024, the market value of our publicly held common stock (which is our only outstanding class of capital stock) was approximately $1.5 million. If the value of our publicly held common stock declines below $1 million, we would also be subject to Nasdaq delisting proceedings on that basis. Nasdaq s staff also maintains discretionary authority under its listing rules to delist companies whose capital structure or public offerings raise public interest and investor protection concerns, including as a result of highly dilutive issuances, and it is possible that Nasdaq could assert that our present offering, past offerings that we have consummated, or future offerings we may consummate, raise such concerns. If our common stock is delisted, we may seek to have our common stock quoted on an over-the-counter marketplace, such as on the OTCQX. The OTCQX is not a stock exchange, and if our common stock trades on the OTCQX rather than a securities exchange, there may be significantly less trading volume and analyst coverage of, and significantly less investor interest in, our common stock, which may lead to lower trading prices for our common stock. Any potential delisting of our common stock from the Nasdaq Capital Market may have materially adverse consequences to our stockholders, including: a reduced market price and liquidity with respect to our shares of common stock, which could make our ability to raise new investment capital more difficult; limited dissemination of the market price of our common stock; limited news coverage; limited interest by investors in our common stock; volatility of the prices of our common stock, due to low trading volume; our common stock being considered a "penny stock," which would result in broker-dealers participating in sales of our common stock being subject to the regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Exchange Act; increased difficulty in selling our common stock in certain states due to "blue sky" restrictions; and limited ability to issue additional securities or to secure additional financing. Going Concern Uncertainty We incurred substantial losses of approximately $10.0 million and $9.3 million for fiscal years 2023 and 2022, respectively, and approximately $2.3 million for the three months ended March 31, 2024, and from our inception through March 31, 2024, we had an accumulated deficit of approximately $29.3 million We do not currently generate any operating income. As of March 31, 2024, we possessed cash and cash equivalents of approximately $2.7 million, while having current liabilities of approximately $1.5 million. We expect that our net cash used in operating activities will continue to be negative over at least the next 12 months as we continue to conduct clinical trial work and, if such trials are successful, begin preparation of an FDA submission. These financial results and financial position, and our expected forward-looking outwork of significant negative cash flow in the future, raise substantial doubt with respect to our ability to continue as a going concern. As a result of our lack of cash, we have slowed the timeline of our clinical trial work to preserve cash resources in the near-term, and we expect that this will delay our Symphony platform regulatory submission timeline until 2025, if we are even able to generate sufficient clinical trial results to support such a submission. In addition, as described below, we have recently obtained $2 million of bridge financing that will need be repaid in full (at a repayment level of $2.3 million) from the proceeds of this offering. If we fail to obtain additional material financing in the near-term, our clinical trials and targeted FDA submission timeline could be delayed further, and we could be forced to abandon such activities entirely and cease operations, with the possible loss of such properties or assets. If we are unable to obtain a material quantum of financing in the imminent future or unable to continue to obtain additional financing over at least the next 12 months as we continue to generate negative cash flow, our board of directors could determine to cause the Company to undertake a process of liquidation under Chapter 7 of applicable U.S. bankruptcy laws, or otherwise seek other protection under such laws. In such event, we expect that holders of shares of our common stock would recoup little if any material value in such process (and that the Class C Warrants and Class D Warrants being sold in this offering would have little or no recoupable value). 5 May 2024 Bridge Financing On May 31, 2024, we entered into a Note Purchase Agreement with an accredited investor (the "NPA"), and a Securities Purchase Agreement with three accredited investors (the "SPA"), which transactions closed on June 3, 2024. Under the terms of the NPA, an investor provided us $1,000,000 in cash in exchange for the issuance of a senior secured note, which is repayable in an amount equal to $1,176,470, with the difference between such amount and the subscription amount being an original issue discount. Under the terms of the SPA, the three investors collectively provided us $1,000,000 in cash in exchange for the issuance of senior secured notes, and the collective issuance of 72,537 shares of common stock. These notes will collectively be repayable in an amount equal to $1,111,110, with the difference between such amount and the subscription amount also being an original issue discount. We are required under the terms of the notes to use the proceeds of this offering to fully repay the notes. If such an offering does not occur, the notes will each mature and be repayable in cash on September 1, 2024, other than in the case of an event of default or change in control event. The Company has granted to the collective holders of the notes issued under the NPA and SPA a first lien and continuing first priority security interest in and to substantially all assets of the Company. The notes will not otherwise accrue interest beyond the original issue discount amounts unless an event of default occurs. January 2024 Public Offering On December 27, 2023, we commenced a public offering ("the January 2024 Public Offering") for the issuance and sale of (i) 67,221 shares (the "January 2024 Shares") of our common stock, par value $0.0001 per share and (ii) prefunded warrants to purchase up to an aggregate 269,317 shares of common stock (the "January 2024 Prefunded Warrants"). The January 2024 Shares and January 2024 Prefunded Warrants were sold together with warrants to purchase up to an aggregate of 336,538 shares of common stock at an exercise price of $10.40 per share (the "January 2024 Warrants"). On December 27, 2023, we entered into a securities purchase agreement with certain institutional and accredited investors (the "January 2024 Purchase Agreement"). The combined public offering price was $10.40 per January 2024 Share and related January 2024 Warrant and $10.3992 per January 2024 Prefunded Warrant and related January 2024 Warrant. The Company intends to use the net proceeds from the January 2024 Public Offering to fund matters related to obtaining FDA approval (including clinical studies related thereto), as well as for other research and development activities, and for general working capital needs. Pursuant to an engagement letter, dated as of August 7, 2023, as amended October 11, 2023, by and between the Company and H.C. Wainwright & Co., LLC ("Wainwright"), we paid Wainwright a total cash fee equal to 7.0% of the gross proceeds received in the Offering. We also paid Wainwright in connection with the January 2024 Public Offering a management fee equal to 1.0% of the gross proceeds raised in the offering and certain expenses
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/BNTC_benitec_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/BNTC_benitec_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..84d5313eea6d2269f5641f58b3c7b86c3d4affa9
--- /dev/null
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@@ -0,0 +1 @@
+This summary highlights information contained in other parts of this prospectus and in the documents incorporated by reference herein and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus and the documents incorporated by reference herein, including our consolidated financial statements and the related notes, and the information set forth under the section titled Risk Factors, as well as those risk factors included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 and any subsequent Quarterly Report on Form 10-Q. Some of the statements in this prospectus and the documents incorporated by reference herein constitute forward-looking statements that involve risks and uncertainties. See the information set forth under the section Special Note Regarding Forward-Looking Statements. Company Overview We endeavor to become the leader in discovery, development, and commercialization of therapeutic agents capable of addressing significant unmet medical need via the application of the silence and replace approach to the treatment of genetic disorders. Benitec Biopharma Inc. ( Benitec or the Company or in the third person, we or our ) is a clinical-stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California. The proprietary platform, called DNA-directed RNA interference, or ddRNAi, combines RNA interference, or RNAi, with gene therapy to create medicines that facilitate sustained silencing of disease-causing genes following a single administration. The unique therapeutic constructs also enable the simultaneous delivery of wildtype replacement genes, facilitating the proprietary silence and replace approach to the treatment of genetically defined diseases. The Company is developing a silence and replace-based therapeutic (BB-301) for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), a chronic, life-threatening genetic disorder. BB-301 is a silence and replace-based genetic medicine currently under development by Benitec. BB-301 is an AAV-based gene therapy designed to permanently silence the expression of the disease-causing gene (to slow, or halt, the biological mechanisms underlying disease progression in OPMD) and to simultaneously replace the mutant gene with a wildtype gene (to drive restoration of function in diseased cells). This fundamental therapeutic approach to disease management is called silence and replace. The silence and replace mechanism offers the potential to restore the normative physiology of diseased cells and tissues and to improve treatment outcomes for patients suffering from the chronic, and potentially fatal, effects of OPMD. BB-301 has been granted Orphan Drug Designation in the United States and the European Union. The targeted gene silencing effects of RNAi, in conjunction with the durable transgene expression achievable via the use of modified viral vectors, imbues the silence and replace approach with the potential to produce permanent silencing of disease-causing genes along with simultaneous replacement of the wild type gene function following a single administration of the proprietary genetic medicine. We believe that this novel mechanistic profile of the current and future investigational agents developed by Benitec could facilitate the achievement of robust and durable clinical activity while greatly reducing the frequency of drug administration traditionally expected for medicines employed for the management of chronic diseases. Additionally, the achievement of permanent gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders. We will require additional financing to progress our product candidates through to key inflection points. Table of Contents Closing of Private Placement On April 22, 2024 we closed a private investment in public equity (PIPE) financing (the April 2024 private placement ) in which we sold 5,749,152 shares of our common stock, par value $0.0001 per share (the Common Stock ) at a price per share of $4.80 and, in lieu of shares of Common Stock, pre-funded warrants to purchase up to an aggregate of 2,584,239 shares of Common Stock at a price per pre-funded warrant of $4.7999 (the Pre-Funded Warrants ), to certain institutional accredited investors pursuant to a securities purchase agreement dated April 17, 2024 (the Securities Purchase Agreement ). The Pre-Funded Warrants were immediately exercisable until exercised in full at an exercise price of $0.0001 per share of Common Stock. Gross proceeds from the financing totaled $40.0 million. Net proceeds, net of commissions and other offering expenses, totaled approximately $37.2 million. Voting Commitment Agreement In connection with the April 2024 private placement, we entered into a Voting Commitment Agreement with the purchasers in the private placement (the Voting Commitment Agreement ). Pursuant to the Voting Commitment Agreement, the Company is obligated to use its reasonable best efforts to obtain stockholder approval of the exercise of the Pre-Funded Warrants issued in the private placement and the warrants issued in the Company s underwritten public offerings on September 15, 2022 and August 11, 2023 (the Existing Warrants, and together with the Pre-Funded Warrants, the Warrants ) in accordance with the rules of the Nasdaq Stock Market which otherwise would be subject to the Beneficial Ownership Limitation, as defined in the Warrants (the Stockholder Approval ) at the Company s 2024 annual meeting of stockholders (the Annual Meeting ), provided that the Company may elect to call a special meeting of its stockholders (the Special Meeting ) before the Annual Meeting to obtain the Stockholder Approval. If the Stockholder Approval is not obtained at the Annual Meeting (or at a Special Meeting called prior to the Annual Meeting, at the election of the Company), the Company is obligated to use its reasonable best efforts to obtain the Stockholder Approval at its 2025 annual meeting of stockholders (the 2025 Annual Meeting ). If the Stockholder Approval is not obtained before or at the 2025 Annual Meeting, then the Company would no longer be obligated to seek to obtain the Stockholder Approval. The purchasers agreed that the Company will not be liable for any penalty, damages, or other remedy if the Company fails, after using its reasonable best efforts in accordance with the Voting Commitment Agreement to obtain the Stockholder Approval. Pursuant to the Voting Commitment Agreement, the purchasers agreed to vote or cause to be voted any and all shares of the Company s Common Stock over which it or its affiliates has or shares voting control on the record date for shares eligible to vote at any Company Special Meeting or Annual Meeting seeking the Stockholder Approval where such proposal is presented in favor of approving the proposal or proposals seeking the Stockholder Approval. Board Designation Letter We also entered into a Board Designation Side Letter (the Board Designation Agreement ) with Suvretta Capital Management, LLC ( Suvretta Capital ) at the closing of the April 2024 private placement. Pursuant to the Board Designation Agreement, the Company agreed to consider for appointment and appoint Kishen Mehta to the Company s Board of Directors (the Board ) following consummation of the transactions contemplated by the Securities Purchase Agreement, and in such board class as determined by the Company prior to his appointment. Suvretta Capital will be entitled to propose additional candidates for appointment to the Board to the extent the Board does not appoint Mr. Mehta for one or more of the reasons set forth in the Board Designation Agreement. Pursuant to the Board Designation Agreement, Suvretta Capital agreed that (1) in connection with the closing of the April 2024 private placement, (i) the Company and Suvretta Capital will take such action as may be required to permit Suvretta Capital to exercise its Warrants up to the 19.99% Beneficial Ownership Limitation, and (ii) Suvretta Capital will vote all of its shares of Common Stock owned on the record date for such votes in favor of (1) all of the Company s director nominees for election to the Board at the Company s annual meetings of stockholders to be held during the term of the Board Designation Agreement, and Table of Contents (2) the proposal seeking the Stockholder Approval pursuant to the Voting Commitment Agreement at any annual or special meeting of the Company where such proposal is presented. Registration Rights Agreement As previously disclosed, in connection with the closing of the April 2024 private placement, on April 22, 2024 (the Closing Date ) we entered into a registration rights agreement (the Registration Rights Agreement ) with the purchasers in the private placement, pursuant to which we agreed to register for resale the shares of Common Stock and the shares underlying Warrants held by the purchasers in the private placement (the Registrable Securities ). Under the Registration Rights Agreement, we agreed to file a registration statement covering the resale of the Registrable Securities by no later than the 30th calendar day following the Closing Date. We filed the registration statement of which this prospectus forms a part pursuant to the terms of the Registration Rights Agreement. Summary of Risk Factors An investment in our securities involves a high degree of risk. Any of the factors set forth herein under Risk Factors and the risk factors included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 and any subsequent Quarterly Report on Form 10-Q may limit our ability to successfully execute our business strategy. You should carefully consider all of the information set forth in this prospectus and in the documents incorporated by reference herein and, in particular, should evaluate the specific factors set forth herein under Risk Factors in deciding whether to invest in our securities. These risk factors include, among others: We have incurred significant losses since inception and anticipate that we will continue to incur losses for the foreseeable future. If we are unable to achieve or sustain profitability, the market value of our Common Stock will likely decline; We have never generated any revenue from product sales and may never be profitable; We will need to continue our efforts to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain capital when needed may negatively impact our ability to continue as a going concern; Sales of a substantial amount of the Common Stock in the public markets, as a result of the exercise of the Warrants or otherwise, may cause the market price of the Common Stock to decline; Our largest stockholders may have significant influence on our governance and operations; Our product candidates are based on ddRNAi and silence and replace technology. Currently, no product candidates utilizing ddRNAi technology or silence and replace technology have been approved for commercial sale and our approach to the development of ddRNAi technology and silence and replace technology may not result in safe, effective or marketable products; We are early in our product development efforts and our current product candidate is in early clinical stage. We may not be able to obtain regulatory approvals for the commercialization of our product candidates; Issues that may impact delivery of our therapeutics to the cell could adversely affect or limit our ability to develop and commercialize product candidates; We face competition from entities that have developed or may develop product candidates for our target disease indications, including companies developing novel treatments and technology platforms based on modalities and technology similar to ours; and If we are unable to obtain or protect sufficient intellectual property rights related to our product candidates, we may not be able to obtain exclusivity for our product candidates or prevent others from developing similar competitive products. Table of Contents Corporate Information We were incorporated as a Delaware corporation on November 22, 2019 and completed a re-domiciliation on April 15, 2020. Our predecessor, Benitec Limited, Inc., was incorporated under the laws of Australia in 1995. Our Common Stock is traded on The Nasdaq Capital Market under the symbol BNTC. Our principal executive offices are located at 3940 Trust Way, Hayward, California 94545. Our telephone number is (510) 780-0819, and our Internet website is www.benitec.com. The information on, or that can be accessed through, our website is not part of this prospectus and is not incorporated by reference herein. Implications of Being a Smaller Reporting Company We are a smaller reporting company and will remain a smaller reporting company while either (i) the market value of our stock held by non-affiliates was less than $250 million as of the last business day of our most recently completed second fiscal quarter or (ii) our annual revenue was less than $100 million during our most recently completed fiscal year and the market value of our stock held by non-affiliates was less than $700 million as of the last business day of our most recently completed second fiscal quarter. We may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies, including many of the same exemptions from disclosure requirements as those that are available to emerging growth companies, such as reduced disclosure obligations regarding executive compensation in our registration statements, prospectus and our periodic reports and proxy statements. For so long as we remain a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies. Table of Contents THE OFFERING Issuer Benitec Biopharma Inc. Securities offered by the Selling Stockholders 32,871,201 shares of Common Stock consisting of (i) 7,247,532 shares of Common Stock currently outstanding and (ii) 25,623,669 shares of Common Stock issuable upon exercise of the Warrants. We are registering for resale 12,950,610 shares of Common Stock underlying Pre-Funded Warrants with an exercise price of $0.0001 per share, 588,235 shares of Common Stock underlying Pre-Funded Warrants with an exercise price of $0.0017 per share, 1,240,265 shares of Common Stock underlying Common Warrants with an exercise price of $1.93 per share, and 10,844,559 shares of Common Stock underlying Common Warrants with an exercise price of $3.86 per share. Common Stock outstanding prior to this offering 9,367,485 shares as of May 10, 2024 Common Stock to be outstanding immediately following this offering assuming the issuance of the 25,623,669 shares of Common Stock underlying the Warrants that are being registered hereunder 42,238,686 shares Use of proceeds We will not receive any of the proceeds from the sale of the shares being offered by the Selling Stockholders. We would, however, receive proceeds upon the exercise of the Warrants by the Selling Stockholders, which, if such Warrants are exercised in full for cash, would be approximately $44.3 million. Proceeds, if any, received from the exercise of any such Warrants will be used to fund the clinical development and related commercialization of BB-301, including the natural history lead-in study and the Phase 1b/2a BB-301 treatment study, and for general corporate purposes. No assurances can be given that any such Warrants will be exercised. Plan of distribution Each Selling Stockholder may sell all or a portion of the Shares of Common Stock beneficially owned by it and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. Registration of the Common Stock covered by this prospectus does not mean, however, that such shares necessarily will be offered or sold. See Plan of Distribution.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/BTCW_wisdomtree_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/BTCW_wisdomtree_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2a2fb9b9390021d107ee9d33dc1ec0138a1feab7
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/BTCW_wisdomtree_prospectus_summary.txt
@@ -0,0 +1,735 @@
+PROSPECTUS SUMMARY 
+
+ 
+
+This is only a summary of the information
+contained in this Prospectus and, while it contains material information about the Trust and its Shares, it does not contain or summarize
+all of the information about the Trust and the Shares contained in this Prospectus that is material and/or which may be important to
+you. You should read this entire Prospectus before making an investment decision about the Shares. For a glossary of defined terms, see
+Appendix A. 
+
+ 
+
+As used below, Bitcoin with an uppercase B 
+is used to describe the system as a whole that is involved in maintaining the ledger of bitcoin ownership and facilitating the transfer
+of bitcoin among parties. When referring to the digital asset within the Bitcoin network, bitcoin is written with a lower -case b. 
+
+ 
+
+Overview of the Trust, the Sponsor and Certain other Service Providers
+
+ 
+
+The WisdomTree Bitcoin Fund (the Trust )
+is an exchange-traded fund that issues common shares of beneficial interest (the Shares ) that will be listed on the Cboe
+BZX Exchange, Inc. (the Exchange ) and will trade under a ticker symbol BTCW. 
+
+ 
+
+WisdomTree Digital
+Commodity Services, LLC (the Sponsor ) is the sponsor of the Trust, Delaware Trust Company (the Trustee ) is
+the trustee of the Trust, Coinbase Custody Trust Company LLC (the Bitcoin Custodian )
+is the custodian of the Trust that will hold all of the Trust s bitcoin on the Trust s
+behalf. 
+
+ 
+
+The Trust s Investment Objective and Strategies 
+
+ 
+
+The Trust s investment objective is
+to gain exposure to the price of bitcoin, less expenses and liabilities of the Trust s operations. In seeking to achieve its investment
+objective, the Trust will hold bitcoin and will value its Shares daily based on the value of bitcoin as reflected by the CME CF Bitcoin
+Reference Rate New York Variant (the Reference Rate ), which is an independently calculated value based on an aggregation
+of executed trade flow of major bitcoin spot platforms. The Reference Rate currently uses substantially the same methodology as the CME
+CF Bitcoin Reference Rate ( BRR ), including utilizing the same five bitcoin platforms, which is the underlying rate to determine
+settlement of CME bitcoin futures contracts, except that the Reference Rate is calculated as of 4 pm Eastern time, whereas the BRR is
+calculated as of 4 pm London time. There can be no assurance that the Trust will achieve its investment objective. The Trust is a passive
+investment vehicle that does not seek to generate returns beyond tracking the price of bitcoin. Accordingly, the Sponsor does not speculatively
+sell bitcoin at times when its price is high nor does the Sponsor speculatively acquire bitcoin at low prices in the expectation of future
+price increases. The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.
+Except with respect to securing the repayment of Trade Credits, the Sponsor and the service providers will not loan or pledge the Trust's
+assets, nor will the Trust's assets serve as collateral for any loan or similar arrangement.
+
+ 
+
+When the Trust sells or redeems its Shares, it
+will do so in blocks of 5,000 Shares (a Basket ) based on the quantity of bitcoin attributable to each Share of the Trust
+(net of accrued but unpaid expenses and liabilities). These transactions will take place in exchange for cash. Subject to the Exchange
+receiving the In-Kind Regulatory Approval these transactions may also take place in exchange for bitcoin. For a subscription of Shares,
+the subscription shall be in the amount of cash needed to purchase the amount of bitcoin represented by the Basket being created as calculated
+by the Administrator. For a redemption of Shares, the Sponsor shall arrange for the bitcoin represented by the Basket to be sold and
+the cash proceeds distributed. Authorized Participants will deliver cash to the Trust s account with the Cash Custodian (as defined
+below) in exchange for Shares when they purchase Shares, and will receive cash from the Cash Custodian, as applicable, when they redeem
+Shares with the Trust. The Transfer Agent (as defined below) will facilitate the processing of purchase and sale orders in Baskets from
+the Trust. The Authorized Participants will deliver only cash to create Shares and will receive only cash when redeeming Shares. Further,
+Authorized Participants will not directly or indirectly purchase, hold, deliver, or receive bitcoin as part of the creation or redemption
+process or otherwise direct the Trust or a third-party with respect to purchasing, holding, delivering, or receiving bitcoin as part
+of the creation or redemption process.
+
+ 
+
+The initial price per share is $50 and was selected
+as an appropriate and convenient price that would facilitate secondary market trading of shares. 
+
+ 
+
+An investment in the Shares is anticipated to
+be:
+
+ 
+
+ Easily Accessible. As the Shares will be listed on the
+ Exchange, investors can invest in a portfolio comprised of bitcoin through a traditional
+ brokerage account. The Trust provides investors with the opportunity to access the market
+ for bitcoin through a traditional brokerage account without the potential barriers to entry
+ or certain of the risks involved with holding or transferring bitcoin directly, acquiring
+ it from a bitcoin platform, or mining it. Investors may be able to more effectively implement
+ strategic and tactical asset allocation strategies by investing in the Shares as compared
+ to other means of investing in bitcoin.
+
+ 
+
+ 
+
+ 3 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ Exchange-traded
+ and Transparent. The Shares will trade on the Exchange, providing investors with an efficient
+ means to implement various investment strategies. Furthermore, the Sponsor undertakes to
+ cause the Trust s holdings in bitcoin to be posted at www.wisdomtree.com/investments
+ daily, providing investors with a clear and timely picture
+ of the Trust s holdings in bitcoin. 
+
+ 
+
+ Competitively Priced. The Sponsor s fee and
+ certain other expenses paid by the Trust represent costs to an investor in the Shares. An
+ investor s decision to purchase Shares may be influenced by such fees and expenses
+ relative to the costs associated with investing in bitcoin by other means.
+
+ 
+
+Except when aggregated in Baskets,
+Shares are not redeemable securities.
+
+Baskets are only redeemable by Authorized
+Participants.
+
+ 
+
+Bitcoin and the Bitcoin Network 
+
+ 
+Bitcoin
+ is believed to have been largely conceptualized in 2008 and in early 2009 the first-ever
+ bitcoin was mined. Bitcoin is a system for a decentralized digital value exchange that is
+ designed to enable units of bitcoin to be transferred across borders without the need for
+ currency conversion. Bitcoin is not legal tender. The supply of bitcoin is not determined
+ by a central government, but rather by an open-source software program that limits both the
+ total amount of bitcoin that will be produced and the rate at which it is released into the
+ network. Under the source code that governs the Bitcoin network, the supply of new bitcoin
+ is mathematically controlled so that the number of bitcoin grows at a limited rate pursuant
+ to a pre-set schedule. The number of bitcoin awarded for solving a new block is automatically
+ halved after every 210,000 blocks are added to the Bitcoin blockchain, approximately every
+ 4 years. Currently, the fixed reward for solving a new block is 6.25 bitcoin per block and
+ this is expected to decrease by half to become 3.125 bitcoin in 2024. This deliberately controlled
+ rate of bitcoin creation means that the number of bitcoin in existence will increase at a
+ controlled rate until the number of bitcoin in existence reaches the pre-determined 21 million
+ bitcoin. However, the 21 million supply cap could be changed in a hard fork. As of December
+ 1, 2023, approximately 19.5 million bitcoins were outstanding and the date when the 21 million
+ bitcoin limitation will be reached is estimated to be the year 2140. The responsibility for
+ maintaining the official ledger of who owns what bitcoin and for validating new bitcoin transactions
+ is not entrusted to any single central entity. Instead, it is distributed among the network s
+ participants.
+
+ 
+
+Bitcoin was designed to be a scarce digital asset
+that allowed peer-to-peer transfers of value in an environment whereby value could be transferred without the need for a central authority.
+The underlying protocol is essentially an amalgamation of existing digital practices but is built on a foundation of encryption and cryptography,
+hence the common name cryptocurrency. The ability to store value digitally with no central authority providing verification
+is achieved through distributed ledger essentially a peer-to-peer network that shares a record of all transactions and verifies
+all new ones by each member checking them against the rules of the protocol and coming to consensus.
+
+ 
+
+Bitcoin is based
+on the decentralized, open-source protocol of a peer-to-peer electronic network (the Bitcoin network ). It is widely
+understood that no single entity owns or operates the Bitcoin network. Bitcoin is not issued by governments,
+banks or any other centralized authority. The infrastructure of the Bitcoin network is collectively maintained on a distributed basis
+by the network s participants, consisting of miners, who run special software to validate transactions, developers,
+who maintain and contribute updates to the Bitcoin network s source code, and users, who download and maintain on their individual
+computer a full or partial copy of the Bitcoin Blockchain (as defined below) and related software. Anyone can be a user, developer, or
+miner. The Bitcoin network is accessed through software, and software governs bitcoin s creation, movement, and ownership. The
+source code for the Bitcoin network and related software protocol is open-source, and anyone can contribute to its development. The value
+of bitcoin is, in part, determined by the supply of, and demand for, bitcoin in the global markets for the trading of bitcoin, market
+expectations for the adoption of bitcoin as a decentralized store of value, the number of merchants and/or institutions that accept bitcoin
+as a form of payment, and the volume of peer-to-peer transactions, among other factors. 
+
+ 
+As
+ part of the Bitcoin network, bitcoin transactions and ownership records are reflected on
+ the Bitcoin blockchain, which is a digital public recordkeeping system or ledger (the Bitcoin
+ Blockchain ). The buying, holding and selling of bitcoin is very different than the
+ buying, holding and selling of more conventional instruments like cash, stocks or bonds.
+ For example, bitcoin must either be acquired through the process of mining 
+ (as further described below), obtained in a peer-to-peer transaction, or purchased through
+ an online trading platform where bitcoin is sold (each a bitcoin platform )
+ or other intermediary, such as a broker in the institutional over-the-counter ( OTC )
+ market. Peer-to-peer transactions may be difficult to arrange, and involve complex and potentially
+ risky procedures around safekeeping, transferring and holding the bitcoin. Alternatively,
+ purchasing bitcoin on a bitcoin platform requires choosing a bitcoin platform, opening an
+ account, and transferring money from a bank account or credit card to the bitcoin platform
+ in order to purchase the bitcoin. Some bitcoin platforms have been subject to unauthorized
+ cybersecurity breaches ( hacks ), resulting in significant losses to end users.
+
+ 
+
+ 
+
+ 4 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Miners authenticate and bundle bitcoin transactions
+sequentially into files called blocks, which requires performing computational work to solve a cryptographic puzzle set
+by the Bitcoin network s software protocol. Because each solved block contains a reference to the previous block, they form a chronological
+ chain back to the first bitcoin transaction. Copies of the Bitcoin Blockchain are stored in a decentralized manner on the
+computers of each individual Bitcoin network full node, i.e., any user who chooses to maintain on their computer a full copy of the Bitcoin
+Blockchain as well as related software. Each bitcoin is associated with a set of unique cryptographic keys, in the form
+of a string of numbers and letters, which allow whoever is in possession of the private key to assign that bitcoin in a transfer that
+the Bitcoin network will recognize.
+
+ 
+
+The Sponsor believes that the bitcoin market
+has matured such that it is operating at a level of efficiency and scale similar in material respects to established global equity, fixed
+income and commodity markets. The Sponsor believes that this maturation is indicated by various objective factors, including, but not
+limited to:
+
+ 
+
+ the launch of futures contracts for bitcoin on a major,
+ established and regulated commodity futures exchange in the United States;
+
+ 
+
+ the subsequent growth of significant trading volume in
+ those futures contracts;
+
+ 
+
+ increased
+ participation by established institutional firms and publicly traded companies of all types,
+ that are both helping to drive demand for bitcoin and building
+ out its market and blockchain infrastructures to accommodate established investment channels
+ and bitcoin applications beyond investment;
+
+ 
+
+ the public offering of shares in registered investment
+ companies, including ETFs, that invest primarily in bitcoin futures pursuant to a registration
+ statement declared effective by the SEC, and the offering of interests in private investment
+ vehicles that invest in bitcoin by numerous investment managers;
+
+ 
+
+ the arrival of major, established market makers that
+ rely on sophisticated and technologically enabled trading systems to arbitrage price discrepancies
+ that may appear between bitcoin prices on different bitcoin platforms;
+
+ 
+
+ the development of a robust bitcoin lending market;
+
+ 
+
+ a significant expansion in the availability of institutional-quality
+ custody services from regulated third-party custodians;
+
+ 
+
+and
+
+ 
+
+ the advent and increasing prevalence of significant insurance
+ on custodied assets held at third-party custodians.
+
+ 
+
+These factors, among others, have combined to
+improve the efficiency of the bitcoin market, creating a dynamic, institutional-quality, two-sided market. For more information on bitcoin
+and the Bitcoin network, see Bitcoin, Bitcoin Market, Bitcoin platforms and Regulation of Bitcoin below.
+
+ 
+
+The CME CF
+Bitcoin Reference Rate New York Variant
+
+ 
+
+The Reference Rate,
+which was introduced on February 28, 2022, is based on materially the same methodology (except calculation time) as the Administrator s
+BRR, which was first introduced in 2016 and is the rate on which bitcoin futures contracts are cash-settled in U.S. dollars at the CME.
+The administrator of the Reference Rate is CF Benchmarks Ltd. (the Benchmark Administrator ) and is a member of the Crypto
+Facilities group of companies which is in turn a member of the Payward, Inc. group of companies. Payward, Inc. is the owner and operator
+of the Kraken Exchange. The Reference Rate is calculated daily and aggregates the notional value of bitcoin trading activity across major
+bitcoin spot exchanges.
+
+ 
+
+ 
+
+ 5 
+
+ 
+
+ 
+
+ 
+
+ 
+
+The Sponsor believes
+that the use of the Reference Rate is reflective of a reasonable valuation of the average spot price of bitcoin and that resistance to
+manipulation is a priority aim of its design methodology. The methodology: (i) takes an observation period and divides it into equal
+partitions of time; (ii) then calculates the volume-weighted median of all transactions within each partition; and (iii) the
+value is determined from the equally weighted average of the volume-weighted medians. By employing
+the foregoing steps, the Reference Rate thereby seeks to ensure that transactions in bitcoin conducted at outlying prices do not have
+an undue effect on the value of a specific partition, large trades or clusters of trades transacted over a short period of time will
+not have an undue influence on the index level, and the effect of large trades at prices that deviate from the prevailing price are mitigated
+from having an undue influence on the benchmark level. 
+
+ 
+
+In addition, the Sponsor notes that an oversight
+function is implemented by the Benchmark Administrator in seeking to ensure that the Reference Rate is administered through codified
+policies for Reference Rate integrity.
+
+ 
+
+Reference Rate data and the description of the
+Reference Rate are based on information made publicly available by the Benchmark Administrator on its website at https://www.cfbenchmarks.com.
+None of the information on the Benchmark Administrator s website is incorporated by reference into this Prospectus.
+
+ 
+
+Emerging Growth Company Status 
+
+ 
+
+The Trust is an
+ emerging growth company as defined in the JOBS Act. An emerging growth company may
+take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise
+generally applicable to public companies. For as long as the Trust is an emerging growth company, unlike other public companies, it will
+not be required to, among other things: 
+
+ 
+
+ provide an auditor s attestation report on management s
+ assessment of the effectiveness of our system of internal control over financial reporting
+ pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002; or
+
+ 
+
+ comply with any new audit rules adopted by the Public
+ Company Accounting Oversight Board after April 5, 2012, unless the SEC determines otherwise.
+
+ 
+
+The Trust will remain an emerging growth
+company until the earliest of (i) the last day of the fiscal year during which it has $1.235 billion or more in total annual gross
+revenues, (ii) the date on which the Trust is deemed to be a large accelerated filer, (iii) the date on which it has, during the previous
+three year period, issued more than $1.0 billion of non-convertible debt or (iv) the last day of the fiscal year following the fifth
+anniversary of its initial public offering.
+
+ 
+
+In addition, Section 107 of the JOBS Act
+also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)
+of the 1933 Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption
+of certain accounting standards until those standards would otherwise apply to private companies.
+
+ 
+
+The Trust s Legal Structure 
+
+ 
+
+The
+Trust is a Delaware statutory trust, formed on March 8, 2021, pursuant to the Delaware Statutory Trust Act. The Trust continuously
+issues common shares representing fractional undivided beneficial interest in and ownership of the Trust that may be purchased and
+sold on the Exchange. The Trust operates pursuant to the Second Amended and Restated Trust Agreement, dated as of January 6, 2024,
+as may be further amended and restated from time to time (the Trust Agreement ). Delaware Trust Company, a Delaware
+trust company, is the Delaware trustee of the Trust (the Trustee ). The Trust is managed and controlled by the Sponsor.
+The Sponsor is a limited liability company formed in the state of Delaware on March 5, 2021.
+
+ 
+
+Principal Offices 
+
+ 
+
+The Trustee s principal office is located
+at 251 Little Falls Drive, Wilmington, DE 19808. The Sponsor s address is 250 West 34th Street, 3rd Floor, New York, NY 10119,
+and its telephone number is 866-909-9473 (WISE). The Trust Administrator s, Fund Accountant s, Cash Custodian s and
+Transfer Agent s principal office is located at One Congress Street, Boston, MA 02114. The Bitcoin Custodian s address is
+200 Park Avenue South, Suite 1208, New York, NY 10003.
+
+ 
+
+ 
+
+ 6 
+
+ 
+
+ 
+
+ 
+
+ 
+
+The Trust s Service Providers 
+
+ 
+
+The Sponsor 
+
+ 
+
+The Sponsor arranged for the creation of the
+Trust and is responsible for the ongoing registration of the Shares for their public offering in the United States and the listing of
+Shares on the Exchange. In addition, the Sponsor:
+
+ 
+
+(i) selects (and may remove, change or replace) the Trust s
+other service providers, including the Trustee, Trust Administrator, Transfer Agent, Custodian, Marketing Agent and the Trust s
+auditor, as well as the Reference Rate;
+
+ 
+
+(ii) negotiates various agreements and fees; and
+
+ 
+
+(iii) performs such other services as the Sponsor believes
+that the Trust may from time to time require.
+
+ 
+
+As further described below, (i) the Trust
+will pay the Sponsor a fee for its services provided to the Trust; and (ii) the Sponsor has agreed to pay routine operational, administrative
+and ordinary expenses of the Trust as further detailed below. The Sponsor will not be reimbursed in connection with the payment of such
+expenses. 
+
+ 
+
+The Trustee 
+
+ 
+
+The Trustee,
+a Delaware trust company, acts as the trustee of the Trust as required to create a Delaware statutory trust in accordance with the Trust
+Agreement and the Delaware Statutory Trust Act.
+
+ 
+
+The Trust Administrator, Fund Accountant and Transfer Agent
+
+ 
+
+State
+Street Bank and Trust Company ( State Street ) serves as the Trust s administrator (the Trust
+Administrator or Administrator ), fund accountant (the Fund Accountant ) and transfer agent for
+the Trust (the Transfer Agent ). Under the Administration Agreement, the Trust Administrator provides certain services
+necessary for the administration of the Trust and also provides certain services necessary for the operation of the Trust, including
+net asset value calculations and accounting services. Under the Transfer Agency Agreement, the Transfer Agent facilitates the
+issuance and redemption of Shares of the Trust.
+
+ 
+
+The Custodians 
+
+ 
+
+Bitcoin. Coinbase Custody Trust
+Company, LLC serves as the Trust s custodian for bitcoin (the Bitcoin Custodian ), other than bitcoin which is maintained
+in a trading account (the Trading Balance ) with Coinbase, Inc. ( Coinbase Inc. or the Prime Execution
+Agent , which is an affiliate of the Bitcoin Custodian), as further described below. Under the Bitcoin Custody Agreement, the Bitcoin
+Custodian is responsible for safekeeping all of the bitcoin owned by the Trust.
+
+ 
+
+Cash. State Street
+also serves as the Trust s custodian for the Trust s cash (the Cash Custodian ). Under the Cash Custodian Agreement
+(the Cash Custody Agreement ), the Cash Custodian is responsible for safekeeping all of all cash and other non-digital assets
+owned by the Trust, if any, other than cash which is maintained in the Trading Balance with the Prime Execution Agent, as further described
+below.
+
+ 
+
+The Marketing Agent 
+
+ 
+
+Foreside Fund Services,
+LLC (the Marketing Agent ) is responsible for reviewing and approving the marketing materials prepared by the Trust for
+compliance with applicable SEC and Financial Industry Regulatory Authority ( FINRA ) advertising
+laws, rules, and regulations. 
+
+ 
+
+ 
+
+ 7 
+
+ 
+
+ 
+
+ 
+
+ 
+
+The Trust s Fees and Expenses 
+
+ 
+
+The
+Trust will pay the Sponsor a fee of 0.30% (the Sponsor Fee ). The Sponsor Fee is calculated on a daily basis (accrued
+at 1/365 of the applicable percentage of the net asset value (the NAV ) on that day) and paid on a monthly basis. For a
+six-month period commencing on the day the Shares are initially listed on the Exchange, the Sponsor will waive the entire Sponsor
+Fee for the first $1.0 billion of the Trust s assets. Except for periods during which all or a portion of the Sponsor Fee is being waived, the
+Sponsor Fee will accrue and be payable in U.S. dollars. The Trust s only ordinary recurring expense is expected to be the
+Sponsor Fee. In exchange for the Sponsor s Fee, the Sponsor has agreed to assume the marketing and the following
+administrative expenses of the Trust: the fees of the Trustee, the Trust Administrator, Fund Accountant, Transfer Agent, and
+Marketing Agent, the Custodians Fee, Exchange listing fees, SEC registration fees, printing and mailing costs, tax reporting
+fees, audit fees, license fees and ordinary legal fees and expenses. The Sponsor will also pay the costs of the Trust s
+organization and the initial sale of the Shares. There is no cap on the amount of these Sponsor paid expenses.
+
+ 
+
+The Sponsor may, at its sole discretion and from
+time to time, waive all or a portion of the Sponsor Fee for stated periods of time. The Sponsor is under no obligation to waive any portion
+of its fees and any such waiver shall create no obligation to waive any such fees during any period not covered by the waiver. As of
+the date of this Prospectus, the Sponsor has not decided to waive any of the Sponsor Fee and there are no specific circumstances under
+which the Sponsor has determined it will waive the fee.
+
+ 
+
+The Trust may incur certain non-recurring
+expenses that are not assumed by the Sponsor, including but not limited to, taxes and governmental charges, any applicable brokerage
+commissions, financing charges or fees, Bitcoin network fees and similar transaction fees, expenses and costs of any extraordinary services
+performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of Shareholders
+(including, for example, in connection with any fork of the Bitcoin Blockchain), any indemnification of the Cash Custodian, Bitcoin Custodian,
+Trust Administrator or other agents, service providers or counterparties of the Trust and extraordinary legal fees and expenses, including
+any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.
+
+ 
+
+Because the Trust does not have any income, it
+will need to sell bitcoin to cover the Sponsor s Fee and expenses not assumed by the Sponsor, if any. The Trust may also be subject
+to other liabilities (for example, as a result of litigation) that have also not been assumed by the Sponsor. The only source of funds
+to cover those liabilities will be sales of bitcoin held by the Trust. Even if there are no expenses other than those assumed by the
+Sponsor, and there are no other liabilities of the Trust, the Trust will still need to sell bitcoin to pay the Sponsors Fee. The result
+of these sales is a decrease in the amount of bitcoin represented by each Share.
+
+ 
+
+To cover the Sponsor s Fee and expenses
+not assumed by the Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to convert bitcoin into U.S. dollars at
+the price available through the Prime Execution Agent. The number of bitcoins represented by a Share will decline each time the Trust
+pays the Sponsor Fee or any Trust expenses not assumed by the Sponsor by transferring or selling bitcoins. The Trust is responsible for
+paying any costs associated with the transfer of bitcoin to the Sponsor or the sale of bitcoin. However, under the terms of each Authorized
+Participant Agreement, the Authorized Participants will be responsible for any brokerage or transaction costs associated with the sale
+or transfer of Bitcoin incurred in connection with the fulfillment of a creation or redemption order.
+
+ 
+
+Understanding Custody (Storage) of Digital Assets such as Bitcoin
+
+ 
+
+There 2 main options for storage:
+
+ 
+
+ Hot
+ storage: Private keys used to sign transactions and prove ownerships of funds are held
+ on online devices, that is to say connected to internet, and therefore do not necessarily
+ require human intervention to extract. As it is online it is
+ more accessible, but it is also more likely to be a
+ target for attackers. Common market practice is to only keep
+ a small amount of a given cryptocurrency in hot wallets for trading, quick transfer etc.
+ Attacks on holdings of cryptocurrencies and hacking
+ of private keys commonly impacts hot wallet storage,
+ as opposed to cold wallet storage. 
+
+ 
+
+ Cold storage: Private keys used to sign transactions
+ and prove ownerships of funds are held on offline devices (i.e., without connection
+ to the internet) and therefore requires human intervention to extract. This feature makes
+ it more secure, as further described immediately below, but more difficult to access.
+
+ 
+
+ 
+
+ 8 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Custody (Storage) of the Trust s
+Bitcoin
+
+ 
+
+The Trust s Bitcoin Custodian will keep
+custody of all of the Trust s bitcoin in one or more accounts that are required to be segregated from the assets held by the Bitcoin
+Custodian as principal and the assets of its other customers (the Vault Balance ), other than that which is maintained in
+the Trading Balance. The Trust s bitcoin, and the corresponding private keys, associated with the Vault Balance will be held in
+ cold storage . Cold storage is a safeguarding method with multiple layers of protections and protocols, by which the private
+key(s) corresponding to the Trust s bitcoin is (are) generated and stored in an offline manner. Private keys are generated in offline
+computers that are not connected to the internet so that they are resistant to being hacked. The Trust s bitcoin will remain in
+the Vault Balance, and thereby in cold storage, except when transferred to and from the Trading Balance in connection with (i) the receipt
+and delivery of bitcoin from and to third parties, such as the Trade Execution Agent; (ii) selling bitcoin to pay the Trust's expenses
+and liabilities that are not included within the Sponsor Fee, if any; and (iii) paying the Sponsor Fee. Bitcoin within the Trading Balance
+will generally be held in hot storage .
+
+ 
+
+Cold storage of
+private keys may involve keeping such keys in an offline environment or non-networked computer or electronic device or storing the public
+key and private keys on a storage device (for example, a USB thumb drive) or printed medium and deleting the keys from all computers.
+The Bitcoin Custodian may receive deposits of bitcoin but may not send bitcoin without use of the corresponding private keys. In order
+to send bitcoin when the private keys are kept in cold storage, either the private keys must be retrieved from cold storage and entered
+into a software program to sign the transaction, or the unsigned transaction must be sent to the cold server in which the
+private keys are held for signature by the private keys. At that point, the Bitcoin Custodian can transfer the bitcoin. Investors should,
+however, be aware that bitcoin in transit to cold storage or from cold storage will be exposed to the internet.
+
+ 
+
+With respect to the Trust s Trading Balance,
+the Trust does not have an identifiable claim to any particular bitcoin. Instead, the Trust s Trading Balance represents an entitlement
+to a pro rata share of the bitcoin (and cash) the Prime Execution Agent holds on behalf of customers who hold similar entitlements against
+the Prime Execution Agent. In this way, the Trust s Trading Balance represents an omnibus claim on the Prime Execution Agent s
+bitcoins (and cash) held on behalf of the Prime Execution Agent s customers. The Prime Execution Agent holds the bitcoin associated
+with customer entitlements across a combination of omnibus cold wallets, omnibus hot wallets (meaning wallets whose private
+keys are generated and stored online, in Internet-connected computers or devices) or in omnibus accounts in the Prime Execution Agent s
+name on a trading venue (including third-party venues and the Prime Execution Agent s own execution venue) where the Prime Execution
+Agent executes orders to buy and sell bitcoin on behalf of its clients. Within such omnibus hot and cold wallets and accounts, the Prime
+Execution Agent has represented to the Sponsor that it keeps the majority of assets in cold wallets, to promote security, while the balance
+of assets is kept in hot wallets to facilitate rapid withdrawals. However, the Sponsor has no control over, and for security reasons
+the Prime Execution Agent does not disclose to the Sponsor, the percentage of bitcoin that the Prime Execution Agent holds for customers
+holding similar entitlements as the Trust which are kept in omnibus cold wallets, as compared to omnibus hot wallets or omnibus accounts
+in the Prime Execution Agent s name on a trading venue. The Prime Execution Agent has indicated to the Sponsor that the percentage
+of assets maintained in cold versus hot storage is determined by ongoing risk analysis and market dynamics, in which the Prime Execution
+Agent attempts to balance anticipated liquidity needs for its customers as a class against the anticipated greater security of cold storage.
+
+ 
+
+The Trust s Transfer Agent will facilitate
+the settlement of Shares in response to the placement of creation orders and redemption orders from Authorized Participants.
+
+ 
+
+Net Asset Value 
+
+ 
+
+NAV means the total assets of the Trust including,
+but not limited to, all bitcoin, cash or other assets, less total liabilities of the Trust, each determined on the basis of generally
+accepted accounting principles in the U.S., consistently applied under the accrual method of accounting.
+
+ 
+
+The Trust Administrator calculates the NAV of
+the Trust and NAV per Share once each day that the Exchange is open for regular trading. The Sponsor undertakes to post each daily NAV
+and NAV per Share at www.wisdomtree.com/investments.
+
+ 
+
+Plan of Distribution 
+
+ 
+
+The Trust continuously offers Baskets consisting
+of 5,000 Shares to Authorized Participants. See Creation and Redemption of Shares. Authorized Participants may then offer
+Shares to the public at prices that depend on various factors, including the supply and demand for Shares, the value of the Trust s
+assets, and market conditions at the time of a transaction. Authorized Participants pay a transaction fee for each order they place to
+create or redeem one or more Baskets. Investors who buy or sell Shares during the day from their broker may do so at a premium or discount
+relative to the NAV of the Shares of the Trust.
+
+ 
+
+The offering of
+the Shares is a best efforts offering. The Trust does not intend to issue fractions of a Basket. The Shares are traded on the Exchange
+under the symbol BTCW. Prior to this offering, there has been no public market for the Shares. Investors
+that purchase Shares through a commission or fee-based brokerage account may pay commissions or fees charged by the brokerage account.
+Investors should review the terms of their brokerage accounts for details on applicable charges. 
+
+ 
+
+ 
+
+ 9 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Federal Income Tax Considerations 
+
+ 
+
+It is expected that owners of Shares will be
+treated, for U.S. federal income tax purposes, as if they own a proportionate share of the assets of the Trust, as if they directly receive
+a proportionate share of any income of the Trust, and as if they will incur a proportionate share of the expenses of the Trust. Consequently,
+each sale of bitcoin by the Trust (which includes under current Internal Revenue Service ( IRS ) guidance using bitcoin to
+pay expenses of the Trust) would constitute a taxable event to shareholders. See United States Federal Income Tax Consequences Taxation
+of U.S. Shareholders. 
+
+ 
+
+Use of Proceeds 
+
+ 
+
+Proceeds received
+by the Trust from the issuance of Baskets consist of cash. Deposits of cash are held by the Cash Custodian or Prime Execution Agent on
+behalf of the Trust. Once the cash is used to purchase the applicable amount of bitcoin, such bitcoin is moved from the Trading Balance
+and held by the Bitcoin Custodian on behalf of the Trust.
+
+ 
+
+Summary of
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/BTSGU_brightspri_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/BTSGU_brightspri_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2ca16849ac199fa4e62c7b61003577af98a06f23
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/BTSGU_brightspri_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our common stock. You should read the entire prospectus carefully, including Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, and our consolidated financial statements and related notes included elsewhere in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Summary Highlights of Our Business A leading, diversified, independent provider of home and community-based healthcare services in the United States Scaled national platform with a presence in all 50 states, a quality and compliance focus, longer-term customer relationships, a successful M&A track record, and an experienced management team Complementary pharmacy and provider services that more completely address the multiple needs of complex Senior and Specialty patients across their various settings and over time Focus on clinical and operational excellence and coordinated front-line healthcare services to deliver improved outcomes in lower-cost settings with high levels of satisfaction among stakeholders Compelling and proven value proposition for all constituents, including our clients, patients and their respective families, customers, partners, payors, employees, and investors Over $1.0 trillion combined market opportunity with numerous positive industry trends and drivers Growth opportunities available through organic expansion in core pharmacy and provider businesses, our ability to leverage complementary and care management services for integrated care synergies and value-based care payment models, and through strategic acquisitions In 2022, grew revenue by $1.0 billion, or 15.3%, to $7.7 billion In 2022, net income decreased by $105.5 million to $(54.2) million In 2022, increased Adjusted EBITDA by $29.4 million, or 6.0%, to $522.5 million Overall, the comprehensive services that we provide at the scale we provide them create economies of scale, stability, and attractive near-term and long-term commercial opportunities that address societal needs Who We Are We are a leading home and community-based healthcare services platform, focused on delivering complementary pharmacy and provider services to complex patients. We have a differentiated approach to care delivery, with an integrated and scaled model that addresses critical services that the highest-need and highest-cost patients require. With a focus on Senior and Specialty patients, which includes Behavioral populations, our platform provides pharmacy and provider services (both clinical and supportive care in nature) in lower-cost home and community settings largely to Medicare, Medicaid, and commercially-insured populations. We are an essential part of our nation s health delivery network as a front-line provider of high-quality and cost-effective care to a large and growing number of people, who increasingly require a combination of specialized solutions to enable holistic health care management. Our presence spans all 50 states, we serve over 400,000 patients daily through our approximately 10,000 clinical providers and pharmacists, and our services make a profound impact in the lives and communities of the people we serve. Table of Contents EXPLANATORY NOTE This Registration Statement contains a prospectus relating to an offering of shares of BrightSpring Health Services, Inc. s common stock, or for purposes of this Explanatory Note, the Common Stock Prospectus, together with separate prospectus pages relating to an offering of BrightSpring Health Services, Inc. s Tangible Equity Units, or for purposes of this Explanatory Note, the Tangible Equity Units Prospectus. The complete Common Stock Prospectus follows immediately. Following the Common Stock Prospectus are the following alternative and additional pages for the Tangible Equity Units Prospectus: front and back cover pages, which will replace the front and back cover pages of the Common Stock Prospectus; pages for the Summary The Offering section, which will replace the Summary The Offering section of the Common Stock Prospectus; pages for the Risk Factors Risks Related to the Units, the Separate Purchase Contracts, the Separate Amortizing Notes and Our Common Stock section, which will be added to the Risk Factors section of the Tangible Equity Units Prospectus; pages for the Description of the Units, Description of the Purchase Contracts and Description of the Amortizing Notes sections, which will replace the Tangible Equity Units Offering section of the Common Stock Prospectus; pages for the Material U.S. Federal Income Tax Consequences section, which will replace the Material U.S. Federal Income Tax Consequences to Non-U.S. Holders section of the Common Stock Prospectus; pages for the Certain ERISA Considerations and Book-Entry Procedures and Settlement sections, which will be added to the Tangible Equity Units Prospectus; and pages for the Underwriting (Conflicts of Interest) section, which will replace the Underwriting (Conflicts of Interest) section of the Common Stock Prospectus. The following disclosures and references contained within the Common Stock Prospectus will be replaced or removed in the Tangible Equity Units Prospectus: references to shares of our common stock contained in the first three paragraphs under Table of Contents and the first paragraph under Risk Factors will be replaced with references to the Units in the Tangible Equity Units Prospectus; references to our common stock contained in the first paragraph under Summary, the first paragraph of Summary Summary of Risk Factors and the first paragraph under Risk Factors will be replaced with references to the Units in the Tangible Equity Units Prospectus; the disclosure under Summary Concurrent Offering will be replaced in its entirety with Concurrently with this offering, we are offering, by means of a separate prospectus, 53,333,334 shares of our common stock (or up to 61,333,334 shares of our common stock if the underwriters in the Concurrent Offering exercise in full their option to purchase additional shares of our common stock). We estimate that the net proceeds to us from the sale of shares of our common stock in the Concurrent Offering will be approximately $835.8 million (or approximately $961.9 million if the underwriters exercise in full their option to purchase additional shares of our common stock), assuming an initial public offering price of $16.50 per share (which is the midpoint of the price range set forth on the cover page of the prospectus relating to the Concurrent Offering), in each case after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The closing of this offering is conditioned upon the closing of the Concurrent Offering, but the closing of the Concurrent Offering is not conditioned upon the closing of this offering, and there can be no assurance that the Concurrent Offering will be completed on the terms described in the prospectus relating to the Concurrent Offering or at all. in the Tangible Equity Units Prospectus; Table of Contents INDUSTRY AND MARKET DATA Within this prospectus, we reference information and statistics regarding the industries in which we compete. We have obtained this information and statistics from various independent third-party sources, including independent trade associations, industry publications, government publications, reports by market research firms and other independent sources. In evaluating our business, we reference various studies conducted by independent third-party sources, such as: A study published by the Journal of American Medical Directors Association, which we refer to in this prospectus as the JAMDA study, tested 113 home health patients who were enrolled in our Continue CareRx (in-home medication management) Program for Seniors, or CCRx, from May 1, 2021 through March 31, 2023, or the CCRx group, and compared the results to 21,304 home health patients who were not enrolled in CCRx, but were matched with the CCRx group on age range and gender, during the same time period, or the CCRx control group. The study tested whether patients in the CCRx group had a lower hospitalization rate than patients in the CCRx control group. The CCRx control group had a total of 7015 hospitalizations during 2,128,738 total managed days, whereas the CCRx group had a total of 21 hospitalizations during 23,622 total managed days. The JAMDA study showed that patients in the CCRx group experienced a 73.1% lower hospitalization rate than patients in the CCRx control group; A two-year study published by the Journal of the American Medical Directors Association, which we refer to in this prospectus as the 2022 JAMDA study, tested approximately 760 Behavioral patients from April 1, 2020 to February 28, 2022. The study showed that patients who received office-based primary care, as opposed to home-based primary care, had a 2.12x higher risk of hospitalization compared to the patients who received home-based primary care, while controlling for patients age and hospitalization rate in the year prior to the study; A study published by the Journal of the American Association of Nurse Practitioners, which we refer to in this prospectus as the AANP study, tested rehospitalizations and emergency department visits of a cohort of approximately 80 patients from April 15, 2016 to August 25, 2016 and compared the results to the same cohort during the six month and one year pre-home care inception periods (using insurance claims based data). The study showed that with one-year pre-home care inception period, there was a decrease of 23.7% in emergency department visits and 34.9% decrease in rehospitalizations after the implementation of the home-based primary care program, as compared with a six month pre-home care inception period, where there was a decrease of 35.6% in emergency department visits and 59.4% decrease in rehospitalizations; The State of the States in Intellectual and Developmental Disabilities, an analytical study of public spending and programmatic trends in intellectual and developmental disability services across the United States, published in 2017, which we refer to in this prospectus as the long-term care study; A study conducted by RAND Corporation, which we refer to in this prospectus as the RAND study. RAND tested whether the ExactCare program, a high-touch approach that includes among other things, home visits, comprehensive ongoing medication reviews, and medication compliance packaging, improves medication adherence and reduces health care utilization and costs. Using a national database of a large U.S. insurer, the study identified Medicare Advantage plan members in eight states from 2007 to 2018 who had both medical and prescription drug coverage. Approximately 700 ExactCare patients were propensity-matched to approximately 1,400 non-ExactCare patients. The study showed that when comparing ExactCare patients to non-ExactCare patients over the test period, ExactCare s medication care management model was associated with improved medication adherence and an approximately $2,400 per member per year reduction in total cost of care, representing a 5% reduction in average costs. Each year of ExactCare participation was associated with an average increase in prescription drug costs and decreases in total costs and medical costs, largely attributable to decreases in hospital inpatient costs and skilled nursing facility costs; and Table of Contents Our model focuses on delivering high-touch and coordinated services to medically complex clients and patients, which is a large, growing, and underserved population in the U.S. healthcare system. These high-need and high-cost Senior and Specialty patients comprise a market of over $1.0 trillion across our business. The chronic conditions and long-term health needs of these patients not only represent an outsized share of health care spend today, according to RAND, but we believe that they are expected to also drive a disproportionate share of future expenditures. Americans with five or more chronic conditions make up over 10% of the population and account for 40% of total health care spending, on average spending 10 times more on health services than those without chronic conditions. These patients most often require both pharmacy and provider services to achieve the best outcomes, but must often navigate disjointed and separately-administered health services. This can result in uncoordinated care delivery with adverse medical consequences, as compared to receiving timely, proximal, and complete care support in the home and community that improves health and reduces cost. We have built a significant presence and capability in delivering complementary and high-touch daily healthcare services and programs to complex patients in their homes and in communities in order to address their multiple health needs and requirements more completely. In pharmacy, we leverage our national infrastructure to provide daily medication therapy management to various customer and patient types wherever they reside in the community, including home and in-clinic infusion patients, oncology and other specialty patients in their homes, residents of independent and senior living communities, people receiving hospice care, neuro and Behavioral clients and patients homes, residents of skilled nursing and rehabilitation facilities, hospital patients, and the homes of Seniors who are on a significant number of medications. Within provider services, we address the clinical and supportive care needs of Senior and Specialty populations, including neuro and Behavioral patients, primarily in their homes, as well as some clinic and community settings. Our clinical services consist of home health and hospice and rehab therapy, and our supportive care services address activities of daily living and social determinants of health as well. We also provide home-based primary care for patients in senior living communities, long-term care, and individual homes to directly manage and optimize patient outcomes and to enable value-based care. By providing these complementary and necessary services for complex patients, our care model is designed to address multiple patient needs and better integrate health services delivery to improve quality and patient experiences, while reducing overall costs. We believe that our Company addresses important needs today and is also well-positioned for the long-term, as it is underpinned by capabilities and characteristics that suggest continued differentiation and growth: Complementary pharmacy and provider services that address multiple patient needs We have a healthcare platform that can combine pharmacy and provider care in order to address the spectrum of interrelated and chronic needs that Senior and Specialty patients possess. Through our comprehensive care capabilities, we are able to develop longitudinal relationships and views of our patients, which enables us to more closely manage daily medication requirements and adherence, provide primary care and other skilled nursing and therapy clinical services, and address social determinants of health and daily care needs. Moreover, we believe that this integrated model and capability set will increasingly be a more effective approach for providing high-need and high-cost Senior and Specialty populations the pharmacy and care services solutions they require. Effectively serving complex patients in the home and community setting With over 40 years of experience caring for must-serve client and patient populations, we deliver care in preferred and lower-cost settings with strong quality results. Our services reduce cost by providing care for many of these individuals in non-institutional home and community settings and reducing hospitalizations. For example, across our pharmacies, we achieve 99.99% order accuracy and 98.46% order completeness, excellent and world class NPS, and a reduction in hospitalizations with CCRx, while also driving savings through medication adherence and therapeutic interchanges. We achieve 99% patient satisfaction in our outpatient rehab services, an 84% overall rating of care in hospice, and, as reported Table of Contents references to this offering contained in Summary Historical Consolidated Financial and Other Data, Risk Factors, Use of Proceeds, Capitalization, Dilution, Management s Discussion and Analysis of Financial Condition and Results of Operations, Management, Executive Compensation, Certain Relationships and Related Party Transactions, Principal Stockholders, Description of Capital Stock, Description of Certain Indebtedness, Shares Eligible for Future Sale, and Where You Can Find More Information will be replaced with references to the Concurrent Offering in the Tangible Equity Units Prospectus; references to the concurrent offering of the Units or the Concurrent Offering contained in Risk Factors, Use of Proceeds, Capitalization, Certain Relationships and Related Party Transactions, Description of Certain Indebtedness, and Shares Eligible for Future Sale will be replaced with references to this offering in the Tangible Equity Units Prospectus;
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+Executive and Director Compensation This section discusses the material components of the executive compensation program for the company s executive officers who are named in the 2023 Summary Compensation Table below. In 2023, the named executive officers and their positions with the company were as follows, who included our principal executive officer and the two most highly compensated executive officers (other than our principal executive officer) plus our principal financial officer: Xingjuan (Jane) Chao, Ph.D., President, Chief Executive Officer, and Co-Founder; Scott Blumberg, Chief Financial Officer; Joshua Copp, Chief Business Officer (former Chief Operating Officer); and Raymond Woo, Ph.D., Chief Technology Officer. Mr. Copp commenced services with us on September 18, 2023 as our Chief Operating Officer, and subsequently took on the role of Chief Business Officer in June 2024. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt following the completion of this offering may differ materially from the currently planned programs summarized in this discussion. As an emerging growth company as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies. Further, while, as an emerging growth company as defined in the JOBS Act, we are not required to include Scott Blumberg as a named executive officer pursuant to the scaled disclosure requirements, we have elected to include Mr. Blumberg as a named executive officer. 2023 Summary Compensation Table The following table sets forth information concerning the compensation of the named executive officers for the year ended December 31, 2023. Name and Principal Position Salary ($) Option Awards ($)(1) Non-Equity Incentive Plan Compensation ($)(2) All Other Compensation ($)(3) Total ($) Xingjuan (Jane) Chao, Ph.D. 466,250 1,630,832 255,300 28,343 2,380,725 President, Chief Executive Officer, and Co-Founder Scott Blumberg 328,875 192,138 151,600 672,613 Chief Financial Officer Joshua Copp(4) 105,000 857,885 46,000 1,008,885 Chief Business Officer (former Chief Operating Officer) Raymond Woo, Ph.D. 318,000 417,081 146,600 881,681 Chief Technology Officer (1)Amounts reflect the grant date fair value of stock options granted during 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. See Note 11 of the financial statements elsewhere included in this prospectus for a discussion of valuation assumptions made in determining the grant date fair value and compensation expense of our stock options. (2)Amounts represent annual bonuses earned by each named executive officer in 2023 which were paid by us after certification of performance achievement in early 2024. See 2023 Bonuses below. (3)Amounts in the All Other Compensation column for Dr. Chao represent reimbursements by us for car travel in connection with her commute to the company s headquarters. (4)Mr. Copp commenced services with us on September 18, 2023, and his base salary and bonus were pro-rated for his partial employment with us in 2023. 2023 Salaries In 2023, the named executive officers received an annual base salary to compensate them for services rendered to the company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive s skill set, experience, role, and responsibilities. For fiscal year 2023, Dr. Chao s annual base salary was $475,000 effective as of April 1, 2023 (and it was $440,000 prior), Mr. Blumberg s base salary was $335,000 effective as of April 1, 2023 (and it was $310,500 prior), Mr. Copp s base salary was $360,000 (but was pro-rated for 2023 for his partial employment with us starting in September 2023), and Dr. Woo s base salary was $324,000 effective as of April 1, 2023 (and it was $300,000 prior). 2023 Bonuses In 2023, each Dr. Chao, Mr. Blumberg, Mr. Copp, and Dr. Woo were eligible to earn an annual cash bonus targeted at 50%, 40%, 40%, and 40% respectively of their respective annual base salaries. Mr. Copp s actual annual bonus was pro-rated for his partial employment with us in 2023 from September 18, 2023 through December 31, 2023. Pursuant to our annual cash bonus program, each named executive officer was eligible to earn his or her annual cash bonus based on the attainment of pre-established annual company and individual performance objectives, which were comprised of the company s performance against corporate objectives (weighted 100% of Dr. Chao s and 75% of Mr. Blumberg s, Mr. Copp s, and Dr. Woo s respective bonus opportunity), including revenue, research and development project milestones, operational excellence metrics, and individual goals (weighted 25% of Mr. Blumberg's, Mr. Copp s, and Dr. Woo s respective bonus opportunity). The actual achieved bonus amount was paid in 2024 based on achievement of company and individual performance objectives. The actual annual cash bonuses awarded to each named executive officer for 2023 performance are set forth above in the Summary Compensation Table in the column entitled Non-Equity Incentive Plan Compensation. Equity Compensation Each of our named executive officers currently holds outstanding stock option awards granted pursuant to the 2014 Stock Incentive Plan (the 2014 Plan ). In 2023, Dr. Chao was granted stock option awards covering an aggregate of 541,633 shares of our common stock, Mr. Blumberg was granted stock option awards covering an aggregate of 63,812 shares of our common stock, Mr. Copp was granted stock option awards covering an aggregate of 256,223 shares of our common stock, and Dr. Woo was granted stock option awards covering an aggregate of 138,519 shares of our common stock, as described in further detail below. In February 2023, in connection with our annual review of compensation, we granted Dr. Chao, Mr. Blumberg, and Dr. Woo each (i) an option to purchase 298,832, 63,812 and 59,921, respectively, shares of our common stock, which vests and becomes exercisable as to 1/48th of the total number of shares underlying the stock option on each of the first 48 monthly anniversaries of April 1, 2023. Additionally, in February 2023, in connection with our annual review of compensation, we granted Dr. Chao and Dr. Woo each an option to purchase 242,801 and 78,598, respectively, shares of our common stock, which vests and becomes exercisable as to 1/24th of the total number of shares underlying the stock option on each of the first 24 monthly anniversaries of April 1, 2023, in each case, subject to the applicable named executive officer s continued service through the applicable vesting date. In September 2023, in connection with his commencement of employment, we granted Mr. Copp (i) an option to purchase 213,423 shares of our common stock, which vests and becomes exercisable as to 25% of the total number of shares underlying the stock option on the first anniversary of the September 19, 2023 and 1/48th of the total number of shares underlying the stock option on each of the subsequent 36 monthly anniversaries thereafter and (ii) an option to purchase 42,800 shares of our common stock, which vests and becomes exercisable in four substantially equal tranches following the company s certification of its annual performance for each of 2024, 2025, 2026 and 2027 (which certification must occur by March 31 of the year following the applicable performance year), in each case, subject to Mr. Copp s continued service through the applicable vesting date. Certain stock option awards granted to the named executive officers are subject to accelerated vesting upon qualifying termination of employment as set forth in each of their respective employment agreements. For additional information about the accelerated vesting provisions, please see the section titled Executive Employment Agreements below. In connection with this offering, we adopted the 2024 Plan in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of our subsidiaries (if any) and to enable us to obtain and retain the services of these individuals, which is essential to our long-term success. We expect that the 2024 Plan will be effective as of the date immediately preceding the date the registration statement relating to this offering becomes effective. For additional information about the 2024 Plan, please see the section titled Equity Compensation Plans below. Other Elements of Compensation Retirement Plans We maintain a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. Our named executive officers are eligible to participate in the 401(k) plan on the same terms as other full-time employees. We did not make any matching contributions on behalf of our executives in 2023. We anticipate that, following the consummation of this offering, our named executive officers will continue to participate in this 401(k) plan on the same terms as other full-time employees. Employee Benefits and Perquisites Health/Welfare Plans. All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans, including: medical, dental, and vision benefits; medical and dependent care flexible spending accounts; short-term and long-term disability insurance; and life insurance. We believe that the employee benefits described above are necessary and appropriate to provide a competitive compensation package to our named executive officers. No Tax Gross-Ups We do not make gross-up payments to cover our named executive officers personal income taxes that may pertain to any of the compensation or perquisites paid or provided by our company. Outstanding Equity Awards at Fiscal Year-End The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2023. Option Awards Name Vesting Commencement Date (1) Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Xingjuan (Jane) Chao, Ph.D. 11/7/15 126,692 0.39 11/10/25 6/11/19 (2) 44,724 2.24 6/10/29 6/11/19 152,551 2.24 6/10/29 6/10/21 176,312 105,788 3.65 6/10/31 4/1/23 49,805 249,028 4.70 2/16/33 4/1/23 (3) 80,932 161,868 4.70 2/16/33 Scott Blumberg 4/8/20 (2) 80,403 12,063 2.26 6/5/30 6/10/21 14,703 14,592 3.65 6/10/31 1/1/21 (5) 10,864 10,863 3.65 12/2/31 4/1/23 10,635 53,177 4.70 2/16/33 Joshua Copp 9/19/23 (2) 213,423 5.17 9/29/33 1/1/24 (4) 42,800 5.17 9/29/33 Raymond Woo, Ph.D. 6/11/19 (2) 41,634 2.24 6/10/29 6/10/21 36,478 21,887 3.65 6/10/31 4/1/23 9,986 49,935 4.70 2/16/33 4/1/23 (3) 32,748 45,850 4.70 2/16/33 (1)Unless otherwise indicated, the stock option vests and becomes exercisable as to 1/48th of the total number of shares underlying the stock option on each of the first 48 monthly anniversaries of the applicable vesting commencement date, subject to applicable named executive officer s continued service through the applicable vesting date. (2)The stock option vests and becomes exercisable as to 25% of the total number of shares underlying the stock option on the first anniversary of the vesting commencement date and 1/48th of the total number of shares underlying the stock option on each of the subsequent 36 monthly anniversaries thereafter, subject to the applicable named executive officer s continued service through the applicable vesting date. (3)The stock option vests and becomes exercisable as to 1/24th of the total number of shares underlying the stock option on each of the first 24 monthly anniversaries of the vesting commencement date, subject to the applicable named executive officer s continued service through the applicable vesting date. (4)The stock option vests and becomes exercisable upon following the company s certification of its annual performance for each of 2024, 2025, 2026, and 2027 (which certification must occur by March 31 of the year following the applicable performance year), subject to the named executive officer s continued service through the applicable vesting date. (5)The stock option vests and becomes exercisable upon following the company s certification of its annual performance for each of 2021, 2022, and 2023 (which certification must occur by March 31 of the year following the applicable performance year), subject to the named executive officer s continued service through the applicable vesting date. Executive Compensation Arrangements Executive Employment and Severance Arrangements Each of our named executive officers is party to an employment agreement that provided for position, salary, target bonus, and equity grants. The agreements also provided for severance, which will be superseded by the change in control and severance agreements set forth below in connection with this offering. There are no material ongoing obligations under the employment agreements. In connection with this offering, we plan to enter into new change in control and severance agreements with each of our named executive officers, which will supersede any severance entitlements in any prior change in control agreements, employment agreements, or offer letters. If the named executive officer s employment is terminated by us without cause or due to his or her resignation for good reason outside the period commencing three months preceding and ending 12 months following the consummation of a change in control (such period, the Change in Control Period ) (each such term, as defined in the change in control and severance agreement), then, subject to the named executive officer s timely execution and non-revocation of a general release of claims and continued compliance with restrictive covenants, he or she will be eligible to receive (i) continuing payments of base salary for 18 months for Dr. Chao (and six months for other named executive officers if they are employed for less than one year at the date of termination or 12 months otherwise) from the date of such termination, payable in accordance with our regular payroll procedures, and (ii) COBRA reimbursements for 18 months for Dr. Chao (and six months for other named executive officers if they are employed for less than one year at the date of termination or 12 months otherwise). Pursuant to the change in control and severance agreements, if the named executive officer s employment is terminated by us without cause or due to his or her resignation for good reason during the Change in Control Period, then, subject to the named executive officer s timely execution and non-revocation of a general release of claims and continued compliance with restrictive covenants, he or she will be eligible to receive (i) continuing payments of base salary for 18 months for Dr. Chao and 12 months for each other named executive officer from the date of such termination, payable in accordance with our regular payroll procedures, (ii) accelerated vesting as to 100% of his or her then-outstanding unvested equity awards (excluding any performance-based equity awards), (iii) a lump sum cash payment equal to one and a half times for Dr. Chao and one time for each other named executive officer the applicable target annual performance bonus, and (iv) COBRA reimbursements for 18 months for Dr. Chao and 12 months for each other named executive officer. Pursuant to the change in control and severance agreements, in the event that any amounts payable to a named executive officer are subject to an excise tax pursuant to Section 280G or Section 4999 of the Internal Revenue Code of 1986, as amended (the Code ), the named executive officer will receive either (i) the full amount of such payments or (ii) such payments reduced to the least extent necessary to prevent the application of such excise tax, whichever will result in the greatest after tax benefit to the named executive officer. The change in control and severance agreements require the named executive officer to continue to abide by our standard confidential information and invention assignment agreement and a non-disparagement restrictive covenant in order to receive the severance benefits set forth above. Equity Compensation Plans The following summarizes the material terms of the 2014 Plan and EIP, under which we have previously made periodic grants of equity and equity-based awards to our named executive officers and other key employees. In addition, we have adopted the 2024 Plan and the ESPP in connection with this offering. 2024 Incentive Award Plan In connection with this offering, our board of directors adopted and our stockholders have approved the 2024 Plan, which will be effective as of the date immediately preceding the date the registration statement relating to this offering becomes effective. The principal purpose of the 2024 Plan is to attract, retain, and motivate selected employees, consultants, and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. The material terms of the 2024 Plan, as it is currently contemplated, are summarized below. Share Reserve. Under the 2024 Plan, 4,366,326 shares of our common stock will be initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights ( SARs ), restricted stock awards, restricted stock unit awards, and other stock-based awards. The number of shares initially reserved for issuance pursuant to awards under the 2024 Plan will be increased by (i) the number of shares represented by awards outstanding under our 2014 Plan and our EIP (collectively, the Prior Plan Awards ) that become available for issuance under the counting provisions described below following the effective date and (ii) an annual increase on the first day of each fiscal year beginning in fiscal year 2025 and ending in fiscal year 2034, equal to the lesser of (A) 5% of the shares of our common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of stock as determined by our board of directors; provided, however, that no more than 31,128,404 shares of stock may be issued upon the exercise of incentive stock options. The following counting provisions will be in effect for the share reserve under the 2024 Plan: to the extent that an award (including a Prior Plan Award) terminates, expires or lapses for any reason or an award is settled in cash without the delivery of shares, any shares subject to the award at such time will be available for future grants under the 2024 Plan; to the extent shares are tendered or withheld to satisfy the grant, exercise price or tax withholding obligation with respect to any award under the 2024 Plan or Prior Plan Award, such tendered or withheld shares will be available for future grants under the 2024 Plan; to the extent shares subject to SARs are not issued in connection with the stock settlement of SARs on exercise thereof, such shares will be available for future grants under the 2024 Plan; to the extent that shares of our common stock are repurchased by us prior to vesting so that shares are returned to us, such shares will be available for future grants under the 2024 Plan; the payment of dividend equivalents in cash in conjunction with any outstanding awards or Prior Plan Awards will not be counted against the shares available for issuance under the 2024 Plan; and to the extent permitted by applicable law or any exchange rule, shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by us or any of our subsidiaries (if any) will not be counted against the shares available for issuance under the 2024 Plan. In addition, the sum of the grant date fair value of all equity-based awards and the maximum that may become payable pursuant to all cash-based awards to any individual for services as a non-employee director during any calendar year may not exceed $750,000 for such individual s first year of service as a non-employee director and $500,000 for each year thereafter. Administration. The administrator of the 2024 Plan is expected to be the compensation committee of our board of directors unless our board of directors assumes authority as the administrator. The compensation committee must consist of at least three members of our board of directors, each of whom is intended to qualify as a non-employee director for purposes of Rule 16b-3 under the Exchange Act and an independent director within the meaning of the rules of the applicable stock exchange, or other principal securities market on which shares of our common stock are traded. The 2024 Plan provides that the board or compensation committee may delegate its authority to grant awards to employees other than executive officers and certain senior executives of the company to a committee consisting of one or more members of our board of directors or one or more of our officers, other than awards made to our non-employee directors, which must be approved by our full board of directors. Subject to the terms and conditions of the 2024 Plan, the administrator has the authority to select the persons to whom awards are to be made, to determine the number of shares to be subject to awards and the terms and conditions of awards, and to make all other determinations and to take all other actions necessary or advisable for the administration of the 2024 Plan. The administrator is also authorized to adopt, amend, or rescind rules relating to administration of the 2024 Plan. Our board of directors may at any time remove the compensation committee as the administrator and revest in itself the authority to administer the 2024 Plan. The full board of directors will administer the 2024 Plan with respect to awards to non-employee directors. Eligibility. Options, SARs, restricted stock, restricted stock units, and all other stock-based and cash-based awards under the 2024 Plan may be granted to individuals who are then our officers, employees, or consultants or are the officers, employees, or consultants of certain of our subsidiaries (if any). Such awards also may be granted to our directors. Only employees of our company or certain of our subsidiaries (if any) may be granted incentive stock options ( ISOs ). Awards. The 2024 Plan provides that the administrator may grant or issue stock options, SARs, restricted stock, restricted stock units, other stock-based or cash-based awards, and dividend equivalents, or any combination thereof. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award. Nonstatutory Stock Options ( NSOs ) will provide for the right to purchase shares of our common stock at a specified price which may not be less than fair market value on the date of grant (except in the case of certain substitute awards or awards granted to participants not subject to Section 409A of the Code), and usually will become exercisable (at the discretion of the administrator) in one or more installments on or after the grant date, subject to the participant s continued employment or service with us and/or subject to the satisfaction of corporate performance targets and individual performance targets established by the administrator. NSOs may be granted for any term specified by the administrator that does not exceed ten years. NSOs may not be sold, or otherwise transferred or hypothecated, until the option is exercised and the holder receives the underlying shares. ISOs will be designed in a manner intended to comply with the provisions of Section 422 of the Code and will be subject to specified restrictions contained in the Code. Among such restrictions, ISOs must have an exercise price of not less than the fair market value of a share of common stock on the date of grant, may only be granted to employees, and must not be exercisable after a period of ten years measured from the date of grant. In the case of an ISO granted to an individual who owns (or is deemed to own) at least 10% of the total combined voting power of all classes of our capital stock, the 2024 Plan provides that the exercise price must be at least 110% of the fair market value of a share of common stock on the date of grant and the ISO must not be exercisable after a period of five years measured from the date of grant. ISOs may not be sold, or otherwise transferred or hypothecated, until the option is exercised and the holder receives the underlying shares. Restricted Stock may be granted to any eligible individual and made subject to such restrictions as may be determined by the administrator. Restricted stock, typically, may be forfeited for no consideration or repurchased by us at the original purchase price if the conditions or restrictions on vesting are not met. In general, restricted stock may not be sold, or otherwise transferred or hypothecated, until restrictions are removed or expire. Recipients of restricted stock, unlike recipients of options or restricted stock units, will have voting rights and will have the right to receive dividends, if any, prior to the time when the restrictions lapse, however, extraordinary dividends will generally be placed in escrow, and will not be released until restrictions are removed or expire. Restricted Stock Units may be awarded to any eligible individual, typically without payment of consideration, but subject to vesting conditions based on continued employment or service or on performance criteria established by the administrator. Like restricted stock, restricted stock units may not be sold, or otherwise transferred or hypothecated, until vesting conditions are removed or expire. Unlike restricted stock, stock underlying restricted stock units will not be issued until the restricted stock units have vested, and recipients of restricted stock units generally will have no voting or dividend rights prior to the time when vesting conditions are satisfied. SARs may be granted in connection with stock options or other awards, or separately. SARs granted in connection with stock options or other awards typically will provide for payments to the holder based upon increases in the price of our common stock over a set exercise price. The exercise price of any SAR granted under the 2024 Plan must be at least 100% of the fair market value of a share of our common stock on the date of grant. SARs under the 2024 Plan will be settled in cash or shares of our common stock, or in a combination of both, at the election of the administrator. Other Stock or Cash Based Awards are awards of cash, fully vested shares of our common stock and other awards valued wholly or partially by referring to, or otherwise based on, shares of our common stock. Other stock-based or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of base salary, bonus, fees, or other cash compensation otherwise payable to any individual who is eligible to receive awards. The plan administrator will determine the terms and conditions of other stock-based or cash-based awards, which may include vesting conditions based on continued service, performance, and/or other conditions. Dividend Equivalents represent the right to receive the equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents are credited as of dividend payment dates during the period between a specified date and the date such award terminates or expires, as determined by the plan administrator. In addition, dividend equivalents with respect to shares covered by a performance award will only be paid to the participant at the same time or times and to the same extent that the vesting conditions, if any, are subsequently satisfied and the performance award vests with respect to such shares. Any award may be granted as a performance award, meaning that the award will be subject to vesting and/or payment based on the attainment of specified performance goals. Change in Control. In the event of a change in control, unless the plan administrator elects to terminate an award in exchange for cash, rights, or other property, or cause an award to accelerate in full prior to the change in control, such award will continue in effect or be assumed or substituted by the acquirer, provided that any performance-based portion of the award will be subject to the terms and conditions of the applicable award agreement. The administrator may also make appropriate adjustments to awards under the 2024 Plan and is authorized to provide for the acceleration, cash-out, termination, assumption, substitution, or conversion of such awards in the event of a change in control or certain other unusual or nonrecurring events or transactions. In the event the acquirer refuses to assume or replace awards granted, prior to the consummation of such transaction, awards issued under the 2024 Plan will be subject to accelerated vesting such that 100% of such awards will become vested and exercisable or payable, as applicable. In the event that a participant s services with us are terminated by us for other than cause (as defined in the 2024 Plan) or by such participant for good reason (as defined in the 2024 Plan) within three months prior to the closing of a change in control and ending 12 months following a change in control, then the vesting and, if applicable, exercisability of 50% of the then-unvested shares subject to the outstanding equity awards (other than any portion subject to performance-based vesting, which shall be handled as specified in the individual agreement or as otherwise provided by us) held by such participant under the 2024 Plan will accelerate effective as of the date of such termination. Adjustments of Awards. In the event of any stock dividend or other distribution, stock split, reverse stock split, reorganization, combination or exchange of shares, merger, consolidation, split-up, spin-off, recapitalization, repurchase, or any other corporate event affecting the number of outstanding shares of our common stock or the share price of our common stock that would require adjustments to the 2024 Plan or any awards under the 2024 Plan in order to prevent the dilution or enlargement of the potential benefits intended to be made available thereunder, the administrator will make appropriate, proportionate adjustments to: (i) the aggregate number and type of shares subject to the 2024 Plan; (ii) the number and kind of shares subject to outstanding awards and terms and conditions of outstanding awards (including, without limitation, any applicable performance targets or criteria with respect to such awards); and (iii) the grant or exercise price per share of any outstanding awards under the 2024 Plan. Amendment and Termination. The administrator may terminate, amend or modify the 2024 Plan at any time and from time to time subject to stockholder approval only to the extent required by applicable law, rule, or regulation (including any applicable stock exchange rule). Notwithstanding the foregoing, an option may be amended to reduce the per share exercise price below the per share exercise price of such option on the grant date and options may be granted in exchange for, or in connection with, the cancellation or surrender of options having a higher per share exercise price without receiving additional stockholder approval. No ISOs may be granted pursuant to the 2024 Plan after the tenth anniversary of the effective date of the 2024 Plan, and no additional annual share increases to the 2024 Plan s aggregate share limit will occur from and after such anniversary. Any award that is outstanding on the termination date of the 2024 Plan will remain in force according to the terms of the 2024 Plan and the applicable award agreement. 2024 Employee Stock Purchase Plan In connection with this offering, our board of directors adopted and our stockholders have approved the ESPP, which will be effective as of the date immediately preceding the date the registration statement relating to this offering becomes effective. The ESPP is designed to allow our eligible employees to purchase shares of our common stock, at semi-annual intervals, with their accumulated payroll deductions. The ESPP is intended to qualify under Section 423 of the Code. The material terms of the ESPP are summarized below. Components. The ESPP is comprised of two distinct components in order to provide increased flexibility to grant options to purchase shares under the ESPP to U.S. and to non-U.S. employees. Specifically, the ESPP authorizes (1) the grant of options to U.S. employees that are intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Code (the Section 423 Component ), and (2) the grant of options that are not intended to be tax-qualified under Section 423 of the Code to facilitate participation for employees located outside of the U.S. who do not benefit from favorable U.S. tax treatment and to provide flexibility to comply with non-U.S. law and other considerations (the Non-Section 423 Component ). Where possible under local law and custom, we expect that the Non-Section 423 Component generally will be operated and administered on terms and conditions similar to the Section 423 Component. Administration. Subject to the terms and conditions of the ESPP, our compensation committee will administer the ESPP. Our compensation committee can delegate administrative tasks under the ESPP to the services of an agent and/or employees to assist in the administration of the ESPP. The administrator will have the discretionary authority to administer and interpret the ESPP. Interpretations and constructions by the administrator of any provision of the ESPP or of any rights thereunder will be conclusive and binding on all persons. We will bear all expenses and liabilities incurred by the ESPP administrator. Share Reserve. The maximum number of shares of our common stock which will be authorized for sale under the ESPP is equal to the sum of (a) 451,689 shares of common stock and (b) an annual increase on the first day of each fiscal year beginning in fiscal year 2025 and ending in fiscal year 2034, equal to the lesser of (i) 1% of the shares of our common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by our board of directors; provided, however, no more than 5,836,575 shares of our common stock may be issued under the ESPP. The shares reserved for issuance under the ESPP may be authorized but unissued shares or reacquired shares. Eligibility. Employees eligible to participate in the ESPP for a given offering period generally include employees who are employed by us or one of our subsidiaries (if any) on the first day of the offering period, or the enrollment date. Our employees (and, if applicable, any employees of our subsidiaries) who customarily work less than five months in a calendar year or are customarily scheduled to work less than 20 hours per week will not be eligible to participate in the ESPP. Finally, an employee who owns (or is deemed to own through attribution) 5% or more of the combined voting power or value of all our classes of stock or of one of our subsidiaries (if any) will not be allowed to participate in the ESPP. Participation. Employees will enroll under the ESPP by completing a payroll deduction form permitting the deduction from their compensation of at least 1% of their compensation but not more than 15% of their compensation. Such payroll deductions may be expressed as either a whole number percentage or a fixed dollar amount, and the accumulated deductions will be applied to the purchase of shares on each purchase date. However, a participant may not purchase more than a specified number of shares in each offering period as determined in the offering document. The ESPP administrator has the authority to change these limitations for any subsequent offering period. Notwithstanding the foregoing, a participant may be granted rights under the ESPP only if such rights, together with any other rights granted to such participant under employee stock purchase plans of the Company, any parent or any subsidiary, as specified by Section 423(b)(8) of the Code, do not permit such participant s rights to purchase stock of the Company or any parent or subsidiary thereof to accrue at a rate that exceeds $25,000 of the fair market value of such stock (determined as of the first day of the offering period during which such rights are granted) in accordance with Section 423(b)(8) of the Code. Offering. Under the ESPP, participants are offered the option to purchase shares of our common stock at a discount during a series of successive offering periods, the duration and timing of which will be determined by the ESPP administrator. However, in no event may an offering period be longer than 27 months in length. The option purchase price will be set forth in the offering document but shall not be lower of 85% of the closing trading price per share of our common stock on the first trading date of an offering period in which a participant is enrolled or 85% of the closing trading price per share on the purchase date. Unless a participant has previously canceled his or her participation in the ESPP before the purchase date, the participant will be deemed to have exercised his or her option in full as of each purchase date. Upon exercise, the participant will purchase the number of whole shares that his or her accumulated payroll deductions will buy at the option purchase price, subject to the participation limitations listed above. A participant may cancel his or her payroll deduction authorization at any time prior to the end of the offering period. Upon cancellation, the participant will have the option to either (i) receive a refund of the participant s account balance in cash without interest or (ii) exercise the participant s option for the current offering period for the maximum number of shares of common stock on the applicable purchase date, with the remaining account balance refunded in cash without interest. Following at least one payroll deduction, a participant may also decrease (but not increase) his or her payroll deduction authorization once during any offering period. If a participant wants to increase or decrease the rate of payroll withholding, he or she may do so effective for the next offering period by submitting a new form before the offering period for which such change is to be effective. A participant may not assign, transfer, pledge or otherwise dispose of (other than by will or the laws of descent and distribution) payroll deductions credited to a participant s account or any rights to exercise an option or to receive shares of our common stock under the ESPP, and during a participant s lifetime, options in the ESPP shall be exercisable only by such participant. Any such attempt at assignment, transfer, pledge or other disposition will not be given effect. Adjustments upon Changes in Recapitalization, Dissolution, Liquidation, Merger or Asset Sale. In the event of any increase or decrease in the number of issued shares of our common stock resulting from a stock split, reverse stock split, stock dividend, combination, or reclassification of the common stock, or any other increase or decrease in the number of shares of common stock effected without receipt of consideration by us, we will proportionately adjust the aggregate number of shares of our common stock offered under the ESPP, the number and price of shares which any participant has elected to purchase under the ESPP, and the maximum number of shares which a participant may elect to purchase in any single offering period. If there is a proposal to dissolve or liquidate the company, then the ESPP will terminate immediately prior to the consummation of such proposed dissolution or liquidation, and any offering period then in progress will be shortened by setting a new purchase date to take place before the date of our dissolution or liquidation. We will notify each participant of such change in writing at least ten business days prior to the new purchase date. If we undergo a merger with or into another corporation or sell all or substantially all of our assets, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or the parent or subsidiary of the successor corporation. If the successor corporation refuses to assume the outstanding options or substitute equivalent options, then any offering period then in progress will be shortened by setting a new purchase date to take place before the date of our proposed sale or merger. We will notify each participant of such change in writing at least ten business days prior to the new exercise date. Amendment and Termination. Our board of directors may amend, suspend, or terminate the ESPP at any time. However, the board of directors may not amend the ESPP without obtaining stockholder approval within 12 months before or after such amendment to the extent required by applicable laws. 2024 Equity Incentive Plan The EIP was adopted by our board of directors, effective as of April 23, 2024, with an initial reserve 1,404,761 of shares available for future awards. Following this offering, and in connection with the effectiveness of our 2024 Plan, no further awards will be granted under the EIP. However, all outstanding awards under the EIP will continue to be governed by their existing terms under the EIP. Upon the circumstances set forth under the description of our 2024 Plan, shares subject to outstanding awards under the EIP will be added to the share reserve of the 2024 Plan. Administration. The EIP is administered by our board of directors, or a committee thereof appointed by the board of directors and composed of one or more members of board of directors and/or our executive officers. The plan administrator has the authority to (i) determine which service providers will receive awards, (ii) grant awards, (iii) set all terms and conditions of awards, and (iv) take all actions and make all determinations contemplated by the EIP and adopt, amend and repeal such administrative rules, guidelines and practices related to the EIP as it deems advisable. The plan administrator may also correct any defect or ambiguity, supply any omissions or reconcile any inconsistencies in the EIP or any award into effect, as it determines. All determinations under the EIP are made in the plan administrator s sole discretion, which are final and binding on all persons having or claiming any interest in the EIP or in any award. Eligibility. Our employees and consultants, directors, employees and consultants of our parents or subsidiaries (if any), and non-employee members of our board of directors are eligible to receive awards under the EIP, provided that only employees may be granted awards intended as ISOs. Share Reserve. An aggregate of (i) 1,404,761 shares of our common stock plus (ii) any shares of common stock subject to outstanding awards granted under the 2014 Plan and that (A) are not issued because such award (or a portion thereof) expires or otherwise terminates without all of the shared of common stock covered by such award having been issued, (B) are not issued because such award (or a portion thereof) is settled in cash, (C) are forfeited back to or repurchased by the company because of a failure to meet a contingency or condition required for the vesting of such shares, (D) are withheld or reacquired to satisfy the exercise, strike or purchase price, or (E) are withheld or reacquired to satisfy any related taxes may be issued under the EIP; provided that in no event may more than 6,080,354 shares of common stock be issued under the EIP. Upon the effectiveness of the 2024 Plan, no additional stock awards may be granted under the EIP. Any unused common stock covered by an award that expires or lapses or is terminated, surrendered or cancelled without having been fully exercised or settled or is forfeited in whole or in part, in any case, in a manner that results in any shares of common stocks not being issued or being so reacquired by the company will again be available for the grant of awards under the EIP. Further, shares of common stock delivered to the company by a participant in satisfaction of an exercise or purchase price of an award and/or in satisfaction of any applicable tax will be added to the number of shares of common stock available for the grant of awards under the EIP. Awards. The EIP provides that the plan administrator may grant or issue stock options, restricted stock, restricted stock units, or other stock-based awards under the EIP to eligible service providers. In general, awards granted under the EIP may not be sold or otherwise transferred except by will or in accordance with the laws of descent and distribution. Stock Options. Stock options may be granted to any eligible person, provided that ISOs may only be granted to our employees or employees of our parents or subsidiaries (if any), subject to the EIP and such restrictions as may be determined by the plan administrator and set forth in an applicable award agreement. The exercise price of stock options granted to employees, directors or consultants will be determined by the plan administrator and set forth in an applicable award agreement; provided that such exercise price may not be less than fair market value of a share on grant date (or 110% of fair market value with respect to ISOs granted to employees holding 10% or more of the total combined voting power of the company). No stock option award may have a term of more than ten years following the date of grant. Restricted Stock. Restricted stock may be granted to any eligible person and made subject to such restrictions as may be determined by the plan administrator. Restricted stock, typically, may be forfeited or repurchased by us at the issue price or other stated or formula price if the conditions or restrictions on vesting are not satisfied prior to the end of the applicable restriction period(s) as established by the plan administrator. Recipients of restricted stock, unlike recipients of options or restricted stock units, will generally have the right to receive dividends, if any, prior to the time when the restrictions lapse; however, any dividends or distributions paid in shares or other property will be subject to the same restrictions on transferability and forfeitability as the shares of the restricted stocks with respect to which they were paid. Restricted Stock Units. Restricted stock units may be awarded to any eligible person, subject to vesting or forfeiture conditions during the applicable restriction period(s) established by the plan administrator. Shares of common stock underlying restricted stock units will not be issued until the restricted stock units have vested, and, if provided by the plan administrator, dividends may be paid currently or credited to an account for the participant, may be settled in cash and/or shares of common stock and may be subject to the same restrictions on transfer or forfeitability as the restricted stock units with respect to which the dividends are paid. Other Stock-Based Awards. Other awards of shares of common stock and other awards that are valued in whole or in part by reference to or otherwise based on shares of common stock or other property may be granted to any eligible person, subject to the EIP and such restrictions as may be determined by the plan administrator and set forth in an applicable award agreement. Adjustments of Awards. In the event the plan administrator determines that any dividend or other distribution, reorganization, merger, consolidation, combination, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange, or other disposition of all or substantially all of the assets of the company, or sale or exchange of common stock or other securities of the company, issuance of warrants or other rights to purchase common stock or other securities of the company, or other similar corporate transaction or event ( Transactions ) affects the common stock such that an adjustment is appropriate in order to prevent dilution or enlargement of benefits or potential benefits intended by the company to be made under the EIP or with respect to any award, the plan administrator may, in such manner as it may deem equitable, adjust any or all of the number and kind of shares of common stock with respect to which awards may be granted or awarded, the number and kind of shares of common stock subject to outstanding awards, the grant or exercise price with respect to any award, and the terms and conditions of any awards. In the event of a non-reciprocal transaction between the company and its stockholders that affects the shares of common stock or other securities of the company or the share price of common stock or other securities of the company and causes a change in the per share value of the common stock underlying outstanding awards, the plan administrator will equitably adjust each outstanding award as the plan administrator deems appropriate. In the event of a Transaction affecting the common stock or the share price of the common stock, the plan administrator may refuse to permit the exercise of any award during a period of up to thirty days prior to the consummation of any such Transaction. Corporate Transaction. In the event of any Transaction (including a change in control of the company) or any unusual or nonrecurring transaction or event affecting the company or the financial statements of the company or any change in any laws or accounting principles, the plan administrator is authorized to (i) provide for the cancellation of any awards in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such award or realization of the rights under the vested portion of such award, (ii) provide that such award shall vest and be exercisable as to all share covered thereby, (iii) provide that such award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof (if any), or be substituted for by awards covering the stock of the successor or survivor corporation, or a parent or subsidiary therefor (if any), with appropriate adjustments, (iv) make adjustments in the number and type of shares of common stock (or other property) subject to outstanding awards and/or in the terms and conditions of, and the criteria included in, outstanding award which may be granted in the future, (v) replace such award with other rights or property, and/or (vi) provide that the award will terminate and cannot vest, be exercised or become payable after the applicable event. Amendment and Termination. The board of members may amend, suspend or terminate the EIP at any time (subject to stockholder approval if required in accordance with the EIP) provided that no amendment of the EIP will materially and adversely affect any outstanding award without the consent of the affected participant. Following this offering and in connection with the effectiveness of our 2024 Plan, the EIP will terminate and no further awards will be granted under the EIP. However, all outstanding awards will continue to be governed by their existing terms. 2014 Plan The 2014 Plan was adopted by our board of directors, effective as of August 29, 2014 and was amended effective as of each of August 29, 2014, August 11, 2015, April 24, 2017, May 26, 2018, September 21, 2018, April 21, 2021, September 16, 2022, and March 14, 2024, and was terminated on April 23, 2024. As of June 30, 2024, 4,379,617 options to purchase shares of our common stock at a weighted-average exercise price per share of $4.09 remained outstanding under the 2014 Plan. Administration. The 2014 Plan is administered by our board of directors, or a committee thereof appointed by the board of directors and composed of members of board of directors. The plan administrator has the authority, in its discretion, to (i) select the employees, directors and consultants to whom awards may be granted from time to time under the 2014 Plan, (ii) determine whether and to what extent awards are granted under the 2014 Plan, (iii) determine the number of shares or the amount of other consideration to be covered by each award granted under the 2014 Plan, (iv) approve forms of award agreements for use under the 2014 Plan, (v) determine the terms and conditions of any award granted under the 2014 Plan, (vi) establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non-U.S. jurisdictions and afford grantees favorable treatment under such rules or laws, subject to the provisions of the 2014 Plan, (vii) amend the terms of any outstanding award granted under the 2014 Plan, subject to certain restrictions set forth in the 2014 Plan, (viii) construe and interpret the terms of the 2014 Plan and awards, including any notice of award or award agreement pursuant to the 2014 Plan, and (ix) take such other actions, not inconsistent with the terms of the 2014 Plan, it deems appropriate. All decisions, or actions taken, by the plan administrator or in connection with the administration of the 2014 Plan shall be final, conclusive and binding on all persons having an interest in the 2014 Plan. Eligibility. Our employees and consultants, directors, employees and consultants of our parents or subsidiaries (if any), and non-employee members of our board of directors are eligible to receive awards under the 2014 Plan, provided that only employees may be granted awards intended as ISOs. Share Reserve. At the time of the 2014 Plan s termination, a total of 7,760,256 shares of our common stock had been authorized for issuance under the 2014 Plan. As of the termination of the 2014 Plan, options to purchase a total of 4,678,121 shares of our common stock were issued and outstanding and a total of 1,935,170 shares of common stock had been issued upon the exercise of options or pursuant to other awards granted under the 2014 Plan and were outstanding. The remaining 1,146,964 shares that were available for issuance were retired when the 2014 Plan terminated and became part of the new share reserve under the EIP. Awards. The 2014 Plan provides that the plan administrator may grant or issue stock options, SARs, dividend equivalent rights, restricted stocks, restricted stock units, or other rights or benefits under the 2014 Plan to eligible employees, consultants, and directors. In general, awards granted under the 2014 Plan may not be sold or otherwise transferred except pursuant to a beneficiary designation, by will, in accordance with the laws of descent and distribution or, except in the case of incentive stock options, to the extent and in the manner authorized by the administrator by gift or pursuant to domestic relations order to members of the grantee s immediate family. Stock Options. Stock options may be granted to any eligible person, provided that ISOs may only be granted to our employees or employees of our parents or subsidiaries (if any), subject to the 2014 Plan and such restrictions as may be determined by the plan administrator and set forth in an applicable award agreement. The exercise price of stock options granted to employees, directors or consultants will be determined by the plan administrator and set forth in an applicable award agreement; provided that such exercise price may not be less than fair market value of a share on grant date (or 110% of fair market value with respect to ISOs granted to employees holding 10% or more of the total combined voting power of the company). No stock option award may have a term of more than ten years following the date of grant. Restricted Stock. Restricted stock may be granted to any eligible individual and made subject to such restrictions as may be determined by the administrator. Restricted stock, typically, may be forfeited for no consideration or repurchased by us at the original purchase price if the conditions or restrictions on vesting are not met. In general, restricted stock may not be sold, or otherwise transferred or hypothecated until restrictions are removed or expire. Recipients of restricted stock, unlike recipients of options and restricted stock units, will have voting rights and will have the right to receive dividends, if any, prior to the time when the restrictions lapse, however, extraordinary dividends will generally be placed in escrow, and will not be released until restrictions are removed or expire. Restricted Stock Units. Restricted stock units may be awarded to any eligible individual, typically without payment of consideration, but subject to vesting conditions based on continued employment or service or on performance criteria established by the administrator. Like restricted stock, restricted stock units may not be sold, or otherwise transferred or hypothecated, until vesting conditions are removed or expire. Unlike restricted stock, stock underlying restricted stock units will not be issued until the restricted stock units have vested, and recipients of restricted stock units generally will have no voting or dividend rights prior to the time when vesting conditions are satisfied. Stock Appreciation Rights. SARs typically will provide for payments to the holder based upon increases in the price of our common stock over a set exercise price. The exercise price of any SAR granted under the 2014 Plan must be at least 100% of the fair market value of a share of our common stock on the date of grant. SARs under the 2014 Plan will be settled in cash or shares of our common stock, or in a combination of both, at the election of the administrator. Other Awards. Other stock-based or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of cash compensation otherwise payable to any individual who is eligible to receive awards. The administrator will determine the terms and conditions of other awards, which may include vesting conditions based on continued service, performance, and/or other conditions. Dividend Equivalent Rights. Dividend equivalent rights represent the right to receive the equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents are credited as of dividend payment dates during the period between a specified date and the date such award terminates or expires, as determined by the plan administrator. In addition, dividend equivalents with respect to shares covered by a performance award will only be paid to the participant at the same time or times and to the same extent that the vesting conditions, if any, are subsequently satisfied and the performance award vests with respect to such shares. Adjustments of Awards. In the event of any increase or decrease in the number of issued shares resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the shares or similar transaction affecting the shares, any other increase or decrease in the number of issued shares effected without receipt of consideration by the company or any other transaction with respect to common stock (including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, partial or complete liquidation or any similar transaction, proportionate adjustments will be made to the number of shares covered by each outstanding award and the number of shares which have been authorized for issuance under the 2014 Plan, the exercise or purchase price of each such outstanding award, the maximum number of shares with respect to which awards may be granted to any grantee in any calendar, as well as any other terms that the plan administrator determines required. In the event of any distribution of cash or other assets to stockholders other than a normal cash dividend, the plan administrator shall also make such adjustments or substitute, exchange or grant awards to effect such adjustments, in each case, in a manner that precludes the enlargement of rights and benefits under such awards. In connection with the foregoing adjustments, the plan administrator may, in its discretion, prohibit the exercise of awards or other issuance of shares, cash, or other consideration pursuant to awards during certain periods of time. Corporate Transactions. Effective upon the consummation of a merger, consolidation, reverse merger, or series of related transactions culminating in a reverse merger, liquidation, dissolution, acquisition in a single or series of related transactions by any person or related group of persons of beneficial ownership of securities possessing more than 50% of the total combined voting power of the company s outstanding securities (unless otherwise determined by the plan administrator), or the sale, transfer, or other disposition of all or substantially all of the assets of the company, all outstanding awards under the 2014 Plan shall terminate but only to the extent they are not assumed in connection with such corporate transaction. The plan administrator shall have the authority, exercisable either in advance of any actual or anticipated corporate transaction or at any time of an actual corporate transaction and exercisable at the time of the grant of an award under the 2014 Plan or at any time while an award remains outstanding, to provide for the full or partial automatic vesting and exercisability of one or more outstanding unvested awards under the plan and the release from restrictions on transfer and repurchase or forfeiture rights of such awards in connection with a corporate transaction on such terms and conditions as the plan administrator may specify. The plan administrator also has the authority to condition any such award vesting and exercisability or release form such limitation upon subsequent termination of the continuous service of the grantee within a specified period following the effective date of the corporate transaction. Amendment and Termination. The 2014 Plan was terminated on April 23, 2024. However, all outstanding awards will continue to be governed by their existing terms. Clawback Policy In connection with this offering, we have adopted an incentive compensation recovery policy, or a clawback policy, that is compliant with the Nasdaq Listing Rules, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Non-Employee Director Compensation Prior to the effectiveness of the registration statement of which this prospectus forms a part, we did not have a formal policy with respect to compensation payable to our non-employee directors for service as directors. We have, however, paid each of our non-affiliated directors, Mr. Taylor, Mr. Burke, and Ms. Robertson, cash fees as set forth in the table below for their service on our board. From time to time, we have granted equity awards to certain non-employee directors for their service on our board of directors. In February 2023, we granted Mr. Taylor an option to purchase 19,455 shares of our common stock, which vest as to 1/48th of the shares subject thereto on each monthly anniversary of September 13, 2021, subject to Mr. Taylor s continued service on the applicable vesting date. We have also reimbursed our directors for expenses associated with attending meetings of our board of directors and committees of our board of directors. In addition to his service on the board, Dr. Parvizi serves as Chief Medical Advisor to the company. Dr. Parvizi received a cash fee of $7,000, payable biweekly, until April 1, 2023, and subsequently has received a cash fee of $7,700, payable biweekly, since April 1, 2023, in consideration of his consulting services. Director Compensation Table for Fiscal Year 2023 The following table sets forth information regarding the compensation of our non-employee directors for the fiscal year ended December 31, 2023. Name Fees Earned or Paid in Cash ($) Option Awards ($)(1) (2) All Other Compensation ($) (3) Total ($) Juliet Tammenoms Bakker William W. Burke 27,500 27,500 Lucian Iancovici, M.D. Josef Parvizi, M.D., Ph.D. 180,600 180,600 Rebecca (Beckie) Robertson 30,000 30,000 Joseph M. Taylor 28,000 58,579 86,579 (1)Amounts reflect the full grant-date fair value of stock options granted during 2023 computed in accordance with ASC Topic 718. See Note 11 of the financial statements included elsewhere in this prospectus for a discussion of valuation assumptions made in determining the grant date fair value and compensation expense of our stock options. (2)The aggregate number of option awards (whether exercisable or unexercisable) held as of December 31, 2023 by Mr. Burke, Ms. Robertson, and Mr. Taylor is 57,879, 83,949 and 68,254, respectively. None of our other directors held outstanding options as of December 31, 2023. (3)Amounts shown for Dr. Parvizi reflect the cash consulting fees paid for consulting services performance in 2023. In September 2024, in order to provide certain directors with additional equity grants to compensate them for their prior services, we granted Ms. Robertson and Mr. Taylor each 13,229 and 6,614 restricted stock units, respectively (the RSUs ). The RSUs vest based on the satisfaction of two requirements (i) a liquidity-based requirement that is satisfied on a change in control or initial public offering, subject to the director s continued service through such date, and (ii) a service-based requirement, where 1/16thof the RSUs will vest on each quarterly anniversary of September 1, 2024, subject to the director s continued service through the applicable vesting date. The service-based requirement will be satisfied in full on the closing of change in control, subject to the director s continued service through immediately prior to such date. In connection with this offering, we will be entering into an amended consulting agreement with Dr. Parvizi to govern the terms of this consulting services following the consummation of this offering. Please see the section titled Certain Relationships and Related-Party Transactions for a description of the updated consulting terms. Finally, in connection with this offering, we have adopted a non-employee director compensation program for our non-employee directors (the Director Compensation Program ), to be effective upon the date of effectiveness of this registration statement. Pursuant to the Director Compensation Program, our non-employee directors will receive cash compensation as set forth in the tables below. Board Service Non-Employee Director $40,000 Additional Board Service Non-Executive Chairperson: $45,000 Additional Committee Service Chair Non-Chair Audit Committee Member $20,000 $10,000 Compensation Committee Member $15,000 $7,500 Nominating and Corporate Governance Committee Member $10,000 $5,000 Director fees under the Director Compensation Program will be payable in cash in arrears in four equal quarterly installments not later than 30 days following the final day of each calendar quarter, provided that the amount of each payment will be prorated for any portion of a quarter that a director is not serving on our board. Directors may elect to receive all or a portion of their cash fees in restricted stock units ( RSUs ), with each such RSU award covering a number of shares calculated by dividing (i) the amount of the annual retainer by (ii) the average per share closing trading price of our common stock over the most recent 30 trading days as of the grant date (the 30 day average price ). Such RSUs will be automatically granted on the fifth day of the month following the end of the calendar quarter to which the corresponding director fees were earned and will be fully vested on grant. Under the Director Compensation Program, unless otherwise provided by the board prior to commencement of service of an applicable director, each non-employee director will automatically be granted that number of RSUs upon the director s initial appointment or election to our board of directors (referred to as the Initial Grant ), calculated by dividing (i) $300,000 by (ii) the 30 day average price. The Initial Grant will vest as to one-third of the underlying shares on each anniversary of the grant date, subject to continued service through each applicable vesting date. In addition, each non-employee director who (i) has been serving on the board for six months prior to an annual meeting following this offering and (ii) will continue to service on the board following such annual meeting will automatically be granted that number of RSUs upon each annual meeting we have following this offering (referred to as the Annual Grant ), calculated by dividing (i) $150,000 by (ii) the 30 day average price. The Annual Grant will vest on the earlier of the first anniversary of the date of grant or the date of the next annual stockholder s meeting to the extent unvested as of such date, subject to continued service through each applicable vesting date. Finally, each non-employee director who (i) has been serving on the board as of this offering and (ii) will continue to service on the board following this offering will automatically be granted that number of RSUs upon the effectiveness of the Form S-8 following the effectiveness of the registration statement of which this prospectus is a part (referred to as the IPO Grant ), calculated by dividing (i) $112,500 by (ii) the initial public offering price per share of our common stock in this offering. The IPO Grant will vest on the earlier of the first anniversary of the date of grant or the date of the next annual stockholder s meeting to the extent unvested as of such date, subject to continued service through each applicable vesting date. All equity awards held by non-employee directors under the Director Compensation Program will vest in full upon the consummation of a Change in Control (as defined in the 2024 Plan), subject to their continued service through immediately prior to such date. Each director may elect to defer all or a portion of their RSUs they receive under the Director Compensation Program until the earliest of a fixed date properly elected by the director, the director s termination of service, or a Change in Control. Certain Relationships and Related-Party Transactions The following includes a summary of transactions since January 1, 2021 and any currently proposed transactions to which we were or are expected to be a participant in which (1) the amount involved exceeded or will exceed $120,000, and (2) any of our directors, executive officers, or holders of more than 5% of our capital stock, or any affiliate or member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest, other than compensation and other arrangements that are described under the section titled Executive and Director Compensation. Series C Redeemable Convertible Preferred Stock Financing In April 2021, we entered into a Series C redeemable convertible preferred stock purchase agreement with various investors, pursuant to which we issued an aggregate of 8,680,233 shares of Series C-1 redeemable convertible preferred stock at $11.49 per share for gross proceeds of $99.7 million in multiple closings, and 243,734 shares of Series C-NV redeemable convertible preferred stock at $11.49 per share for gross proceeds of $2.8 million in the first closing. The first closing occurred in April 2021, at which time we issued 4,197,669 shares of Series C-1 redeemable convertible preferred stock and 243,734 shares of Series C-NV redeemable convertible preferred stock for aggregate gross proceeds of $51.0 million. The second closing occurred in May 2021, at which time we issued 130,163 shares of Series C-1 redeemable convertible preferred stock for gross proceeds of $1.5 million. The third closing occurred in September 2022, at which time we issued 4,352,401 shares of Series C-1 redeemable convertible preferred stock for gross proceeds of $50.0 million. The table below sets forth the number of shares of our Series C-1 redeemable convertible preferred stock and Series C-NV redeemable convertible preferred stock purchased by our executive officers, directors, holders of more than 5% of our capital stock at the time of the transaction, and their affiliated entities or immediate family members. Each share of Series C-1 and Series C-NV redeemable convertible preferred stock in the table below will convert into one share of our common stock upon the completion of this offering. Name(1) Series C-1 Convertible Preferred Stock (#) Series C-NV Convertible Preferred Stock (#) Aggregate Cash Purchase Price ($) Entities affiliated ABG WTT-Ceribell Limited(2) 2,176,202 $ 24,999,999 Longitude Venture Partners IV, L.P.(3) 2,140,600 $ 24,591,012 The Rise Fund Clearthought L.P.(4) 1,366,087 $ 15,693,486 Entities affiliated with Red Tree Venture Capital(5) 654,448 $ 7,518,241 Optimas Capital Partners Fund LP(6) 472,601 $ 5,429,204 u.life fund(7) 243,734 $ 2,799,999 Josef Parvizi, M.D., Ph.D.(8) 184,824 $ 2,123,255 (1)For additional information regarding these stockholders and their equity holdings, see Principal Stockholders. (2)ABG WTT-Ceribell Limited owns more than 5% of our outstanding capital. (3)Longitude Venture Partners IV, L.P. owns more than 5% of our outstanding capital. Ms. Tammenoms Bakker is a member of our board of directors and is a managing member of Longitude Capital Partners IV, LLC, the general partner of Longitude Venture Partners IV, L.P. (4)The Rise Fund Clearthought L.P. owns more than 5% of our outstanding capital. (5)Entities affiliated with Red Tree Venture Capital own more than 5% of our outstanding capital. (6)Entities affiliated with Optimas Capital Partners Fund LP owns more than 5% of our outstanding capital. (7)u.life fund owns more than 5% of our outstanding capital. (8)Dr. Parvizi is a co-founder, our Chief Medical Advisor, and a member of our board of directors. Includes 32,049 shares of Series C redeemable convertible preferred stock purchased by an immediate family member of Dr. Parvizi. Investors Rights Agreement We are party to an amended and restated investors rights agreement, as amended, with the purchasers of our outstanding redeemable convertible preferred stock, including holders of more than 5% of our capital stock and entities with which certain of our directors are affiliated. Following the consummation of this offering, the holders of approximately 17.8 million shares of our common stock issuable upon the conversion of our outstanding redeemable convertible preferred stock are entitled to rights with respect to the registration of their shares under the Securities Act. For a more detailed description of these registration rights, see Description of Capital Stock Registration Rights. Voting Agreement We are party to an amended and restated voting agreement, as amended, with certain holders of our common stock and redeemable convertible preferred stock, including certain of our directors and executive officers, holders of more than 5% of our capital stock, and entities with which certain of our directors are affiliated. Upon the consummation of this offering, the amended and restated voting agreement will terminate. Right of First Refusal and Co-Sale Agreement We are party to an amended and restated right of first refusal and co-sale agreement with certain holders of our common stock and redeemable convertible preferred stock, including certain of our directors and executive officers, holders of more than 5% of our capital stock, and entities with which certain of our directors are affiliated. This agreement provides for rights of first refusal and co-sale relating to the shares of our common stock held by the parties to the agreement. Upon the consummation of this offering, the amended and restated right of first refusal and co-sale agreement will terminate. Executive Officer and Director Compensation Please see Executive and Director Compensation for information regarding the compensation of our directors and executive officers. Employment Agreements We have entered into change in control and severance agreements with our executive officers that, among other things, provide for certain compensatory and change-in-control benefits, as well as severance benefits. For a description of these agreements with our named executive officers, see the section titled Executive and Director Compensation. Parvizi Consulting Agreement We entered into a consulting agreement with Dr. Parvizi on May 7, 2018, and amended the consulting agreement on October 2, 2024. Pursuant to the consulting agreement, Dr. Parvizi was paid $84,000, $168,000, and $180,600 in 2021, 2022, and 2023, respectively, in consideration of his consulting services. Under the consulting agreement, Dr. Parvizi has agreed to provide services as our Chief Medical Advisor, providing guidance to Ceribell with respect to medical and scientific issues related to neurology. Dr. Parvizi s compensation for his consulting services is $450 per hour, up to a total of 36 hours per month, unless additional hours are approved by prior written consent of the compensation committee of our board of directors. We have also agreed to reimburse Dr. Parvizi for all reasonable expenses he incurs in performing his services under the consulting agreement, if he receives written consent from an authorized agent of Ceribell prior to incurring such expenses and submits receipts for such expenses in accordance with our policy and the contract terms. The consulting agreement continues until terminated by Ceribell or Dr. Parvizi, and whichever party wishes to terminate must provide three months prior written notice to the other party. The consulting agreement also provides that Dr. Parvizi may not solicit or attempt to solicit our employees to leave their employment either for Dr. Parvizi or any other person or entity without our prior written consent until 12 months after the termination of the consulting agreement for any reason. See also the section titled Executive and Director Compensation. Indemnification Agreements We have entered into indemnification agreements with certain of our current directors and executive officers and intend to enter into new indemnification agreements with each of our current directors and executive officers before the completion of this offering. Our amended and restated certificate of incorporation and our amended and restated bylaws will provide that we will indemnify our directors and officers to the fullest extent permitted by applicable law. See the section titled Management Limitations on Liability and Indemnification Matters. Policies and Procedures for Related-Party Transactions Our board of directors has adopted a written related-party transaction policy, to be effective upon the consummation of this offering, setting forth the policies and procedures for the review and approval or ratification of related-party transactions. This policy will cover, with certain exceptions set forth in Item 404 of Regulation S-K, any transaction, arrangement, or relationship, or any series of similar transactions, arrangements, or relationships, in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including without limitation purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness, and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including but not limited to whether the transaction is on terms comparable to those that could be obtained in an arm s length transaction with an unrelated third party and the extent of the related person s interest in the transaction. All of the transactions described in this section occurred prior to the adoption of this policy. Principal Stockholders The following table sets forth, as of June 30, 2024, information regarding beneficial ownership of our capital stock by: each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; each of our named executive officers; each of our directors; and all of our executive officers and directors as a group. The percentage ownership information under the column titled Beneficial Ownership Prior to this Offering is based on 23,412,594 shares of our common stock outstanding as of June 30, 2024, including 17,817,643 shares of our common stock resulting from the Preferred Stock Conversion, as if this conversion had occurred as of June 30, 2024. The ownership information under the column titled Beneficial Ownership After this Offering assumes the foregoing, the issuance of 10,606,060 shares of common stock in this offering, no exercise of the underwriters option to purchase additional shares and that the stockholders who have indicated an interest in purchasing our shares in this offering purchase the maximum amount of shares they have indicated an interest in purchasing. In addition, the following table assumes the conversion of Series C-NV redeemable convertible preferred stock into common stock and does not reflect any shares of common stock that may be purchased in this offering. We have determined beneficial ownership according to the rules and regulations of the SEC, and thus it generally means that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power of that security. In addition, shares of common stock issuable upon the exercise of stock options or warrants that are currently exercisable or exercisable within 60 days of June 30, 2024 are included in the following table. These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The information contained in the following table does not necessarily indicate beneficial ownership for any other purpose. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws. Certain of our existing stockholders, including Longitude Capital, The Rise Fund (which are affiliated with our board members, Juliet Tammenoms Bakker and Lucian Iancovici, M.D., respectively), Ally Bridge Group and Red Tree, each of which owns 5% or more of our capital stock prior to this offering, have indicated an interest in purchasing up to an aggregate of approximately $40 million of shares of our common stock in this offering at the initial public offering price (which would represent approximately 22.9% of the shares sold in this offering, assuming an offering price of $16.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus). However, because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, fewer or no shares of our common stock in this offering to these entities, or these entities may determine to purchase more, fewer or no shares of our common stock in this offering. The underwriters will receive the same underwriting discounts and commissions on any shares of our common stock purchased by these entities as they will on any other shares of our common stock sold to the public in this offering. Unless otherwise noted below, the address for each beneficial owner listed in the table below is c/o CeriBell, Inc., 360 N. Pastoria Avenue, Sunnyvale, California 94085. Beneficial Ownership Prior to this Offering Beneficial Ownership After this Offering Name of Beneficial Owner Number of Outstanding Shares Beneficially Owned Number of Shares Exercisable Within 60 Days Number of Shares Beneficially Owned Percentage of Beneficial Ownership Number of Shares Beneficially Owned Percentage of Beneficial Ownership 5% and Greater Stockholders: Entities affiliated with The Rise Fund Clearthought L.P.(1) 3,587,154 3,587,154 15.3 % 4,193,214 12.3 % Entities affiliated with The Global Value Investment Portfolio Management Pte Ltd.(2) 2,368,345 2,368,345 10.1 % 2,368,345 7.0 % Entities affiliated with Longitude Venture Partners IV, L.P.(3) 2,237,876 2,237,876 9.6 % 2,480,300 7.3 % Entities affiliated ABG WTT-Ceribell Limited(4) 2,176,202 2,176,202 9.3 % 2,782,262 8.2 % Entities affiliated with Red Tree Venture Fund, L.P.(5) 2,010,940 2,010,940 8.6 % 2,313,970 6.8 % Entities affiliated with Optimas Capital Partners Fund LP(6) 1,550,814 1,550,814 6.6 % 1,550,814 4.6 % Named Executive Officers and Directors: Xingjuan (Jane) Chao, Ph.D.(7) 952,468 836,528 1,788,996 7.4 % 1,788,996 5.1 % Scott Blumberg(8) 88,366 170,139 258,505 1.1 % 258,505 * Joshua Copp * * Raymond Woo, Ph.D.(9) 117,696 172,274 289,970 1.2 % 289,970 * Josef Parvizi, M.D., Ph.D.(10) 2,084,205 2,084,205 8.9 % 2,084,205 6.1 % Juliet Tammenoms Bakker(3) 2,237,876 2,237,876 9.6 % 2,480,300 7.3 % William W. Burke(11) 1,945 35,808 37,753 * 37,753 * Lucian Iancovici, M.D. * * Rebecca (Beckie) Robertson(12) 79,895 79,895 * 79,895 * Joseph M. Taylor(13) 44,207 62,984 107,191 * 107,191 * All current directors and executive officers as a group (10 persons)(14) 5,157,675 1,357,628 6,515,303 26.3 % 6,757,727 19.1 % * Indicates beneficial ownership of less than 1% of the total outstanding common stock. (1)Consists of 3,587,154 shares of common stock issuable upon conversion of redeemable convertible preferred stock held by The Rise Fund Clearthought L.P ( Rise Clearthought ). The general partner of Rise Clearthought is The Rise Fund GenPar, L.P., whose general partner is The Rise Fund GenPar Advisors, LLC. TPG GP A is the managing member of TPG Group Holdings (SBS) Advisors, LLC, which is the general partner of TPG Group Holdings (SBS), L.P., which holds 100% of the shares of Class B common stock (which represents a majority of the combined voting power of the common stock) of TPG Inc. ( TPG ), which is the controlling shareholder of TPG GP Co, LLC, TPG Holdings II-A, LLC, which is the general partner of TPG Operating Group II, L.P., which is the managing member of TPG Holdings I-A, LLC, which is the general partner of TPG Operating Group I, L.P., which is the sole member of The Rise Fund GenPar Advisors, LLC. Because of TPG GP A s relationship with Rise Clearthought, TPG GP A may be deemed to beneficially own the shares held by Rise Clearthought. TPG GP A is controlled by entities owned by Messrs. David Bonderman, James Coulter, and Jon Winkelried (the Control Group ). Because of the relationship of the Control Group to TPG GP A, each member of the Control Group may be deemed to beneficially own the shares held by the Rise Clearthought. Each member of the Control Group disclaims beneficial ownership of the shares held by Rise Clearthought except to the extent of their pecuniary interest therein. The principal address for The Rise Fund Clearthought L.P. entities is 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Entities affiliated with The Rise Fund Clearthought L.P. have indicated an interest in purchasing up to $10 million of shares of common stock in this offering and the number of shares beneficially owned after this offering assumes the purchase of such shares in this offering at a price of $16.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. (2)Consists of (i) 2,350,936 shares of common stock issuable upon conversion of redeemable convertible preferred stock held by u.life fund and (ii) 17,409 shares of common stock issuable upon conversion of redeemable convertible preferred stock held by GVIP Ventures SPC-SP3 ( GVIP ). The Global Value Investment Portfolio Management Pte Ltd, a Singapore company ( GVIP Management ), has voting control of u.life fund and GVIP. Caroline Kwong is the Managing Director of GVIP Management. Ms. Kwong disclaims beneficial ownership of such shares held by u.life fund and GVIP. The principal address for the GVIP Management entities is Level 19, Singapore Land Tower, 50 Raffles Place, Singapore 048623. (3)Consists of (i) 2,140,600 shares of common stock issuable upon conversion of redeemable convertible preferred stock, and (ii) 97,276 shares of common stock held by Longitude Venture Partners IV, L.P. ( LVPIV ). Longitude Capital Partners IV, LLC ( LCPIV ) is the general partner of LVPIV, and may be deemed to have voting, investment, and dispositive power over the securities held by LVPIV. Patrick G. Enright, and Juliet Tammenoms Bakker, a member of our board of directors, are managing members of LCPIV, and may be deemed to share voting, investment, and dispositive power over the securities held by LVPIV. Each of LCPIV, Mr. Enright, and Ms. Tammenoms Bakker disclaims beneficial ownership of such securities, except to the extent of their respective pecuniary interests therein. The principal address for these entities is 2740 Sand Hill Road, 2nd Floor, Menlo Park, CA 94025. Entities affiliated with LVPIV have indicated an interest in purchasing up to $4 million of shares of common stock in this offering and the number of shares beneficially owned after this offering assumes the purchase of such shares in this offering at a price of $16.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. (4)Consists of 2,176,202 shares of common stock issuable upon conversion of redeemable convertible preferred stock held by ABG WTT-Ceribell Limited, which is 100% owned by Ally Bridge Group-WTT Global Life Science Capital Partners, L.P. ( ABG-WTT Fund ), and Ally Bridge Group Global Life Science Capital Partners V, L.P. ( ABG V ). Mr. Fan Yu is the director of the entities that respectively act as the general partner of ABG-WTT Fund and ABG V. The registered address of ABG WTT-Ceribell Limited is the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Entities affiliated with ABG WTT-Ceribell Limited have indicated an interest in purchasing up to $10 million of shares of common stock in this offering and the number of shares beneficially owned after this offering assumes the purchase of such shares in this offering at a price of $16.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. (5)Consists of (i) 1,376,172 shares of common stock issuable upon conversion of redeemable convertible preferred stock directly held by Red Tree Venture Fund, L.P. ( Red Tree Fund I ), (ii) 460,672 shares of common stock directly held by Red Tree Fund I, and (iii) 174,096 shares of common stock issuable upon conversion of redeemable convertible preferred stock directly held by Red Tree SPV II, LLC ( Red Tree SPV II ). Red Tree GP, L.P. ( Red Tree GP I ) is the general partner of Red Tree Fund I and Red Tree SPV II, and may be deemed to have sole voting and dispositive power over the shares held by Red Tree Fund I and Red Tree SPV II. Red Tree GP I and Heath Lukatch, the Managing Director of Red Tree GP I who may be deemed to share voting and dispositive power over the reported securities, disclaim beneficial ownership of the reported securities held by Red Tree Fund I and Red Tree SPV II, except to the extent of any pecuniary interest therein. The principal address for these entities is 2055 Woodside Road, Suite 270, Redwood City, CA 94061. Entities affiliated with Red Tree Fund I have indicated an interest in purchasing up to $5 million of shares of common stock in this offering and the number of shares beneficially owned after this offering assumes the purchase of such shares in this offering at a price of $16.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. (6)Consists of (i) 173,706 shares of common stock, and (ii) 1,377,108 shares of common stock issuable upon conversion of redeemable convertible preferred stock held by Optimas Capital Partners Fund LP. Optimas Capital Partners is the general partner of Optimas Capital Partners Fund LP. Yongzhi Jiang is the managing member of Optimas Capital Partners and, as a result, holds voting and dispositive power with respect to the shares held by Optimas Capital Partners Fund LP. Mr. Jiang disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. The principal address for the Optimas Capital Partners Fund LP entities is Unit 709-710, 7/F, Chater House, 8 Connaught Road, Central, Hong Kong. (7)Consists of (i) 583,380 shares of common stock held by Dr. Chao, (ii) 836,528 shares of common subject to options exercisable within 60 days of June 30, 2024 held by Dr. Chao, and (iii) 369,088 shares of common stock held by the ACP 2021 Trust. Dr. Chao is a co-trustee of the ACP 2021 Trust, and therefore may be deemed to share beneficial ownership of the securities held by such trust. (8)Consists of (i) 88,366 shares of common stock, and (ii) 170,139 shares of common stock subject to options exercisable within 60 days of June 30, 2024. (9)Consists of (i) 117,696 shares of common stock, and (ii) 172,274 shares of common stock subject to options exercisable within 60 days of June 30, 2024. (10)Consists of (i) 654,431 shares of common stock held by Dr. Parvizi, (ii) 152,775 shares of common stock issuable upon conversion of redeemable convertible preferred stock held by Dr. Parvizi, (iii) 907,911 shares of common stock held by the Innovation ACP Trust, and (iv) 369,088 shares of common stock held by the ACP 2021 Trust. Dr. Parvizi is a co-trustee of the Innovation ACP Trust and the ACP 2021 Trust, and therefore may be deemed to share beneficial ownership of the securities held by such trusts. (11)Consists of (i) 1,945 shares of common stock, and (ii) 35,808 shares of common stock subject to options exercisable within 60 days of June 30, 2024. (12)Consists of 79,895 shares of common stock subject to options exercisable within 60 days of June 30, 2024. (13)Consists of (i) 44,207 shares of common stock issuable upon conversion of redeemable convertible preferred stock, and (ii) 62,984 shares of common stock subject to options exercisable within 60 days of June 30, 2024. (14)Consists of (i) 5,157,675 shares owned by our current directors and executive officers, without duplication, and (ii) 1,357,628 shares of common stock subject to options exercisable within 60 days of June 30, 2024. Description of Capital Stock The following description of our capital stock and provisions of our amended and restated certificate of incorporation and amended and restated bylaws are summaries. You should also refer to the amended and restated certificate of incorporation, the amended and restated bylaws, and the amended and restated investors rights agreement, which are filed as exhibits to the registration statement of which this prospectus is a part. General Upon the completion of this offering and the filing of our amended and restated certificate of incorporation, our authorized capital stock will consist of 500,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. Common Stock Outstanding Shares As of June 30, 2024, we had 23,412,594 shares of common stock outstanding, held of record by 139 stockholders, after giving effect to the Preferred Stock Conversion. Voting Rights Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Our stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the voting shares are able to elect all of the directors. Dividends Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our common stock are entitled to receive ratably any dividends that our board of directors may declare out of funds legally available. Liquidation In the event of our liquidation, dissolution, or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock. Rights and Preferences Holders of our common stock have no preemptive, conversion, or subscription rights, and there are no redemption or sinking-fund provisions applicable to our common stock. The rights, preferences, and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future. Preferred Stock Upon the completion of this offering, all of our currently outstanding shares of redeemable convertible preferred stock will convert into common stock, and we will not have any preferred shares outstanding. Immediately prior to the completion of this offering, our certificate of incorporation will be amended and restated to delete all references to such shares of redeemable convertible preferred stock. Under the amended and restated certificate of incorporation, our board of directors will have the authority, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences, and privileges of the shares of each wholly unissued series and any qualifications, limitations, or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring, or preventing a change in control of our company that may otherwise benefit holders of our common stock and may adversely affect the market price of the common stock and the voting and other rights of the holders of common stock. We have no current plans to issue any shares of preferred stock. Stock Options and Restricted Stock Units As of June 30, 2024, 5,087,158 shares of common stock were issuable upon the exercise of outstanding stock options, at a weighted-average exercise price of $4.83 per share and no Restricted Stock Units were outstanding. For additional information regarding terms of our equity incentive plans, see the section titled Executive and Director Compensation Equity Compensation Plans. Warrants The following table sets forth information about outstanding warrants to purchase shares of our stock as of June 30, 2024. Immediately prior to the completion of this offering, the warrants to purchase shares of our Series B redeemable convertible preferred stock and warrants to purchase shares of our Series C-1 redeemable convertible preferred stock will convert into warrants to purchase shares of our common stock. Class of Stock Underlying Issue Date Number of Shares of Preferred Stock Exercisable Prior to this Offering Number of Shares of Common Stock Underlying Warrants on As-Converted Basis Exercise Price Per Share Expiration Date Series B Convertible Preferred Stock 5/1/2020 45,726(1) 45,726 $ 7.6540 May 1, 2030 Series C-1 Convertible Preferred Stock 3/10/2022 15,228 15,228 $ 11.49 March 10, 2032 Series C-1 Convertible Preferred Stock 2/6/2024 41,345 41,345 $ 11.49 February 6, 2034 (1) In March 2022, the Company amended the terms of certain warrants exercisable for up to 6,528 shares of Series B redeemable convertible preferred stock to be exercisable at the holder s option for either (i) 6,528 shares of Series B redeemable convertible preferred stock or (ii) 4,350 shares of Series C-1 redeemable convertible preferred stock. The figures in the table above assume that these warrants amended in March 2022 are exercisable for shares of Series B redeemable convertible preferred stock. Registration Rights Upon the completion of this offering and subject to the lock-up agreements entered into in connection with this offering and federal securities laws, certain holders of shares of our common stock, including those shares of our common stock that will be issued upon the conversion of our redeemable convertible preferred stock in connection with this offering, will initially be entitled to certain rights with respect to registration of such shares under the Securities Act. These shares are referred to as registrable securities. The holders of these registrable securities possess registration rights pursuant to the terms of our amended and restated investors rights agreement, as amended, and are described in additional detail below. The registration of shares of our common stock pursuant to the exercise of the registration rights described below would enable the holders to trade these shares without restriction under the Securities Act when the applicable registration statement is declared effective. We will pay the registration expenses, other than underwriting discounts, selling commissions, stock transfer taxes, fees and disbursements of more than one special counsel for the holders, and the compensation of regular employees of the company, of the shares registered pursuant to the demand, piggyback, and Form S-3 registrations described below. Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions and limitations, to limit the number of shares the holders may include. The demand, piggyback, and Form S-3 registration rights described below will terminate upon the earliest to occur of (1) the date five years after the consummation of this offering or (2) with respect to each stockholder, such time after the completion of this offering at which Rule 144 of the Securities Act ( Rule 144 ) or another similar exemption under the Securities Act is available for the sale of all of such stockholder s shares without limitation, during a three-month period without registration. Demand Registration Rights Upon the completion of this offering, holders of up to approximately 17.8 million shares of our common stock issuable upon conversion of our outstanding redeemable convertible preferred stock will be entitled to certain demand registration rights. Beginning on the earlier of (i) September 16, 2025 and (ii) six months following the effectiveness of the registration statement of which this prospectus is a part, investors holding, collectively, not less than 20% of registrable securities may, on not more than two occasions, request that we register all or a portion of their shares, subject to certain specified exceptions. Such request for registration must cover securities the anticipated aggregate offering price of which is at least $25.0 million and the proposed sale price of which is at least $22.98 per share. If such holders exercise their demand registration rights, then holders of approximately 17.8 million shares of our common stock issuable upon conversion of our outstanding redeemable convertible preferred stock will be entitled to register their shares, subject to specified conditions and limitations in the corresponding offering. Piggyback Registration Rights In connection with this offering, holders of up to approximately 17.8 million shares of our common stock issuable upon conversion of our outstanding redeemable convertible preferred stock are entitled to their rights to notice of this offering and to include their shares of registrable securities in this offering. The requisite percentage of these stockholders have waived all such stockholders rights to notice of this offering and to include their shares of registrable securities in this offering. In the event that we propose to register any of our securities under the Securities Act in another offering, either for our own account or for the account of other security holders, the holders of registrable securities will be entitled to certain piggyback registration rights allowing them to include their shares in such registration, subject to specified conditions and limitations. S-3 Registration Rights Upon the completion of this offering, the holders of up to approximately 17.8 million shares of our common stock issuable upon conversion of our outstanding redeemable convertible preferred stock will initially be entitled to certain Form S-3 registration rights. Any holder or holders of registrable securities may, with respect to not more than two such registrations within any 12-month period, request that we register all or a portion of their shares on Form S-3 if we are qualified to file a registration statement on Form S-3, subject to specified exceptions. Such request for registration on Form S-3 must cover securities with aggregate proceeds, net of underwriting discounts and expenses related to the issuance, which equal or exceed $3.0 million. The right to have such shares registered on Form S-3 is further subject to other specified conditions and limitations. Anti-Takeover Provisions of Delaware Law and Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws Section 203 of the Delaware General Corporation Law We are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions: before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. In general, Section 203 defines a business combination to include the following: any merger or consolidation involving the corporation and the interested stockholder; any sale, transfer, pledge, or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; and the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges, or other financial benefits by or through the corporation. In general, Section 203 defines an interested stockholder as an entity or person who, together with the person s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price. Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws Among other things, our amended and restated certificate of incorporation and amended and restated bylaws will: permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences, and privileges as they may designate; provide that the authorized number of directors may be changed only by resolution of our board of directors; provide that our board of directors will be classified into three classes of directors, divided as nearly as equal in number as possible; provide that, subject to the rights of any series of preferred stock to elect directors, directors may only be removed for cause, which removal may be effected, subject to any limitation imposed by law, by the holders of at least 66 2/3% of the voting power of all of our then-outstanding shares of the capital stock entitled to vote generally at an election of directors; provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent or electronic transmission; provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing and also specify requirements as to the form and content of a stockholder s notice; provide that special meetings of our stockholders may be called only by our board of directors pursuant to a resolution adopted by a majority of the total number of directors constituting the board, and not by our stockholders; and not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose. The amendment of any of these provisions would require approval by the holders of at least 66 2/3% of the voting power of all of our then-outstanding common stock. The combination of these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Because our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to effect a change in control of our company. These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in control or management of our company. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts. We believe that the benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company, outweigh the disadvantages of discouraging takeover proposals because negotiation of takeover proposals could result in an improvement of their terms. Choice of Forum Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim of breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws (as either may be amended from time to time); or any action asserting a claim against us that is governed by the internal affairs doctrine; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. Our amended and restated certificate of incorporation will also provide that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees, or agents and arising under the Securities Act. Nothing in our amended and restated certificate of incorporation or amended and restated bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in state or federal court, subject to applicable law. If any action the subject matter of which is within the scope described above is filed in a court other than a court located within the State of Delaware (a Foreign Action ), in the name of any stockholder, such stockholder shall be deemed to have consented to the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the applicable provisions of our amended and restated certificate of incorporation and having service of process made upon such stockholder in any such action by service upon such stockholder s counsel in the Foreign Action as agent for such stockholder. Although our amended and restated certificate of incorporation will contain the choice of forum provision described above, it is possible that a court could find that such a provision is inapplicable for a particular claim or action or that such provision is unenforceable. This choice of forum provision may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees, or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Furthermore, the enforceability of similar choice of forum provisions in other companies certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. Limitations on Liability and Indemnification For a discussion of liability and indemnification, see the section titled Management Limitations on Liability and Indemnification Matters. Listing We have applied to list our common stock on the Nasdaq Global Market under the trading symbol CBLL. Transfer Agent and Registrar Upon completion of this offering, the transfer agent and registrar for our common stock will be Broadridge Corporate Issuer Solutions, LLC. The transfer agent and registrar s address is 51 Mercedes Way, Edgewood, NY 11717. Shares Eligible for Future Sale Prior to this offering, there has been no public market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of our common stock, including shares issued upon the exercise of outstanding options or warrants or upon settlement of RSUs, in the public market after the completion of this offering, or the perception that those sales may occur, could adversely affect the prevailing market price for our common stock from time to time or impair our ability to raise equity capital in the future. As described below, only a limited number of shares of our common stock will be available for sale in the public market for a period of several months after the completion of this offering due to contractual and legal restrictions on resale described below. Future sales of our common stock in the public market either before or after restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price of our common stock at such time and our ability to raise equity capital at a time and price we deem appropriate. Sale of Restricted Shares Based on the number of shares of our common stock outstanding as of June 30, 2024, upon the completion of this offering and assuming (i) the Preferred Stock Conversion, (ii) no exercise of the underwriters option to purchase additional shares of our common stock, and (iii) no exercise of outstanding options or warrants, we will have outstanding an aggregate of 34,018,654 shares of common stock. Of these shares, all of the 10,606,060 shares of common stock to be sold in this offering will be freely tradable in the public market without restriction or further registration under the Securities Act, unless the shares are held by any of our affiliates as such term is defined in Rule 144. All remaining shares of common stock held by existing stockholders will be restricted securities, as such term is defined in Rule 144. These restricted securities were issued and sold by us in private transactions and are eligible for public sale only if registered under the Securities Act or if they qualify for an exemption from registration under the Securities Act, including the exemptions provided by Rule 144 or Rule 701 of the Securities Act ( Rule 701 ), which rules are summarized below. As a result of the lock-up agreements and market standoff restrictions referred to below and the provisions of Rule 144 and Rule 701, based on the number of shares of our common stock outstanding (calculated as of June 30, 2024 on the basis of the assumptions described above and assuming no exercise of the underwriters option to purchase additional shares, if any, and no exercise of outstanding options or warrants), the shares of our common stock (excluding the shares sold in this offering) that will be available for sale in the public market are as follows: Approximate number of shares First date available for sale into public market 23.4 million shares 181 days after the date of this prospectus, upon expiration of the lock-up agreements and market standoff restrictions referred to below, subject in some cases to applicable volume, manner of sale and other limitations under Rule 144 and Rule 701. We may issue shares of common stock from time to time as consideration for future acquisitions, investments, or other corporate purposes. In the event that any such acquisition, investment, or other transaction is significant, the number of shares of common stock that we may issue may in turn be significant. We may also grant registration rights covering those shares of common stock issued in connection with any such acquisition and investment. In addition, the shares of common stock reserved for future issuance under the 2024 Plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, lock-up agreements, market standoff restrictions, a registration statement under the Securities Act, or an exemption from registration, including Rule 144 and Rule 701. Rule 144 Under Rule 144, as currently in effect, once we have been subject to the public company reporting requirements of the Exchange Act for at least 90 days, and we are current in our Exchange Act reporting at the time of sale, a person (or persons whose shares are required to be aggregated) who is not deemed to have been one of our affiliates for purposes of Rule 144 at any time during the 90 days preceding a sale and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months, including the holding period of any prior owner other than one of our affiliates, is entitled to sell those shares in the public market (subject to the lock-up agreement or market standoff restrictions referred to below, if applicable) without complying with the manner of sale, volume limitations, or notice provisions of Rule 144, but subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than affiliates, then such person is entitled to sell such shares in the public market without complying with any of the requirements of Rule 144 (subject to the lock-up agreement or market standoff restrictions referred to below, if applicable). In general, under Rule 144, as currently in effect, once we have been subject to the public company reporting requirements of the Exchange Act for at least 90 days, our affiliates, as defined in Rule 144, who have beneficially owned the shares proposed to be sold for at least six months, are entitled to sell in the public market, upon expiration of any applicable lock-up agreements or market standoff restrictions and within any three-month period, a number of those shares of our common stock that does not exceed the greater of: 1% of the number of shares of common stock then outstanding, which will equal approximately 340,187 shares of common stock immediately upon the completion of this offering (calculated as of June 30, 2024 on the basis of the assumptions described above and assuming no exercise of the underwriters option to purchase additional shares and no exercise of outstanding options or warrants subsequent to June 30, 2024); or the average weekly trading volume of our common stock on the Nasdaq Global Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. Such sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions, notice requirements, and requirements related to the availability of current public information about us. Notwithstanding the availability of Rule 144, the holders of substantially all of our restricted securities have entered into lock-up agreements or are subject to market standoff restrictions as referenced above, and their restricted securities will become eligible for sale (subject to the above limitations under Rule 144) upon the expiration of the restrictions set forth in those agreements. Rule 701 In general, under Rule 701 as currently in effect, any of our employees, directors, officers, consultants, or advisors who acquired common stock from us in connection with a written compensatory stock or option plan or other written agreement in compliance with Rule 701 before the effective date of the registration statement of which this prospectus is a part (to the extent such common stock is not subject to a lock-up agreement or market standoff restrictions) and who are not our affiliates as defined in Rule 144 during the immediately preceding 90 days, is entitled to rely on Rule 701 to resell such shares beginning 90 days after the date of this prospectus in reliance on Rule 144, but without complying with the notice, manner of sale, public information requirements, or volume limitation provisions of Rule 144. Persons who are our affiliates may resell those shares beginning 90 days after the date of this prospectus without compliance with minimum holding period requirements under Rule 144 (subject to the terms of the lock-up agreement or market standoff restrictions referred to below, if applicable). Lock-Up Agreements and Market Standoff Restrictions In connection with this offering, we, our directors, our executive officers, and certain other record holders that together represent approximately 90% of our outstanding common stock, stock options, warrants, RSUs, and other securities convertible into or exercisable or exchangeable for our common stock, have agreed, that without the prior written consent of the representatives on behalf of the underwriters, subject to certain exceptions, we and they will not, and will not publicly disclose an intention to, during the Lock-Up Period, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock; file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock; enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock; or make any demand for, or exercise any right with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock. These agreements are described in the section titled Underwriting. Furthermore, an additional approximately 10% of our outstanding common stock, stock options, warrants, RSUs, and other securities convertible into or exercisable or exchangeable for our common stock are subject to market standoff restrictions with us that include restrictions on the sale, transfer, or other disposition of shares during the Lock-Up Period. As a result of the foregoing, substantially all of our outstanding common stock, stock options, warrants, RSUs, and other securities convertible into or exercisable or exchangeable for our common stock are subject to a lock-up agreement or market standoff provisions during the Lock-Up Period. We have agreed to enforce all such market standoff restrictions on behalf of the underwriters and not to release, amend, or waive any such market standoff provisions during the Lock-Up Period without the prior consent of BofA Securities, Inc. and J.P. Morgan Securities LLC, on behalf of the underwriters, provided that we may release shares from such restrictions to the extent that it would be permissible to release such shares under the form of lock-up agreement with the underwriters signed by or that will be signed by certain record holders of our securities as described herein. Following the Lock-Up Period, and assuming that the representatives of the underwriters do not release any parties from these agreements, all of the shares of our common stock that are restricted securities or are held by our affiliates as of the date of this prospectus will be eligible for sale in the public market in compliance with Rule 144 under the Securities Act. Registration Rights Upon the completion of this offering, the holders of 17.8 million shares of our common stock will be entitled to rights with respect to the registration of their shares under the Securities Act, subject to the lock-up agreements described under Lock-Up Agreements and Market Standoff Restrictions above. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates, immediately upon the effectiveness of the relevant filed registration statement, subject to the terms of the lock-up agreements described above. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock. The requisite percentage of these stockholders have waived all such stockholders rights to notice of this offering and to include their shares of registrable securities in this offering. See the section titled Description of Capital Stock Registration Rights. Equity Incentive Plans We intend to file with the SEC a registration statement on Form S-8 under the Securities Act covering the shares of common stock subject to issuance upon the exercise of outstanding stock options and settlement of RSUs under the 2014 Plan and the EIP and reserved for issuance under the 2024 Plan and the ESPP. Such registration statement is expected to be filed and become effective as soon as practicable after the completion of this offering. Accordingly, shares registered under such registration statement will be available for sale in the open market following its effective date, subject to Rule 144 volume limitations, vesting restrictions, and the lock-up agreements and market standoff restrictions described above, if applicable. Rule 10b5-1 Trading Plans Certain of our employees, directors, and stockholders may adopt written plans, known as Rule 10b5-1 trading plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis to diversify their assets and investments. Under these Rule 10b5-1 trading plans, a broker may execute trades pursuant to parameters established by the employee, director, or stockholder when entering into the plan, without further direction from such employee, director, or stockholder. Such sales would not commence until the expiration of the applicable market standoff restrictions or lock-up agreements entered into by such employee, director, or stockholder in connection with this offering. Material U.S. Federal Income Tax Consequences to Non-U.S. Holders The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the purchase, ownership, and disposition of our common stock issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local, or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the Code ), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the IRS ), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership, and disposition of our common stock. This discussion is limited to Non-U.S. Holders that hold our common stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder s particular circumstances, including the impact of the Medicare contribution tax on net investment income and the alternative minimum tax. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation: U.S. expatriates and former citizens or long-term residents of the United States; persons holding our common stock as part of a hedge, straddle, or other risk reduction strategy or as part of a conversion transaction or other integrated investment; banks, insurance companies, and other financial institutions; brokers, dealers, or traders in securities; controlled foreign corporations, passive foreign investment companies, and corporations that accumulate earnings to avoid U.S. federal income tax; partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); tax-exempt organizations or governmental organizations; persons deemed to sell our common stock under the constructive sale provisions of the Code; persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation; tax-qualified retirement plans; and qualified foreign pension funds as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds. If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership, and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them. THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY. Definition of a Non-U.S. Holder For purposes of this discussion, a Non-U.S. Holder is any beneficial owner of our common stock that is neither a U.S. person nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following: an individual who is a citizen or resident of the United States; a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia; an estate, the income of which is subject to U.S. federal income tax regardless of its source; or a trust that (i) is subject to the primary supervision of a U.S. court and all substantial decisions of which are subject to the control of one or more United States persons (within the meaning of Section 7701(a)(30) of the Code), or (ii) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. Distributions As described in the section titled Dividend Policy, we do not anticipate paying any cash dividends in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder s adjusted tax basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described under the subsection titled Sale or Other Taxable Disposition below. Subject to the discussion below regarding effectively connected income, dividends paid to a Non-U.S. Holder will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable tax treaties. If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder s conduct of a trade or business within the United States. Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules. Sale or Other Taxable Disposition A Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless: the gain is effectively connected with the Non-U.S. Holder s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable); the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or our common stock constitutes a U.S. real property interest ( USRPI ) by reason of our status as a U.S. real property holding corporation ( USRPHC ) for U.S. federal income tax purposes. Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items. A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on gain realized upon the sale or other taxable disposition of our common stock, which may be offset by certain U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses. With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition of our common stock by a Non-U.S. Holder will not be subject to U.S. federal income tax if our common stock is regularly traded, as defined by applicable Treasury Regulations, on an established securities market, and such Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder s holding period. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules. Information Reporting and Backup Withholding Payments of dividends on our common stock will not be subject to backup withholding, provided the Non-U.S. Holder certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E, or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any distributions on our common stock paid to the Non-U.S. Holder, regardless of whether such distributions constitute dividends or whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting if the applicable withholding agent receives the certification described above or the Non-U.S. Holder otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-U.S. office of a non-U.S. broker that does not have certain enumerated relationships with the United States generally will not be subject to backup withholding or information reporting. Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder s U.S. federal income tax liability, provided the required information is timely furnished to the IRS. Additional Withholding Tax on Payments Made to Foreign Accounts Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act ( FATCA )) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or (subject to the proposed Treasury Regulations discussed below) gross proceeds from the sale or other disposition of, our common stock paid to a foreign financial institution or a non-financial foreign entity (each as defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and reporting obligations, (ii) the non-financial foreign entity either certifies it does not have any substantial United States owners (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (i) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain specified United States persons or United States owned foreign entities (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our common stock. While withholding under FATCA would have applied also to payments of gross proceeds from the sale or other disposition of our common stock beginning on January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued. Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our common stock. UNDERWRITING BofA Securities, Inc. and J.P. Morgan Securities LLC are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of shares of common stock set forth opposite its name below. Underwriter Number of Shares BofA Securities, Inc. J.P. Morgan Securities LLC William Blair & Company, L.L.C. TD Securities (USA) LLC Canaccord Genuity LLC Total 10,606,060 Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the underwriting agreement if any of these shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated. Sales of any shares made outside of the United States may be made by affiliates of the underwriters. We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities. The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel, or modify offers to the public and to reject orders in whole or in part. Commissions and Discounts The representatives have advised us that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. After the initial offering, the public offering price, concession, or any other term of the offering may be changed. The following table shows the public offering price, underwriting discount, and proceeds before expenses to us. The information assumes either no exercise or full exercise by the underwriters of their option to purchase additional shares. Per Share Without Option With Option Public offering price $ $ $ Underwriting discount $ $ $ Proceeds, before expenses, to us $ $ $ The expenses of the offering, not including the underwriting discount, are estimated at $4.6 million and are payable by us. We have also agreed to reimburse the underwriters for their expenses relating to clearance of this offering with the Financial Industry Regulatory Authority in an amount up to $50,000. Option to Purchase Additional Shares We have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to additional shares at the public offering price, less the underwriting discount. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter s initial amount reflected in the above table. No Sales of Similar Securities We, our executive officers and directors and our other existing security holders have agreed not to sell or transfer any common stock or securities convertible into, exercisable for or exchangeable for common stock (collectively, the Lock-Up Securities ) during the Lock-Up Period without first obtaining the written consent of the representatives. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly offer, pledge, sell or contract to sell any Lock-Up Securities, sell any option or contract to purchase any Lock-Up Securities, purchase any option or contract to sell any Lock-Up Securities, grant any option, right or warrant for the sale of any Lock-Up Securities, lend or otherwise dispose of or transfer any Lock-Up Securities, request or demand that we file or make a confidential submission of a registration statement related to the Lock-Up Securities, enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any Lock-Up Securities whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise, or publicly disclose the intention to do any of the foregoing. This lock-up provision applies to any Lock-Up Securities whether now owned or acquired later by the person executing the agreement or for which the person executing the agreement has or later acquires the power of disposition. The representatives, in their sole discretion, may release the Lock-Up Securities subject to the lock-up agreements described above in whole or in part at any time with or without notice. Furthermore, an additional approximately 10% of our Lock-Up Securities are subject to market standoff restrictions with us that include restrictions on the sale, transfer, or other disposition of shares during the Lock-Up Period. As a result of the foregoing, substantially all of our Lock-Up Securities are subject to a lock-up agreement or market standoff provisions during the Lock-Up Period. We have agreed to enforce all such market standoff restrictions on behalf of the underwriters and not to release, amend, or waive any such market standoff provisions during the Lock-Up Period without the prior consent of BofA Securities, Inc. and J.P. Morgan Securities LLC, on behalf of the underwriters, provided that we may release shares from such restrictions to the extent that it would be permissible to release under such shares the form of lock-up agreement with the underwriters signed by or that will be signed by certain record holders of our securities as described herein. Record holders of our securities are typically the parties to the lock-up agreements with the underwriters and the market standoff restrictions referred to above, while holders of beneficial interests in our shares who are not also record holders in respect of such shares are not typically subject to any such agreements or other similar restrictions. Accordingly, we believe that holders of beneficial interests who are not record holders and are not bound by market standoff restrictions or lock-up agreements could enter into transactions with respect to those beneficial interests that negatively impact our stock price. In addition, a security holder who is neither subject to market standoff restrictions with us nor a lock-up agreement with the underwriters may be able to sell, short sell, transfer, pledge, or otherwise dispose of or attempt to sell, short sell, transfer, hedge, pledge, or otherwise dispose of their equity interests at any time. Listing We have applied to list our common stock on the Nasdaq Global Market under the symbol CBLL. Before this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations between us and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are: the valuation multiples of publicly traded companies that the representatives believe to be comparable to us, our financial information, the history of, and the prospects for, our company and the industry in which we compete, an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues, the present state of our development, and the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours. An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial public offering price. The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority. Price Stabilization, Short Positions and Penalty Bids Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix, or maintain that price.
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+A Ordinary Shares. See "Summary of the Prospectus — Regulatory Matters," and "Risk Factors — Risks Related to Doing Business in China — The filing with the CSRC may be required in connection with future overseas fund-raising activities, and we cannot predict whether we will be able to obtain such approval or complete such filing." Cash may be transferred within the group in the following manner: (1) Cheche Group Inc. may transfer funds to its subsidiaries by way of capital contributions, inter-group advances or loans; (2) we and our subsidiaries may provide loans to the VIE and vice versa; (3) funds may be transferred from the VIE to WFOE, as service fees for services contemplated by the VIE agreements; and (4) our subsidiaries, including WFOE, may make dividends or other distributions to us. Cash is transferred within the group to satisfy working capital requirement of the respective operating entities, and is managed by our finance department based on fund control policy and procedure. None of us and our subsidiaries is able to make direct capital contributions to the VIE or its subsidiaries, and the VIE is not able to make dividends or other distributions to us. As an offshore holding company, we may use the proceeds of our offshore fund-raising activities to provide loans or make capital contributions to subsidiaries in mainland China and Hong Kong or provide loans to the VIE, in each case subject to the satisfaction of applicable regulatory requirements. In 2021 and 2022, cash in the form of loans in the amount of RMB215.6 million and RMB34.8 million was transferred from the Affiliated Entities to CCT and its PRC Subsidiaries. In the six months ended June 30, 2023, the repayment of the loans in the amount of RMB15.0 million was transferred from the Affiliated Entities to CCT and its PRC Subsidiaries. As of the date of this prospectus, no other transfers, dividends or distributions have been made among us, CCT, our subsidiaries and the VIE, or to investors; and no other cash flows and transfers of other assets by type have occurred among us, CCT, our subsidiaries, and the VIE. None of us, WFOE and the VIE intends to distribute earnings or settle amounts owed under the VIE agreements. See "Selected Historical Financial Data — Financial Information Related to the Affiliated Entities." In light of the holding company structure and the VIE structure as well as our operations through WFOE and the Affiliated Entities in China, our ability to pay dividends to the shareholders, and to service any debt we may incur, may highly depend upon dividends and other distributions on equity paid by WFOE to us, and service fees paid by the Affiliated Entities to WFOE, despite that we may obtain financing at the holding company level through other methods. We, WFOE and the Affiliated Entities in China are subject to certain statutory reserve and solvency conditions before they can distribute dividends or make payment to us, which, if failed, may restrict their ability to pay dividends or make payments to Cheche Group Inc., the Cayman Islands holding company, and thus significantly decline the value of our securities or cause it to be worthless. As of the date of this prospectus, none of us, WFOE and the VIE has ever declared any dividends or distributions to us or our respective shareholders outside of China. See "Summary of the Prospectus — Implication of Being a Company with the Holding Company Structure and the VIE Structure — Cash and Asset Flows through Organization." Our issued and outstanding share capital consists of Class A Ordinary Shares and Class B Ordinary Shares. Mr. Lei Zhang, our founder, chairman of the board of directors and chief executive officer (the "Founder"), beneficially owns all of such issued Class B Ordinary Shares and is able to exercise 49.5% of the total voting power of such issued and outstanding share capital. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. Each Class A Ordinary Share is entitled to one vote, and each Class B Ordinary Share is entitled to three votes. At the option of the holder of Class B Ordinary Shares, each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. See "Description of Our Securities." We are an "emerging growth company" as that term is used in the Jumpstart Our Business Startups Act of 2012, as amended, and, as such, may elect to comply with certain reduced public company reporting requirements in future reports. 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 of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, such as the rules regulating solicitation of proxies and certain insider reporting and short-swing profit rules. Moreover, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the corporate governance standards of the Nasdaq Stock Market. Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 17 of this prospectus and other risk factors contained in the documents incorporated by reference herein for a discussion of information that should be considered in connection with an investment in our securities. Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. PROSPECTUS DATED , 2024 TABLE OF CONTENTS Page ABOUT THIS ROSPECTUS ii FINANCIAL STATEMENT PRESENTATION iii INDUSTRY AND MARKET DATA iv FREQUENTLY USED TERMS v FORWARD-LOOKING STATEMENTS ix SUMMARY OF THE PROSPECTUS 1
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+This Registration Statement contains a prospectus relating to the initial public offering of Class A ordinary shares of Cantor Equity Partners I, Inc. for $10.00 per share. This Registration Statement also contains a prospectus relating to offers and sales of Class A ordinary shares of Cantor Equity Partners I, Inc. in connection with certain market making transactions that may be effected by Cantor Fitzgerald & Co. in the secondary market for 30 days following the date of this prospectus. The complete prospectus relating to the initial public offering of our Class A ordinary shares (the IPO Prospectus ) follows immediately after this Explanatory Note. Following the IPO Prospectus are certain pages of the prospectus relating solely to such market making transactions (together with the remainder of the prospectus as modified as indicated below, the Market Making Prospectus ), including an alternate front and back cover page, an alternate table of contents and alternate sections entitled Summary The Offering, Use of Proceeds and Plan of Distribution. Each of such alternate pages has been marked Alternate Page for Market Making Prospectus. The Market Making Prospectus will not include the information in the sections of the IPO Prospectus entitled Risk Factors Our sponsor paid an aggregate of $25,000 for the founder shares, or approximately $0.005 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class B ordinary shares., Risk Factors The determination of the offering price of our Class A ordinary shares and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our Class A ordinary shares properly reflects the value of such Class A ordinary shares than you would have in a typical offering of an operating company., Dilution, Capitalization, Use of Proceeds and Underwriting (Conflict of Interest). All other sections of the IPO Prospectus are to be used in the Market Making Prospectus. A complete version of each of the IPO Prospectus and the Market Making Prospectus will be filed with the U.S. Securities and Exchange Commission in accordance with Rule 424 under the Securities Act of 1933, as amended (the Securities Act ). Table of Contents The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED DECEMBER 18, 2024 $200,000,000 Cantor Equity Partners I, Inc. 20,000,000 Class A Ordinary Shares _________________________ Cantor Equity Partners I, Inc. is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any discussions, directly or indirectly, with any business combination target regarding an initial business combination with our company. This is an initial public offering of our Class A ordinary shares at an offering price of $10.00 per share. Unlike in the initial public offerings by certain other special purpose acquisition companies, this is not an offering of units and investors will not receive warrants that would become exercisable following the completion of our initial business combination. We have until the date that is 24 months from the closing of this offering or until such earlier liquidation date as our board of directors may approve, to consummate our initial business combination. If we are unable to complete our initial business combination within 24 months from the closing of this offering and we do not seek shareholder approval to amend our amended and restated memorandum and articles of association to extend the date by which we must consummate our initial business combination, or by such earlier liquidation date as our board of directors may approve, we will redeem 100% of the Class A ordinary shares sold in this offering at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned thereon (less taxes paid and payable), divided by the number of then issued and outstanding public shares, subject to applicable law and certain conditions as further described herein. We will provide our public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or vote against, our initial business combination, all or a portion of their Class A ordinary shares that are sold in this offering, which we refer to collectively as our public shares, upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account, less taxes payable (excluding any excise tax), divided by the number of then outstanding public shares, subject to the limitations and conditions described herein. See Summary The Offering Redemption rights for our public shareholders upon completion of our initial business combination on page 24, Summary The Offering Redemption rights in connection with proposed amendments to our memorandum and articles of association on page 28, Summary The Offering Redemption of public shares and distribution and liquidation if no initial business combination on page 29 and Summary The Offering Manner of Conducting Redemptions on page 25 for more information, including for details related to limitations and conditions to effecting redemption rights. Our sponsor has also agreed to lend us up to $3,000,000, which we refer to herein as the sponsor note, which sponsor note will be drawn by us in connection with the consummation of our initial business combination, an extension of time for us to consummate an initial business combination or our liquidation (each, a Redemption Event ), such that an amount equal to $0.15 per public share being redeemed in connection with the applicable Redemption Event will be added to the trust account and paid to the holders of the applicable redeemed shares on such Redemption Event. The sponsor note will not bear interest and will be convertible at our sponsor s option into Class A ordinary shares at a conversion price of $10.00 per share no earlier than 60 days after the date of this offering. Otherwise, the sponsor note will be repaid by us at the closing of our initial business combination. If we are unable to consummate an initial business combination, the outstanding amounts under the sponsor note would be repaid only out of funds held outside of the trust account. See Summary The Offering Sponsor note on page 19 for more information about the sponsor note. Table of Contents Notwithstanding the redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct repurchases in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the Exchange Act )), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering without our prior consent. However, we would not be restricting our shareholders ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination. See Summary The Offering Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold a shareholder vote on page 27 for further discussion on certain limitations on redemption rights. Our sponsor, Cantor EP Holdings I, LLC, has agreed to purchase 500,000 Class A ordinary shares at a price of $10.00 per share ($5,000,000 in the aggregate) in a private placement that will close simultaneously with the closing of this offering. These Class A ordinary shares are identical to the Class A ordinary shares sold in this offering, subject to certain limited exceptions as described in this prospectus. Our sponsor has purchased 5,000,000 Class B ordinary shares for $25,000 (or approximately $0.005 per founder share), which will automatically convert into non-redeemable Class A ordinary shares in connection with the consummation of our initial business combination or at any time and from time to time at the option of the holder thereof, as described herein. See Summary The Offering Sponsor Information on page 10 for further discussion on our sponsor s and our affiliates shares and compensation. Prior to the closing of our initial business combination, only holders of our Class B ordinary shares (i) will have the right to appoint and remove directors prior to or in connection with the completion of our initial business combination and (ii) will be entitled to vote on continuing our company in a jurisdiction outside the Cayman Islands (including any special resolution required to adopt new constitutional documents as a result of our approving a transfer by way of continuation to a jurisdiction outside the Cayman Islands). On any other matters submitted to a vote of our shareholders prior to or in connection with the completion of our initial business combination, holders of our Class B ordinary shares and holders of our Class A ordinary shares will vote together as a single class, except as required by law. The Class B ordinary shares will automatically convert into non-redeemable Class A ordinary shares in connection with the consummation of our initial business combination or at any time and from time to time at the option of the holder thereof, on a one-for-one basis, subject to adjustment for share sub-divisions, share dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold pursuant to this offering and related to the closing of the initial business combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares issued and outstanding upon the completion of this offering (not including the private placement shares) plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial business combination). This may result in material dilution of the public shares. Class A ordinary shares issued in connection with the conversion of our Class B ordinary shares issued prior to the consummation of our initial business combination are subject to the same restrictions as applicable to the Class B ordinary shares prior to such conversion including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial business combination as described elsewhere in this prospectus. See Summary The Offering Founder shares on page 15, Summary The Offering Transfer restrictions on founder shares on page 17 and Summary The Offering Founder shares conversion and anti-dilution rights on page 18 for more information about our sponsor s founder shares. As more fully discussed in Management Conflicts of Interest on page 140, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities and there may be actual material conflicts of interest between our sponsor, its affiliates, our officers and directors, or promoters, on the one hand, and purchasers in this offering, on the other hand. Cantor will be the beneficial owner of founder shares Table of Contents and private placement shares following this offering by virtue of its ownership of our sponsor, and members of our management team may indirectly own such securities. Because of such ownership and interests, Cantor, and any of our officers and directors who have an ownership interest in or are employed by Cantor, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Additionally, our officers and directors may have conflicts of interest with other entities to which they owe fiduciary or contractual obligations with respect to initial business combination opportunities, including the Active Cantor SPACs (as defined herein). See the sections titled Summary Conflicts of Interest on page 31, Proposed Business Sources of Target Business on page 114 and Management Conflicts of Interest on page 140, for more information. The low price that our sponsor paid for the founder shares (approximately $0.005 per share) creates an incentive whereby our sponsor could potentially make a substantial profit even if we select an acquisition target that subsequently declines in value and is unprofitable for public shareholders. If we are unable to complete our initial business combination within 24 months from the closing of this offering, or by such earlier or later liquidation date as our board of directors or shareholders may approve, the founder shares and private placement shares may expire worthless, except to the extent the holders thereof receive liquidating distributions from assets outside the trust account, which could create an incentive for our sponsor and our executive officers and directors who have an ownership interest or are employed by Cantor to complete a transaction even if we select an acquisition target that subsequently declines in value and is unprofitable for public shareholders. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement with respect to our initial business combination. Additionally, we will reimburse our sponsor $10,000 per month for office space, administrative and shared personnel support services made available to us, and we will pay cash fees to our independent directors of $50,000 per year, payable quarterly, each as described elsewhere in this prospectus. Upon consummation of this offering, we will repay up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses. Further, upon consummation of our initial business combination, unless converted into Class A ordinary shares by our sponsor, we will be obligated to repay the up to $1,750,000 loan commitment made by our sponsor for working capital and the up to $3,000,000 sponsor note, each of which does not bear interest, and any other working capital loans made by our sponsor or any of its affiliates. Such working capital loans and the sponsor note will also be convertible at the sponsor s option into Class A ordinary shares at a conversion price of $10.00 per share no earlier than 60 days after the date of this offering. Further, Cantor Fitzgerald & Co. ( CF&Co. ), an affiliate of our sponsor, will be entitled to receive an underwriting discount of $4,000,000 upon the closing of this offering, a business combination marketing fee of $7,000,000 upon the closing of our initial business combination and such other fees in connection with any additional financial advisory, placement agency or other similar investment banking services it may provide to us in the future. As a result, there may be actual or potential material conflicts of interest between our sponsor and our management team and their respective affiliates on the one hand, and purchasers in this offering on the other hand. See Summary The Offering Limited payments to insiders on page 30, Summary The Offering Sponsor Information on page 10 and Proposed Business Sponsor Information on page 109, for further discussion on our sponsor s and our affiliates shares and compensation. Currently, there is no public market for our Class A ordinary shares. We intend to apply to list our Class A ordinary shares on the Nasdaq Global Market, or Nasdaq, under the symbol CEPO . We expect that our Class A ordinary shares will be listed on the Nasdaq Global Market on or promptly after the date of this prospectus. We cannot guarantee that our Class A ordinary shares will be approved for listing on Nasdaq. We are an emerging growth company and a smaller reporting company under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See Risk Factors beginning on page 40 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Table of Contents No offer or invitation, whether directly or indirectly, is being or may be made to the public in the Cayman Islands to subscribe for any of our securities. Per Share Total Public offering price $ 10.00 $ 200,000,000 Underwriting discounts and commissions(1) $ 0.20 $ 4,000,000 Proceeds, before expenses, to Cantor Equity Partners I, Inc. $ 9.80 $ 196,000,000 ____________ (1) We will also pay $100,000 to Odeon Capital Group LLC for acting as a qualified independent underwriter in this offering. See the section of this prospectus entitled Underwriting (Conflicts of Interest) beginning on page 176 for a description of compensation and other items of value payable to the underwriters. Of the proceeds we receive from this offering and the sale of the private placement shares, $200,000,000 ($10.00 per public share) will be deposited into a trust account in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee, and $1,000,000, together with $1,750,000 of additional committed loans by our sponsor, will be available to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering. Because our sponsor acquired the founder shares at a nominal price (approximately $0.005 per share), our public shareholders will incur an immediate and substantial dilution upon the closing of this offering. Further, the Class A ordinary shares issuable in connection with the conversion of the founder shares may result in material dilution to our public shareholders due to the anti-dilution rights of our founder shares that may result in an issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion, and the issuance of Class A ordinary shares to our sponsor upon the conversion of any loans made by our sponsor may also cause material dilution to our public shareholders. See the sections titled Risk Factors Risks Relating to our Management Team The nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of our public shares upon the consummation of our initial business combination and our sponsor is likely to make a substantial profit on its investment in us in the event we consummate an initial business combination, even if the business combination causes the trading price of our ordinary shares to materially decline. on page 66 and Risk Factors Risks Relating to our Management Team The value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our ordinary shares at such time is substantially less than $10.15 per share. on page 67. The following table illustrates the difference between the public offering price per Class A ordinary share and our net tangible book value per Class A ordinary share ( NTBV ), as adjusted to give effect to this offering and assuming the redemption of our public shares at varying levels. See the section titled Dilution on page 92 for more information. As of September 30, 2024 Offering Price of $10.00 per Class A ordinary share 25% of Maximum Redemptions 50% of Maximum Redemptions 75% of Maximum Redemptions Maximum Redemptions NTBV NTBV Difference between NTBV and Offering Price NTBV Difference between NTBV and Offering Price NTBV Difference between NTBV and Offering Price NTBV Difference between NTBV and Offering Price $ 7.58 $ 6.99 $ 3.01 $ 6.01 $ 3.99 $ 4.11 $ 5.89 $ (1.24 ) $ 11.24 The underwriters are offering the Class A ordinary shares for sale on a firm commitment basis. The underwriters expect to deliver the Class A ordinary shares to the purchasers on or about , 2024. Sole Book-Running Manager Cantor , 2024 Table of Contents TABLE OF CONTENTS Page Summary 1
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our financial statements and the related notes and the information set forth under the headings Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations in each case included elsewhere in this prospectus. Unless otherwise stated or the context requires otherwise, references in this prospectus to Panbela, the Company, we, us, our and similar references refer to Panbela Therapeutics, Inc. and its subsidiaries. Business Overview Panbela is a clinical stage biopharmaceutical company developing disruptive therapeutics for the treatment of patients with urgent unmet medical needs. We are currently enrolling patients in our randomized double-blind placebo controlled clinical trial for the treatment of pancreatic cancer and we are a regulatory and commercial collaborator in a Phase III clinical trial funded by the National Cancer Institute (the NCI ) for the study of colon cancer risk reduction and colon adenoma therapy ( CAT ), a preventative treatment approach for survivors of colorectal cancer or those who have high-risk colon polyps. In addition, the Company is designing a global protocol for a Phase III registration trial for familial adenomatous polyposis ( FAP ), a rare inherited condition that can cause the growth of thousands of colorectal adenomas (i.e., adenomatous polyps), which are recognized as a key risk factor for colon cancer. The global protocol will be submitted to the U.S. Federal Drug Administration ( FDA ) and European Medicines Agency ( EMA ) for agreement on the registration pathway. By leveraging Panbela s extensive experience with FAP and in designing global registration trials, the team can develop a high-quality trial protocol that meets the standards of regulatory agencies and is designed to demonstrate the potential safety and efficacy of Flynpovi efficiently and effectively in the treatment of FAP. We also support several investigator initiated trials and company sponsored preclinical trials including: (1) Phase II clinical trial for the treatment of early-onset type 1 diabetes funded by the Juvenile Diabetes Research Foundation; (2) Phase II clinical trial for treatment of gastric cancer funded by the NCI; (3) Phase I/II clinical trial for the treatment of non-small cell lung cancer (NSCLC) possessing the STK11 mutation; (4) Phase II program for the treatment of Metastatic Castration-Resistant Prostate Cancer; and (5) preclinical studies that we have sponsored in the orphan disease and cancer fields. The Company s lead assets are ivospemin (SBP-101), FlynpoviTM (eflornithine (CPP-1X) and sulindac), and eflornithine (CPP-1X), which provides a multi-targeted approach to reset dysregulated biology present in many types of diseases such as cancer and autoimmune disorders. Many tumors require greatly elevated levels of polyamines to support their growth and survival. These agents target the polyamine pathway at complementary junctions, which have been shown to be altered in disease. In particular, our lead assets have the potential to suppress and prevent tumor growth, enhance anti-tumor activity of other anti-cancer agents, and modulate the immune system. Ivospemin is a proprietary polyamine analogue designed to induce polyamine metabolic inhibition. Ivospemin has demonstrated encouraging activity against metastatic disease in a clinical trial of patients with pancreatic cancer. The efficacy and safety results demonstrated in our completed Phase I clinical trial of ivospemin in combination with gemcitabine and nab-paclitaxel in the first line treatment of metastatic pancreatic cancer provide support for the current randomized, double-blind, placebo-controlled study of ivospemin in combination with gemcitabine and nab-paclitaxel in patients previously untreated for metastatic pancreatic cancer. We believe that ivospemin, if successfully developed, may represent a novel approach that effectively treats patients with pancreatic cancer and could become a dominant product in that market. In the past decade, two combination chemotherapy regimens, a quadruplet of fluorouracil, leucovorin, irinotecan, and oxaliplatin (FOLFIRINOX) and a doublet, nab-paclitaxel and gemcitabine have been utilized as first-line standard of care. The first was based on a phase III trial but not FDA approved and the latter based on a phase III trial which led to FDA approval. Most recently, the FDA approved Onivyde (irinotecan liposome injection) plus oxaliplatin, fluorouracil and leucovorin (NALIRIFOX) as a first-line treatment in adults living with metastatic pancreatic adenocarcinoma ( mPDAC ). This is the first FDA approval in first line mPDAC in over ten years. Ivospemin has received Fast Track status and orphan drug designation status for pancreatic cancer in the United States and we have also received orphan drug designation in Europe. Panbela Therapeutics, Inc. Notes to Condensed Consolidated Financial Statements 1. Business Panbela Therapeutics, Inc. ( Panbela ) and its direct wholly owned subsidiaries: Panbela Research, Inc. ( Panbela Research ) Cancer Prevention Pharmaceuticals, Inc. ( CPP ) and Cancer Prevention Pharma (Ireland) Limited ( Cancer Prevention ) exist for the primary purpose of developing disruptive therapeutics for the treatment of patients with urgent unmet medical needs. Panbela Therapeutics Pty Ltd is a wholly owned subsidiary of Panbela Research organized under the laws of Australia. Cancer Prevention has two wholly owned dormant subsidiaries: Cancer Prevention Pharma Limited, a United Kingdom entity, and Cancer Prevention Pharmaceuticals, LLC, an Arizona limited liability company. Panbela Therapeutics, Inc., together with its direct and indirect subsidiaries are collectively referred to throughout this report as we, us, our, and the Company. The primary objective of our pipeline is the utilization of pharmacotherapies to reduce or normalize increased disease-associated polyamines using complementary pharmacotherapies. Our lead candidates are ivospemin (SBP-101) for which we have exclusively licensed the worldwide rights from the University of Florida Research Foundation, Inc., Flynpovi a combination of eflornithine (CPP-1X) and sulindac and eflornithine (CPP-1X) alone in tablet or sachet form. We have exclusively licensed rights from the Arizona Board of Regents of the University of Arizona to commercialize Flynpovi. Reverse stock splits Effective January 13, 2023, June 1, 2023, and January 18, 2024, the Company's Board of Directors approved one-for-forty, one-for-thirty, and one-for-twenty reverse stock splits of its common stock, respectively. The par value and authorized shares of the Company's common stock were not affected by the reverse stock splits. Unless specifically provided otherwise herein, all share and per share amounts of our common stock presented have been retroactively adjusted to reflect all reverse stock splits. See Note 7 for more information. 2. Risks and Uncertainties The Company operates in a highly regulated and competitive environment. The development, manufacturing and marketing of pharmaceutical products require approval from, and are subject to ongoing oversight by, the Food and Drug Administration (the FDA ) in the United States, the Therapeutic Goods Administration in Australia, the European Medicines Agency in the European Union, and comparable agencies in other countries. Obtaining approval for a new pharmaceutical product is never certain, may take many years, and is normally expected to involve substantial expenditures. On March 5, 2024, the Nasdaq Stock Market LLC ( Nasdaq ) notified us that the Nasdaq Hearings Panel had determined to delist our common stock and trading of our common stock was suspended on Nasdaq effective March 7, 2024. On April 17, 2024, our common stock became eligible for quotation on the OTCQB. Also in April 2024, Nasdaq filed a Form 25 Notification of Removal from Listing with the U.S. Securities and Exchange Commission (the SEC ) and the delisting of our common stock from Nasdaq became effective ten days later. We have applied to relist our common stock on the Nasdaq. No assurances can be given that we will satisfy the initial listing criteria, the application will be approved, or, if listed, that a trading market will develop or be maintained. In the interim, we intend to maintain the existing eligibility for quotation of our common stock on the OTCQB under its current symbol, PBLA. We have incurred losses of $139.8 million since our inception in 2011. For the six months ended June 30, 2024, we incurred a net loss of $14.3 million. We also incurred negative cash flows from operating activities of approximately $10.4 million for this period. As we continue to pursue development activities and seek commercialization, we expect to incur substantial losses, which are likely to generate negative net cash flows from operating activities. As of June 30, 2024, we had cash of approximately $59,000, working capital deficit of $16.0 million, (working capital is defined as current assets less current liabilities), and stockholders deficit of $10.6 million. The Company s principal sources of cash have historically included the issuance of debt and equity securities. Our June 2022 acquisition of Cancer Prevention Pharmaceuticals, Inc. ( CPP ) added the Company s second lead asset, eflornithine, in multiple forms. First, an investigational new drug product, Flynpovi is a combination of the polyamine synthesis inhibitor eflornithine and the non-steroidal anti-inflammatory drug sulindac and then eflornithine as a single agent. Eflornithine is an enzyme-activated, irreversible inhibitor of the enzyme ornithine decarboxylase, the first rate-limiting enzyme in the biosynthesis of polyamines. Sulindac, a non-steroidal anti-inflammatory drug, facilitates the export and catabolism of polyamines. Flynpovi has a unique dual mechanism of action whereby it suppresses the synthesis of new polyamines and increases the export and catabolism of polyamines from the diet and microbiome. We believe Flynpovi is unique in that it is designed to treat the risk factors (e.g., polyps) that are hypothesized to lead to FAP surgeries and colon cancer and therefore may have the ability to prevent various types of colon cancer. In the FAP-310 Phase III trial, the efficacy and safety of the combination of Flynpovi (eflornithine and sulindac), as compared with either drug alone, in adults with FAP was conducted. While the study missed the primary composite endpoint (Burke et al. 2020), a post-hoc analysis showed that none of the patients in the combination arm progressed to a need for lower gastrointestinal ( LGI ) surgery for up to 48 months compared to 13.2% and 15.7% of patients in the sulindac and eflornithine arms (Balaguer et al. 2022). This data corresponded to risk reductions for the need for LGI surgery approaching 100% between combination and either monotherapy. Given the statistical significance of the LGI group, a new drug application ( NDA ) was filed with the FDA; however, since this was based on the results of an exploratory analysis, a complete response letter ( CRL ) was issued. To address the CRL, the Company is designing a Phase III registration trial and will advance this program while not increasing our current cash requirements. There are no currently approved pharmaceutical therapies for FAP. Additional programs are evaluating a single agent tablet eflornithine or high dose powder eflornithine sachets for several indications including prevention of gastric cancer, recent onset Type 1 diabetes, metastatic castration-resistant prostate cancer, and STK-11 mutant NSCLC. Preclinical studies and Phase I or Phase II investigator-initiated trials suggest that eflornithine treatment is well tolerated and has potential activity. Flynpovi has received Fast Track designation in the United States and orphan drug designation status for FAP in the United States and Europe. In addition, we have received orphan drug designation status for eflornithine as a single agent for Neuroblastoma in the United States and Europe and for gastric cancer in the United States. Clinical Trials Ivospemin (SBP-101) In August 2015, the FDA accepted our Investigational New Drug ( IND ) application for our ivospemin product candidate. We have completed an initial clinical trial of ivospemin in patients with previously treated locally advanced or metastatic pancreatic cancer. This was a Phase I, first-in-human, dose-escalation, safety study. From January 2016 through September 2017, we enrolled twenty-nine patients into six cohorts, or groups, in the dose-escalation phase of the Phase I trial. No drug-related bone marrow toxicity or peripheral neuropathy was observed at any dose level. In addition to being evaluated for safety, 23 of the 29 patients were evaluable for preliminary signals of efficacy prior to or at the eight-week conclusion of their first cycle of treatment using the Response Evaluation Criteria in Solid Tumors ( RECIST ), the currently accepted standard for evaluating change in the size of tumors. In 2018, we began enrolling patients in our second clinical trial, a Phase Ia/Ib study of the safety, efficacy, and pharmacokinetics of ivospemin administered in combination with two standard-of-care chemotherapy agents, gemcitabine and nab-paclitaxel. A total of 25 subjects were enrolled in four cohorts to evaluate the dosage level and schedule. An additional 25 subjects were enrolled in the expansion phase of the trial. Interim results were presented in January of 2022. Best response in evaluable subjects (cohorts 4 and Ib N=29) was a Complete Response in 1 (3%), Partial Response in 13 (45%), Stable Disease in 10 (34%) and Progressive Disease in 5 (17%). One subject did not have post baseline scans with RECIST tumor assessments. Median Progression Free Survival ( PFS ), now final at 6.5 months may have been negatively impacted by drug dosing interruptions to evaluate potential toxicity. Median overall survival in Cohort 4 + Phase Ib was 12.0 months when data was presented in January 2022 and is now final at 14.6 months. Two patients from cohort 2 have demonstrated long term survival at data base lock on March 18, 2022. One at 30.3 months (final data) and one at 33.0 months and still alive. Seven subjects are still alive at data base lock, one from cohort 2 and six from cohort 4 plus Ib. In January of 2022, the Company announced the initiation of a new pancreatic cancer clinical trial. Referred to as ASPIRE, the trial is a randomized double-blind placebo-controlled trial in combination with gemcitabine and nab-paclitaxel, a standard pancreatic cancer treatment regimen, in patients previously untreated for metastatic pancreatic cancer. The trial will be conducted globally at approximately 95 sites in the United States, Europe and Asia Pacific. The ASPIRE trial will evaluate overall survival as the primary endpoint and will also be examined at the interim analysis. PFS will also be analyzed to provide additional efficacy evidence. This trial design was supported by the final data from the Phase Ia/Ib first line metastatic pancreatic cancer trial which completed enrollment in December of 2020. The ASPIRE study will enroll 600 subjects and is anticipated to take 36 months to complete enrollment with the interim analysis available in mid- 2024. The independent Data Safety Monitoring Board (DSMB) has met three times for a prespecified safety analysis, most recently in June 2024, and recommended the trial continue without modification. On January 25, 2024, the Company announced that the trial had exceeded 50% enrollment and projects that full enrollment will be completed by the first quarter of 2025. The interim data analysis based on overall survival was originally projected to be available by the middle of 2024. The Company announced on April 22, 2024 that the interim analysis is now expected in the first quarter of 2025, as the patients are living longer than expected which may suggest a survival benefit. On June 24, 2024, the Company reaffirmed the enrollment completion in Q1 2025, and the interim analysis is still expected in early 2025. As previously announced, our contract research organization ( CRO ) for the ASPIRE trial notified the Company of their intent to terminate our relationship as of June 15, 2024 if we were unable to pay the balance due within a satisfactory timeframe. In exchange for a $1.5 million payment made on July 26, 2024, our CRO for the ASPIRE trial has provided an extension of their intent to terminate our relationship to August 19, 2024. The payment to that CRO was funded by proceeds from a loan secured by the Company, as further described in both Note 4, titled Liquidity and Business Plan and Note 10, titled Subsequent Events . If we are unable to pay the remaining balance due, or unable to negotiate an extension, by August 16, 2024, the CRO will begin termination procedures as of August 19, 2024. The balance due totaled $11.2 million as of June 30, 2024, and is recorded in the Company s current liabilities. If the CRO terminates the relationship, the ASPIRE trial could be delayed. The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts of liabilities that might result from the outcome of these uncertainties. Our current independent registered public accounting firm included a paragraph emphasizing this going concern uncertainty in their audit report regarding our 2023 financial statements dated March 26, 2024. Our ability to continue as a going concern, realize the carrying value of our assets and discharge our liabilities in the ordinary course of business is dependent upon a number of factors, including our ability to obtain additional financing, the success of our development efforts, our ability to obtain marketing approval for our product candidates in the United States, Australia, the European Union or other markets and ultimately our ability to market and sell our product candidates. These factors, among others, raise substantial doubt about our ability to continue operations as a going concern. See Note 4 titled Liquidity and Business Plan. 3. Basis of Presentation We have prepared the accompanying interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States ( U.S. GAAP ) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission ( SEC ). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which, in the opinion of management, are necessary to present fairly our consolidated financial position, consolidated results of operations and consolidated cash flows for the periods and as of the dates presented. Our fiscal year ends on December 31. The condensed consolidated balance sheet as of December 31, 2023, was derived from audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes thereto included in our most recent filed Annual Report on Form 10-K and our subsequent filings with the SEC. The nature of our business is such that the results of any interim period may not be indicative of the results to be expected for the entire year. 4. Liquidity and Business Plan On July 24, 2024, Panbela and its wholly-owned subsidiary, CPP, entered into a Loan Agreement (the Loan Agreement ) with USWM, LLC ( USWM ) by executing and delivering to the Lender a Term Promissory Note (the USWM Term Note ). Pursuant to the Loan Agreement, Panbela and CPP obtained a term loan from USWM in the original principal amount of $1,500,000 (the USWM Loan ). The Loan Agreement and USWM Term Note are described in more detail in Note 10 titled Subsequent Events . On January 31, 2024, the Company completed a registered public offering of common stock and warrants to purchase shares of common stock which resulted in gross proceeds of approximately $9.0 million. During the year ended December 31, 2023, the Company completed two registered offerings of common stock and warrants to purchase shares of common stock. On June 21, 2023 and January 31, 2023, the Company completed registered public offerings for gross proceeds of approximately $8.5 million and $15.0 million, respectively. The Company provided inducement warrants to certain shareholders to exercise their warrants. On November 2, 2023 gross proceeds were approximately $1.9 million and on December 21, 2023 the gross proceeds were approximately $2.0 million from these transactions. During 2023, the Company also sold shares of common stock via an At the Market (ATM) facility with net proceeds of approximately $1.6 million. If we successfully complete all FDA recommended clinical studies, we intend to seek marketing authorization from the FDA, the EMA (European Union), and Therapeutic Goods Administration ( TGA ) (Australia). The submission fees in the US and Europe may be waived for ivospemin as it has been designated an orphan drug in these geographic regions. In early April 2024, the Company announced a poster presentation highlighting the results for ivospemin as a polyamine metabolism modulator in ovarian cancer at the American Association for Cancer Research Annual Conference. The poster concludes that the treatment of C57Bl/6 mice containing VDID8+ ovarian cancer with SBP-101 in combination with doxorubicin significantly prolonged survival and decreased overall tumor burden. The results suggest that SBP-101 in combination with doxorubicin may have a role in the clinical management of ovarian cancer, in particular the difficult to treat platinum-resistant population where few options exist, and the Company intends to continue pre-clinical and clinical studies in ovarian cancer. Additional preclinical work is underway evaluating ivospemin (also known as SBP-101) and eflornithine (also known as CPP-1X or DFMO) in multiple myeloma (cell lines). Data published in the November 2023, supplemental issue of the Journal Blood investigated the effects of polyamine inhibition by ivospemin and CPP-1X on myeloma cell lines growth and viability in vitro. Results showed that ivospemin and CPP-1X treatment significantly decreased cell proliferation and induced apoptosis in a panel of multiple myeloma cell lines. When ivospemin and CPP-1X were combined an almost complete abolition of cell growth occurred. These results demonstrate the anti-neoplastic potential of ivospemin and CPP-1X and offer a compelling rationale for its clinical development as a potentially promising treatment option for multiple myeloma. The work reflects the Company s on-going collaboration with researchers from The University of Texas MD Anderson Cancer Center for the evaluation of polyamine metabolic inhibitor therapies in combination with CAR-T cell therapies in preclinical models. FLYNPOVI In December 2009, the FDA accepted our IND application for the combination product, Flynpovi. Flynpovi showed promising results in an NCI supported randomized, placebo-controlled Phase IIb/III clinical trial to prevent recurrent colon adenomas, particularly high-risk pre-cancerous polyps in which 375 subjects who had resected sporadic adenoma were treated for 3 years with eflornithine (500 mg once a day) + sulindac (150 mg once a day [N = 191]) or matched placebo/placebo (N = 184). Results demonstrated a marked risk reduction (70%) in developing metachronous adenomas, 92% risk reduction in developing advanced adenomas, and 95% risk reduction in developing multiple adenomas with the active combination regimen compared to placebo (Meyskens et al. 2008). This combination regimen was generally well tolerated. Given the similar mechanism of disease in sporadic and FAP-associated adenomatous polyposis, and the mechanism of action of Flynpovi in prevention of progressive polyposis in both the general population with sporadic adenomas and in patients with FAP, a Phase III program in FAP, and a Phase III program to study colon cancer risk reduction in partnership with the Southwest Oncology Group (SWOG) and the NCI were initiated. In the FAP-310 Phase III study completed in 2019, the efficacy and safety of the combination of eflornithine and sulindac, as compared with either drug alone, in adults with familial adenomatous polyposis was conducted (Burke et al. 2020). The patients were randomly assigned in a 1:1:1 ratio to receive eflornithine, sulindac, or both once daily for up to 48 months. The primary end point, assessed in a time-to-event analysis, was disease progression, defined as a composite of major surgery, endoscopic excision of advanced adenomas, diagnosis of high-grade dysplasia in the rectum or pouch, or progression of duodenal disease. A total of 171 patients underwent randomization. Disease progression occurred in 18 of 56 patients (32%) in the eflornithine-sulindac group, 22 of 58 (38%) in the sulindac group, and 23 of 57 (40%) in the eflornithine group, with a hazard ratio of 0.71 (95% confidence interval [CI], 0.39 to 1.32) for eflornithine-sulindac as compared with sulindac (P = 0.29) and 0.66 (95% CI, 0.36 to 1.23) for eflornithine-sulindac as compared with eflornithine (Burke et al. 2020). Adverse and serious adverse events were similar across the treatment groups. In a post-hoc analysis, none of the patients in the combination arm progressed to a need for LGI surgery for up to 48 months compared with 7 (13.2%) and 8 (15.7%) patients in the sulindac and eflornithine arms (Balaguer et al. 2022). These data corresponded to risk reductions for the need for LGI surgery approaching 100% between combination and either monotherapy with HR = 0.00 (95% CI, 0.00-0.48; p = 0.005) for combination versus sulindac and HR = 0.00 (95% CI, 0.00-0.44; p = 0.003) for combination versus eflornithine. Given the statistical significance of the LGI group, an NDA was filed with the FDA. As the study failed to meet the primary endpoint, and the NDA was based on the results of an exploratory analysis, a complete response letter was issued. To address this deficiency concern, the Company must submit the results of one or more adequate and well-controlled clinical trials which demonstrate an effect on a clinical endpoint. In collaboration with the NCI, and SWOG, a Phase III clinical trial has been initiated to study the benefits of Flynpovi as a therapeutic treatment for use by colon cancer survivors. The trial is named PACES for Prevention of Adenomas and Cancer with eflornithine and sulindac. The PACES trial is funded by the NCI and managed by the Southwest Oncology Group ( SWOG ). This is an ongoing double-blind placebo-controlled trial of Flynpovi to prevent recurrence of high-risk adenomas and second primary colorectal cancers in patients with stage 0-III colon or rectal cancer, Phase III Preventing Adenomas of the Colon With Eflornithine and Sulindac ( PACES ). The purpose of this study is to assess whether Flynpovi (compared to corresponding placebos) has a reduced rate of cancer or high-risk adenoma recurrence compared to comparator arms after three years of daily dosing. We have exclusive rights to the data that comes from the trial for regulatory and commercial purposes. The Company is evaluating its options for CAT in the European Union and Asia. We need to raise additional capital to support our current business plans. We may seek to raise additional funds through various sources, such as equity and debt financing, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure additional sources of funds to support our operations, or if such funds are available to us, that such additional financing will be sufficient to meet our needs or on terms acceptable to us. This risk would increase if our clinical data were not positive or economic and market conditions deteriorate. Our future success is dependent upon our ability to obtain additional financing, the success of our development efforts, our ability to obtain marketing approval for our product candidates ivospemin, Flynpovi and eflornithine in the United States or other markets and ultimately our ability to market and sell product candidates. If we are unable to obtain additional financing when needed, if our clinical trials are not successful or if we are unable to obtain marketing approval, we would not be able to continue as a going concern and would be forced to cease operations and liquidate our company. There can be no assurances that we will be able to obtain additional financing on commercially reasonable terms, or at all. The sale of additional convertible debt or equity securities would likely result in dilution to our current stockholders. 5. Summary of Significant Accounting Policies Principles of consolidation The accompanying condensed consolidated financial statements include the assets, liabilities, and expenses of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of expenses during the reporting period. Actual results could differ from those estimates, particularly given the significant social and economic disruptions and uncertainties with the ongoing pandemic and control responses. Research and development costs Research and development costs include expenses incurred in the conduct of our clinical trials; for third-party service providers performing various testing and accumulating data related to our preclinical studies; sponsored research agreements; developing and scaling the manufacturing process necessary to produce sufficient amounts of drug product for our product candidates for use in our pre-clinical studies and human clinical trials; consulting resources with specialized expertise related to execution of our development plan for our product candidates; personnel costs, including salaries, benefits and share-based compensation; and costs to license and maintain licensed intellectual property. We charge research and development costs, including clinical trial costs, to expense when incurred. Our human clinical trials are, and will be, performed at clinical trial sites and are administered jointly by us with assistance from CROs. Costs of setting up clinical trial sites are accrued upon execution of the study agreement. Expenses related to the performance of clinical trials generally are accrued based on contracted amounts and the achievement of agreed upon milestones, such as patient enrollment, patient follow-up, etc. We monitor levels of performance under each significant contract, including the extent of patient enrollment and other activities through communications with the clinical trial sites and CROs, and adjust the estimates, if required, on a quarterly basis so that clinical expenses reflect the actual effort expended at each clinical trial site and by each CRO. The cost to secure certain third-party drug product for the clinical trials, which is often paid for in advance of delivery, is charged to research and development when it is received and available to be shipped to clinical sites. All material CRO contracts are terminable by us upon written notice, and we are generally only liable for actual effort expended by the CROs and certain non-cancelable expenses incurred at any point of termination. We expense costs associated with obtaining licenses for patented technologies when it is determined there is no alternative future use of the intellectual property subject to the license. In April 2023, the Company announced that it regained the North American rights to develop and commercialize Flynpovi in patients with FAP, as a result of the termination of the license agreement between CPP and One-Two Therapeutics Assets Limited effective July 4, 2023. Eflornithine (CPP-1X) and eflornithine sachets (CPP-1X-S) For the single agent eflornithine, there is a Phase I/II trial in STK11 mutation patients with non-small cell lung cancer and Phase II trial in Recent Onset Type I diabetes with eflornithine have been initiated and are enrolling. Recently, a phase II trial evaluating eflornithine and High Dose Testosterone With Enzalutamide in Metastatic Castration-Resistant Prostate Cancer started enrolling. Lastly, a Phase II trial evaluating eflornithine for the prevention of gastric cancer was completed in 2021 with data analysis ongoing. On June 10, 2024, the Company announced the Oral Presentation at Digestive Disease Week (DDW): Evaluation of the Safety and Efficacy of Eflornithine (Difluoromethylornithine, DFMO) in Patients with Gastric Premalignant Conditions in the High Incidence Areas of Latin America. The results of the study demonstrated that eflornithine reduced DNA damage long-term in patients after completing treatment, as measured by pH2AX immunostaining, a DNA damage marker was significantly lower at the 24 month vs. 18-month time point in the eflornithine group and unchanged in the placebo group. Recent Developments OTCQB Quotation On March 5, 2024, the Nasdaq Stock Market LLC ( Nasdaq ) notified us that the Nasdaq Hearings Panel had determined to delist our common stock and trading of our common stock was suspended on Nasdaq effective March 7, 2024. On April 17, 2024, our common stock became eligible for quotation on OTCQB, under the symbol PBLA. Also in April 2024, Nasdaq filed a Form 25 Notification of Removal from Listing with the U.S. Securities and Exchange Commission (the SEC ) and the delisting of our common stock from Nasdaq became effective ten days later. Intent to Seek Nasdaq Relisting We have applied to relist our common stock on the Nasdaq Capital Market under the symbol, PBLA. No assurances can be given that we will satisfy the initial listing criteria, the application will be approved, or that a trading market will develop or be maintained. We will not consummate this offering unless our common stock is approved for listing on Nasdaq. In the interim, we intend to maintain the existing eligibility for quotation of our common stock on the OTCQB under its current symbol. Reverse Stock Split
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+Table of Contents When the Index Change at the end of the Crediting Period is negative, your Policy will lose value only to the extent that the Index Account Option s downside protection does not protect you from loss. The downside protection provided by an Index Account Option will depend on its Downside Protection Type. We currently only offer Index Account Options with Buffer as the Downside Protection Type. Due to the operation of the Buffer, your investment will incur loss for negative Index performance beyond the Buffer Rate. If the negative Index performance does not go beyond the Buffer Rate, you will not incur any loss as a result of that negative Index performance. See AVAILABLE ALLOCATION ACCOUNTS DOWNSIDE PROTECTION TYPE: CALCULATING LOSS USING THE BUFFER for more information, including examples. For more information about how gains and losses are calculated at the end of the Crediting Period, as well as about Interim Values and the Performance Lock feature, including examples, see VALUING YOUR INVESTMENT IN AN INDEX ACCOUNT OPTION below. PERFORMANCE LOCK ACCOUNT The Performance Lock Account is an interest-bearing account to which your locked-in Interim Value (less any applicable charges) will be transferred upon exercising Performance Lock for an Index Account Option. The amount held in the Performance Lock Account will be credited compound interest daily based on the annual interest rate in effect on that day and will be reduced on a dollar for dollar basis for any fees, charges, or withdrawals deducted from the Performance Lock Account, until the next Allocation Anniversary. We may change the current annual interest rate for the Performance Lock Account at any time at our discretion, subject to a guaranteed minimum effective annual interest rate. The guaranteed minimum effective annual interest rate will be established on the Policy Date, and will be 1.00% or the guaranteed minimum interest rate required by state law, whichever is greater. You bear the risk that we will not credit interest at a rate greater than the guaranteed minimum effective annual interest rate. You may obtain the current annual interest rate online at https://www.transamerica.com/annuities/rila or upon request by contacting our Administrative Office or your financial intermediary. The Performance Lock Account is part of our Fixed Account. See VALUING YOUR INVESTMENT IN AN INDEX ACCOUNT OPTION PERFORMANCE LOCK for information about the Performance Lock feature. VALUING YOUR INVESTMENT IN AN INDEX ACCOUNT OPTION INDEX ACCOUNT OPTION VALUE The value of your investment in an Index Account Option at the end of a Crediting Period is your Index Account Option Value. Your Index Account Option Value is calculated using the following formula: Index Account Option Value = Index Base x (1 + Index Credit Rate) Index Credit Rate / Index Credit. The Index Credit Rate represents the percentage gain or loss that we apply to your Index Account at the end of the Crediting Period (i.e., your Index rate of return). Your gain or loss can also be expressed as a dollar amount, which we then refer to as the Index Credit. The Index Credit Rate and the Index Credit may be positive, negative, or zero. Index Base. Your Index Base generally represents your investment in the Index Account Option. The following is an example of how we calculate your Index Account Option Value at the end of a Crediting Period: Assume you invest $10,000 in an Index Account Option. At the beginning of the Crediting Period, your Index Base is $10,000. At the end of the Crediting Period, your Index Base is still $10,000 if there were no deductions for fees or charges or withdrawals before the end of the Crediting Period. At the end of the Crediting Period, we will apply the Index Credit Rate to your Index Base to calculate your Index Account Option Value. Assuming an Index Credit Rate of +10%, your Index Account Option Value would equal $11,000 (i.e., $10,000 x (1 + 10%) = $11,000). The Index Credit is +$1,000. Assuming an Index Credit Rate of -10%, your Index Account Option Value would equal $9,000 (i.e., $10,000 x (1 + -10%) = $9,000). The Index Credit is -$1,000. Table of Contents Transamerica Financial Life Insurance Company Notes to Financial Statements Statutory Basis (Dollars in Millions, Except per Share amounts) December 31, 2022 Aggregate Fair Value Admitted Value (Level 1) (Level 2) (Level 3) Admitted assets Cash equivalents and short-term investments, other than affiliates $ 157 $ 157 $ 84 $ 73 $ Bonds 4,536 5,243 378 4,158 Preferred stocks, other than affiliates 4 4 4 Common stocks, other than affiliates 6 6 3 3 Mortgage loans on real estate 1,637 1,853 1,637 Other invested assets 22 24 22 Derivative assets: Interest rate swaps 181 181 181 Currency swaps 20 12 20 Credit default swaps 4 5 4 Equity swaps 5 5 5 Equity futures 1 1 1 Derivative assets total 211 204 1 210 Policy loans 143 143 143 Securities lending reinvested collateral 309 309 183 126 Separate account assets 16,371 16,399 15,518 853 Liabilities Investment contract liabilities 4,236 4,245 1 4,235 Derivative liabilities: Interest rate swaps 212 216 212 Currency swaps 1 1 Equity swaps 7 7 7 Equity futures 1 1 1 Derivative liabilities total 221 224 1 220 Dollar repurchase agreements 20 20 20 Payable for securities lending 412 412 412 Payable for derivative cash collateral 51 51 51 Separate account liabilities 16,107 16,107 15,636 471 Table of Contents NEGATIVE ADJUSTMENTS TO INDEX BASE On the first day of the Crediting Period, your Index Base equals the dollar amount that you allocated to that Index Account Option. Your Index Base for that Index Account Option will not change unless you take any type of withdrawal from that Index Account Option (including an automatic withdrawal, minimum required distribution, surrender charge-free withdrawal, or any other withdrawal), before the end of the Crediting Period, in which case your Index Base will be subject to a negative adjustment at that time. The negative adjustment is a proportionate reduction to your Index Base. It is derived by reducing your Index Base by the same percentage as the percentage reduction to your Interim Value due to the amount of the withdrawal or the charge deducted (which is deducted from the Interim Value on a dollar for dollar basis). A negative adjustment to your Index Base could result in less gain (if any) or more loss at the end of a Crediting Period, perhaps significantly less gain or more loss, because the Index Credit Rate will be applied to a lower Index Base. All withdrawals taken from an Index Account Option before the end of a Crediting Period will trigger a negative adjustment to your Index Base. A negative adjustment to your Index Base may be greater than the amount withdrawn, or the charge deducted. A negative adjustment will also result in lower Interim Values for the remainder of the Crediting Period (because the interim rate of return will be applied to a smaller Index Base). There is no way to increase your Index Base during a Crediting Period, and therefore no way to reverse or offset the negative impact of a negative adjustment to your Index Base. For example, assume that your Index Base on the first day of a Crediting Period for an Index Account is $10,000. Further, assume that there are no deductions as a result of withdrawals from that Index Account until a given day before the end of the Crediting Period, on which day your Interim Value is $9,500 (before any deductions for withdrawals) and a total of $475 in withdrawals is deducted from that Index Account Option on that date. The $475 deduction would reduce your Interim Value to $9,025, representing a 5% reduction in your Interim Value (i.e., ($9,025 / $9,500) 1 = 5%). As such, your Index Base would likewise be reduced by 5% from $10,000 to $9,500 (i.e., ($10,000 x (1 + -5%) = $9,500), a negative adjustment to the Index Base of -$500. Please note that in this example, the negative adjustment to the Index Base (-$500) was greater than the reduction in the Interim Value (-$475). Continuing this example to the end of the Crediting Period, assume that there are no other deductions as a result of withdrawals from that Index Account Option before the end of the Crediting Period: Assuming an Index Credit Rate of +10%, your Index Account Option Value would equal $10,450 (i.e., $9,500 x (1 + 10%) = $10,450). The Index Credit is +$950. In comparison, had your original Index Base of $10,000 not been subject to the negative adjustment earlier in this example, the Index Account Option Value would have equaled $11,000 (i.e., $10,000 x (1 + 10%) = $11,000), and the Index Credit would have been +$1,000. Assuming an Index Credit Rate of -10%, your Index Account Option Value would equal $8,550 (i.e., $9,500 x (1 + -10%) = $8,550). The Index Credit is -$950. In comparison, had your original Index Base of $10,000 not been subject to the negative adjustment earlier in this example, the Index Account Option Value would have equaled $9,000 (i.e., $10,000 x (1 + -10%) = $9,000), and the Index Credit would have been -$1,000. See APPENDIX B: ADDITIONAL EXAMPLES FOR INDEX ACCOUNT OPTIONS for additional examples of negative adjustments. INTERIM VALUES We calculate the Interim Value of your investment in an Index Account Option each Business Day between the first and last day of the Crediting Period. The Interim Value on a given Business Day determines the amount available from that Index Account Option for withdrawals, Surrender, and the other transactions listed below. The Interim Value is calculated at the end of a Business Day. The Interim Value for an Index Account Option will generally change each Business Day, and the change may be positive or negative compared to the last Business Day (even when the Index has increased in value). You should understand that the Interim Value for an Index Account Option on a Business Day will not impact your investment in that Index Account Option unless one of the following transactions occurs on that Business Day: An amount is deducted from the Index Account Option as a result of a Surrender or withdrawal (including an automatic withdrawal, minimum required distribution, surrender charge-free withdrawal, or any other withdrawal); The Policy is annuitized; The death benefit is paid; or You exercise the Performance Lock feature (that Business Day being the Performance Lock Date). Table of Contents Transamerica Financial Life Insurance Company Notes to Financial Statements Statutory Basis (Dollars in Millions, Except per Share amounts) The following tables provide information about the Company s financial assets and liabilities measured at fair value as of December 31, 2023 and 2022: 2023 Level 1 Level 2 Level 3 Total Assets: Bonds Industrial and miscellaneous $ $ 4 $ $ 4 Total bonds 4 4 Preferred stock Industrial and miscellaneous 4 4 Total preferred stock 4 4 Common stock Industrial and miscellaneous 3 3 Total common stock 3 3 Cash equivalents and short-term investments Money market mutual funds 1,163 1,163 Total cash equivalents and short-term investments 1,163 1,163 Derivative assets 24 24 Other long term 3 3 Separate account assets 17,728 313 18,041 Total assets $ 18,891 $ 348 $ 3 $ 19,242 Liabilities: Derivative liabilities $ 1 $ 25 $ $ 26 Total liabilities $ 1 $ 25 $ $ 26 2022 Level 1 Level 2 Level 3 Total Assets: Bonds Industrial and miscellaneous $ $ 3 $ $ 3 Total bonds 3 3 Preferred stock Industrial and miscellaneous 4 4 Total preferred stock 4 4 Common stock Industrial and miscellaneous 3 3 6 Total common stock 3 3 6 Cash equivalents and short-term investments Money market mutual funds 84 62 146 Total cash equivalents and short-term investments 84 62 146 Derivative assets 1 187 188 Other long term 4 4 Separate account assets 15,518 403 15,921 Total assets $ 15,603 $ 666 $ 3 $ 16,272 Liabilities: Derivative liabilities $ 1 $ 187 $ $ 188 Total liabilities $ 1 $ 187 $ $ 188 Table of Contents In any of those circumstances, the transaction will be processed based on the Interim Value for that Index Account Option on that Business Day. If you have multiple ongoing Crediting Periods for Index Account Options that end at different times, the transactions listed above will be based on an Interim Value for some or all of your Index Account Options. For as long as you have multiple ongoing Crediting Periods for Index Account Options, there may be no time that any such transaction can be performed without the application of at least one Interim Value. Interim Values for an Index Account Option generally reflect less upside potential and less downside protection than would otherwise apply at the end of the Crediting Period. As such, when a transaction is processed based on an Interim Value, the Interim Value could reflect less gain or more loss (perhaps significantly less gain or more loss) than would be applied at the end of the Crediting Period. This means that there could be significantly less money available under your Policy for fees and charges, withdrawals, a Surrender, annuitization, and the death benefit. The application of an Interim Value may result in a loss to an Owner even if the reference Index at the time of withdrawal or Surrender or other transaction listed above is higher than at the beginning of the Crediting Period. If you use the Performance Lock feature to lock-in an Interim Value (less any applicable charges) that is lower than the amount you invested in that Index Account Option on the Crediting Period start date, you may be locking-in a loss. The Interim Value for an Index Account Option is calculated using the following formula: Index Base x (1 + Interim Value Index Credit Rate) Index Base. Similar to the end of a Crediting Period, we calculate Interim Values by applying a percentage gain or loss to your Index Base. Interim Value Index Credit Rate. The Interim Value Index Credit Rate is a rate of return that may be positive, negative, or zero. We calculate this interim rate of return differently than the Index Credit Rate at the end of the Crediting Period. Gains and losses for Interim Values are not directly tied to the performance of the Index for the Index Account Option. We calculate the Interim Value Index Credit Rate by using a formula that looks to changes in the values of certain financial instruments, including derivative instruments referencing the Index (Option Value) and fixed income instruments (Bond Reference Portfolio Yield). The values of these instruments can be affected by factors such as Index performance, volatility (based on availability of calculation data), and interest rates. This formula is designed to produce an estimated fair value for your investment in the Index Account Option on that Business Day. The estimated fair value is intended to reflect factors such as the likelihood, and magnitude of, a positive or negative Index Credit Rate at the end of the Crediting Period, the length of time remaining in the Crediting Period, and the risk of loss and the possibility of gain at the end of the Crediting Period. If a premium payment allocated to an Index Account Option is still within its six-year surrender charge period, then in addition to applicable surrender charges, the Interim Value formula described above includes an adjustment to the impact of fixed income markets on the Interim Value of your investment. In decreasing yield environments, this adjustment will serve to reduce the Interim Value. In increasing yield environments, this adjustment will serve to increase the Interim Value. The impact of the adjustment on Interim Value is at its greatest on the first day of the surrender charge period and lessens as the remaining number of days in the surrender charge period decreases. There is no adjustment if a premium payment allocated to an Index Account Option is outside of the six-year surrender charge period. Please note that a six-year surrender charge period applies to each premium payment, including the initial premium payment and any additional premium payment. Our process for calculating Interim Values is explained in detail in APPENDIX A: INTERIM VALUE CALCULATIONS AND EXAMPLES, including the formula we use to calculate the Interim Value Index Credit Rate. The following examples are intended to illustrate how an Interim Value is calculated. Assume that you purchase a Policy, and on the Policy Date, you invest $10,000 in an Index Account Option with a 1-year Crediting Period. Further, assume that you take no withdrawals from that Index Account Option, or exercise the Performance Lock feature, before the end of the Crediting Period. Based on these assumptions, Examples 1 and 2 illustrate the Interim Value calculation halfway through the Crediting Period with positive and negative market scenarios, respectively. Examples 3 and 4 illustrate the Interim Value calculation close to the end of the Crediting Period with positive and negative market scenarios, respectively. The Examples assume that the Interim Values are calculated 182 days (Examples 1 and 2) or 335 days (Examples 3 and 4) into the 6-year surrender charge period applicable to your premium payment. Table of Contents Transamerica Financial Life Insurance Company Notes to Financial Statements Statutory Basis (Dollars in Millions, Except per Share amounts) Bonds classified as Level 2 are valued using inputs from third party pricing services or broker quotes. Bonds classified as Level 3 are primarily those valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilize significant inputs that are not market observable. Preferred stock classified as Level 2 are valued using inputs from third party pricing services or broker quotes. Common stock classified as Level 2 are valued using inputs from third party pricing services or broker quotes. Common stock classified as Level 3 are comprised primarily of shares in the FHLB of New York, which are valued at par as a proxy for fair value as a result of restrictions that allow redemptions only by FHLB. Money market mutual funds and other cash or cash equivalents classified as Level 2 are valued using inputs from third party pricing services. Derivatives classified as Level 2 represent over-the-counter (OTC) contracts valued using pricing models based on the net present value of estimated future cash flows, directly observed prices from exchange-traded derivatives, other OTC trades, or external pricing services. Other long-term classified as Level 2 are comprised of surplus debentures, which are valued using inputs from third party pricing services or broker quotes. Separate account assets and liabilities are valued and classified in the same way as general account assets and liabilities (described above). The following tables summarize the changes in assets classified as Level 3 for 2023 and 2022: Beginning Balance at January 1, 2023 Transfers in (Level 3) Transfers out (Level 3) Total Gains (Losses) Included in Net income (a) Total Gains (Losses) Included in Surplus (b) Bonds Other $ $ $ $ (1 ) $ 1 Common stock $ 3 $ $ $ $ Total $ 3 $ $ $ (1 ) $ 1 Purchases Issuances Sales Settlements Ending Balance at December 31, 2023 Bonds Other $ $ $ $ $ Common stock $ $ $ $ $ 3 Total $ $ $ $ $ 3 (a) Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations (b) Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus Table of Contents Example 1 Example 2 Example 3 Example 4 Index Base $ 10,000 $ 10,000 $ 10,000 $ 10,000 Interim Value Index Credit Rate Option Value Current day 4.00 % -4.00 % 4.00 % -4.00 % First day of Crediting Period 2.00 % 2.00 % 2.00 % 2.00 % # of calendar days remaining in Crediting Period 183 183 30 30 # of calendar days in Crediting Period 365 365 365 365 ratio 0.5014 0.5014 0.0822 0.0822 Option Value rate 2.9973 % -5.0027 % 3.8356 % -4.1644 % Bond Reference Portfolio Yield Current day 1.93 % 1.93 % 2.46 % 2.46 % First day of Crediting Period 2.00 % 2.00 % 2.00 % 2.00 % Calendar days remaining/365.25 0.5010 0.5010 0.0821 0.0821 Bond Reference Portfolio Yield rate 0.0341 % 0.0341 % -0.0369 % -0.0369 % Days Remaining in Surrender Charge Period # of calendar days remaining in surrender charge period 2008 2008 1855 1855 # of calendar days in surrender charge period 2190 2190 2190 2190 1 - ratio 0.08311 0.08311 0.15297 0.15297 Interim Value Index Credit Rate 3.00 % -5.00 % 3.83 % -4.17 % Interim Value Index Base $ 10,000 $ 10,000 $ 10,000 $ 10,000 Interim Value Index Credit Rate 3.00 % -5.00 % 3.83 % -4.17 % Interim Value $ 10,300 $ 9,500 $ 10,383 $ 9,583 As previously noted, if a premium payment allocated to an Index Account Option is still within its 6-year surrender charge period, then in addition to applicable surrender charges, your Interim Values for that Index Account Option may be higher or lower than if the premium payment were outside of its surrender charge period. In comparison to the examples above, the table below shows what the Interim Value would have been in each example had the premium payment not been within its surrender charge period at those times (all other assumptions being the same): Interim Value Index Base $ 10,000 $ 10,000 $ 10,000 $ 10,000 Interim Value Index Credit Rate 3.03 % -4.97 % 3.80 % -4.20 % Interim Value $ 10,303 $ 9,503 $ 10,380 $ 9,580 See APPENDIX A: INTERIM VALUE CALCULATIONS AND EXAMPLES for detailed explanations and examples of Interim Value calculations. INDEX SUBSTITUTIONS During a Crediting Period, if an Index is discontinued, or if the calculation of the Index is substantially changed by the index provider, or if Index Values should become unavailable for any reason, we may substitute the Index with a new Index once we obtain all necessary regulatory approvals. We will notify you of any such substitution in writing. We will seek to notify you at least 30 days prior to substituting an Index for any Index Account Option in which you are invested. However, in the event that it is necessary to substitute on less than 30 days notice due to circumstances outside of our control, we will provide notice of the substitution as soon as practicable. If we substitute an Index, we will select a new Index that we determine in our judgment is comparable to the old Index. We may look at factors which include, but are not limited to, asset class, index composition, strategy, and index liquidity. If we substitute an Index during a Crediting Period, we will calculate the Index Change using the original Index up until the substitution date. After the substitution date, we will calculate the Index Change using the replacement Index, but with a revised Initial Index Value for the replacement Index. The revised Initial Index Value for the replacement Index will reflect the Index Change for the original Index from the start of the Crediting Period to the substitution date. We will use a similar process if multiple substitutions occur during a Crediting Period. The substitution of an Index will have no impact on the Index Account Option s Crediting Period, Growth Opportunity Type, Downside Protection Type, or any other features or rates for that Index Account Option other than the Index to which the Index Account Option is linked. This example is intended to show how we would calculate the Index Change during a Crediting Period in which an Index was substituted. Table of Contents Transamerica Financial Life Insurance Company Notes to Financial Statements Statutory Basis (Dollars in Millions, Except per Share amounts) Beginning Balance at January 1, 2022 Transfers in (Level 3) Transfers out (Level 3) Total Gains (Losses) Included in Net income (a) Total Gains (Losses) Included in Surplus (b) Common stock $ 7 $ $ $ (3 ) $ (1 ) Total $ 7 $ $ $ (3 ) $ (1 ) Purchases Issuances Sales Settlements Ending Balance at December 31, 2022 Common stock $ $ $ $ $ 3 Total $ $ $ $ $ 3 (a) Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations (b) Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period. 5. Investments Bonds and Stocks The carrying amounts and estimated fair value of investments in bonds and stocks are as follows: Book Adjusted Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2023 Bonds: United States Government and agencies $ 327 $ 7 $ 29 $ 305 State, municipal and other government 117 1 16 102 Hybrid securities 41 4 37 Industrial and miscellaneous 3,473 37 465 3,045 Mortgage and other asset-backed securities 995 19 108 906 Total unaffiliated bonds 4,953 64 622 4,395 Unaffiliated preferred stocks 4 4 $ 4,957 $ 64 $ 622 $ 4,399 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Unaffiliated common stocks $ 3 $ $ $ 3 Table of Contents Index Change on substitution date for original Index Initial Index Value for original Index 1,000 Index Value for original index on substitution date 1,050 Index Change for original Index on substitution date (1,050 / 1,000) - 1 = 5% This 5% Index Change on the substitution date is then used to calculate the revised Initial Index Value for the replacement Index. Revised Initial Index Value for replacement Index Index Value for replacement Index on substitution date 1000 Index Change for original Index on substitution date 5 % Revised Initial Index Value for replacement Index 1000 / (100% + 5%) = 952.38 The Index Change calculation for that Crediting Period is then based on the change between the revised Initial Index Value for the replacement Index, and the Final Index Value for the replacement Index. PERFORMANCE LOCK On any Business Day between the first and last day the Crediting Period for an Index Account Option, you may exercise the Performance Lock feature. You may exercise Performance Lock for one, some, or all of your Index Account Options. If you have multiple ongoing Crediting Periods for the same Index Account Option, you may exercise Performance Lock for one, some, or all of them. You may decide not to exercise Performance Lock at all. If you exercise Performance Lock for an Index Account Option, your Interim Value for that Index Account Option (less any applicable charges) on the Performance Lock Date is locked-in and transferred to the Performance Lock Account. If you exercise Performance Lock, you will be locking-in an Interim Value (and that Interim Value will be reduced dollar for dollar by any applicable charges). Interim Values fluctuate daily, positively or negatively, and may be unfavorable to you. If you lock-in an amount that is lower than the amount you invested in that Index Account Option on the Crediting Period start date, you may be locking-in a loss. Amounts held in the Performance Lock Account will not participate in any Index performance (positive or negative). No Index Credit will be applied at the end of the Crediting Period of the Index Account Option for which you exercised Performance Lock. Depending on when you exercised Performance Lock, your investment might not participate in Index performance for up to one year. For example, assume you invest $10,000 in an Index Account Option and you elect to exercise Performance Lock. If the Interim Value on the Performance Lock Date is $10,500, we will transfer $10,500 to the Performance Lock Account, locking-in $500 of gain (before any future credited interest or withdrawals applied to the Performance Lock Account). Conversely, if the Interim Value on the Performance Lock Date is $9,500 we will transfer $9,500 to the Performance Lock Account, locking-in a $500 loss (before any future credited interest or withdrawals applied to the Performance Lock Account). You may manually exercise Performance Lock by contacting us on any Business Day before the end of the Crediting Period, in which case we will lock-in the Interim Value (less any applicable charges) next calculated after we receive your request in good order. You may also exercise Performance Lock automatically based on a target gain that you provide us in advance. If you wish to enroll in this feature, you must provide us with instructions that identify a target gain percentage. After you enroll, Performance Lock will be automatically exercised if your Interim Value (after the deduction any applicable charges) is greater than your Index Base by a percentage at least equal to your target gain. For instance, if you instruct us to exercise Performance Lock on any Business Day that would lock-in at least a 5% gain, Performance Lock will be automatically exercised on any Business Day that the Interim Value (after the deduction of any applicable charges) is at least 5% greater than your Index Base. In this example, if your Interim Value on a Business Day were at least 5% greater than your Index Base, but the deduction of any applicable charges would result in less than a 5% gain, Performance Lock would not be automatically exercised on that Business Day. You may cancel your target gain instructions at any time before Performance Lock is exercised. Table of Contents Transamerica Financial Life Insurance Company Notes to Financial Statements Statutory Basis (Dollars in Millions, Except per Share amounts) Book Adjusted Carrying Value Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2022 Bonds: United States Government and agencies $ 367 $ 8 $ 25 $ 350 State, municipal and other government 130 1 20 111 Hybrid securities 51 6 45 Industrial and miscellaneous 3,629 22 597 3,054 Mortgage and other asset-backed securities 1,082 21 127 976 Total unaffiliated bonds 5,259 52 775 4,536 Unaffiliated preferred stocks 4 4 $ 5,263 $ 52 $ 775 $ 4,540 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Unaffiliated common stocks $ 4 $ 2 $ $ 6 The carrying amount and estimated fair value of long and short-term bonds at December 31, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. 2023 Carrying Value Fair Value December 31: Due in one year or less $ 100 $ 99 Due after one year through five years 586 567 Due after five years through ten years 851 774 Due after ten years 2,433 2,062 Subtotal 3,970 3,502 Mortgage and other asset-backed securities 1,008 919 Total $ 4,978 $ 4,421 Table of Contents If you submit instructions with your Policy application for Performance Lock to be automatically exercised for an Index Account Option, those instructions will apply to any portion of your initial premium payment allocated to that Index Account Option (including any portion of your initial premium payment that we receive after the Policy Date). Those instructions will not apply to any additional premium payment, any other Index Account Option, or any future Crediting Period. You must submit separate instructions to exercise Performance Lock automatically in those instances. If you exercise Performance Lock manually, you won t know the locked-in Interim Value in advance. The locked-in Interim Value may be lower or higher than the Interim Value that was last calculated before you submitted your request. If you exercise Performance Lock automatically, you will not know the locked-in Interim Value in advance, but the locked-in Interim Value (less the deduction of any applicable charges) will be triggered by the target gain that you set in advance. We will not provide advice or notify you regarding whether you should exercise the Performance Lock feature or the optimal time for doing so. We will not warn you if you exercise the Performance Lock feature at a sub-optimal time. We are not responsible for any losses related to your decision whether or not to exercise the Performance Lock feature. On the Performance Lock Date, the amount transferred to the Performance Lock Account will equal the locked-in Interim Value (less any applicable charges). Thereafter, until the next Allocation Anniversary, that amount will be credited compound interest daily based on the annual interest rate in effect on that day and will be reduced on a dollar for dollar basis for any fees, charges, or withdrawals deducted from the Performance Lock Account. We may change the current annual interest rate at any time at our discretion, subject to a guaranteed minimum effective annual interest rate. The guaranteed minimum effective annual interest rate will be established on the Policy Date, and will be 1.00% or the guaranteed minimum interest rate required by state law, whichever is greater. For any date on which a fee, charge, or withdrawal is deducted from the Performance Lock Account, daily interest will have been credited before the deduction of the fee, charge, or withdrawal. Withdrawals from the Performance Lock Account are not subject to Interim Values or negative adjustments to an Index Base, but are subject to the other risks associated with withdrawals or a Surrender, including applicable surrender charges and taxes and a 10% federal penalty tax if made before age 591 2. The amount held in the Performance Lock Account will remain there until the next Allocation Anniversary unless earlier withdrawn or annuitized. On the next Allocation Anniversary, you may transfer the amount held in the Performance Lock Account to any Allocation Account that is available for investment. You could also withdraw such amount or annuitize the Policy, but it cannot remain in the Performance Lock Account. We must receive your instructions at least one Business Day before the next Allocation Anniversary. In the absence of instructions, the amount held in the Performance Lock Account will be automatically reinvested in the same Index Account Option for which your exercised Performance Lock. If that Index Account Option is no longer available for investment, such amount will be transferred to the Default Option. Currently, the Default Option is the Fixed Account Option. Other information about Performance Lock: Exercise of the Performance Lock feature is irrevocable. The Performance Lock Account is an interest-bearing holding account under the Policy; it is not an investment option that you can select for investment. There is no limit on the number of times that you may exercise Performance Lock during the accumulation phase, but it may be exercised only once during any single Crediting Period for an Index Account Option. If you have multiple ongoing Crediting Periods for the same Index Account Option, you may exercise Performance Lock for one, some, or all of them. You may provide separate manual or automatic Performance Lock instructions for any such Crediting Period. If you exercise Performance Lock multiple times (for different Index Account Options or different Crediting Periods for the same Index Account Option) within a one year period, amounts held in the Performance Lock Account that are attributable to one exercise of Performance Lock will be treated as distinct from any amounts attributable to another exercise of Performance Lock for purposes of crediting interest; deducting fees, charges, and withdrawals; and transferring amounts from the Performance Lock Account on the next Allocation Anniversary. Table of Contents Transamerica Financial Life Insurance Company Notes to Financial Statements Statutory Basis (Dollars in Millions, Except per Share amounts) The estimated fair value of bonds, preferred stocks and common stocks with gross unrealized losses at December 31, 2023 and 2022 is as follows: 2023 Equal to or Greater than 12 Months Less than 12 Months Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses United States Government and agencies $ 14 $ 4 $ 181 $ 25 State, municipal and other government 84 16 Hybrid securities 32 4 Industrial and miscellaneous 2,406 463 99 2 Mortgage and other asset-backed securities 718 107 56 1 Total bonds $ 3,254 $ 594 $ 336 $ 28 Preferred stocks-unaffiliated 4 Common stocks-unaffiliated 3 $ 3,254 $ 594 $ 343 $ 28 2022 Equal to or Greater than 12 Months Less than 12 Months Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses United States Government and agencies $ $ $ 222 $ 25 State, municipal and other government 27 8 64 11 Hybrid securities 13 4 28 2 Industrial and miscellaneous 542 221 2,212 376 Mortgage and other asset-backed securities 240 48 642 80 Total bonds $ 822 $ 281 $ 3,168 $ 494 Preferred stocks-unaffiliated 4 Common stocks-unaffiliated 3 $ 822 $ 281 $ 3,175 $ 494 During 2023 and 2022, there were no loan-backed or structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold. For loan-backed and structured securities with a recognized OTTI due to the Company s cash flow analysis, in which the security is written down to estimated future cash flows discounted at the security s effective yield, in 2023, 2022 and 2021, the Company recognized OTTI of $6, $3 and $0, respectively. Table of Contents THE INDEX Each Index Account Option is linked to the performance of an Index. Currently, the only Index offered under the Policy is the S&P 500 Index (Ticker: SPX). We may offer other Indexes under the Policy in the future. The S&P 500 Index is a market index. A market index tracks, directly or indirectly, the performance of a specific basket of stocks or other assets considered to represent a particular market or sector. Please note that by investing in an Index Account Option that is linked to the performance of a market index, you are not investing in the market index (it is not possible to invest directly in a market index) and you have no rights with respect to the index. The S&P 500 Index is widely regarded as the best single gauge of large-cap U.S. equities. This market index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. The S&P 500 Index is calculated without adjustments for dividends. See PRODUCT
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+Prospectus Summary 1 Risk Factors 7 Use of Proceeds 26 Management s Discussion and Analysis of Financial Condition and Results of Operations 28 Business 38 Management 64 Executive Compensation 69 Security Ownership of Certain Beneficial Owners and Management 71 Selling Shareholders 72 Plan of Distribution 73 Dilution 75 Certain Relationships and Related Transactions 81 Description of Securities 81 Part II II-1 Item 13. Other Expenses of Issuances and Distribution II-1 Item 14. Indemnification of Directors and Officers II-1 Item 15. Recent Sales of Unregistered Securities II-1 Item 16. Exhibits and Financial Statement Schedule II-2 Item 17. Undertakings II-3 We and the underwriters have not authorized any person to give you any supplemental information or to make any representations for us. You should not rely upon any information about us that is not contained in this prospectus. Information contained in this prospectus or in our other public reports may become stale. You should not assume that the information contained in this prospectus, any prospectus supplement or the documents incorporated by reference are accurate as of any date other than their respective filing dates, regardless of the time of delivery of this prospectus or of any sale of the shares. Our business, financial condition, results of operations and prospects may have changed since those dates. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. For Investors Outside the United States: The underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States. Unless otherwise indicated, in this prospectus, for periods following the Share Exchange, references to we, our, us, the Company or the Registrant refer to DiamiR Biosciences Corp, a Delaware corporation, and its wholly-owned subsidiary DiamiR, LLC a private Delaware limited liability company. Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option. Numerical figures included in this prospectus may have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. COMMONLY USED DEFINED TERMS Unless the context otherwise requires, in this registration statement references to: AD refers to Alzheimer s disease. CAP refers to College of Clinical Pathology (CAP) accredited laboratory. CLIA refers to Clinical Laboratory Improvement Amendments. FDA refers to the U.S. Food and Drug Administration. IVD refers to an in vitro diagnostic. Laboratory refers to the Company s laboratory in New Haven, CT, unless otherwise noted. LDT refers to lab-developed test. An LDT is an in vitro diagnostic (IVD) test that is designed, manufactured, and performed within a single laboratory. The development of the lab-developed test includes custom assay design and validation of the test system, including accuracy and replicability of the test. MCI refers to Mild Cognitive Impairment. ND refers to neurodegenerative diseases. microRNA (miRNA) refers to non-coding small nucleic acid molecules. NIH refers to National Institute of Health. PD refers to Parkinson s disease. Risk Stratification in the context of clinical tests refers to the process of categorizing individuals or patients into different risk groups based on certain factors or parameters measured through diagnostic tests. The goal is to identify individuals who are at higher risk of developing a particular condition or experiencing certain outcomes, such as disease progression based on their testing results. Risk stratification typically involves assessing various clinical variables, biomarkers, demographic information, medical history, and other relevant factors to determine an individual s level of risk for a certain condition. This information helps healthcare professionals tailor their management strategies, interventions, and follow-up plans according to the specific needs of each risk group. For example, in brain health, risk stratification may involve assessing factors such as miRNA profile, protein biomarker status, APOE genotype, and family history of AD to categorize patients into low, moderate, or high-risk groups. This information guides decisions regarding treatment options, lifestyle modifications, and preventive measures for each risk category. SBIR refers to Small Business Innovation Research, a funding program administered by the National Institutes of Health. LIMS refers to Laboratory Information Management System. i PROSPECTUS SUMMARY The following summary provides an overview of selected information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our common stock. You should carefully read this prospectus in its entirety before investing in our common stock, including the information discussed in the section titled Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and notes thereto that appear elsewhere in this prospectus. DiamiR Biosciences Corp. ( DiamiR or the Company ) is a molecular diagnostics company focused on developing and commercializing blood-based tests for detection and monitoring of pathology. We have devoted most of our financial resources to conducting our studies on quantitative analysis of circulating organ-enriched microRNAs as biomarkers of brain health and other disorders and building our patent portfolio. We have not completed development of any product candidate and we have therefore not generated any revenues from product sales, and currently our only source of revenue is from investments made from time to time by our officers and directors and from a Small Business Innovation Research (SBIR) grant in the original amount of $3,359,115 that we received in 2020, which is insufficient to carry out our business plans. We have incurred net losses in each year since our inception, including net losses of $614,405 and $1,318,431 for the years ended May 31, 2024 and 2023, respectively, and $176,275 for the three months ended August 31, 2024. At August 31, 2024, we had an accumulated deficit of $5,255,611 primarily due to operating expenses. Because of the numerous risks and uncertainties associated with the development of our LDTs, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. We expect to incur increased expenses as we conduct our clinical studies. We also expect an increase in our expenses associated with creating additional infrastructure (including hiring additional personnel) to complete the development and launch CogniMIR , a proprietary test for early detection and risk stratification of Alzheimer s disease and mild cognitive impairment, and support operations as a public company. As a result, we expect to continue to incur net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders equity and working capital. Our two co-founders, currently own and control a combined 84.9% of our currently outstanding common stock. Kira Sheinerman, co-founder and Executive Director, owns 44.9% of outstanding common stock. Samuil Umansky, co-founder and Chief Scientific Officer, owns 40.0% of outstanding common stock. Following the consummation of this offering, Kira Sheinerman and Samuil Umansky will own and control a combined [ ]% of our currently outstanding common stock. Our Company and Business We are a molecular diagnostics company initially focused on the development and commercialization of innovative blood-based tests for detection and monitoring of Mild Cognitive Impairment (MCI), Alzheimer s disease (AD), Parkinson s disease (PD), and other neurodegenerative diseases (NDs). The proprietary technology we developed is based on quantitative analysis of organ-enriched , i.e. present at higher concentration in specific organs or tissues, microRNAs (miRNAs) in plasma. We believe that the technology can also be applied to disease areas beyond NDs. These projects include a test for a rare neurological and developmental disorder Rett syndrome which is currently being clinically validated, and cancer and inflammatory disorders, where the Company s work is at an early stage. The tests being developed at the Company are currently not commercially available. 1 While launching a lab-developed test (LDT) is our primary goal, we believe that providing testing services for pharma and biotech companies involved in the development of therapeutic treatments for MCI and AD will allow us to generate revenues prior to launching the LDT in the clinical setting, improve our test performance characteristics, and potentially allow us to offer our test as a companion diagnostic. However, since we do not currently have any definitive agreements to provide such testing services, such revenues cannot be guaranteed. Even if we are able to generate revenue from these testing services, we cannot be sure it will provide sufficient revenue to support our operation and R&D. miRNAs as biomarkers. miRNAs are a class of 21-23 base-pair, short non-coding functional RNA molecules that bind to messenger RNA (mRNA) and regulate protein synthesis and cellular processes, such as growth, inflammation, survival, and death. miRNAs may be enriched in certain organs (e.g., brain, liver, lung), tissues or organ regions (e.g. hippocampus, midbrain), cell types (e.g. neurons), and cellular compartments (e.g. synapses and neurites). miRNAs can cross the blood-brain barrier and appear in the bloodstream. These properties of brain-enriched miRNAs make them powerful and patient friendly biomarkers of NDs and other brain health conditions. miRNAs are quantified, from plasma, using established reverse transcription quantitative polymerase chain reaction, RT-qPCR, technology and their expression patterns can be used to develop testing algorithms to assign risk of progression to individual patients. In October 2024, the Nobel Assembly at Karolinska Institutet awarded the 2024 Nobel Prize in Physiology or Medicine jointly to Dr. Victor Ambros and Dr. Gary Ruvkun for the discovery of microRNA and its role in post-transcriptional gene regulation. The press release regarding this award stated that the recipients groundbreaking discovery revealed a completely new principle of gene regulation that turned out to be essential for multicellular organisms, including humans. It is now known that the human genome codes for over one thousand microRNAs. Their surprising discovery revealed an entirely new dimension to gene regulation. MicroRNAs are proving to be fundamentally important for how organisms develop and function. Press release: The Nobel Prize in Physiology or Medicine 2024 - NobelPrize.org High need for minimally invasive early detection of MCI and AD. According to Alzheimer s Association Report: 2023 Alzheimer s Disease Facts and Figures (https://www.alz.org/media/documents/alzheimers-facts-and-figures.pdf), 6.7M Americans over age 65 currently have AD; someone in the US develops AD every 67 seconds. In 2021, total cost of care for Alzheimer s disease and other dementias was estimated at $321 billion (not including unpaid caregiving). AD dementia is typically preceded by 10-20 years of the disease development in the brain, initially without clinical symptoms (pre-symptomatic MCI due to AD), and then subsequently manifested as MCI, which itself is a precursor to AD-associated dementia. Detailed analyses of failed clinical trials of anti-AD therapies suggest that therapeutic benefit is mostly seen in the sub-groups of patients with MCI and/or moderate AD. Thus, there is a critical need for the development of methods for early AD detection. Because cognitive testing cannot reliably identify patients in pre-symptomatic stages of AD, effective biomarkers are now viewed as necessary targets for successful patient enrollment into clinical trials and treatment monitoring. Recent advances in detection techniques based on neuroimaging and cerebrospinal fluid (CSF) biomarkers have facilitated the shift in clinical research from the dementia phase to MCI preclinical AD. However, the high cost of over $3,000 with limited reimbursement, along with invasiveness of neuroimaging and cerebrospinal fluid needle draw for analysis, make their application for primary and monitoring purposes impractical. These techniques are also frequently not available in community centers, where blood-based tests can provide a viable solution as an initial diagnostic assessment tool. Over the past 15 years, significant progress has been made in the development of blood protein markers as valid diagnostic markers for MCI and AD and recently, the utility of such markers as surrogates for disease monitoring and therapeutic response measurements has been strongly considered ( Diagnostic Accuracy of a Plasma Phosphorylated Tau 217 Immunoassay for Alzheimer Disease Pathology , by Ashton NJ et al. JAMA Neurol. 2024. doi:10.1001/jamaneurol.2023.5319; Highly Accurate Blood Test for Alzheimer s Disease Comparable or Superior to Clinical CSF Tests , by Barth lemy NR et al., Nat Med. 2024 doi:10.1038/s41591-024-02869-z; Discriminative Accuracy of Plasma Phospho-tau217 for Alzheimer Disease vs Other Neurodegenerative Disorders , by Palmqvist S et al. JAMA. 2020, 324:772-781. doi:10.1001/jama.2020.12134; Palmqvist S, Tideman P, Cullen N, et al. Prediction of future Alzheimer s disease dementia using plasma phospho-tau combined with other accessible measures , Palmqvist S et al. by Nat Med. 2021, 27:1034-1042. doi:10.1038/s41591-021-01348-z; Differential roles of A 42/40, p-tau231 and p-tau217 for Alzheimer s trial selection and disease monitoring , by Ashton NJ et al., Nat Med. 2022, 28:2555-2562. doi:10.1038/s41591-022-02074-w; Blood-based biomarkers for Alzheimer s disease: towards clinical implementation , by Teunissen CE et al. Lancet Neurol. 2022, 21:66-77. doi: 10.1016/S1474-4422(21)00361-6). Biomarker signatures for detection of NDs. We are working on developing a comprehensive portfolio of tests for early and specific detection of neurodegenerative diseases. Our primary testing platform targets brain-enriched and inflammation-associated miRNAs; however, we may add blood protein biomarkers and mutational markers to our test over time. We have completed several studies in independent cohorts of samples and in collaborations with academic centers. We believe that the data generated to date indicate that our approach to detecting and differentiating neurodegenerative disorders may provide clinically meaningful information to clinicians and patients. Clinically meaningful tests are tests that impact the practice of medicine by either changing the treatment course for a patient or making physician practice more efficient. Clinically meaningful tests can be LDTs or FDA-approved tests. Foundational articles in Alzheimer s field have demonstrated that synaptic dysfunction/loss precede clinical manifestation of AD ( Hypothetical model of dynamic biomarkers of the Alzheimer s pathological cascade by Jack Jr CR et al. Lancet Neurol 2010 9:119, PMID: 20083042; Toward defining the preclinical stages of Alzheimer s disease: recommendations from the National Institute on Aging-Alzheimer s Association workgroups on diagnostic guidelines for Alzheimer s disease by Sperling RA et al. Alzheimers Dement 2011 7:280, PMID: 21514248). We believe DiamiR s miRNA biomarker approach captures synaptic dysfunction and loss, reflecting early stages of neurodegeneration, as reported in DiamiR publications listed elsewhere in the disclosure. Statements made by several experts within the field, in the report titled Technology Niche Analysis for CogniMIR titled In Vitro Test for Early Detection and Monitoring of Alzheimer s Disease (Project #: NIH1052TN), in the publication Foresight Science & Technology, further support commercial and clinical potential of our approach. According to a comprehensive report published by the Alzheimer s Association ( 2019 Alzheimer s Disease Facts and Figures ): Finding a simple and inexpensive test, such as a blood test, to diagnose Alzheimer s would be ideal for patients, physicians and scientists. A more recent report from the Association ( 2023 Alzheimer s Disease Facts and Figures ) stated: The relatively recent discovery that Alzheimer s disease begins 20 years or more before the onset of symptoms suggests that there is a substantial window of time in which we may be able to intervene in the progression of the disease. Scientific advances are already helping the field to make progress in these presymptomatic years. Biomarkers enable earlier detection of Alzheimer s, giving those affected the opportunity to address modifiable
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+PROSPECTUS SUMMARY The following summary highlights selected information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. It does not contain all the information that may be important to you and your investment decision. You should carefully read this entire prospectus, including the matters set forth under "Risk Factors," "Management s Discussion and Analysis of Financial Condition and Results of Operations," and our financial statements and related notes included elsewhere in this prospectus. In this prospectus, unless the context requires otherwise, references to "we," "us," "our," "Fintech," or "the Company" refer to Fintech Scion Limited. The share and per share information in this prospectus reflects, other than in our Financial Statements and the Notes thereto, a reverse stock split of the authorized and outstanding common stock at an anticipated ratio of one-for-ten (1:10) to occur immediately following the effective date but prior to the closing of the offering. Overview We are a fintech enterprise looking to revolutionize the financial landscape through our digital Software-as-a-Service (SaaS) platform. Our mission is to empower merchants by furnishing them with an integrated suite of tools, skills, and solutions that streamline payment services, unlocking a realm of secure, online, and fully managed transactions and settlements. At the core of our enterprise lies a sophisticated financial ecosystem, underpinned by a robust technological infrastructure. This infrastructure has been developed with the mission of empowering financial institutions to offer seamless, consolidated experiences across diverse verticals encompassing business-to-business, business-to-consumer, and consumer-to-business domains. In an era where merchants are leveraging an array of software solutions and digital tools to bolster their competitive edge, our role has emerged as a pivotal enabler. The intricate challenge of managing disparate software systems sourced from various providers has become an impediment for merchants of all sizes to seamlessly embrace payments. Our current clientele encompasses an array of enterprises and organizations, spanning varied sectors, all with a common objective: to minimize the intricacies and costs associated with fund transfers. We extend our services to online businesses, providing comprehensive solutions encompassing payment collection, cross-border transactions, FX services, and corporate bank accounts. Notably, we cater to a specific subset of online businesses that grapple with establishing and maintaining physical bank accounts across multiple territories. This subset includes but not limited to small and medium enterprises (SMEs) and online businesses. Our cutting-edge payments platform boasts a comprehensive suite of integrated payment products and services tailored to various channels–be it in-store, online, or through mobile and tablet interfaces. This suite encompasses end-to-end payment processing for an array of payment types, merchant acquiring and issuing, diverse methods of mobile and contactless payments, and QR code-based solutions. Complementary software integrations, virtual international bank account numbers (IBAN), integrated mobile point-of-sale (POS) solutions, risk management tools, and robust reporting and analytics capabilities augment our platform s offerings. Our payment services seamlessly integrate e-money remittance solutions within the global marketplace, spanning open banking and credit card processing to wire transfers. Our SaaS model empowers clients to focus on their core operations and sales while we handle the intricate aspects of payment processing. This streamlined approach facilitates efficient onboarding, elevates customer retention, and cultivates new revenue streams. Our vision transcends boundaries as we aspire to cement our position as a global leader in the payments and banking sphere. Our team, comprising seasoned experts across operations, technology, sales, legal, compliance, and more, forms the backbone of our enterprise. The crux of our vision lies in simplifying and automating global fund transfers while upholding the highest standards of security. We endeavor to furnish merchants with an all-encompassing Merchant Payment Ecosystem (MPE), a unified platform catering to their diverse payment needs. Our diverse merchant base ranges from small to medium-sized enterprises, or SMEs, to large enterprises. While we are rooted in the SaaS framework, our belief in democratizing technology has led us to offer an initial free platform, generating revenue through value-added services. Our revenue streams encompass processing fees based on payment volumes, a hybrid model featuring fixed transaction fees and monthly charges, and diverse layers that allow us to cross-sell services and nurture lasting client relationships. In the competitive landscape, our distinct layers constitute the heart of our approach, underpinned by a commitment to exemplary customer service. We understand the nuanced needs of various merchants and have meticulously curated layers tailored to their requirements, including cutting-edge technology, diverse payment processing and integrated banking. These layers collectively form the bedrock of our operations, fostering seamless merchant experiences and propelling us to the forefront of the industry. As we chart our course, we stand poised to not only cater to our diverse clientele but to exceed their expectations. Our pursuit of excellence remains unwavering as we continue to innovate, expand our offerings, and forge new partnerships to reshape the payments and banking landscape. Range of Services Our comprehensive suite of services is carefully tailored across six strategic business areas, each designed to cater to the distinct needs of our diverse clientele. These business areas represent the core of our operations, enabling us to offer a seamless and integrated payment ecosystem to merchants worldwide. 1.Payment Services Provider (PSP): Operating under the brand name FintechCashier, we excel as a PSP, facilitating international payment solutions for merchants by collaborating with card acquiring banks and alternative payment solution providers. Our expertise in this domain empowers merchants to effortlessly navigate the complexities of cross-border transactions. 2.Business Accounts: Our specialized business account services extend across diverse industries and currencies, offering tailored solutions to corporate entities. We assist our clients in establishing and managing corporate accounts, ensuring they can seamlessly operate on a global scale, irrespective of their sector. 3.SEPA & SWIFT Payments: Our proficient settlement services encompass SEPA and SWIFT payments, enabling swift and secure fund transfers for merchants and business clients across international banks. Our streamlined process involves efficient inter-account fund transfers, culminating in the issuance of SWIFT or SEPA payments. 4.Foreign Exchange (FX) Conversion: Through strategic partnerships, we provide foreign exchange payment solutions, facilitating seamless currency conversion for clients. Whether it s settling invoices, processing payrolls, or making payments for goods and services, our FX conversion services ensure seamless and efficient transactions. 5.Acquirer Services: As a global player, we specialize in offering debit and credit card acquiring services to online merchants across the globe. 6.Whitelabelling: Our whitelabelling service presents a fully customizable merchant back office platform, complete with comprehensive access to an array of banking payment methods. This tailored solution empowers merchants to seamlessly integrate their operations within a unified framework. Within these strategic business areas, we have structured three distinct service layers, all seamlessly integrated within a single platform. This holistic approach empowers merchants to expand their operational horizons, fueling their growth within a unified payment ecosystem. Fintech Digital Solution Limited is a software technology provider combining hundreds of payment providers and payment methods under one platform. In response to updated regulatory compliance mandates from the United Kingdom, potentially impacting our operations as of December 2023, our management has opted to discontinue the use of an Electronic Money Directive (EMD) agency service to instead implement an individual and case by case approach to ensure our operations comply with the varying regulatory requirements throughout multiple jurisdictions. Our management team remains committed to collaborating with various firms across these multiple jurisdictions where regulatory licenses or registrations are essential for our operations. We are actively engaging with licensed and regulated entities on a referral basis to ensure seamless continuity of our services including Business Accounts, SEPA & SWIFT Payments and Foreign Exchange (FX) Conversion services and maintaining our commitment to delivering reliable payment solutions without any interruption. Market Opportunity By targeting three different layers within the payment space, FintechCashier expands its reach across multiple layers in the payment space, unlocking substantial potential instead of confining itself to a single market. This approach minimizes the necessity to compete for a dominant market share within any specific layer, opting instead to pursue smaller market shares across multiple layers, thereby fostering opportunities for growth. The global digital payment market is estimated to reach $361.30 billion by 2030 with a CAGR of 20.5% according to a September 2022 report published by Grand View Research, Inc. The global cashless transactions are likely to foresee significant growth amid the usage and preference for cashless transactions and by 2025, a growth of 1.9 trillion transactions is estimated. Accenture conducted a research study that shows transactions worth US$7 trillion is expected to shift from cash to card and other digital payments by 2023 and grow to US$48 trillion by 2030. The COVID-19 pandemic brought a positive impact to the digital payment market with an increase in online shopping and the fear of virus transmission through physical monetary transactions. The key market trends include: a)The increasing preference for online shopping is a driving factor for the market. It offers the users a number of benefits such as fast checkout options, customized customer experience, and multiple payment options. In addition, companies are also designing enhanced smartwatches that are capable of making contactless payments, similar to the process used in smartphones. For instance, Xiaomi launched the brand new Mi Smart Band 6 in collaboration with Master Card in December 2021, which is capable of conducting contactless payments at Master Card terminals. b)Smart city initiative is a significant component in the digital payment market growth, as digital payments are used throughout the various departments to cover multiple Citizen-to-Government (C2G), and Government-to-Citizen (G2C) payments. c)Introduction of digital wallets, and the decreasing number of worldwide unbanked population, seem favorable for the digital payment vendors to expand their customer base. Overall, the digital payment market is expected to witness a much higher rate of growth, owing to the driving factors like the promotion of digital payments, rise in internet penetration, high proliferation of smartphones that enables m-commerce growth, and a hike in e-commerce sales. d)Constant acceleration of e-commerce supports the use of ePayments and brings about significant benefits. ePayments help overcome the complicated and costly process of physically collecting cash for a product purchased or sold online. Furthermore, innovations in ePayments can ease the process of carrying out payments and other financial services, which can boost additional e-commerce opportunities. Thus, rising e-commerce sales are expected to positively impact the growth of the payment processing solutions market. e)Internet access has reached all corners of the world, and this has led to a boost in the online shopping industry. Smartphones have also become an essential part of several people in the 21st century. The growth of e-commerce is driven by the rapid technology adoption, which is led by the rising use of devices, such as smartphones and tablets, and access to the internet through 4G, 5G, and so on. To take advantage of this trend, merchants worldwide are actively pursuing international expansion, thereby increasing their demand for seamless payment processing across diverse methods and channels within intricate and fragmented payment ecosystems. Contactless Payment Market - The global contactless payment market size is expected to reach USD 6.25 trillion by 2028, according to a new report by Grand View Research, Inc. In a survey conducted by Thales Group in November 2022, it stated it is anticipated to register a CAGR of 20.3% from 2021 to 2028. Various benefits, such as improved service delivery and reduction in transaction time offered by contactless payments, are expected to propel the market growth over the forecast period. Mobile Payment Market - The global mobile payment market size is expected to reach USD 587.52 billion by 2030, expanding at a CAGR of 35.3% from 2022 to 2030, according to a new report by Grand View Research, Inc. The market growth can be attributed to the increasing shift toward contactless payment amid the COVID-19 pandemic. Moreover, the increasing popularity of the e-commerce industry across the globe is expected to accelerate the adoption of mobile payment over the forecast period. Payment As A Service Market - The global payment as a service market size is expected to reach USD 25.7 billion by 2027, expanding at a CAGR of 16.9%, according to a new report by Grand View Research, Inc. Digital disruption in the money transfer ecosystem, combined with the rise in need for quick money transfer methods, has transformed the payment gateway model. As a result of digital money transfer methods, consumers now demand secure digital transaction processing systems to transfer money to their merchants and individuals. Competitive Strengths FintechCashier competes with a range of providers, each of whom may provide a component of our offering, but do not provide an integrated offering capable of solving complex business challenges for software partners and merchants. For certain services and solutions, including end-to-end payments, we compete with third-party payment processors and integrated payment providers. The competitive landscape across the three layers are shown in the table Layer Market Sector Competitors Technical Payment Gateway Market Crassula, Contis, Mambu, SBlock Payments Payment Processing Market Nuvei, Worldpay, Checkout, Ayden Banking Digital Payment Market Solaris Bank, Tide Mollie, Revolut, Issuing Issuing Layer Marqueta We believe our market opportunity is demonstrated by a number of recent transactions completed by our competitors throughout the three layers outlined above. With respect to the technical layer, in a December 2021 Series E funding round, Mambu raised $265.7 million, for a company valuation of $5.4 billion post-money. With respect to the banking layer, Revolut, a competitor on our banking layer, cites a $33 billion market cap, while Marqueta, our competitor in the issuing layer is valued today at nearly $3.7 billion. Unlike many players in the market FintechCashier is not exclusively focused on payments. By targeting different layers, it can provide full solutions for customers covering all their payment needs. Combining all layers under one platform, FintechCashier solution creates a greater market opportunity and potential for increasing market penetration. Intellectual Property We rely on a combination of trademark, domain names and trade secret laws, as well as employee and third-party nondisclosure, confidentiality and other types of contractual arrangements to establish, maintain and enforce our intellectual property rights, including with respect to our proprietary rights related to our products and services. In addition, we use service platform technology, have an exclusive distribution technology license and license technology from third parties. Recent Developments On December 27, 2023, our Board of Directors appointed Lim Chun Hoo as Chief Executive Officer of the Company concurrently with its acceptance of the resignation of Shalom Dodun as the Company s CEO and as a member of the Company s Board of Directors. Mr. Lim previously served as Chief Financial Officer of the Company since November 2022 and is a member of the Board. Mr. Dodoun s resignation was not the result of any disagreement with the Company relating to its operations, policies or practices. In connection with Mr. Dodoun s resignation from the Board, the Board approved a reduction in the size of the Board to three directors. On December 27, 2023, the Board appointed Colin Ellis as Chief Financial Officer of the Company. Mr. Ellis had served as a non-executive director of the Company since February 2023 and transitioned to an executive director upon his appointment as Chief Financial Officer of the Company. Corporate History and Structure We were incorporated in the state of Nevada on November 19, 2013 as "Albero, Corp." On January 8, 2016, we changed our name to "Vitaxel Group Limited." On March 2, 2022, we changed our name to "HWGC Holdings Limited." On May 16, 2023, we changed our name to "Fintech Scion Limited." On July 21, 2022, we entered into a share exchange agreement with FintechCashier Asia P.L.C. (formerly known as HWGG Capital P.L.C.), a Labuan company ("FintechAsia"), and all of the shareholders of FintechAsia pursuant to which all shareholders of FintechAsia irrevocably agreed to transfer and assign to the Company all FintechAsia s shares held by the shareholders in exchange for newly issued shares of the Company s common stock. Following the closing of the share exchange on November 15, 2022, FintechAsia became a wholly-owned subsidiary of the Company. On August 9, 2022, we entered into another share exchange agreement with Fintech Scion Limited ("Fintech"), a private limited company incorporated in the United Kingdom, and all of the shareholders of Fintech pursuant to which All shareholders of Fintech irrevocably agreed to transfer and assign to the Company all of Fintech s shares held by such shareholders in exchange for newly issued shares of the Company s common stock. Following the closing of the share exchange on November 30, 2022, Fintech became a wholly-owned subsidiary of the Company. On December 30, 2022, we entered into a stock purchase agreement with Mr. Leong Yee Ming, the previous Chief Executive Officer of the Company (the "Purchaser"), pursuant to which the Company sold to the Purchaser all issued and outstanding shares of Aelora Sdn Bhd ("ASB" and formerly known as Vitaxel Sdn Bhd) and Vitaxel Online Mall Sdn Bhd ("Vionmall", and together with ASB, the "Former Subsidiaries"). The Company sold the Former Subsidiaries for an aggregate purchase price of RM4,500,002 (the "Purchase Price"), with RM4,500,000 allocated for the purchase price of ASB and RM2 for the purchase of Vionmall. The Purchase Price was paid by the Purchaser s assumption of a certain amount of intercompany debt owed by the Company to ASB. Pursuant to the terms of the agreement, the Company and ASB assigned, and the Purchaser s assumed, that portion of intercompany debt equal to the Purchase Price and in full satisfaction of the Purchase Price. Following the completion of the disposal of the Former Subsidiaries to the Purchaser on the same day, ASB and Vionmall ceased to be the subsidiaries of the Company as of December 30, 2022. On October 11, 2023, we entered into an Asset Conveyance Agreement (the "Purchase Agreement") with CICO Digital Solutions Limited, a British Columbia company ("CICO" and a related party company that has a common control by a major shareholder of the Company). The Purchase Agreement provided for the acquisition by the Company of substantially all of the assets of CICO (the "Assets") related to CICO s business of providing a service platform and software application for payment services from CICO. As consideration for the transfer and sale of the Assets, the Company issued CICO 10,000,000 restricted shares of common stock of the Company, par value $0.01 per share, as adjusted for the 1-for-10 reverse split (the "Shares"). On December 27, 2023, the Company and CICO mutually and voluntarily agreed to unwind the transaction contemplated by the Purchase Agreement. Upon termination, each of the parties to the Purchase Agreement were relieved of their respective rights, liabilities, expenses and other obligations under the Purchase Agreement. In connection therewith, CICO transferred the Shares back to the Company for cancellation upon receipt. The Shares were cancelled and removed from the Company s issued and outstanding shares of common stock on January 30, 2024. The diagram below illustrates our current corporate structure: Risk Factor Summary Our business is subject to a number of risks of which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under "Risk Factors" in deciding whether to invest in our securities. Among these important risks are the following: Risks Related to Our Business and Industry We have a limited operating history with financial results that may not be indicative of future performance, and our revenue growth rate is likely to slow down as our business matures. Impairment of goodwill may adversely impact future results of operations. Substantial and increasing competition, both within our industry and from other payment methods, and disintermediation from other participants in the payment chain may harm our business. Interruption or failure of our information technology and communications systems could impair our operations, which could also damage our reputation and harm our results of operations. Cybersecurity risks, including cyber-attacks, data breaches, and system vulnerabilities could adversely affect our business and disrupt our operations. Our reliance on the platform and internal systems from third parties may adversely affect our business operations and financial results. If we cannot retain our key personnel, our business, financial condition and results of operations may be adversely affected. In a dynamic industry like ours, the ability to attract, recruit, develop and retain qualified employees is critical to our success and growth. If we are not able to do so, our business and prospects may be materially and adversely affected. If we fail to raise additional capital, our ability to implement our business model and strategy could be compromised. The financial technology industry in which we operate is characterized by rapid technological changes, new product introductions, evolving industry standards and changing customer needs. Risks Related to Our Intellectual Property If we are unable to successfully obtain, maintain, protect, enforce, or otherwise manage our intellectual property and proprietary rights, we may incur significant expenses, and our business may be adversely affected. Claims by others that we have infringed their proprietary technology or other intellectual property rights could harm our business. If we are unable to obtain or fail to comply with the required licenses to operate our business or experience disputes with licensors or disruptions to our business relationships with our licensors, we could lose license rights that are important to our business. Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets. Risks Related to Regulation Complex and enhanced regulatory oversight in the banking and financial services industry could adversely affect our operations or our relationships with our banking partners. We are subject to chargeback and refund liability risk when our merchants refuse to or cannot reimburse chargebacks and refunds resolved in favor of their customers. Any increase in chargebacks and refunds not paid by our merchants may adversely affect our business, financial condition or results of operations. We are subject to costs and risks associated with new or changing laws and regulations and governmental action affecting our business. Changes in tax law, changes in our effective tax rate or exposure to additional tax liabilities could affect our profitability and financial condition. Transfer pricing rules may result in increased tax costs. New and evolving regulations in respect of the protection of personal data and any failure to comply with these regulations could have a material adverse effect on our business and financial condition. We collect, process, store, and use data, including personal information, which subjects us to governmental regulation and other legal obligations, including EU financial services regulation, particularly related to privacy, data protection and information security, marketing, and consumer protection laws across different markets where we conduct our business. Our actual or perceived failure to comply with such obligations could harm our business and/or result in reputational harm, loss of customers, material financial penalties and legal liabilities. We may not be able to continue to expand our share of the existing payment processing markets or expand into new markets, which would inhibit our ability to grow and increase our profitability. We are subject to anti-corruption, anti-bribery and anti-money laundering laws and regulations. We may be subject to further queries or requests regarding the SEC Subpoena. Risks Related to Our Common Stock and This Offering If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares. We presently do not intend to pay cash dividends on our common stock. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock. The price of our stock may be volatile, and you could lose all or part of your investment. Even if our common stock is listed on Nasdaq, there can be no assurance that we will be able to comply with the continued listing standards of Nasdaq, a failure of which could result in a delisting of our common stock. Certain shareholders may exercise significant control over our business policies. The requirements of being a public company are expensive and administratively burdensome. Anti-takeover provisions in our Articles of Incorporation and Bylaws and Nevada law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock. Our Articles of Incorporation allow for our board of directors to create new series of preferred stock without further approval by our shareholders which could adversely affect the rights of the holders of our common stock. If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and any trading volume could decline. Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plan or otherwise, could result in dilution of the percentage ownership of our shareholders and could cause our stock price to fall. Our common stock may be subject to the "penny stock" rules of the SEC, which may make it more difficult for shareholders to sell our common stock. We have never paid cash dividends on our capital stock and do not anticipate paying dividends in the foreseeable future. Proposed Changes to Our Capital Structure We plan to effect a 1-for-10 reverse split of our outstanding shares of common stock prior to the date of this prospectus. No fractional shares will be issued in connection with the reverse stock split and all such fractional interests will be rounded up to the nearest whole number of shares of common stock. The conversion and/or exercise prices of our issued and outstanding convertible securities, including shares issuable upon exercise of outstanding stock options and warrants, and conversion of our outstanding convertible notes will be adjusted accordingly. All information presented in this prospectus assumes the 1-for-10 reverse split of our outstanding shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price and/or exercise price data set forth in this prospectus have been adjusted to give effect to the assumed reverse stock split. Implications of Being a Smaller Reporting Company We are a "smaller reporting company" as defined in the Securities Exchange Act of 1934 as amended (the "Exchange Act"). We may continue to be a smaller reporting company so long as either (i) the market value of our common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company under the requirements of (ii) above, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. Corporate Information Our principal executive office is located at M Floor & 1st Floor, No. 33, Jalan Maharajalela, 50150, Kuala Lumpur, Malaysia, and our telephone number is +603 9226 0908. Our website is www.fintechcashier.com. Information provided on, or accessible through, our website, however, is not part of this prospectus and is not incorporated herein by reference. THE OFFERING Common stock offered by us: ___ shares of common stock Common stock outstanding prior to this Offering: ___ shares of common stock Common stock to be outstanding immediately after this Offering: ___ shares (__ shares if the underwriters exercise their option to cover over-allotments, if any) Over-allotment Option: We have granted the underwriters an option for a period of 45 days from the date of this prospectus to purchase up to an additional __ shares of common stock, representing 15% of the shares of common stock sold in the offering at a purchase price per additional share of common stock equal to the public offering price per share of common stock, less the underwriting discount. Representative s Warrant: We have agreed to issue Spartan Capital Securities, LLC, the representative of the underwriters in this offering, a warrant to issue the number of shares of common stock equal to 5.0% of the shares of common stock being offered in this offering (the "Representative s Warrant"). The Representative s Warrant will be exercisable at any time, and from time to time, in whole or in part, commencing on a date that is 180 days after the commencement of sales of the share of common stock in this offering and expiring four and a half years from the date of the commencement of sales at an exercise price of $[ ] (120% of the offering price per share). See "Underwriting." Lock-up Agreements: We have agreed with the underwriters not to sell additional equity securities for a period of 180 days after the effective date of this Offering. Our directors and officers have agreed with the underwriters not to offer for sale, sell, contract to sell, pledge or otherwise dispose of any of their shares of our common stock or securities convertible into our common stock, subject to certain exceptions, for a period of 180 days after the date of this prospectus, which restriction may be waived in the discretion of the Representative. Use of Proceeds: We estimate that the net proceeds from this offering will be approximately $ million, assuming a public offering price of $_______, based on the last sale price of our common stock as reported on the OTC Pink Market of the OTC Markets Group (the "OTC") on , 2024 or approximately $ million if the underwriters exercise their over-allotment option in full, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds of this offering for continuing operating expenses and working capital. See "Use of Proceeds." Risk Factors: Investing in our securities involves a high degree of risk. See "Risk Factors" starting on page ______ of this prospectus for a discussion of factors you should carefully consider before investing in our securities. Trading Symbol/Nasdaq Listing Application: Our common stock is currently quoted on the OTC Pink Market under the trading symbol "FINR." We intend to apply to list our common stock on The Nasdaq Capital Market under the symbol "FINR." However, no assurance can be given that our listing application will be approved. If Nasdaq does not approve our listing application, we will not consummate this offering. Except as otherwise indicated herein, all information in this prospectus reflects or assumes: a one-for-ten share reverse stock split of our common stock to be effected on ________, 2024; no exercise of the underwriters option to purchase up to an additional [ ] shares of our common stock to cover over-allotments, if any; and the cancellation, on January 30, 2024, of the 10,000,000 shares that were issued to CICO for the acquisition of assets. SUMMARY
\ No newline at end of file
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+PROSPECTUS SUMMARY
+
+ 
+
+This summary highlights
+information contained elsewhere or incorporated by reference in this prospectus. This summary is not complete and does not contain all
+of the information that you should consider before investing in our Common Stock. We urge you to read this entire prospectus and the documents
+incorporated by reference herein carefully, including the financial statements and notes to those financial statements incorporated by
+reference herein and therein. Please read the section of this prospectus entitled Risk Factors for more information about
+important risks that you should consider before investing in our common stock. 
+
+ 
+
+Overview
+
+ 
+
+We were incorporated in the
+State of Florida on April 14, 2014 under the name Illumination America, Inc.
+
+ 
+
+On August 17, 2017, we acquired
+Grom Holdings, Inc., a Delaware corporation ( GHLD ), pursuant to a share exchange agreement (the Share Exchange Agreement )
+entered into on May 15, 2017 (the Share Exchange ). In connection with the Share Exchange, the Company acquired 100% of the
+outstanding shares of capital stock of GHLD from GHLD s stockholders in exchange for an aggregate of 5,774 shares of Common Stock.
+As a result of the Share Exchange, the stockholders of GHLD acquired approximately 92% of the Company s then-issued and outstanding
+shares of common stock and GHLD became a wholly-owned subsidiary of the Company. In connection with the Share Exchange, on August 17,
+2017, we changed our name to Grom Social Enterprises, Inc. (the Company or GROM ).
+
+ 
+
+We are a media, technology
+and entertainment company that focuses on (i) delivering content to children under the age of 13 years in a safe secure platform that
+is compliant with Children s Online Privacy Protection Act ( COPPA ) and can be monitored by parents or guardians, (ii)
+creating, acquiring, and developing the commercial potential of Kids & Family entertainment properties and associated business opportunities,
+(iii) providing world class animation services, and (iv) offering protective web filtering solutions to block unwanted or inappropriate
+content. We operate our business through the following subsidiaries:
+
+ 
+
+ 
+ 
+ 
+ Grom Social, Inc. ( GSOC ), incorporated in the State of Florida on March 5, 2012, operates our social media network designed for children under the age of 13 years.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ TD Holdings Limited ( TDH ), incorporated in Hong Kong on September 15, 2005, operates through its two wholly-owned subsidiaries: (i) Top Draw Animation Hong Kong Limited ( TDAHK ), a Hong Kong corporation, and (ii) Top Draw Animation, Inc. ( TDAM ), a Philippines corporation. The group s principal activities are the production of animated films and televisions series.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Grom Educational Services, Inc. ( GEDU ), incorporated in the State of Florida on January 17, 2017, operates our web filtering services provided to schools and government agencies.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Grom Nutritional Services, Inc. ( GNUT ), incorporated in the State of Florida on April 19, 2017, intends to market and distribute nutritional supplements to children. It has been nonoperational since its inception.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Curiosity Ink Media, LLC ( CIM ), organized in the State of Delaware on January 9, 2017, develops, acquires, builds, grows and maximizes the short, mid and long-term commercial potential of kids and family entertainment properties and associated business opportunities.
+
+ 
+ 
+
+ 
+
+ 
+
+ 
+
+ 4 
+
+ 
+
+ 
+
+ 
+
+ 
+
+We own 100% of each of GSOC,
+TDH, GEDU and GNUT, and 80% of CIM. We are headquartered in Boca Raton, Florida with offices in Los Angeles, California; Salt Lake City,
+Utah; Peachtree Corners, Georgia; and Manila, Philippines.
+
+ 
+
+We have three reportable business
+segments: Animation, which includes TDH; Original Content, which includes CIM; and Social & Technology, which includes GSOC and GEDU.
+
+ 
+
+Recent Developments 
+
+ 
+
+September 2023 Reverse Stock Split
+
+ 
+
+On June 23, 2023, our Board
+and shareholders approved the granting of authority to the Board to amend our articles of incorporation, as amended, to effect a reverse
+stock split of the issued and outstanding shares of our Common Stock, by a ratio of no less than 1-for-2 and no more than 1-for-20, with
+the exact ratio to be determined by the Board in its sole discretion, and with such reverse stock split to be effective at such time and
+date as determined by the Board in its sole discretion. On September 7, 2023, our Board effected a 1-for-20 reverse stock split in connection
+with the continued listing of our Common Stock on Nasdaq.
+
+ 
+
+The reverse stock split did
+not have any impact on the number of authorized shares of Common Stock, which remains at 500,000,000 shares.
+
+ 
+
+Anticipated Reverse Stock Split
+
+ 
+
+On April 24, 2024, our Board
+and shareholders approved the granting of authority to the Board to amend our articles of incorporation, as amended, to effect a reverse
+stock split of the issued and outstanding shares of our Common Stock, by a ratio of no less than 1-for-2 and no more than 1-for-20, with
+the exact ratio to be determined by the Board in its sole discretion, and with such reverse stock split to be effective at such time and
+date as determined by the Board in its sole discretion. The reverse stock split will not have any impact on the number of authorized shares
+of Common Stock, which will remain at 500,000,000 shares.
+
+ 
+
+November 2023 SPA for Convertible Promissory
+Note and Warrants with Generating Alpha and Amendments
+
+ 
+
+On November 9, 2023, we entered
+into a Securities Purchase Agreement (as amended on November 20, 2023 and March 11, 2024, the November 2023 SPA ) with Generating
+Alpha Ltd. ( Generating Alpha ) pursuant to which we have agreed to sell two convertible promissory notes, with each note
+having an initial principal amount of $4,000,000, for a price of $3,640,000 per note. In connection with the purchase and sale of the
+notes, we have agreed to issue to Generating Alpha warrants to acquire a total of 3,028,146 shares of our Common Stock.
+
+ 
+
+On December 21, 2023, we consummated
+a private placement offering (the December 2023 Offering ) pursuant to the November 2023 SPA with Generating Alpha for the
+purchase of (1) a convertible promissory note, dated December 21, 2023 and amended on March 11, 2024 (the December 2023 Note ),
+having an initial principal amount of $4,000,000, (2) a common stock purchase warrant to purchase up to an aggregate of 757,036 shares
+of Common Stock at an exercise price of $1.78 per share of Common Stock (the Warrant A ), and (3) a common stock purchase
+warrant to purchase up to an aggregate of 757,036 shares of common stock at an exercise price of $0.001 per share of common stock (the
+ Warrant B, together with the Warrant A, the December 2023 Offering Warrants ). The purchase price of the December
+2023 Note was $3,640,000. The aggregate gross proceeds of the December 2023 Offering were approximately $3.6 million, before deducting
+fees to the placement agent and other expenses payable by us.
+
+ 
+
+In connection with the November
+2023 SPA, we entered into a Registration Rights Agreement, dated December 21, 2023 (the December 2023 Registration Rights Agreement ),
+with Generating Alpha. The December 2023 Registration Rights Agreement provided that we shall file a registration statement covering
+the resale of all of the Registrable Securities (as defined in the December 2023 Registration Rights Agreement) with the SEC.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 5 
+
+ 
+
+ 
+
+ 
+
+ 
+
+On March 11, 2024, we entered
+into a second amendment agreement (the Second Amendment ) to the November 2023 SPA with Generating Alpha, pursuant to which
+(1) the exercise price of each of the Warrant A and the Warrant C (as described in the November 2023 SPA) has been amended from $1.78
+per share of common stock to $0.001 per share, and (2) we shall promptly effect a reverse stock split in the event that the closing price
+of our common stock falls below $0.25 per share for a period of five consecutive trading days.
+
+ 
+
+In connection with the Second
+Amendment, we entered into an amendment to the December 2023 Note with Generating Alpha, pursuant to which in no event shall the conversion
+price be less than $0.25.
+
+ 
+
+EF Hutton LLC acted as placement
+agent for the financing.
+
+ 
+
+Notice of Delisting of Failure to Satisfy
+a Continued Listing Rule or Standard
+
+ 
+
+On February 29, 2024, we received
+a deficiency letter (the Letter ) from the Staff indicating that unless we request a hearing before the Nasdaq Hearings Panel
+(the Panel ) by March 7, 2024, our securities will be delisted from The Nasdaq Capital Market based upon our non-compliance
+with the Minimum Bid Requirement as set forth in Nasdaq Listing Rule 5550(a)(2). The Letter specified that we are not in compliance with
+the Minimum Bid Requirement for continued listing on The Nasdaq Capital Market (Nasdaq Listing Rule 5550(a)(2)), as the bid price for
+our listed securities closed at less than $1 per share for the previous 30 consecutive business days. Pursuant to Nasdaq Listing Rule
+5810(c)(3)(A)(iv), as we previously implemented two reverse stock splits over the prior two-year period with a cumulative ratio of 250
+shares or more to one, we are not eligible for any compliance period specified in Nasdaq Listing Rule 5810(c)(3)(A).
+
+ 
+
+On March 6, 2024, we requested
+a hearing before the Panel to appeal the determination made by the Staff which was scheduled for May 2, 2024, and the suspension of our
+securities was stayed pending the Panel s decision. On April 15, 2023 we received a letter from the Panel that based on our written
+appeal, Nasdaq has granted an extension until August 27, 2024 provided that we effect a reverse stock split no later than August 13, 2024
+to regain compliance with the Minimum Bid Requirement.
+
+ 
+
+Non-Binding Letter of Intent with Arctic7
+
+ 
+
+On March 5, 2024, we signed
+a non-binding letter of intent to acquire Arctic7, Inc. ( Arctic7 ), an emerging gaming industry service provider, through
+the issuance of shares of our Common Stock. Arctic7 is currently engaged in the business of providing full game development, co-development,
+transmedia and virtual production services to its customers and partners.
+
+ 
+
+March 2024 SPA for Equity Line of Credit
+with Generating Alpha
+
+ 
+
+On March 11, 2024, we entered
+into a Securities Purchase Agreement (the March 2024 SPA ) with Generating Alpha pursuant to which we have agreed to issue
+and sell to Generating Alpha from time to time up to $25 million worth of Common Stock.
+
+ 
+
+Pursuant to the March 2024
+SPA, we may require Generating Alpha to purchase shares of Common Stock by delivering put notices to Generating Alpha, subject to certain
+conditions set forth therein, at a purchase price of 85% of the lowest traded price of our Common Stock during the 10 trading days immediately
+preceding the date 10 business days after the date the put shares have been accepted and cleared by Generating Alpha s brokerage
+firm. As of the date of this prospectus, we have not requested any drawdown on the equity line of credit. We have agreed to issue to Generating
+Alpha as a commitment fee a Common Stock Purchase Warrant (the March 2024 Warrant ) for 2,314,814 shares of Common Stock
+with an exercise price of $0.001 per share.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 6 
+
+ 
+
+ 
+
+ 
+
+ 
+
+In connection with the March
+2024 SPA, we entered into a Registration Rights Agreement (the March 2024 Registration Rights Agreement ) with Generating
+Alpha, pursuant to which we have agreed to use our commercially reasonable efforts to file a registration statement (the Registration
+Statement ) with the SEC on a date no later than sixty (60) days following the date thereof and to have the Registration Statement
+declared effective by the SEC within thirty (30) calendar days, but no more than ninety (90) calendar days, after we have filed the Registration
+Statement.
+
+ 
+
+On April 24, 2024, we entered
+into an omnibus amendment agreement with Generating Alpha pursuant to which (1) the March 2024 SPA was amended to clarify that the calculation
+of the number of put shares issuable by us without any shareholder approval required by an exchange shall include all shares of Common
+Stock beneficially owned by Generating Alpha, and (2) the March 2024 Warrant was amended to remove its alternative cashless exercise feature.
+
+ 
+
+April 2024 SPA for Convertible Promissory
+Note and Warrants with Generating Alpha
+
+ 
+
+On April 1, 2024, we entered
+into a Securities Purchase Agreement (the April 2024 SPA ) with Generating Alpha pursuant to which we have agreed to sell
+a convertible promissory note (the April 2024 Note , and together with the December 2023 Note, the Notes ),
+having an initial principal amount of $650,000, for a price of $520,000. In connection with the purchase and sale of the April 2024 Note,
+we issued Generating Alpha a common stock purchase warrant to acquire a total of 962,962 shares of our Common Stock. The transactions
+closed on April 4, 2024.
+
+ 
+
+In connection with the April
+2024 SPA, we entered into a Registration Rights Agreement, dated April 1, 2024 (the April 2024 Registration Rights Agreement ),
+with Generating Alpha. The April 2024 Registration Rights Agreement provided that we shall file a registration statement covering the
+resale of all of the Registrable Securities (as defined in the April 2024 Registration Rights Agreement) with the SEC.
+
+ 
+
+On April 24, 2024, we entered
+into a first amendment agreement (the First Amendment ) to the April 2024 SPA with Generating Alpha pursuant to which we
+shall promptly effect a reverse stock split in the event that the closing price of our Common Stock falls below $0.25 per share for a
+period of five consecutive trading days.
+
+ 
+
+In connection with the First
+Amendment, we entered into an amendment to the April 2024 Note with Generating Alpha pursuant to which in no event shall the conversion
+price be less than $0.17.
+
+ 
+
+EF Hutton LLC acted as placement
+agent for the financing.
+
+ 
+
+March, April and May 2024 Private Placements
+
+ 
+
+In March and April of 2024,
+we entered into a Securities Purchase Agreement with certain accredited investors pursuant to which we have agreed to sell a convertible
+promissory note (the March and April Private Note ), having an aggregate initial principal amount of $402,500, for a price
+of $402,500. The March and April Private Notes accrue interest at 10% and mature upon the earlier of one year or the consummation of a
+financing transaction of $10 million or more.
+
+ 
+
+In May 2024, we entered into
+a Securities Purchase Agreement with certain accredited investors to which we have agreed to sell a convertible promissory note (the May
+Note ), having an aggregate initial principal amount of $402,500, for a price of $402,500. The May Notes will convert on the same
+terms and on the same day as the date our next equity offering.
+
+ 
+
+In June 2024, we issued a
+promissory note to an accredited investor with an initial principal amount of $235,000. The note accrues interest at 10% for a period
+of 90 days and matures in 90 days (with an option for the Company to extend for an additional 90 days) and has 50% warrant coverage.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 7 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Waiver to November 2023 SPA and April 2024
+SPA
+
+ 
+
+On July 18, 2024, the Company
+entered into a consent and waiver (the Waiver ) to November 2023 SPA and April 2024 SPA with Generating Alpha, pursuant to
+which Generating Alpha consented to this offering and waived any and all restrictions or prohibitions in the Purchase Agreements and all
+other transaction documents relating to the Financing. As consideration for the Waiver, the Company agreed to the following: (i) 35% of
+net proceeds received from this offering will be utilized to repay the principal balances outstanding on the December 2023 Note and April
+2024 Note, and the repayments are subject to the 130% optional redemption right under Section 4.1 of the December 2023 Note and the April
+2024 Note; (ii) the Company shall use its best efforts to obtain approval of the Nasdaq to reset the conversion floor price of the November
+2023 Notes to 20% of Nasdaq Official Closing Price as of the date of the Waiver, (iii) a one-time issuance of a pre-funded warrant (the
+ July 2024 Waiver Warrant ) to purchase $750,000 worth of shares of Common Stock at an exercise price of $0.0001 to Generating
+Alpha, in a form substantially similar to the warrants issued pursuant to the April 2024 SPA, and (iv) waive the requirement to reinvest
+a percentage of any realized net profit as defined under Section 6.09 of the November 2023 SPA.
+
+ 
+
+Our Corporate Information
+
+ 
+
+Our principal executive offices
+are located at 2060 NW Boca Raton, Suite #6, Boca Raton, Florida 33431. Our telephone number is (561) 287-5776. Our website address is
+www.gromsocial.com. Information contained in, or that can be accessed through, our website is not incorporated by reference into
+this prospectus, and you should not consider information on our website to be part of this prospectus.
+
+ 
+
+Smaller Reporting Company 
+
+ 
+
+We are a smaller reporting
+company as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and have elected to take
+advantage of certain of the scaled disclosure available for smaller reporting companies.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 8 
+
+ 
+
+ 
+
+ 
+
+ 
+
+The Offering 
+
+ 
+
+ 
+ Units offered by us:
+ 
+ Up to 9,869,233 Units in a firm commitment underwritten offering. Each Unit consists of: (i) one share of Common Stock; (ii) two Series A Warrants; and (iii) one Series B Warrant. Each Warrant is exercisable for one share of Common Stock.
+
+ 
+ 
+ 
+ 
+
+ 
+ Pre-Funded Units offered by us:
+ 
+ 
+ We are also offering the opportunity to purchase,
+ if the purchaser so chooses and in lieu of Units, up to 9,869,233 Pre-Funded Units to purchasers whose purchase of Units in this offering
+ would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99%
+ (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock immediately following the consummation of this offering.
+
+ 
+
+ Each Pre-Funded Unit consists of: (i) one Pre-Funded
+ Warrant exercisable for one share of Common Stock; (ii) two Series A Warrant to purchase one share of Common Stock; and (iii) one Series
+ B Warrant to purchase one share of Common Stock.
+
+ 
+
+ The purchase price of each Pre-Funded Unit is
+ equal to the price at which the Units are being sold to the public in this offering, minus $0.0001, and the exercise price of each Pre-Funded
+ Warrant included in each Pre-Funded Unit is $0.0001 per share.
+
+ 
+
+ The Pre-Funded Warrants will be exercisable immediately
+ and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. For each Pre-Funded Unit we sell, the number
+ of Units we are offering will be decreased on a one-for-one basis. Because we will issue two Series A Warrants and one Series B Warrant
+ as part of each Unit or Pre-Funded Unit, the number of Series A Warrants and Series B Warrants sold in this offering will not change as
+ a result of a change in the mix of the Units and Pre-Funded Units sold. This offering also relates to the shares of Common Stock issuable
+ upon exercise of any Pre-Funded Warrants sold in this offering.
+
+ 
+ 
+ 
+ 
+
+ 
+ Warrants offered by us:
+ 
+ 
+ The Series A Warrants are exercisable upon issuance
+ and have an exercise price of $0.4053 per share of Common Stock (subject to certain anti-dilution and share combination event protections)
+ and have a term of 5.5 years from issuance date.
+
+ 
+
+ The Series B Warrants will be exercisable following
+ the Reset Date (as defined in the Series B Warrant), will have an exercise price of $0.0001 per share of Common Stock and will have a
+ term of 5.5 years from the issuance date.
+
+ The exercise price and number of shares of Common
+ Stock issuable under the Series A Warrants are subject to adjustment and the number of shares of Common Stock issuable under the Series
+ B Warrant will be determined following the 11th trading day after the issuance date (the Reset Date ), and to be determined
+ pursuant to the lowest daily average trading price of the Common Stock during the Reset Period (as defined in the Series B Warrant), subject
+ to a pricing floor of $0.0811 per share of Common Stock, such that the maximum number of shares of Common Stock underlying the Series
+ A Warrants and Series B Warrants would be an aggregate of approximately 19,738,466 shares and 39,452,592 shares, respectively.
+
+ 
+
+ The Common Stock and Pre-Funded Warrants, and
+ the accompanying Warrants, as the case may be, can only be purchased together in this offering but will be issued separately and will
+ be immediately separable upon issuance. This prospectus also relates to the offering of the Common Stock issuable upon exercise of the
+ Warrants.
+
+ 
+ 
+ 
+ 
+
+ 
+ Common Stock outstanding prior to this offering:
+ 
+ 9,021,617 shares
+
+ 
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 9 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+ Common Stock to be outstanding after the offering(1):
+ 
+ 18,890,850 shares (assuming no issuance of Pre-Funded Units, and no Warrants issued in this offering are exercised and the underwriters do not exercise the over-allotment). 
+
+ 
+ 
+ 
+ 
+
+ 
+ Use of Proceeds:
+ 
+ We expect to receive net proceeds of approximately $3.3 million, after deducting underwriting fees and expenses and other offering expenses (assuming the sale of all securities offered hereby, at the assumed public offering price of $0.4053 per Unit, no issuance of Pre-Funded Units, and no Warrants issued in this offering are exercised and the underwriters do not exercise the over-allotment). We intend to use all of the net proceeds we receive from this offering as follows: up to 35% from the net proceeds of this Offering or $1.1 million will be used to pay off part of the December 2023 Note and the April 2024 Note, and the remainder for the acquisition, research and development of original content and technology, strategic partnerships, and for working capital, capital expenditures and general corporate purposes.
+
+ 
+ 
+ 
+ 
+
+ 
+ Risk Factors:
+ 
+ Investing in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in the Risk Factors section on page 11 before deciding to invest in our securities.
+
+ 
+ 
+ 
+ 
+
+ 
+ Trading Symbols:
+ 
+ Our Common Stock and registered warrants are currently quoted on The Nasdaq Capital Market under the trading symbols GROM and GROMW, respectively. There is no established public trading market for the Units, Pre-Funded Units, Warrants or Pre-Funded Warrants, and we do not expect a market to develop. We do not intend to list the Units, Pre-Funded Units, Warrants or Pre-Funded Warrants on Nasdaq, any other national securities exchange or any other trading market. Without an active trading market, the liquidity of the Warrants or the Pre-Funded Warrants will be extremely limited.
+
+ 
+ 
+
+(1) The shares of Common Stock
+outstanding and the shares of Common Stock to be outstanding after this offering is based on 9,021,617 shares outstanding as of July
+18, 2024. The number excludes an aggregate of up to approximately 31,228,222 shares of Common Stock based upon the following:
+
+ 
+
+ 
+ 
+ (i) 
+ 347 shares of Common Stock issuable upon exercise of outstanding stock options at a weighted average exercise price of $1,788.00 per share;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ (ii)
+ 8,063,401 shares of Common Stock issuable upon the exercise of outstanding Common Stock purchase warrants at a weighted average exercise price of $2.13 (which includes the warrants being registered under the Resale Prospectus which includes (a) 2,314,814 shares of common stock issuable upon the exercise of the March 2024 Warrant, (b) 962,962 shares of common stock issuable upon the exercise of the April 2024 Warrant, (c) April 2024 Note, (c) 1,923,570 common stock issuable upon the exercise the July 2024 Waiver Warrants);
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ (iii)
+ 13,156,451 shares of Common Stock issuable upon the conversion by convertible promissory note holders of all of the outstanding principal amount and accrued and unpaid interest due, totaling $3,116,983 (which includes 3,823,530 shares of common stock issuable upon conversion of notes being registered under the Resale Prospectus, at the minimum conversion price of $0.17 per share, of our April 2024 Note);
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ (iv)
+ 8,023 shares of Common Stock issuable upon the conversion of 9,243,309 shares of Series C 8% Convertible Preferred Stock; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ (v) 
+ 10,000,000 shares of Common Stock reserved for issuance under our Amended and Restated 2020 Equity Incentive Plan (the 2020 Plan ).
+
+ 
+ 
+
+Except as otherwise indicated
+herein, all information in this prospectus assumes no sale of Pre-Funded Warrants, which, if sold, would reduce the number of shares of
+Common Stock that we are offering on a one-for-one basis, no exercise of the Warrants issued in this offering, and no exercise of options
+issued under our 2020 Plan or of warrants described above.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 10 
+
+ 
+
+ 
+
+ 
+
+RISK FACTORS
+
+ 
+
+Investing in our securities
+involves a high degree of risk. Before investing in our Common Stock and warrants, you should carefully consider the risks described below,
+as well as the other information in this prospectus, including our consolidated financial statements and the related notes. In addition,
+we may face additional risks and uncertainties not currently known to us, or which as of the date of this registration statement we might
+not consider significant, which may adversely affect our business. If any of the following risks occur, our business, financial condition
+and results of operations could be materially adversely affected. In such case the trading price of our Common Stock and warrants could
+decline due to any of these risks or uncertainties, and you may lose part or all of your investment.
+
+ 
+
+Risks Related to This Offering, Ownership of
+Our Securities 
+
+ 
+
+Our independent auditors concurred with
+our management s assessment that raises concern as to our ability to continue as a going concern.
+
+ 
+
+On a consolidated basis, we
+have incurred significant operating losses since inception. Our financial statements do not include any adjustments that might result
+from the outcome of this uncertainty. As of March 31, 2024, we have an accumulated deficit of $108.9 million.
+
+ 
+
+Because we do not expect that
+existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about our ability
+to continue as a going concern. Therefore, we will need to raise additional funds and are currently exploring alternative sources of financing.
+Historically, we have raised capital through private placements of our equity securities and convertible notes and through officer loans
+as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of Common Stock or
+other securities and by obtaining short-term loans. We will be required to continue to do so until our consolidated operations become
+profitable.
+
+ 
+
+These factors, among others,
+raise substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient funding, our business,
+prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as
+a going concern.
+
+ 
+
+If we are unable to maintain compliance
+with all applicable continued listing requirements and standards of Nasdaq, our Common Stock could be delisted from Nasdaq.
+
+ 
+
+Our Common Stock is listed
+on The Nasdaq Capital Market under the symbol GROM. In order to maintain that listing, we must satisfy minimum financial
+and other continued listing requirements and standards, including those regarding director independence and independent committee requirements,
+minimum stockholders equity, minimum share price, and certain corporate governance requirements. There can be no assurances that
+we will be able to remain in compliance with Nasdaq s listing standards or if we do later fail to comply and subsequently regain
+compliance with Nasdaq s listing standards, that we will be able to continue to comply with the applicable listing standards. If
+we are unable to maintain compliance with these Nasdaq requirements, our Common Stock will be delisted from Nasdaq.
+
+ 
+
+In the event that our Common
+Stock is delisted from Nasdaq due to our failure to continue to comply with any requirement for continued listing on Nasdaq, and is not
+eligible for quotation on another market or exchange, trading of our Common Stock could, again, be conducted in the over-the-counter market
+or on an electronic bulletin board established for unlisted securities such as the OTC Pink or the OTCQB tiers of the OTC marketplace.
+In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our Common Stock, and it would likely
+be more difficult to obtain coverage by securities analysts and the news media, which could cause the price of our Common Stock to decline
+further. Also, it may be difficult for us to raise additional capital if we are not listed on a national exchange. See Prospectus
+Summary Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard. 
+
+ 
+
+ 
+
+ 
+
+ 11 
+
+ 
+
+ 
+
+ 
+
+Risks related to our planned reverse stock
+split.
+
+ 
+
+We are planning to effectuate
+a reverse stock split of our issued and outstanding shares of Common Stock, which may decrease the market price of our Common Stock and
+could negatively impact the liquidity of our Common Stock.
+
+ 
+
+We have announced our intention
+to effectuate a reverse stock split of our issued and outstanding shares of Common Stock at a ratio to be determined by our Board of Directors
+within the range of 1-for 2 to 1-for 20. Although the primary purpose of the reverse stock split is to increase the market price of our
+Common Stock to ensure we regain compliance with the Nasdaq minimum bid price requirement, there can be no assurance that the reverse
+stock split will achieve this desired outcome. Further, the reverse stock split may decrease the liquidity of our Common Stock, as the
+reduced number of shares available in the market post-split could discourage trading and increase price volatility. Moreover, the perception
+of the reverse stock split among investors, analysts, and other market participants may be negative, which could lead to a decrease in
+the market price of our Common Stock. Additionally, the reverse stock split could potentially result in a significant number of our shareholders
+owning odd lots (less than 100 shares), which may be more difficult to sell or require higher transaction costs per share
+to sell, potentially affecting the liquidity of these shareholders investment in our Common Stock. Investors should carefully consider
+these risks, as they may result in a loss of value for shareholders.
+
+ 
+
+Future capital raises may dilute our existing
+stockholders ownership and/or have other adverse effects on our operations.
+
+ 
+
+If we raise additional capital
+by issuing equity securities, our existing stockholders percentage ownership may decrease, and these stockholders may experience
+substantial dilution. If we raise additional funds by issuing debt instruments, these debt instruments could impose significant restrictions
+on our operations, including liens on our assets. If we raise additional funds through collaborations and licensing arrangements, we may
+be required to relinquish some rights to our technologies or products, or to grant licenses on terms that are not favorable to us or could
+diminish the rights of our stockholders.
+
+ 
+
+We do not anticipate paying any cash dividends
+on our Common Stock in the foreseeable future; therefore, capital appreciation, if any, of our Common Stock, will be your sole source
+of gain for the foreseeable future.
+
+ 
+
+We have never declared or
+paid cash dividends on our Common Stock. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future.
+We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. In addition,
+future loan arrangements, if any, may contain, terms prohibiting or limiting the amount of dividends that may be declared or paid on our
+Common Stock. As a result, capital appreciation, if any, of our Common Stock, will be your sole source of gain for the foreseeable future.
+
+ 
+
+Our Board of Directors may authorize and
+issue shares of new classes of stock that could be superior to or adversely affect you as a holder of our Common Stock.
+
+ 
+
+Our Board of Directors ( Board )
+has the power to authorize and issue shares of classes of stock, including preferred stock that have voting powers, designations, preferences,
+limitations and special rights, including preferred distribution rights, conversion rights, redemption rights and liquidation rights without
+further shareholder approval which could adversely affect the rights of the holders of our Common Stock. In addition, our Board could
+authorize the issuance of a series of preferred stock that has greater voting power than our Common Stock or that is convertible into
+our Common Stock, which could decrease the relative voting power of our Common Stock or result in dilution to our existing shareholders.
+In the event of such issuances, the preferred stock could be used, under certain circumstances, as a method of discouraging, delaying,
+or preventing a change in control of our Company.
+
+ 
+
+Any of these actions could
+significantly adversely affect the investment made by holders of our Common Stock. Holders of our Common Stock could potentially not receive
+dividends that they might otherwise have received. In addition, holders of our Common Stock could receive less proceeds in connection
+with any future sale of the Company, whether in liquidation or on any other basis.
+
+ 
+
+ 
+
+ 
+
+ 12 
+
+ 
+
+ 
+
+ 
+
+The voting and conversion rights of our
+issued and outstanding shares of Series C 8% Convertible Preferred Stock will have the effect of diluting the voting power of existing
+common stockholders.
+
+ 
+
+Our authorized capital stock
+includes 25,000,000 shares of preferred stock, of which 2,000,000 shares are designated as Series A 10% Convertible Preferred Stock ( Series
+A Stock ), 10,000,000 shares are designated as Series B 8% Convertible Preferred Stock ( Series B Stock"), and 10,000,000
+shares are designated as Series C 8% Convertible Preferred Stock ( Series C Stock ). As of July 18, 2024, no shares of our
+Series A Stock or Series B Stock, and 9,243,309 shares of Series C Stock, are issued and outstanding. The holders of our outstanding shares
+of Series C Stock may at any time, after the 6-month anniversary of the issuance of their shares of Series C Stock on May 20, 2021, convert
+such shares into shares of our Common Stock at a conversion price equal to $1,152.00. In addition, the Company may, at any time, require
+conversion of all or any of the Series C Stock then outstanding at a conversion price equal to an aggregate of $1,152.00. The conversion
+of shares of our Series C Stock will dilute your interests. If all of the shares of our Series C Stock were converted, we would have 8,023
+additional shares of Common Stock issued and outstanding, which, based on the 9,021,617 shares outstanding as of July 18, 2024, would
+represent approximately 0.09% and 0.04% of our shares of Common Stock outstanding prior to and after this offering (assuming the consummation
+of this offering), respectively.
+
+ 
+
+In addition, the holders of
+shares of our Series C Stock vote together as a single class with the holders of shares of our Common Stock, with each share entitling
+the holder to 1.5625 votes per share. Therefore, as of July 18, 2024, the holders of our 9,243,309 shares of Series C Stock, have an aggregate
+of approximately 14,442,671 votes, representing approximately 61.6% of our voting power.
+
+ 
+
+The effects of the voting
+and conversion rights tied to shares of our Series C Stock may affect the rights of our common stockholders by, among other things, restricting
+dividends on our Common Stock, diluting the voting power of our common stockholders, reducing the market price of our Common Stock, or
+impairing the liquidation rights of our Common Stock.
+
+ 
+
+Our Board of Directors may issue and fix
+the terms of shares of our Preferred Stock without stockholder approval, which could adversely affect the voting power of holders of our
+Common Stock or any change in control of our Company.
+
+ 
+
+Our Articles of Incorporation
+authorize the issuance of up to 25,000,000 shares of "blank check" preferred stock, with such designations rights and preferences
+as may be determined from time to time by our board of directors. Our board of directors is empowered, without stockholder approval, to
+issue shares of preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting
+power or other rights of the holders of our common stock. In the event of such issuances, the preferred stock could be used, under certain
+circumstances, as a method of discouraging, delaying, or preventing a change in control of our Company.
+
+ 
+
+Our officers, directors and principal stockholders
+have significant voting power over our stock and will be able to exert significant control over matters subject to stockholder approval.
+
+ 
+
+Our directors, executive officers
+and significant stockholders will continue to have substantial control over us after this offering and could delay or prevent a change
+in corporate control. Our directors, executive officers and holders of more than 5% of our Common Stock or preferred stock, together with
+their affiliates, currently beneficially own, in the aggregate, 0.11% of our outstanding Common Stock and 54.3% of our voting power beneficially
+and through proxies, and after this offering will beneficially own, in the aggregate, 0.05% of our outstanding Common Stock and 38.2%
+of our voting power beneficially and through proxies. As a result, these stockholders, acting together, would have significantly influence
+on the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation
+or sale of all or substantially all of our assets. In addition, these stockholders, acting together, would have significantly influence
+on the management and affairs of our Company. Accordingly, this concentration of ownership might adversely affect the market price of
+our Common Stock by:
+
+ 
+
+ delaying, deferring or preventing a change in control of the Company;
+
+ 
+
+ impeding a merger, consolidation, takeover, or other business combination involving us; or
+
+ 
+
+ discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company. 
+
+ 
+
+ 
+
+ 
+
+ 13 
+
+ 
+
+ 
+
+ 
+
+Substantial future sales of shares of our
+Common Stock could cause the market price of our Common Stock to decline.
+
+ 
+
+The market price of shares
+of our Common Stock could decline as a result of substantial sales of our Common Stock, particularly sales by our directors, executive
+officers and significant stockholders, or a large number of shares of our Common Stock becoming available for sale or the perception in
+the market that holders of a large number of shares intend to sell their shares. After this offering, we will have 18,890,850 shares outstanding
+of our Common Stock, based on the 9,021,617 shares outstanding as of July 18, 2024 (and assuming the sale of all securities offered hereby
+and assuming no sale of any Pre-Funded Units, no exercise of the over-allotment option, and no exercise of the Warrants issued in connection
+with this offering). This includes the shares included in this offering, which may be resold in the public market immediately without
+restriction, unless purchased by our affiliates or existing stockholders.
+
+ 
+
+In the event that our Common Stock is delisted
+from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in shares of our Common Stock because they may be considered
+penny stocks and thus be subject to the penny stock rules.
+
+ 
+
+The SEC has adopted a number
+of rules to regulate penny stock that restricts transactions involving stock which is deemed to be penny stock. These rules
+may have the effect of reducing the liquidity of penny stocks. Penny stocks generally are equity securities with a price
+of less than $5.00 per share (other than securities registered on certain national securities exchanges or quoted on Nasdaq if current
+price and volume information with respect to transactions in such securities is provided by the exchange or system). Our shares of Common
+Stock constitute, penny stock within the meaning of the rules. The additional sales practice and disclosure requirements
+imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our Common Stock, which could
+severely limit the market liquidity of such shares of Common Stock and impede their sale in the secondary market.
+
+ 
+
+A U.S. broker-dealer selling
+penny stock to anyone other than an established customer or accredited investor (generally, an individual with a net worth
+in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability
+determination for the purchaser and must receive the purchaser s written consent to the transaction prior to sale, unless the broker-dealer
+or the transaction is otherwise exempt. In addition, the penny stock regulations require the U.S. broker-dealer to deliver,
+prior to any transaction involving a penny stock, a disclosure schedule prepared in accordance with SEC standards relating
+to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also
+required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities.
+Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the penny
+stock held in a customer s account and information with respect to the limited market in penny stocks. 
+
+ 
+
+Stockholders should be aware
+that, according to the SEC, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such
+patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
+(ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) boiler
+room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive
+and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters
+and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses. Our management is aware of the
+abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior
+of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations
+to prevent the described patterns from being established with respect to our securities.
+
+ 
+
+ 
+
+ 
+
+ 14 
+
+ 
+
+ 
+
+ 
+
+We are increasingly dependent on information
+technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.
+
+ 
+
+Significant disruptions to
+our information technology systems or breaches of information security could adversely affect our business. In the ordinary course of
+business, we may collect, store and transmit large amounts of confidential information, and it is critical that we do so in a secure manner
+to maintain the confidentiality and integrity of such information. We have also outsourced significant elements of our information technology
+infrastructure; as a result, we manage independent vendor relationships with third parties who are responsible for maintaining significant
+elements of our information technology systems and infrastructure and who may or could have access to our confidential information. The
+size and complexity of our information technology systems, and those of our third-party vendors, make such systems potentially vulnerable
+to service interruptions and security breaches from inadvertent or intentional actions by our employees, partners or vendors. These systems
+are also vulnerable to attacks by malicious third parties and may be susceptible to intentional or accidental physical damage to the infrastructure
+maintained by us or by third parties. Maintaining the secrecy of confidential, proprietary and/or trade secret information is important
+to our competitive business position. While we have taken steps to protect such information and have invested in systems and infrastructures
+to do so, there can be no guarantee that our efforts will prevent service interruptions or security breaches in our systems or the unauthorized
+or inadvertent wrongful use or disclosure of confidential information that could adversely affect our business operations or result in
+the loss, dissemination or misuse of critical or sensitive information. The increasing sophistication and frequency of cybersecurity threats,
+including targeted data breaches, ransomware attacks designed to encrypt our data for ransom and other malicious cyber activities, pose
+a significant risk to the integrity and confidentiality of our data systems. A breach our security measures or the accidental loss, inadvertent
+disclosure, unapproved dissemination, misappropriation or misuse of trade secrets, proprietary information or other confidential information,
+whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other cause, could enable others to produce
+competing products, use our proprietary technology or information, and/or adversely affect our business position. Further, any such interruption,
+security breach, loss or disclosure of confidential information could result in financial, legal, business and reputational harm to us
+and could have a material adverse effect on our business, financial position, results of operations and/or cash flow.
+
+ 
+
+Geopolitical conditions,
+including trade disputes and direct or indirect acts of war or terrorism, could have an adverse effect on our operations and financial
+results.
+
+ 
+
+Our operations could be disrupted
+by geopolitical conditions, political and social instability, acts of war, terrorist activity or other similar events. In February 2022,
+Russia initiated significant military action against Ukraine. In response, the U.S. and certain other countries imposed significant sanctions
+and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business,
+and financial organizations, and the U.S. and certain other countries could impose further sanctions, trade restrictions, and other retaliatory
+actions should the conflict continue or worsen. It is not possible to predict the broader consequences of the conflict, including related
+geopolitical tensions, and the measures and retaliatory actions taken by the U.S. and other countries in respect thereof as well as any
+counter measures or retaliatory actions by Russia or Belarus in response, including, for example, potential cyberattacks or the disruption
+of energy exports, is likely to cause regional instability, geopolitical shifts, and could materially adversely affect global trade, currency
+exchange rates, regional economies and the global economy. In addition, the ongoing conflicts in the Middle East may further impact global
+economic conditions and market sentiments. This, in turn, could adversely affect the trading price of our shares of Common Stock and investor
+interest in us. The outcome of the Russia-Ukraine war and conflicts in the Middle East remain uncertain, and while it is difficult to
+predict the impact of any of the foregoing, the conflict and actions taken in response to the conflict could increase our costs, disrupt
+our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at
+all, or otherwise adversely affect our business, financial condition, and results of operations. 
+
+ 
+
+Inflation may adversely
+affect our operations and financial results.
+
+ 
+
+In periods of rising inflation,
+the cost of labor essential to operate our platform, among other things, may increase and as a consequence, our overall profit margin
+may be adversely affected.
+
+ 
+
+ 
+
+ 
+
+ 15 
+
+ 
+
+ 
+
+ 
+
+There is no public market for the Units, Pre-Funded Units, Warrants
+or Pre-Funded Warrants.
+
+ 
+
+There is no public trading
+market for the Units, Pre-Funded Units, Warrants or Pre-Funded Warrants offered by this prospectus, and we do not expect a market to develop.
+In addition, we do not intend to apply to list the Units, Pre-Funded Units, Warrants or Pre-Funded Warrants on any national securities
+exchange or other nationally recognized trading system, including Nasdaq. Without an active market, the liquidity of the warrants will
+be limited.
+
+ 
+
+The Pre-Funded Warrants, Series A Warrants
+and Series B Warrants are speculative in nature.
+
+ 
+
+The Warrants offered in this
+offering do not confer any rights of Common Stock ownership on their holders, such as voting rights or the right to receive dividends,
+but rather merely represent the right to acquire shares of our Common Stock at a fixed price for a limited period of time. Specifically,
+commencing on the date of issuance, holders of the Series A Warrants may exercise their right to acquire the Common Stock and pay an exercise
+price of $0.4053 per share (100% of the assumed offering price per Unit), subject to adjustment, from time to time, until the 5.5 year
+anniversary from the date of issuance, after which date any unexercised Series A Warrants will expire and have no further value, and holders
+of the Pre-Funded Warrants may exercise their right to acquire the Common Stock and pay an exercise price of $0.0001 per share, subject
+to adjustment, from time to time, until all of the Pre-Funded Warrants have been exercised; and commencing on the Reset Date (as defined
+in the Series B Warrant), holders of Series B Warrants may exercise their right to acquire the Common Stock and pay an exercise price
+of $0.0001 per share, subject to adjustment, from time to time, until 5.5 year anniversary from the date of issuance, after which date
+any unexercised Series B Warrants will expire and have no further value.
+
+ 
+
+Since the warrants are executory contracts,
+they may have no value in a bankruptcy or reorganization proceeding.
+
+ 
+
+In the event a bankruptcy
+or reorganization proceeding is commenced by or against us, a bankruptcy court may hold that any unexercised Warrants or Pre-Funded Warrants
+are executory contracts that are subject to rejection by us with the approval of the bankruptcy court. As a result, holders of the Warrants
+and Pre-Funded Warrants may, even if we have sufficient funds, not be entitled to receive any consideration for their Warrants and Pre-Funded
+Warrants or may receive an amount less than they would be entitled to if they had exercised their Warrants and Pre-Funded Warrants prior
+to the commencement of any such bankruptcy or reorganization proceeding.
+
+ 
+
+The warrants may have an adverse effect
+on the market price of our Common Stock and make it more difficult to effect a business combination.
+
+ 
+
+We will be issuing Warrants
+and Pre-Funded Warrants to purchase shares of Common Stock as part of this offering. To the extent we issue shares of Common Stock to
+effect a future business combination, the potential for the issuance of a substantial number of additional shares upon exercise of the
+Warrants or Pre-Funded Warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such warrants, when
+exercised, will increase the number of issued and outstanding shares of Common Stock and reduce the value of the shares issued to complete
+the business combination. Accordingly, the warrants may make it more difficult to effectuate a business combination or increase the cost
+of acquiring a target business. Additionally, the sale, or even the possibility of a sale, of the shares of Common Stock underlying the
+warrants could have an adverse effect on the market price for our securities or on our ability to obtain future financing. If and to the
+extent the warrants are exercised, you may experience dilution to your holdings. 
+
+ 
+
+You will experience immediate and substantial dilution in the
+net tangible book value per share of the Common Stock included in the Units and may experience additional dilution of your investment
+in the future.
+
+ 
+
+The effective price per share
+of Common Stock included in the Units is substantially higher than the net tangible book value per share of our Common Stock outstanding
+prior to this offering. Assuming the sale of all 9,869,233 Units in this offering and no sale of any Pre-Funded Units, and no exercise
+of the over-allotment option, if you purchase Units in this offering, you will suffer immediate and substantial dilution of $0.03 per
+share, with respect to the net tangible book value of the Common Stock as of March 31, 2024. Furthermore, if outstanding options, warrants
+or notes are exercised or converted, as applicable, or the Warrants issued in connection with this offering are exercised, you could experience
+further dilution. See the section titled Dilution below for a more detailed discussion of the dilution you will incur
+if you purchase Units in this offering. Further, because we may need to raise additional capital to fund our anticipated level of operations,
+we may in the future sell substantial amounts of Common Stock or securities convertible into or exchangeable for Common Stock. These future
+issuances of equity or equity-linked securities, together with the exercise or conversion of outstanding options, warrants, notes and/or
+any additional shares issued in connection with acquisitions, if any, will likely result in further dilution to investors.
+
+ 
+
+ 
+
+ 
+
+ 16 
+
+ 
+
+ 
+
+ 
+
+If securities or industry analysts do not
+publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
+
+ 
+
+The trading market for our
+Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several
+analysts may cover our stock. If one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about
+our business, our stock price would likely decline. If one or more of these analysts cease coverage of our Company or fail to publish
+reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
+
+ 
+
+The market price for our Common Stock is
+particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, and lack of profits,
+which could lead to wide fluctuations in our share price.
+
+ 
+
+The market for our Common
+Stock is characterized by significant price volatility when compared to the shares of larger, more established companies that have large
+public floats, and we expect that our share price will continue to be more volatile than the shares of such larger, more established companies
+for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our Common
+Stock is, compared to the shares of such larger, more established companies, sporadically and thinly traded. The price for our Common
+Stock could, for example, decline precipitously in the event that a large number of our Common Stock is sold on the market without commensurate
+demand. Secondly, we are a speculative or risky investment due to our lack of profits to date. As a consequence of this
+enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news
+or lack of progress, be more inclined to sell their shares of Common Stock on the market more quickly and at greater discounts than would
+be the case with the stock of a larger, more established company that has a large public float. Many of these factors are beyond our control
+and may decrease the market price of our Common Stock regardless of our operating performance.
+
+ 
+
+If and when a larger trading market for
+our Common Stock develops, the market price of our Common Stock is still likely to be highly volatile and subject to wide fluctuations.
+
+ 
+
+The market price of our Common
+Stock may be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control,
+including, but not limited to:
+
+ 
+
+ variations in our revenues and operating expenses;
+
+ 
+
+ actual or anticipated changes in the estimates of our operating results or changes in stock market analyst
+recommendations regarding our Common Stock, other comparable companies or our industry generally;
+
+ 
+
+ market conditions in our industry, the industries of our customers and the economy as a whole;
+
+ 
+
+ actual or expected changes in our growth rates or our competitors growth rates;
+
+ 
+
+ developments in the financial markets and worldwide or regional economies;
+
+ 
+
+ announcements of innovations or new products or services by us or our competitors;
+
+ 
+
+ announcements by the government relating to regulations that govern our industry;
+
+ 
+
+ sales of our Common Stock or other securities by us or in the open market;
+
+ 
+
+ 
+
+ 
+
+ 17 
+
+ 
+
+ 
+
+ 
+
+ changes in the market valuations of other comparable companies; and
+
+ 
+
+ other events or factors, many of which are beyond our control, including those resulting from such events,
+or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics
+or pandemics, such as COVID-19, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate
+conditions, whether occurring in the United States or elsewhere, could disrupt our operations, disrupt the operations of our suppliers
+or result in political or economic instability.
+
+ 
+
+In addition, if the market
+for technology stocks or the stock market in general experiences loss of investor confidence, the trading price of our Common Stock could
+decline for reasons unrelated to our business, financial condition or operating results. The trading price of our Common Stock might also
+decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. Each of these
+factors, among others, could harm the value of your investment in our Common Stock. In the past, following periods of volatility in the
+market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could
+result in substantial costs and diversion of management s attention and resources, which could materially and adversely affect our
+business, operating results and financial condition.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 18 
+
+ 
+
+ 
+
+ 
+
+USE OF PROCEEDS
+
+ 
+
+We estimate that the net proceeds
+from this offering will be approximately $3.3 million (assuming the sale of all securities offered hereby, at the assumed public offering
+price of $0.4053 per Unit, equal to the closing sale price of our Common Stock on the Nasdaq on July 16, 2024, and assuming no sale of
+any Pre-Funded Units, no exercise of the over-allotment option, and no exercise of the Warrants issued in connection with this offering)
+($3.9 million if the underwriters exercise their over-allotment option in full), after deducting the underwriting discount and estimated
+offering expenses payable by us.
+
+ 
+
+We intend to use the net proceeds
+we receive from this offering as follows: up to 35% from the net proceeds of this Offering or $1.1 million will be used to pay off part
+of the December 2023 Note and the April 2024 Note, and the remainder $2.2 million will be used for the acquisition, research and development
+of original content and technology, strategic partnerships, and for working capital, capital expenditures and general corporate purposes.
+
+ 
+
+The
+December 2023 Note has a five (5) year maturity with an interest at nine percent (9%) per calendar year and carries a nine percent (9%)
+of original issue discount. The Company agreed to make amortization payments each month in the amount of $83,033.42 in cash or in kind.
+The April 2024 Note has a one (1) year maturity with an interest at twelve percent (12%) per calendar year and carries a twenty percent
+(20%) of original issue discount.
+
+ 
+
+The use of the proceeds represents
+management s estimates based on current business and economic conditions. We will retain broad discretion over the use of the net
+proceeds of this offering which may result in an allocation of net proceeds in differing amounts than those listed above, or in entirely
+new areas. The amount and timing of these proposed expenditures will depend on a number of factors, including the progress of our user
+acquisition efforts, and any unforeseen cash needs. As a result, you will be relying on the judgment of our management with regard to
+the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds
+are being used appropriately. It is possible that the proceeds will be used in a way that does not yield a favorable, or any, return for
+us. Pending application of the net proceeds as described above, we intend to invest the proceeds in investment grade interest bearing
+instruments or will hold the proceeds in interest bearing or non-interest-bearing bank accounts.
+
+ 
+
+Management believes that the
+proceeds from this offering will be sufficient to satisfy our cash needs for the next three to six months.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 19 
+
+ 
+
+ 
+
+ 
+
+DILUTION
+
+ 
+
+If you purchase shares underlying
+the Units in this offering, you will experience dilution to the extent of the difference between the price per share you pay in this offering
+and the net tangible book value per share of our Common Stock immediately after this offering. The net tangible book value of our Common
+Stock on March 31, 2024 was approximately $3.7 million, or approximately $0.42 per share. Net tangible book value per share is equal to
+the amount of our total tangible assets, less total liabilities, divided by the aggregate number of shares of our Common Stock outstanding.
+
+ 
+
+After giving effect to the
+assumed sale by us of 9,869,233 shares underlying the Units (assuming the sale of all securities offered hereby, at the assumed public
+offering price of $0.4053 per Unit, the closing sale price of our Common Stock on The Nasdaq Capital Market on July 16, 2024, and assuming
+no sale of any Pre-Funded Units, no exercise of the over-allotment option and no exercise of the Warrants issued in connection with this
+offering), after deducting the underwriter s fees and estimated offering expenses payable by us, our as adjusted net tangible book
+value as of March 31, 2024 would have been approximately $7.1 million, or approximately $0.38 per share. This represents an immediate
+decrease in net tangible book value of approximately $0.04 per share to existing stockholders and an immediate dilution of approximately
+$0.03 per share to new investors purchasing Units in this offering. The following table illustrates this per share dilution:
+
+ 
+
+ 
+ Assumed public offering price per Unit
+ 
+ $ 
+ 0.4053
+ 
+
+ 
+ Net tangible book value per share as of March 31, 2024
+ 
+ $ 
+ 0.42
+ 
+
+ 
+ Decrease in net tangible book value per share attributable to new investors in this offering
+ 
+ $ 
+ (0.04)
+ 
+
+ 
+ As adjusted net tangible book value per share as of March 31, 2024, after giving effect to this offering
+ 
+ $ 
+ 0.38
+ 
+
+ 
+ Dilution per share to investors participating in this offering
+ 
+ $ 
+ 0.03
+ 
+
+ 
+ 
+
+Each $0.10 increase (decrease)
+in the assumed public offering price of $0.4053 per Unit would increase (decrease) our as adjusted net tangible book value after this
+offering by $898,100, or $0.04 per share, and the dilution per share to new investors by $0.06 per share, assuming that the number of
+Units offered by us, as set forth above, remains the same and after deducting the underwriters fees and estimated offering expenses
+payable by us and no Pre-funded Units are sold in this offering.
+
+ 
+
+The foregoing discussion and
+table does not take into account further dilution to investors in this offering that could occur upon the exercise of outstanding options
+and warrants having a per share exercise price less than the public offering price per share in this offering.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 20 
+
+ 
+
+ 
+
+ 
+
+CAPITALIZATION
+
+ 
+
+The following table sets forth our cash and cash
+equivalents and capitalization as of March 31, 2024:
+
+ 
+
+ 
+ 
+ 
+ on an actual basis; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ on an as adjusted basis to give effect to the sale by us of 9,869,233 Units at the assumed public offering price of $0.4053 per Unit (assuming the sale of all securities offered hereby, at the assumed public offering price of $0.4053 per Unit, the closing sale price of our Common Stock on the Nasdaq on July 16, 2024, and assuming no sale of any Pre-Funded Units, no exercise of the over-allotment option and no exercise of the Warrants issued in connection with this offering), after deducting underwriting discounts and estimated offering expenses payable by us.
+
+ 
+ 
+
+You should read this information together with
+our consolidated financial statements and related notes, as well as the information set forth under the headings Use of Proceeds 
+and Management s Discussion and Analysis of Financial Condition and Results of Operations appearing elsewhere
+in this prospectus.
+
+ 
+
+ 
+ 
+ March 31, 2024 
+
+ 
+ 
+ Actual 
+ As Adjusted 
+
+ 
+ Cash and cash equivalents 
+ $452,454 
+ $3,786,954 
+
+ 
+ Indebtedness due within one year 
+ $107,116 
+ $107,116 
+
+ 
+ Total long-term debt, net of unamortized discounts - non-current portion 
+ $8,245 
+ $8,245 
+
+ 
+ Stockholders equity: 
+ 
+ 
+
+ 
+ Common stock, $0.001 par value, 500,000,000 shares authorized, 8,927,261 shares and 18,796,494 as adjusted shares outstanding 
+ 8,927 
+ 18,796 
+
+ 
+ Series C preferred stock, $0.001 par value, 10,000,000 shares authorized; 9,243,309 shares outstanding 
+ 9,243 
+ 9,243 
+
+ 
+ Additional paid-in capital 
+ 115,012,885 
+ 118,337,516 
+
+ 
+ Accumulated deficit 
+ (100,888,589) 
+ (100,888,589)
+
+ 
+ Accumulated other comprehensive loss 
+ (349,999) 
+ (349,999)
+
+ 
+ Noncontrolling interests 
+ 795,158 
+ 795,158 
+
+ 
+ Total stockholders' equity 
+ 14,587,625 
+ 17,922,125 
+
+ 
+ Total capitalization 
+ $14,702,986 
+ $18,037,486 
+
+ 
+
+_________
+
+ 
+
+The table and discussion above are based on 8,927,261
+shares of Common Stock outstanding as of March 31, 2024.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 21 
+
+ 
+
+ 
+
+ 
+
+UNDERWRITING
+
+ 
+
+EF Hutton LLC is acting as
+the representative of the underwriters in this offering ( EF Hutton or the Representative ). Subject to the
+terms and conditions of the underwriting agreement dated the date of this prospectus, the underwriters agreed to purchase, and we have
+agreed to sell to the underwriters, the following respective number of Units and Pre-Funded Units set forth opposite the underwriter s
+name below.
+
+ 
+
+ 
+ Underwriter
+ 
+ Units
+ Pre-Funded Units
+ 
+
+ 
+ EF Hutton LLC
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+The underwriting agreement
+provides that the underwriters must buy all of the securities if they buy any of them. However, the underwriters are not required to take
+or pay for the securities covered by the underwriters option to purchase additional securities to cover over-allotments, if any,
+as described below. Our securities are offered subject to a number of conditions, including:
+
+ 
+
+ receipt and acceptance of our securities by the underwriters; and
+
+ 
+
+ the underwriters right to reject orders in whole or in part.
+
+ 
+
+Over-Allotment Option 
+
+ 
+
+We have granted the underwriters
+an option to buy up to an aggregate of up to 1,480,385 Units, less underwriting discounts and commissions, solely to cover over-allotments,
+if any and in each case, less the underwriting discounts and commissions set forth on the cover of this prospectus in any combination
+thereof to cover over-allotments, if any. To the extent that the Representative exercises this option, each of the underwriters will become
+obligated, subject to conditions, to purchase approximately the same percentage of these additional securities as the number of Units
+and Pre-Funded Units to be purchased by it in the above table bears to the total number of Units and Pre-Funded Units offered by this
+prospectus. If this option is exercised in full for Units, the total offering price to the public will be approximately $4.6 million and
+the total net proceeds, before expenses and after deducting the underwriting commissions described below, to us will be approximately
+$4.2 million.
+
+ 
+
+Underwriting Discount
+
+ 
+
+The Units and Pre-Funded Units
+sold by the underwriters to the public will be offered at the offering price set forth on the cover of this prospectus. We will pay the
+underwriters a cash commission equal to eight percent (8.0%) of the gross proceeds from the sale of Units and Pre-funded Units sold in
+this offering. Any securities sold by the underwriters to securities dealers may be sold at a discount of up to $ per Unit from the public
+offering price of the Units or $ per Pre-Funded Unit from the public offering price of the Pre-Funded Units. The underwriters may offer
+the securities through one or more of their affiliates or selling agents. Upon execution of the underwriting agreement, the underwriters
+will be obligated to purchase the securities at the prices and upon the terms stated therein.
+
+ 
+
+The underwriting discount
+is equal to the public offering price per Unit, less the amount paid by the underwriter to us per Unit, or in the case of the Pre-Funded
+Units, equal to the public offering price per Pre-Funded Unit, less the amount paid by the underwriters to us per Pre-Funded Unit. The
+underwriting discount was determined through an arms length negotiation between us and the Representative. We have agreed to sell
+the Units to the underwriters at the assumed offering price of $0.4053 per Unit , and in the case of the Pre-Funded Units, $0.4052 per
+Pre-Funded Unit.
+
+ 
+
+ 
+
+ 
+
+ 22 
+
+ 
+
+ 
+
+ 
+
+We have agreed to pay the
+underwriters out-of-pocket accountable expenses, including the underwriters legal fees and disbursements, up to a maximum
+amount of $95,000. Any portion of any advance shall be returned back to us to the extent not actually incurred in compliance with FINRA
+Rule 5110(g)(4)(A).
+
+ 
+
+We estimate that the total
+expenses of the offering payable by us, not including the underwriting discount, will be approximately $345,500, which includes the one
+percent (1%) non-accountable expense allowance payable to EF Hutton.
+
+ 
+
+Tail Period
+
+ 
+
+EF Hutton shall be entitled
+to a cash fee equal to eight percent (8%) of the gross proceeds received by us from the sale of any equity, debt and/or equity derivative
+instruments to any investor actually introduced by EF Hutton to us during the period from July 19, 2024 and the earlier to occur of (i)
+four (4) months from July 19, 2024, (ii) the final closing of this offering and (iii) the termination of the Engagement Letter dated as
+of July 19, 2024 (the Engagement Agreement ) issued by EF Hutton to us (the Engagement Period ), in connection
+with any public or private financing or capital raise (each a Tail Financing ), and such Tail Financing is consummated at
+any time during the Engagement Period or within the four (4) month period following the expiration or termination of the Engagement Period,
+provided that such Tail Financing is by a party actually introduced to us in an offering in which we have direct knowledge of such party s
+participation.
+
+ 
+
+Right of First Refusal
+
+ 
+
+Until four (4) months from
+the closing date of this offering, EF Hutton will have an irrevocable right of first refusal, in its sole discretion, to act as exclusive
+financial advisor in connection with any acquisition or other effort by the Company to obtain control, directly or indirectly and whether
+in one or a series of transactions, of all or a significant portion of the assets or securities of a third party, or the sale or other
+transfer by the Company, whether in one or a series of transactions, of assets or securities, or any extraordinary corporate transaction,
+regardless of the form or structure of such transaction, or as sole investment banker, sole book-runner, and/or sole placement agent,
+at EF Hutton s sole discretion, for all future public and private equity and debt offerings, including all equity-linked financings
+on terms and conditions customary to EF Hutton for such transactions. EF Hutton will have the sole right to determine whether or not any
+other broker-dealer will have the right to participate in any such offering and the economic terms of any such participation.
+
+ 
+
+Indemnification
+
+ 
+
+We have agreed to indemnify
+the underwriters against certain liabilities, including certain liabilities under the Securities Act. If we are unable to provide this
+indemnification, we have agreed to contribute to payments the underwriters may be required to make in respect of those liabilities.
+
+ 
+
+Determination of Offering Price and Warrant
+Exercise Price
+
+ 
+
+The actual offering price
+of the securities we are offering has been negotiated between us and the Representative based on the trading of our shares of Common Stock
+prior to this offering, among other things. Other factors considered in determining the public offering price of the securities we are
+offering include our history and prospects, the stage of development of our business, our business plans for the future and the extent
+to which they have been implemented, an assessment of our management, the general conditions of the securities markets at the time of
+this offering and such other factors as were deemed relevant.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 23 
+
+ 
+
+ 
+
+ 
+
+Stock Exchange
+
+ 
+
+Our shares of Common Stock
+and registered warrants are listed on The Nasdaq Capital Market under the symbols GROM and GROMW, respectively.
+There is no public market for the Pre-Funded Warrants and Warrants sold in this offering and we are not under any obligation to apply
+to have the Pre-Funded Warrants and Warrants listed on any securities exchange or quoted on an interdealer quotation system.
+
+ 
+
+Electronic Distribution
+
+ 
+
+A prospectus in electronic
+format may be made available on websites or through other online services maintained by the underwriters of this offering, or by its affiliates.
+Other than the prospectus in electronic format, the information on any underwriter s website and any information contained in any
+other website maintained by an underwriter is not part of this prospectus or the registration statement of which this prospectus forms
+a part, has not been approved and/or endorsed by us or an underwriter in its capacity as underwriter, and should not be relied upon by
+investors.
+
+ 
+
+Regulation M
+
+ 
+
+The underwriters may not engage
+in any stabilization activity in connection with our securities and may not bid for or purchase any of our securities or attempt to induce
+any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed this offering.
+
+ 
+
+Affiliations
+
+ 
+
+The Representative and its
+respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial
+and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage
+activities. The Representative and its affiliates may from time to time in the future engage with us and perform services for us or in
+the ordinary course of their business for which they will receive customary fees and expenses. In the ordinary course of their various
+business activities, the Representative and its affiliates may make or hold a broad array of investments and actively trade debt and equity
+securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts
+of their customers, and such investment and securities activities may involve securities and/or instruments of us. The Representative
+and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of these securities
+or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in these securities and
+instruments.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 24 
+
+ 
+
+ 
+
+ 
+
+DESCRIPTION OF CAPITAL STOCK
+
+ 
+
+The following description
+of our capital stock is only a summary and is qualified in its entirety by the provisions of our articles of incorporation, as amended
+and bylaws, which have been filed as exhibits to the registration statement of which this prospectus forms a part.
+
+ 
+
+Authorized Capitalization
+
+ 
+
+We have authorized capital
+stock consisting of 500,000,000 shares of Common Stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value
+$0.001 per share, of which 2,000,000 shares have been designated as Series A 10% Convertible Preferred Stock (the Series A Stock ),
+10,000,000 shares have been designated as Series B 8% Convertible Preferred Stock (the Series B Stock ), and 10,000,000 shares
+have been designated as Series C 8% Convertible Preferred Stock (the Series C Stock ).
+
+ 
+
+As of July 18, 2024, we had
+9,021,617 shares of Common Stock and 9,243,309 shares of Series C Stock, issued and outstanding and no shares of Series A Stock or Series
+B Stock were issued and outstanding.
+
+ 
+
+Common Stock
+
+ 
+
+The holders of outstanding
+shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such
+times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share
+held on all matters submitted to a vote of stockholders. There is no cumulative voting of the election of directors then standing for
+election. The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution
+or winding up of our Company, the assets legally available for distribution to stockholders are distributable ratably among the holders
+of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors and senior
+ranked securities.
+
+ 
+
+Preferred Stock
+
+ 
+
+Series A Stock 
+
+ 
+
+Voting. The holders
+of our Series A Stock have the right to vote together with the holders of our Common Stock on an as-converted basis, with five votes for
+each share of Series A Stock, except that so long as any shares of Series A Stock are outstanding, we may not take any actions that would
+amend the rights, preferences or privileges of our Series A Stock without the approval of the holders of a majority of the issued and
+outstanding Series A Stock, voting separately as a single class. Fractional votes by the holders of Series A Stock are not permitted and
+any fractional voting rights will be rounded to the nearest whole number, with one-half being rounded upward.
+
+ 
+
+Maturity. The Series
+A Stock has no maturity and is not subject to any sinking fund or redemption and will remain outstanding indefinitely unless and until
+converted by the holder or we redeem or otherwise repurchase the Series A Stock.
+
+ 
+
+Ranking. The Series
+A Stock ranks, with respect to the payment of dividends and/or the distribution of assets in the event of any liquidation, dissolution
+or winding up of the Company, (i) senior to all classes or series of Common Stock, (ii) on parity with all equity securities issued by
+us with terms specifically providing that those equity securities rank on parity with the Series A Stock; (iii) junior to all equity securities
+issued by us with terms specifically providing that those equity securities rank senior to the Series A Stock; and (iv) effectively junior
+to all existing and future indebtedness (including indebtedness convertible into our Common Stock or preferred stock) of the Company.
+
+ 
+
+ 
+
+ 
+
+ 25 
+
+ 
+
+ 
+
+ 
+
+Dividends. Cumulative
+dividends accrue on each share of Series A Stock at the rate of 10% (the Dividend Rate ) of the stated value of $1.00,
+commencing on the date of issuance.
+
+ 
+
+Dividends are payable monthly
+in arrears, beginning on March 31, 2019 and thereafter on the last calendar day of each month, and, at our discretion, may be paid in
+cash or in stock (the PIK Dividend ) with such shares being valued at $0.25 per share (as may be adjusted as a result of
+stock splits, reverse splits, combinations, or similar transactions from time to time). Any fractional shares of a PIK Dividend may, at
+our discretion, be paid in cash or rounded up to the nearest share. All shares of Common Stock issued in payment of a PIK Dividend will
+upon issuance thereof, be duly authorized, validly issued, fully paid and non-assessable. Dividends will accumulate whether or not we
+have earnings.
+
+ 
+
+Liquidation Preference.
+In the event of a merger, sale of substantially all assets or stock, voluntary or involuntary liquidation, dissolution or winding
+up of the Company, the holders of shares of Series A Stock will be entitled to be paid out of the assets we have legally available for
+distribution to our shareholders, subject to the preferential rights of the holders of any class or series of our capital stock we may
+issue ranking senior to the Series A Stock with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation
+preference equal to the (i) aggregate number of shares of Series A Stock outstanding multiplied by its stated value per share; and (ii)
+any accrued but unpaid dividends before any distribution of assets is made to holders of Common Stock or any other class or series of
+our capital stock that we may issue that ranks junior to the Series A Stock as to liquidation rights. If our assets are not sufficient
+to pay in full the liquidation preference, then the holders of Series A Stock will share ratably in any distribution.
+
+ 
+
+The liquidation preference
+shall be proportionately adjusted in the event of a stock split, stock combination or similar event so that the aggregate liquidation
+preference allocable to all outstanding shares of Series A Stock immediately prior to such event is the same immediately after giving
+effect to such event.
+
+ 
+
+In the event of a sale of
+less than all or substantially all of the assets (by merger, asset sale, change of control, capital lease or long term license/lease spin
+off or otherwise of the Company or any subsidiary) with gross proceeds to the Company in excess of $1,500,000 whereby the assets sold
+exceeds the cost of assets acquired for GAAP purposes, then the holder of the Series A Stock will receive a special dividend 
+from the Company equal to 25% of the value of such holder s Series A Stock, payable in same form of consideration, as received by
+the Company.
+
+ 
+
+Conversion. Each share
+of Series A Stock is convertible, at any time, into five shares of Common Stock.
+
+ 
+
+If at any time, shares of
+Common Stock is changed into the same or a different number of shares of any class or classes of stock, by recapitalization, reclassification,
+reorganization, merger, exchange, consolidation, sale of assets or otherwise (each a Corporate Change ), (i) each holder
+of Series A Stock shall may convert such stock into the kind and amount of stock and other securities and property receivable upon such
+Corporate Change by a holder of the number of shares of Common Stock into which such shares of Series A Stock could have been converted
+immediately prior to such Corporate Change, or with respect to such other securities or property by the terms thereof and (ii) the PIK
+Dividend will be paid in shares of such kind and amount of stock and other securities and property receivable upon such Corporate Change
+as would have been received as such PIK Dividend immediately prior to such Corporate Change, or with respect to such other securities
+or property by the terms thereof.
+
+ 
+
+In the event that any of the
+following occurs (a) a declaration or payment of any dividend or other distribution on the Common Stock, without consideration, in additional
+shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive, directly or indirectly,
+additional shares of Common Stock; (b) a subdivision (by stock split, reclassification or otherwise) of the outstanding shares of Common
+Stock into a greater number of shares of Common Stock; or (c) a combination or consolidation (by reverse stock split) of the outstanding
+shares of Common Stock into a smaller number of shares of Common Stock (each, a Common Stock Event ), the (i) aggregate number
+of shares of Common Stock into which the Series A Stock may be converted (the Conversion Shares ) in effect immediately prior
+to such Common Stock Event, and (ii) the common stock PIK Dividend Rate shall, simultaneously with the occurrence of such Common Stock
+Event, be proportionately decreased or increased, as appropriate. The Conversion Shares shall be readjusted in the same manner upon the
+occurrence of each subsequent Common Stock Event.
+
+ 
+
+ 
+
+ 
+
+ 26 
+
+ 
+
+ 
+
+ 
+
+Share Reservation.
+We are obligated to at all times reserve and keep available out of its authorized but unissued shares of Common Stock, a sufficient number
+of its shares of Common Stock as shall from time to time be available to effect the conversion of all outstanding shares of the Series
+A Stock.
+
+ 
+
+Redemption. The Series
+A Stock is not redeemable.
+
+ 
+
+Transfer. The sale,
+offer to sell, contract to sell, assignment, pledge, hypothecation, encumbrance or other transfer of the Series A Stock or Common Stock
+issuable upon the conversion of the Series A Stock is restricted as provided in a subscription agreement for the shares between the Company
+and the purchaser or its successors and assigns.
+
+ 
+
+Protective Provisions.
+So long as any shares of Series A Stock are outstanding, we may not take any actions (whether by merger, consolidation or otherwise) without
+the approval of the holders of a majority of the issued and outstanding Series A Stock, voting separately as a single class, that would
+amend the rights, preferences or privileges of the Series A Stock.
+
+ 
+
+While we do not currently
+have any plans for the issuance of additional preferred stock, the issuance of such preferred stock could adversely affect the rights
+of the holders of Common Stock and, therefore, reduce the value of the Common Stock. It is not possible to state the actual effect of
+the issuance of any shares of preferred stock on the rights of holders of the Common Stock until the Board determines the specific rights
+of the holders of the preferred stock; however, these effects may include:
+
+ 
+
+ 
+ 
+ 
+ restricting dividends on the Common Stock;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ diluting the voting power of the Common Stock; and
+
+ 
+ 
+ 
+
+ 
+ 
+ impairing the liquidation rights of the Common Stock.
+
+ 
+ 
+
+As of the date of this prospectus,
+we have no shares of our Series A Stock issued and outstanding.
+
+ 
+
+Series B Stock
+
+ 
+
+Ranking. The Series
+B Stock ranks senior and prior to all other classes or series of our preferred stock and Common Stock.
+
+ 
+
+Conversion. The holder
+may at any time after the 12-month anniversary of the issuance of the shares of Series B Stock convert such shares into Common Stock at
+a conversion price equal to the 30-day volume weighted average price ( VWAP ) of a share of Common Stock for each share of
+Series B Stock to be converted. In addition, we at any time may require conversion of all or any of the Series B Stock then outstanding
+at a 50% discount to the 30-day VWAP.
+
+ 
+
+Voting. The holders
+of our Series B Stock vote together as a single class with the holders of shares of our Common Stock, with each share entitling the holder
+to 1.5625 votes per share. The consent of the holders of at least two-thirds of the shares of Series B Stock is required for the amendment
+to any of the terms of the Series B Stock, to create any additional class of stock unless the stock ranks junior to the Series B Stock,
+to make any distribution or dividend on any securities ranking junior to the Series B Stock, to merge or sell all or substantially all
+of our assets or acquire another business or effectuate any liquidation of the Company.
+
+ 
+
+Dividends. Cumulative
+dividends accrue on each share of Series B Stock at the rate of 8% per annum of the stated value of $1.00 per share and are payable in
+Common Stock in arrears quarterly commencing 90 days from issuance.
+
+ 
+
+ 
+
+ 
+
+ 27 
+
+ 
+
+ 
+
+ 
+
+Liquidation. Upon a
+liquidation, dissolution or winding up of the Company, the holders of the Series B Stock are entitled to $1.00 per share plus all accrued
+and unpaid dividends. No distribution may be made to holders of shares of capital stock ranking junior to the Series B Stock upon a liquidation
+until Series B stockholders receive their liquidation preference. The holders of 66 2/3% of the then outstanding shares of Series B Stock,
+may elect to effect a merger, reorganization or consolidation of the Company into or with another corporation, not affiliated with said
+majority, or other similar transaction or series of related transactions in which more than 50% of the voting power of the Company is
+disposed of in exchange for property, rights or securities distributed to holders thereof by the acquiring person, firm or other entity,
+or the sale of all or substantially all of the assets of the Company.
+
+ 
+
+As of the date of this prospectus,
+we have no shares of Series B Stock issued and outstanding.
+
+ 
+
+Series C Stock
+
+ 
+
+Designation and Amount.
+The number of shares constituting the Series C Preferred Stock shall be 10,000,000, with a stated value of $1.00 per share.
+
+ 
+
+Ranking. The Series
+C Preferred Stock ranks senior and prior to all other classes or series of our preferred stock and Common Stock. 
+
+ 
+
+Dividends. Cumulative
+dividends accrue on each share of Series C Preferred Stock at the rate of 8% per annum of the stated value of $1.00 per share and are
+payable in Common Stock in arrears quarterly commencing three months from the date of issuance.
+
+ 
+
+Liquidation. Upon a
+liquidation, dissolution or winding up of the Company, the holders of the Series C Preferred Stock are entitled to $1.00 per share, plus
+all accrued and unpaid dividends. No distribution may be made to holders of shares of capital stock ranking junior to the Series C Preferred
+Stock upon a liquidation until the holders of Series C Preferred Stock receive their liquidation preference. The holders of 66 2/3% of
+the then outstanding shares of Series C Preferred Stock, may elect to effect a merger, reorganization or consolidation of the Company,
+or other similar transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of
+in exchange for property, rights or securities distributed to holders thereof by the acquiring person, firm or other entity, or the sale
+of all or substantially all of our assets, as a liquidation.
+
+ 
+
+Voting. The holders
+of our Series C Preferred Stock vote together as a single class with the holders of our Common Stock, with each share entitling the holder
+to 1.5625 votes per share. The consent of the holders of at least 66 2/3% of the shares of Series C Preferred Stock is required for the
+amendment to any of the terms of the Series C Preferred Stock, to create any additional class of stock unless the stock ranks junior to
+the Series C Preferred Stock, to make any distribution or dividend on any securities ranking junior to the Series C Preferred Stock, or
+to merge or sell all or substantially all of our assets or acquire another business or effectuate any liquidation of the Company.
+
+ 
+
+Conversion. The holder
+may, at any time after the 6-month anniversary of the issuance of the shares of Series C Preferred Stock, convert such shares into Common
+Stock at a conversion rate of $1,152.00 per share. In addition, we may, at any time after the issuance of the shares, convert any or all
+of the outstanding shares of Series C Preferred Stock at a conversion rate of $1,152.00 per share.
+
+ 
+
+As of July 18, 2024, we had
+9,243,309 shares of Series C Stock issued and outstanding.
+
+ 
+
+Stock Options 
+
+ 
+
+As of July 18, 2024, an aggregate
+of 347 shares of Common Stock were issuable upon the exercise of outstanding stock options, at a weighted-average exercise price of $1,788.00
+per share.
+
+ 
+
+Warrants
+
+ 
+
+As of July 18, 2024, warrants
+to purchase an aggregate of 8,063,401 shares of Common Stock at a weighted average exercise price of $2.13 are issued and outstanding
+and terms between 4.7 years and 5.0 years.
+
+ 
+
+ 
+
+ 
+
+ 28 
+
+ 
+
+ 
+
+ 
+
+DESCRIPTION
+OF Securities Being Offered in This Offering
+
+ 
+
+We are offering (A) up to
+9,869,233 Units, each Unit consisting of: (i) one share of our Common Stock; and (ii) two Series A Warrants, each having the right to
+purchase one share of Common Stock; and (iii) one Series B Warrant to purchase a number of shares of Common Stock, and (B) up to 9,869,233
+Pre-Funded Units, each Pre-Funded Unit consisting of: (i) one Pre-Funded Warrant exercisable for one share of Common Stock; (ii) two Series
+A Warrants, each having the right to purchase one share of Common Stock; and (iii) one Series B Warrant to purchase a number of shares
+of Common Stock. For each Pre-Funded Unit we sell, the number of Units we are offering will be decreased on a one-for-one basis. Because
+we will issue two Series A Warrants and one Series B Warrant as part of each Unit or Pre-Funded Unit, the number of Series A Warrants
+and Series B Warrants sold in this offering will not change as a result of a change in the mix of the Units and Pre-Funded Units sold.
+The Units and the Pre-Funded Units have no stand-alone rights and will not be issued or certificated. The shares of Common Stock and/or
+Pre-Funded Warrants, as the case may be, and the Warrants can only be purchased together in this offering but the securities contained
+in the Units or Pre-Funded Units will be issued separately. We are also registering the Common Stock issuable from time to time upon exercise
+of the Warrants and Pre-Funded Warrants included in the Units and Pre-Funded Units offered hereby. 
+
+ 
+
+Warrants and Pre-Funded Warrants Being Offered
+in This Offering
+
+ 
+
+The following summary of certain
+terms and provisions of the Warrants and Pre-Funded Warrants offered hereby is not complete and is subject to, and qualified in its entirety
+by, the provisions of the forms of Warrant and Pre-Funded Warrant, all of which are filed as exhibits to the registration statement of
+which this prospectus is a part. Prospective investors should carefully review the terms and provisions set forth in the forms of Warrants
+and Pre-Funded Warrant.
+
+ 
+
+Pursuant to warrant agent
+agreement between us and Equiniti Trust Company, as Warrant and Pre-Funded Warrant agent, the Warrants and Pre-Funded Warrants will be
+issued in book-entry form and shall initially be represented only by one or more global warrants deposited with the warrant agent, as
+custodian on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise
+directed by DTC.
+
+ 
+
+Exercisability. The
+Pre-Funded Warrants are exercisable at any time after their original issuance until they are exercised in full. The Warrants are exercisable
+at any time after their original issuance up to the date that is five and a half years after their original issuance. Each of the Warrants
+and the Pre-Funded Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed
+exercise notice accompanied by payment in full in immediately available funds for the number of shares of Common Stock subscribed for
+upon such exercise (except in the case of a cashless exercise as discussed below). If a registration statement registering the issuance
+of the shares of Common Stock underlying the Warrants or Pre-Funded Warrants under the Securities Act is not effective or available, the
+holder may, in its sole discretion, elect to exercise the Warrants or Pre-Funded Warrants through a cashless exercise, in which case the
+holder would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the
+Warrants or Pre-Funded Warrants, as applicable.
+
+ 
+
+No fractional shares of Common
+Stock will be issued in connection with the exercise of a Warrant or Pre-Funded Warrant. In lieu of fractional shares, we will pay the
+holder an amount in cash equal to the fractional amount multiplied by the exercise price.
+
+ 
+
+Exercise Limitation. A
+holder will not have the right to exercise any portion of the Pre-Funded Warrants or Warrants if the holder (together with its affiliates)
+would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any warrants, 9.99%) of the number of
+shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance
+with the terms of the Warrants and Pre-Funded Warrants. However, any holder may increase or decrease such percentage to any other percentage
+not in excess of 9.99%, upon at least 61 days prior notice from the holder to us with respect to any increase in such percentage.
+
+ 
+
+Exercise Price. The
+exercise price of each Pre-Funded Warrant included in each Pre-Funded Unit is $0.0001 per share.
+
+ 
+
+ 
+
+ 
+
+ 29 
+
+ 
+
+ 
+
+ 
+
+The Series A Warrants are
+exercisable upon issuance and have an exercise price of $0.4053 per share of Common Stock (subject to certain anti-dilution and share
+combination event protections) and have a term of 5.5 years from issuance date.
+
+ 
+
+The Series B Warrants will
+be exercisable following the Reset Date (as defined in the Series B Warrant), will have an exercise price of $0.0001 per share of Common
+Stock and will have a term of 5.5 years from the issuance date.
+
+ 
+
+The exercise price and number
+of shares of Common Stock issuable under the Series A Warrants are subject to adjustment and the number of shares of Common Stock issuable
+under the Series B Warrant will be determined following the 11th trading day after the issuance date (the Reset Date ), and
+to be determined pursuant to the lowest daily average trading price of the Common Stock during the Reset Period (as defined in the Series
+B Warrant), subject to a pricing floor of $0.0811 per share of Common Stock, such that the maximum number of shares of Common Stock underlying
+the Series A Warrants and Series B Warrants would be an aggregate of approximately 19,738,466 shares and 39,452,592 shares, respectively.
+
+ 
+
+Transferability. Subject
+to applicable laws, the Warrants and the Pre-Funded Warrants may be offered for sale, sold, transferred or assigned without our consent.
+
+ 
+
+Exchange Listing. We
+do not intend to apply for the listing of the Warrants or Pre-Funded Warrants offered in this offering on any stock exchange. Without
+an active trading market, the liquidity of the Warrants and Pre-Funded Warrants will be limited. 
+
+ 
+
+Rights as a Shareholder.
+Except as otherwise provided in the Warrants or the Pre-Funded Warrants or by virtue of such holder s ownership of our shares of
+Common Stock, the holder of a Warrant or Pre-Funded Warrant does not have the rights or privileges of a holder of our shares of Common
+Stock, including any voting rights, until the holder exercises the Warrant or Pre-Funded Warrant.
+
+ 
+
+Fundamental Transaction.
+In the event of a fundamental transaction, as described in the Warrants and the Pre-Funded Warrants, and generally including, with certain
+exceptions, any reorganization, recapitalization or reclassification of our shares of Common Stock, the sale, transfer or other disposition
+of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more
+than 50% of our outstanding shares of Common Stock, or any person or group becoming the beneficial owner of 50% of the voting power represented
+by our outstanding shares of Common Stock, the holders of the Warrants and the Pre-Funded Warrants will be entitled to receive upon exercise
+thereof the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants
+immediately prior to such fundamental transaction. Additionally in the case of Series B Warrant, as more fully described in the Series
+B Warrant, in the event of certain fundamental transactions, the holders of the Warrants will be entitled to receive consideration in
+an amount equal to the Black Scholes value of the remaining unexercised portion of the Warrants on the date of consummation of such fundamental
+transaction.
+
+ 
+
+Governing Law. The
+Pre-Funded Warrants and the Warrants are governed by New York law.
+
+ 
+
+Transfer Agent and Warrant Agent
+
+ 
+
+The transfer agent and warrant
+agent for the shares our Common Stock and warrants is Equiniti Trust Company.
+
+ 
+
+Registration Rights
+
+ 
+
+None of the holders of shares
+of our Common Stock or their transferees, are entitled to certain rights with respect to the registration of the offer and sale of those
+shares under the Securities Act. If the offer and sale of these shares is registered, the shares will be freely tradable without restriction
+under the Securities Act, and a large number of shares may be sold into the public market.
+
+ 
+
+ 
+
+ 
+
+ 30 
+
+ 
+
+ 
+
+ 
+
+Anti-Takeover Provisions
+
+ 
+
+As described above, our articles
+of incorporation, as amended, provide that our Board may issue preferred stock with such designation, rights and preferences as may be
+determined from time to time by our Board. Our preferred stock could be issued quickly and utilized, under certain circumstances, as a
+method of discouraging, delaying or preventing a change in control of the Company or make removal of management more difficult.
+
+ 
+
+Certain provisions of Florida
+law and our bylaws summarized below, may have the effect of delaying, deferring or discouraging another person from acquiring control
+of us.
+
+ 
+
+It is possible that these
+provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their
+best interest or in our best interests, including transactions that might result in a premium over the market price for our shares. 
+
+ 
+
+These provisions expected
+to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking
+to acquire control of us to first negotiate with our Board. We believe that the benefits of increased protection of our potential ability
+to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging
+these proposals because negotiation of these proposals could result in an improvement of their terms.
+
+ 
+
+Florida Law
+
+ 
+
+The FBCA contains a control-share
+acquisition statute that provides that a person who acquires shares in an issuing public corporation, as defined in the
+statute, in excess of certain specified thresholds generally will not have any voting rights with respect to such shares unless such voting
+rights are approved by the holders of a majority of the votes of each class of securities entitled to vote separately, excluding shares
+held or controlled by the acquiring person.
+
+ 
+
+The FBCA also provides that
+an affiliated transaction between a Florida corporation with an interested shareholder, as those terms are
+defined in the statute, generally must be approved by the affirmative vote of the holders of two-thirds of the outstanding voting shares,
+other than the shares beneficially owned by the interested shareholder. The FBCA defines an interested shareholder as any
+person who is the beneficial owner of 10% or more of the outstanding voting shares of the corporation.
+
+ 
+
+These laws could delay or
+prevent an acquisition.
+
+ 
+
+In addition, we are subject
+to Section 607.0902 of the FBCA, which prohibits the voting of shares in a publicly held Florida corporation that are acquired in a control
+share acquisition unless (i) our Board approved such acquisition prior to its consummation or (ii) after such acquisition, in lieu of
+prior approval by our Board, the holders of a majority of the corporation s voting shares, exclusive of shares owned by officers
+of the corporation, employee directors or the acquiring party, approve the granting of voting rights as to the shares acquired in the
+control share acquisition. A control share acquisition is defined as an acquisition that immediately thereafter entitles the acquiring
+party to 20% or more of the total voting power in an election of directors.
+
+ 
+
+Special Stockholder Meetings 
+
+ 
+
+Our bylaws provide that a
+special meeting of stockholders may be called by of our Board, our President and by a demand delivered to the Company of at least 10%
+of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting.
+
+ 
+
+Requirements for Advance Notification of
+Stockholder Nominations and Proposals 
+
+ 
+
+Our bylaws establish advance
+notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors.
+
+ 
+
+ 
+
+ 
+
+ 31 
+
+ 
+
+ 
+
+ 
+
+LEGAL MATTERS
+
+ 
+
+The validity of the securities
+being offered by this prospectus has been passed upon for us by Lucosky Brookman LLP, Woodbridge, New Jersey. Certain legal matters in
+connection with this offering will be passed upon for the underwriters by Sichenzia Ross Ference
+Carmel LLP, New York, New York.
+
+ 
+
+EXPERTS
+
+ 
+
+The consolidated financial
+statements included in this prospectus and in the registration statement for the fiscal years ended December 31, 2023 and December 31,
+2022 have been audited by Rosenberg Rich Baker Berman, P.A., an independent registered public accounting firm, and are included in reliance
+upon such report given upon the authority of said firm as experts in auditing and accounting.
+
+ 
+
+WHERE YOU CAN FIND ADDITIONAL INFORMATION
+
+ 
+
+We have filed with the SEC
+this registration statement on Form S-1 under the Securities Act with respect to the securities being offered by this prospectus. This
+prospectus, which constitutes a part of this registration statement, does not contain all of the information in this registration statement
+and its exhibits. For further information with respect to us and the units, Common Stock and warrants offered by this prospectus, you
+should refer to this registration statement and the exhibits filed as part of that document. Statements contained in this prospectus as
+to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to
+the copy of the contract or other document filed as an exhibit to this registration statement. Each of these statements is qualified in
+all respects by this reference.
+
+ 
+
+We are subject to the informational
+requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and other information with the SEC.
+You can read our SEC filings, including this registration statement, over the Internet at the SEC s website at http://www.sec.gov.
+You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C.
+20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100
+F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference
+facilities. You may also request a copy of these filings, at no cost, by writing or telephoning us at: Grom Social Enterprises, Inc.,
+2060 NW Boca Raton, Suite #6, Boca Raton, Florida 33431 or (561) 287-5776.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 32 
+
+ 
+
+ 
+
+ 
+
+INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
+
+ 
+
+The SEC allows us to incorporate
+by reference information into this prospectus, which means that we can disclose important information to you by referring you to
+those documents and that the information in this prospectus is not complete and you should read the information incorporated by reference
+for more detail. We incorporate by reference in two ways. First, we list certain documents that we have already filed with the SEC. The
+information in these documents is considered part of this prospectus. Second, the information in documents that we file with the SEC in
+the future will update and supersede the current information in, and incorporated by reference in, this prospectus until we file a post-effective
+amendment that indicates the termination of the offering of the Common Stock made by this prospectus.
+
+ 
+
+We incorporate by reference
+the documents listed below and any future filings we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
+(other than information furnished in Current Reports on Form 8-K filed under Item 2.02 or 7.01 of such form unless such form expressly
+provides to the contrary), including those made after the date of the initial filing of the registration statement of which this prospectus
+is a part and prior to effectiveness of such registration statement:
+
+ 
+
+ Our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April
+16, 2024;
+
+ 
+
+ Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, filed with the SEC on
+May 20, 2024;
+
+ 
+
+ Our Current Reports on Form 8-K filed with the SEC on March 6, 2024, March 7, 2024, March 15, 2024, April
+5, 2024, April 24, 2024 and July 22, 2024.
+
+ 
+
+ Our preliminary and definitive information statements on Schedules PRE 14C and DEF 14C, respectively,
+filed with the SEC on May 9, 2024, and May 21, 2024, respectively.
+
+ 
+
+The documents incorporated
+by reference into this prospectus are also available on our corporate website at www.gromsocial.com. We will provide to each person,
+including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the information that has been incorporated
+by reference in this prospectus but not delivered with this prospectus. You may request a copy of this information at no cost, by writing
+or telephoning us at the following address or telephone number:
+
+ 
+
+Grom Social Enterprises, Inc.
+
+2060 NW Boca Raton Blvd., Suite #6
+
+Boca Raton, Florida 33431
+
+(561) 287-5776
+
+Attention: Corporate Secretary
+
+ 
+
+Except for the specific incorporated
+documents listed above, no information available on or through our website shall be deemed to be incorporated in this prospectus or the
+registration statement of which it forms a part.
+
+ 
+
+The SEC maintains an internet
+website that contains reports, proxy and information statements and other information regarding the issuers that file electronically with
+the SEC, including the Company, and can be accessed free of charge on the SEC s website, www.sec.gov.
+
+ 
+
+ 
+
+ 
+
+ 33 
+
+ 
+
+ 
+
+ 
+
+Up to 9,869,233 Units 
+
+Each Unit consisting of:
+
+One share of Common Stock 
+
+Two Series A Warrants, each having the right
+to purchase one share of Common Stock
+
+One Series B Warrant to purchase a number of
+shares of Common Stock
+
+ 
+
+Up to 9,869,233 Pre-Funded Units 
+
+Each Pre-Funded Unit consisting of:
+
+One Pre-Funded Warrant purchase one share of
+Common Stock
+
+Two Series A Warrants, each having the right
+to purchase one share of Common Stock
+
+One Series B Warrant to purchase a number of
+shares of Common Stock
+
+ 
+
+ 
+
+Up to 19,738,466 Shares of Common Stock Underlying
+Series A Warrants 
+
+Up to 39,452,592 Shares of Common Stock Underlying
+Series B Warrants and
+
+ 
+
+Up to 9,869,233 Shares of Common Stock Underlying
+the Pre-Funded Warrants
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+GROM SOCIAL ENTERPRISES, INC.
+
+ 
+
+PROSPECTUS
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+EF Hutton LLC 
+
+ 
+
+ 
+
+ 
+
+ 
+
+_______________, 2024
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+[RESALE PROSPECTUS ALTERNATE PAGE]
+
+ 
+
+The information in this prospectus
+is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange
+Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
+in any state or other jurisdiction where the offer or sale is not permitted.
+
+ 
+
+ 
+
+ 
+ PRELIMINARY PROSPECTUS
+ 
+ SUBJECT TO COMPLETION
+ 
+ DATED JULY 25, 2024
+
+ 
+ 
+
+Up to 9,024,876 Shares of Common Stock
+
+ 
+
+ 
+
+GROM
+SOCIAL ENTERPRISES, INC.
+
+ 
+
+This prospectus relates to
+the offer and resale, from time to time, of up to an aggregate of 9,024,876 shares of our common stock, par value $0.001 per share, consisting
+of:
+
+ 
+
+(1) MARCH 2024 SPA
+
+ 
+
+2,314,814 shares of common stock issuable upon the exercise of our common stock purchase warrant (the March 2024 Warrant ) issued to the Selling Stockholder in connection with the securities purchase agreement by and between Generating Alpha Ltd., a Saint Kitts and Nevis Corporation (the Selling Stockholder or Generating Alpha ) and us, dated March 11, 2024 and as amended on April 24, 2024 (the March 2024 SPA ), as a commitment fee, at an exercise price of $0.001 per share;
+
+ 
+
+(2) APRIL
+2024 SPA
+
+ 
+
+ 
+ 
+ a.
+ 
+ 3,823,530 shares of common stock issuable upon the conversion, at the minimum conversion price of $0.17 per share, of our convertible
+promissory note, dated April 4, 2024 and as amended on April 24, 2024 (the April 2024 Note , and together with the December
+2023 Note, the Notes ), having an initial principal amount of $650,000, sold in a private placement offering (the April
+2024 Offering ) pursuant to the securities purchase agreement, dated April 1, 2024 and as amended on April 24, 2024 (the April
+2024 SPA ), entered into by and between the Selling Stockholder and us; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ b.
+ 
+ 962,962 shares of common stock issuable upon
+the exercise of our common stock purchase warrant (the April 2024 Warrant ), issued to the Selling Stockholder in connection
+with the April 2024 SPA, at an exercise price of $0.001 per share.
+
+ 
+ 
+
+(3) Waiver to November 2023 SPA and April 2024 SPA
+
+ 
+
+1,923,570 shares of common
+stock issuable upon exercise of a pre-funded warrant (the July 2024 Waiver Warrant, and together with the March 2024 Warrant
+and the April 2024 Warrant, the Warrants ) issued to the Selling Stockholder pursuant to a waiver to the securities purchase
+agreement dated November 9, 2023 and as amended on November 20, 2023 and March 11, 2024 (the November 2023 SPA ) and the
+April 2024 SPA, entered into by and between the Selling Stockholder and us on July 18, 2024.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+We are not selling any securities
+under this prospectus and we will not receive proceeds from the sale of the shares of our common stock by the Selling Stockholder. However,
+we may receive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current exercise price with respect
+to all Warrants, would result in gross proceeds to us of approximately $3,470.13.
+
+ 
+
+We will pay the expenses of
+registering the shares of common stock offered by this prospectus, but all selling and other expenses incurred by the Selling Stockholder
+will be paid by the Selling Stockholder. The Selling Stockholder may sell our shares of common stock offered by this prospectus from time
+to time on terms to be determined at the time of sale through ordinary brokerage transactions or through any other means described in
+this prospectus under Plan of Distribution. The prices at which the Selling Stockholder may sell shares will be determined
+by the prevailing market price for our common stock or in negotiated transactions.
+
+ 
+
+Our common stock is quoted
+on The Nasdaq Capital Market under the symbol GROM. On July 16, 2024, the last reported sale price for our common stock
+on The Nasdaq Capital Market was $0.4053 per share.
+
+ 
+
+Investing in our securities
+involves a high degree of risk. See Risk Factors beginning on page 11 of this prospectus for a discussion of
+information that should be considered in connection with an investment 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
+is truthful or complete. Any representation to the contrary is a criminal offense.
+
+ 
+
+The date of this prospectus is _______________,
+2024.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+GROM SOCIAL ENTERPRISES, INC.
+
+ 
+
+TABLE OF CONTENTS 
+
+ 
+
+ 
+ 
+ Page
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001672886_zhong_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001672886_zhong_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..c8fb99848ce6727eb279dbaed1d2aa051efe9c75
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001672886_zhong_prospectus_summary.txt
@@ -0,0 +1,7 @@
+PROSPECTUS SUMMARY
+
+This summary highlights
+information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your
+investment decision. Before investing in our Ordinary Shares, you should carefully read the entire prospectus, including our financial
+statements and the related notes included elsewhere in this prospectus. You should also consider, among other things, the matters described
+under
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001679379_nyiax-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001679379_nyiax-inc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001679379_nyiax-inc_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001684682_cnl_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001684682_cnl_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..4bf0553856b911c7751151393556142b99311fd2
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001684682_cnl_prospectus_summary.txt
@@ -0,0 +1 @@
+CNL STRATEGIC CAPITAL, LLC (Exact name of registrant as specified in governing instruments) Delaware 3990 32-0503849 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Number) (I.R.S. Employer Identification Number) CNL Strategic Capital, LLC 450 South Orange Avenue Orlando, Florida 32801 Tel (407) 650-1000 (Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service) Copies to: Jay L. Bernstein, Esq. Jason D. Myers, Esq. Clifford R. Cone, Esq. Clifford Chance US LLP 31 West 52nd Street New York, New York 10019 Tel (212) 878-8000 Robert H. Bergdolt, Esq. DLA Piper LLP (US) 4141 Parklake Avenue, Suite 300 Raleigh, North Carolina 27612-2350 Tel (919) 786-2000 (Address, including Zip Code, and Telephone Number, including Area Code, of Registrant s Principal Executive Offices) Chirag J. Bhavsar Chief Executive Officer Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 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 post-effective amendment filed pursuant to Rule 462(d) 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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, 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 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 the 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 preliminary prospectus is not complete and may be changed. We may not sell these shares until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary prospectus is not an offer to sell these shares and it is not soliciting an offer to buy these shares in any jurisdiction where the offer or sale thereof is not permitted. Subject to Completion, Preliminary Prospectus Dated October 29, 2024 CNL STRATEGIC CAPITAL, LLC Maximum Offering of up to $1,100,000,000 in shares of Limited Liability Company Interests CNL Strategic Capital, LLC is a limited liability company that primarily seeks to acquire and grow durable, middle-market U.S. businesses. We are externally managed by CNL Strategic Capital Management, LLC ("CNL" or the "Manager") and sub-managed by Levine Leichtman Strategic Capital, LLC (the "Sub-Manager"), an affiliate of Levine Leichtman Capital Partners, LLC ("LLCP"). This is our third public offering. We commenced our initial public offering on March 7, 2018 and terminated our initial public offering on November 1, 2021, after having raised aggregate gross offering proceeds of approximately $264,707,387 from the sale of shares of our limited liability company interests, or our shares, in the initial public offering. We commenced our initial follow-on public offering on November 1, 2021 and terminated our initial follow-on public offering on November 1, 2024, after having raised aggregate gross offering proceeds of approximately $698.9 million from the sale of our shares in the initial follow-on public offering. We are offering up to $1,000,000,000 of our shares on a best efforts basis, which means that CNL Securities Corp., or the Managing Dealer, will use its best efforts but is not required to sell any specific amount of shares. We are offering, in any combination, four classes of our shares in this offering: Class A shares, Class T shares, Class D shares and Class I shares. The initial minimum permitted purchase amount is $5,000 in our shares. There are differing selling fees and commissions for each class. We also pay distribution and shareholder servicing fees, subject to certain limits, on the Class T and Class D shares sold in this primary offering. The current public offering prices for our shares are $38.01 per Class A share, $36.57 per Class T share, $34.53 per Class D share and $35.26 per Class I share. Such prices may be adjusted by our board of directors. Our board of directors determines our net asset value for each class of our shares on a monthly basis. If our net asset value per share on such valuation date increases above or decreases below our net proceeds per share as stated in this prospectus, we will adjust the offering price of any of the classes of our shares, effective five business days after such determination is published, to ensure that no share is sold at a price, after deduction of upfront selling commissions and dealer manager fees, that is above or below our net asset value per share on such valuation date. We are also offering, in any combination, up to $100,000,000 of Class A shares, Class T shares, Class D shares and Class I shares to be issued pursuant to our distribution reinvestment plan. We reserve the right to reallocate the shares between our distribution reinvestment plan and our primary offering. As of October 1, 2024, we had 32,664,408 shares outstanding which consist of 4,039,518 Class FA shares, 7,413,049 Class A shares, 2,569,421 Class T shares, 3,088,993 Class D shares 13,831,676 Class I shares and 1,721,750 Class S shares. As of June 30, 2024, we have raised total net offering proceeds (including amounts raised from our private offerings and public offerings) of approximately $1,025.9 million, including approximately $36.6 million received through our distribution reinvestment plan. We currently intend to sell shares in this offering until November 1, 2026 and we may extend this offering one additional year if all of the shares we have registered are not yet sold within two years; however, we may suspend or terminate this offering sooner, or extend this offering as permitted under applicable securities laws, in each case with respect to any class of shares, and we would announce such event in a prospectus supplement. In addition, some states will require us to renew our registration annually in order to continue offering our shares beyond the initial registration period in such states. Investing in our shares involves a high degree of risk. You should purchase shares only if you can afford a complete loss of your investment. See "Risk Factors" beginning on page 23. Significant risks relating to your investment in our shares include, among others: We may be unable to successfully implement our business and acquisition strategies or generate sufficient cash flow to make distributions to our shareholders. Our success will be dependent on the performance of the Manager and the Sub-Manager, but you should not rely on the past performance of the Manager, the Sub-Manager and their respective affiliates as an indication of future success. Prior to our initial public offering, affiliates of CNL had only sponsored real estate and credit investment programs. We pay substantial fees and expenses to the Manager, the Sub-Manager, the Managing Dealer or their respective affiliates. These payments increase the risk that you will not earn a profit on your investment. Investors will not have the opportunity to evaluate the assets we acquire before we make them, which makes an investment in us more speculative. We face risks with respect to the evaluation and management of future acquisitions. This is a "best efforts" offering and if we are unable to raise substantial funds, we will be limited in the number and type of acquisitions we may make, and the value of your investment in us will fluctuate with the performance of the assets we acquire. Our shares sold in this offering will not be listed on an exchange or quoted through a national quotation system for the foreseeable future, if ever. Therefore, if you purchase shares in this offering, you will have limited liquidity and may not receive a full return of your invested capital if you sell your shares. The purchase price for our shares is based on our most recently determined net asset value and is not based on any public trading market. While our board of directors has engaged an independent valuation firm to assist with the valuation of our businesses, the valuation of our assets is inherently subjective, and our net asset value may not accurately reflect the actual price at which our assets could be liquidated on any given day. The amount of any distributions we may pay is uncertain. We may not be able to pay you distributions and our distributions may not grow over time. We may pay distributions from any source, including from cash resulting from expense support and fee deferrals and/or waivers from the Manager and the Sub-Manager as needed, and there are no limits on the amount of offering proceeds we may use to fund distributions. If we pay distributions from sources other than cash flow from operations, we will have less funds available for investments, and your overall return may be reduced. We believe the likelihood that we will pay distributions from sources other than cash flow from operations will be higher in the early stages of this offering. The Manager, the Sub-Manager and their respective affiliates, including our officers and some of our directors, will face conflicts of interest including conflicts that may result from compensation arrangements with us and our affiliates, which could result in actions that are not in the best interests of our shareholders. If we were to become taxable as a corporation for U.S. federal income tax purposes, we would be required to pay income tax at corporate rates on our net income and would reduce the amount of cash available for distribution to our shareholders. Such distributions, if any, by us to shareholders would constitute dividend income taxable to such shareholders, to the extent of our earnings and profits. Our board of directors may change our business and acquisition policies and strategies without prior notice or shareholder approval, the effects of which may be adverse to you. Neither the Securities and Exchange Commission (the "SEC") nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete, or determined whether the securities offered hereby can be sold in compliance with applicable conduct standards, including the standard imposed under Regulation Best Interest. In addition, the Attorney General of the State of New York has not passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful. The use of forecasts in this offering is prohibited. Any representation to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax consequence which may flow from an investment in our shares is not permitted. Maximum Aggregate Price to Public Maximum Selling Commissions Maximum Dealer Manager Fees Proceeds to Us Before Expenses(1)(5)(6) Maximum Offering $1,000,000,000 $12,000,000(2) $5,500,000(2) $982,500,000 Class A Shares, Per Share $38.01 $2.28 $0.95 $34.78 Class T Shares, Per Share(3) $36.57 $1.10 $0.64 $34.83 Class D Shares, Per Share(3) $34.53 $— $— $34.53 Class I Shares, Per Share $35.26 $— $— $35.26 Distribution Reinvestment Plan(4) $100,000,000 $— $— $100,000,000 Class A Shares, Per Share $34.78 $— $— $34.78 Class T Shares, Per Share $34.83 $— $— $34.83 Class D Shares, Per Share $34.53 $— $— $34.53 Class I Shares, Per Share $35.26 $— $— $35.26 (1) The proceeds to us before expenses are calculated without deducting certain organization and offering expenses. The total of the other organization and offering expenses, excluding selling commissions, dealer manager fees and distribution and shareholder servicing fees, are estimated to be approximately $15,000,000 if the maximum primary offering amount is sold. (2) The maximum selling commissions and dealer manager fee assume that 15%, 10%, 10% and 65% of the gross offering proceeds from this primary offering are from sales of Class A shares, Class T shares, Class D shares and Class I shares, respectively. The selling commissions are equal to 6.00% and 3.00% of the sale price for Class A and Class T shares, respectively, with discounts available to some categories of investors, and the dealer manager fee is equal to 2.50% and 1.75% of the sale price for Class A and Class T shares, respectively, with discounts available to some categories of investors. (3) We pay the Managing Dealer a distribution and shareholder servicing fee, subject to certain limits, with respect to our Class T and Class D shares sold in this primary offering (excluding Class T shares and Class D shares sold through the distribution reinvestment plan and those received as share distributions) in an annual amount equal to 1.00% and 0.50%, respectively, of our current net asset value per share, as disclosed in our periodic or current reports, payable on a monthly basis. See "Plan of Distribution." (4) We will not pay selling commissions and dealer manager fees, or reimburse issuer costs, in connection with our shares issued through our distribution reinvestment plan. For participants in the distribution reinvestment plan, distributions paid on Class A shares, Class T shares, Class D shares and Class I shares, as applicable, will be used to purchase Class A shares, Class T shares, Class D shares and Class I shares, respectively. (5) The total of the above fees, plus other organizational and offering expenses and fees, are estimated to be approximately $32,500,000 if we raise $1,000,000,000. (6) We are offering certain volume discounts resulting in reductions in selling commissions payable with respect to sales of our Class A shares for certain minimum aggregate purchase amounts to an investor. See "Plan of Distribution—Volume Discounts (Class A Shares Only)." The date of this prospectus is November 1, 2024 SUITABILITY STANDARDS Our shares offered through this prospectus are suitable only as a long-term investment for persons of adequate financial means such that they do not have a need for liquidity in this investment. We have established financial suitability standards for initial shareholders in this offering which require that a purchaser of shares have either: a gross annual income of at least $70,000 and a net worth of at least $70,000, or a net worth of at least $250,000. For purposes of determining the suitability of an investor, net worth in all cases should be calculated excluding the value of an investor s home, home furnishings and automobiles. In the case of sales to fiduciary accounts, these minimum standards must be met by the beneficiary, the fiduciary account or the donor or grantor who directly or indirectly supplies the funds to purchase the shares if the donor or grantor is the fiduciary. Those selling shares on our behalf or participating broker-dealers and registered investment advisers recommending the purchase of shares in this offering are required to make every reasonable effort to determine that the purchase of shares in this offering is a suitable and appropriate investment for each investor based on information provided by the investor regarding the investor s other holdings, financial situation, tax status and investment objectives and must maintain records for at least six years of the information used to determine that an investment in the shares is suitable and appropriate for each investor. In making this determination, your participating broker-dealer, authorized investment representative or other person selling shares on our behalf will, based on a review of the information provided by you, consider whether you: meet the minimum income and net worth standards established by us and by your state; can reasonably benefit from an investment in our shares based on your overall investment objectives and portfolio structure; are able to bear the economic risk of the investment based on your overall financial situation, including the risk that you may lose your entire investment; and have an apparent understanding of the following: the fundamental risks of your investment; the risk that you may lose your entire investment; the lack of liquidity of your shares; the restrictions on transferability of your shares; the background and qualification of the Manager and the Sub-Manager; and the tax consequences of your investment. In purchasing shares, custodians or trustees of employee pension benefit plans or individual retirement accounts, or IRAs, may be subject to the fiduciary duties imposed by the Employee Retirement Income Security Act of 1974, as amended, or ERISA, or other applicable laws and to the prohibited transaction rules prescribed by ERISA and related provisions of the Internal Revenue Code of 1986, as amended, or the Code. In addition, prior to purchasing shares, the trustee or custodian of an employee pension benefit plan or an IRA should determine that such an investment would be permissible under the governing instruments of such plan or account and applicable law. i The following states have established additional suitability requirements that are more stringent than the standards that we have established and described above. Shares will be sold to investors residing in these states only if those investors represent that they meet the additional suitability standards. In each case, these additional suitability standards exclude from the calculation of net worth the value of an investor s home, home furnishings and personal automobiles. Alabama – In addition to the general suitability standards, Alabama investors may not invest more than 10% of their liquid net worth in us and our affiliates. California – California investors must have either (i) an estimated gross income of at least $65,000 during the current tax year and a net worth of at least $250,000, or (ii) a net worth of at least $500,000. In addition, California investors should limit their investment in us to 10% of the investor s net worth. For these purposes, "net worth" is exclusive of an investor s home, home furnishings, and automobiles. An investment in Class D shares or Class I shares by a California investor that is an accredited investor as defined in Regulation D under the Securities Act is not subject to the foregoing concentration limitation. Idaho – Investors who reside in the state of Idaho must have either (i) a net worth of $85,000 and annual income of $85,000 or (ii) a liquid net worth of $300,000 (excluding the value of a purchaser s home, furnishings and automobiles). Additionally, an Idaho investor s total investment in us shall not exceed 10% of his or her liquid net worth. Liquid net worth is defined as that portion of net worth consisting of cash, cash equivalents and readily marketable securities. Iowa – Iowa investors must have either (i) a minimum of $100,000 annual gross income and a net worth of $100,000, or (ii) a net worth of at least $350,000 (exclusive of home, home furnishings and automobiles). In addition, Iowa investors may not invest in aggregate more than 10% of their liquid net worth in us and in the securities of other non-traded direct participation programs (DPPs). "Liquid net worth" is defined as the portion of net worth that consists of cash, cash equivalents, and readily marketable securities. An investment by an Iowa investor that is an accredited investor as defined in Regulation D under the Securities Act is not subject to the foregoing concentration limitation. Kansas – It is recommended by the Office of the Kansas Securities Commissioner that Kansas investors limit their aggregate investment in our securities and other similar investments to not more than 10% of their liquid net worth. Liquid net worth shall be defined as that portion of the purchaser s total net worth that is comprised of cash, cash equivalents, and readily marketable securities, as determined in conformity with GAAP. Kentucky – A Kentucky investor may not invest more than 10% of their liquid net worth in us or our affiliates. "Liquid net worth" is defined as that portion of net worth that is comprised of cash, cash equivalents and readily marketable securities. Maine – The Maine Office of Securities recommends that an investor s aggregate investment in this offering and similar direct participation investments not exceed 10% of the investor s liquid net worth. For this purpose, "liquid net worth" is defined as that portion of net worth that consists of cash, cash equivalents and readily marketable securities. Massachusetts – Massachusetts investors may not invest more than 10% of their liquid net worth in us, our affiliates and in other non-publicly traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings). Liquid net worth is that portion of an investor s net worth (total assets exclusive of home, home furnishings and automobiles minus liabilities) that is comprised of cash, cash equivalents and readily marketable securities. Missouri – No more than ten percent (10%) of any one Missouri investor s liquid net worth shall be invested in this offering of our shares. Nebraska – Nebraska investors must have either (i) an annual gross income of at least $70,000 and a net worth of at least $70,000, or (ii) a net worth of at least $250,000. In addition, investors must limit their aggregate investment in us and in the securities of other non-publicly traded programs to 10% of their net worth. Investors who are accredited investors as defined in Regulation D under the Securities Act of 1933, as amended, are not subject to this investment concentration limit. New Jersey – New Jersey investors must have either (i) a minimum liquid net worth of at least $100,000 and a minimum annual gross income of at least $85,000, or (ii) a minimum liquid net worth of $350,000. In addition, investors must limit their investment in us, our affiliates and other non-publicly traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) to 10% of their liquid net worth. For these purposes, "liquid net worth" is defined as that portion of net worth (total assets exclusive of home, home furnishings and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily marketable securities. ii New Mexico – It shall be unsuitable for New Mexico residents to invest more than 10% of their liquid net worth in the issuer, affiliates of the issuer, and in any other non-traded direct participation programs. "Liquid net worth" is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings, and automobiles, minus total liabilities) comprised of cash, cash equivalents, and readily marketable securities. North Dakota – In addition to the stated net income and net worth standards, North Dakota investors must also have a net worth of at least ten times their investment in us. Ohio – It shall be unsuitable for Ohio residents to invest more than 10% of their liquid net worth in the issuer, affiliates of the issuer, and in any other non-traded direct participation programs. "Liquid net worth" is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings, and automobiles, minus total liabilities) comprised of cash, cash equivalents and readily marketable securities. This condition does not apply, directly or indirectly, to federally covered securities. Oklahoma – Oklahoma investors cannot invest more than 10% of their liquid net worth in us and our affiliates. Net worth for this purpose is exclusive of an investor s home, home furnishings and automobiles. Oregon – In addition to the suitability standards set forth above, Oregon investors must limit their investment in us to no more than 10% of their liquid net worth. Pennsylvania – Pennsylvania investors must limit their investment in us to no more than 10% of their net worth, exclusive of home, furnishings and automobiles. Puerto Rico – Residents of Puerto Rico may not invest more than 10% of their liquid net worth in the issuer, affiliates of the issuer, and in any other non-traded direct participation programs. "Liquid net worth" is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings, and automobiles, minus total liabilities) comprised of cash, cash equivalents and readily marketable securities. Tennessee – In addition to meeting the general suitability standards set forth above, Tennessee investors who are not "accredited investors" may not invest more than 10% of their liquid net worth in us. "Net worth" for this purpose is exclusive of an investor s home, home furnishings, and automobiles. Vermont – In addition to the suitability standards set forth above, non-accredited Vermont investors may not purchase an amount in us that exceeds 10% of their liquid net worth. For these purposes, "liquid net worth" is defined as an investor s total assets (not including home, home furnishings, or automobiles) minus total liabilities. Vermont residents who are "accredited investors" as defined in 17 C.F.R. 230.501 are not subject to the limitation described in this paragraph. iii Regulation Best Interest The SEC has adopted Regulation Best Interest under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Regulation Best Interest establishes a new standard of conduct for broker-dealers and their associated persons when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. A retail customer is any natural person, or the legal representative of such person, who receives a recommendation of any securities transaction or investment strategy involving securities from a broker-dealer and uses the recommendation primarily for personal, family, or household purposes. When making such a recommendation, a broker-dealer and its associated persons must act in the best interest of such retail customer when making a recommendation to purchase shares in this offering, without placing their financial or other interest ahead of the retail customer s interests, and should consider reasonable alternatives in determining whether the broker dealer and its associated persons have a reasonable basis for making the recommendation. This standard is different and higher than the quantitative suitability standards we require for an investment in our shares and the current suitability standard applied by the Financial Industry Regulatory Authority, a self-regulatory organization for broker-dealers. Listed entities may be reasonable alternatives to an investment in us, as listed entities may feature characteristics like lower cost, nominal commissions at the time of the initial purchase, less complexity and lesser or different risks. Under Regulation Best Interest, the SEC rules, the broker-dealer must meet four component obligations: Disclosure Obligation: The broker-dealer must provide certain required disclosures, including details about their services and fee structures, before or at the time of the recommendation about the recommendation and the relationship between the broker-dealer and its retail customer. The disclosure includes a customer relationship summary on Form CRS. The broker-dealer s disclosures are separate from the disclosures we provide to investors in this prospectus. Care Obligation: The broker-dealer must exercise reasonable diligence, care, and skill in making the recommendation. Conflict of Interest Obligation: The broker-dealer must establish, maintain, and enforce written policies and procedures reasonably designed to address conflicts of interest. Compliance Obligation: The broker-dealer must establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Regulation Best Interest. There is limited case or administrative law under Regulation Best Interest. iv TABLE OF CONTENTS Page ABOUT THIS PROSPECTUS 2 PROSPECTUS SUMMARY 3
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+PROSPECTUS SUMMARY 1
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+S-1/A Registration No. 333-274531 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1/A Amendment No. 5 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Certiplex Corporation (Name of small business issuer in its charter) Montana 7812 83-1632905 State or Other Jurisdiction of Incorporation or Organization (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Code Number) 663 Rancho Santa Fe Rd Suite 628 San Marcos, CA 92078 Telephone: 800-456-6211 www.Certiplex.com wbcertiplex@gmail.com (Address and telephone number of registrant's principal executive offices and principal place of business) Corporate filings, LLC 1001 S Main Ste 49 Kalispell, MT 59901 (Name, address, including zip code, and telephone number, including area code, of agent for service) Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. 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. [X] 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 post-effective amendment filed pursuant to Rule 462(d) 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. [_] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. Large Accelerated Filer [_] Accelerated Filer [_] Non Accelerated Filer [_] Smaller Reporting Company [X] Emerging Growth company [X] 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 or until the registration statement shall become effective on such date as the commission, acting pursuant to said section 8(a), may determine. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED _________________, 2024 The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(a). Our common stock is not traded on any national exchange and in accordance with Rule 457; the offering price was determined by the price shares were sold to our shareholders in a private placement memorandum. The selling shareholders may sell shares of our common stock at a fixed price of $ .50 per share until our common stock is quoted on the OTCQB and thereafter at prevailing market prices or privately negotiated prices. The fixed price of $.50 has been determined as the selling price based upon the original purchase price paid by the selling shareholders of $0.01 plus an increase based on the fact the share will be liquid and registered. There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. PRELIMINARY PROSPECTUS CERTIPLEX CORPORATION 28,200,000 Shares of Common Stock Price per share: $.50 Total cash proceeds to the Company $0. Through this prospectus, we are registering for resale 28,200,000 shares of common stock. The Company is authorized to issue 75,000,000 shares of common stock, par value $.001 per share. At the twelve months ended December 31, 2023, there were 73,200,000 shares of common stock issued and outstanding. The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. The selling stockholders are selling shares of common stock covered by this prospectus for their own account. There is no present public trading market for the Company's Common Stock and the price at which the Shares are being offered bears no relationship to conventional criteria such as book value or earnings per share. The Company has determined the offering price based, primarily, on its projected operating results. There can be no assurance that the offering price bears any relation to the current fair market value of the Common Stock. There is no trading market for our common stock. The sales price to the public will be offered at a fixed price of $.50 per share until shares are quoted on the OTCQB and thereafter at prevailing market prices or privately negotiated prices. We intend to contact an authorized OTCQB market maker for sponsorship of our securities on the OTC, upon effectiveness of this registration statement, however, there is no guarantee our common stock will be accepted for quotation on the OTCQB. If our common stock becomes quoted on the Over-the-Counter Bulletin Board or another exchange, then the sales price to the public will vary according to the selling decisions of each selling shareholder and the market for our stock at the time of resale. Our CEO, Varton Berian owns approximately 62% of our outstanding common shares and will continue to do so after the filing of this Registration Statement. As a consequence of his stock ownership position, Mr. Berian will retain the ability to elect a majority of our board of directors, and thereby control our management. Varton Berian also has the ability to control the outcome of corporate actions requiring stockholder approval, including mergers and other changes of corporate control, any private transactions, and other extraordinary transactions. The purchase of our shares involves substantial risk. See "risk factors" beginning on page 9 for a discussion of risks to consider before purchasing our common stock. You should rely only on the information contained in this prospectus. We have not, and the Selling Stockholders have not, authorized anyone to provide you with different information. If anyone provides you with different information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the prospectus. Any representation to the contrary is a criminal offense. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL OUR SHARES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL OUR SHARES, AND IT IS NOT SOLICITING AN OFFER TO BUY OUR SHARES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED ______________________, 2024 i TABLE OF CONTENTS PAGE Prospectus Summary 1
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+PROSPECTUS SUMMARY
+ 
+ The summary highlights, and should be read in conjunction with, the more detailed information contained elsewhere in this prospectus and the documents incorporated therein by reference. You should read carefully the entire documents, including our financial statements and related notes, to understand our business, the Ordinary Shares, and the other considerations that are important to your decision to invest in our securities. You should pay special attention to the Risk Factors section of this prospectus and on page 12 of the 2023 Annual Report.
+ 
+ Overview
+ 
+ We are an exempted company with limited liability incorporated in the Cayman Islands on February 25, 2019. Our operational structure includes two operating companies, which are (i) China Liberal Beijing, incorporated in the PRC on August 10, 2011 and (ii) Oriental Wisdom, incorporated in the PRC on August 17, 2009. 
+ 
+ Throughout this prospectus, (i) the terms we, our, and our Company, only refer to China Liberal Education Holdings Limited, the Cayman holding company and when describing the group s consolidated financial information for the fiscal years ended December 31, 2022 and 2023, also includes the Company s subsidiaries and the former affiliated entities, (ii) the terms former affiliated entities refer to Fuzhou Melbourne Polytechnic, a three-year college in China, and Strait College of Minjiang University, a four-year university in China, which were our consolidated affiliated entities under U.S. GAAP from September 2, 2022 to August 31, 2023, (iii) the terms the subsidiaries or our subsidiaries refer to the direct and indirect subsidiary of the Company, including (a) Aiways Automobile Holding Limited and Aiways Merger Sub Limited, companies formed in the Cayman Islands, (b) Yi Xin International Investment Limited, a company formed in the British Virgin Islands, (c) China Boya Education Group Co., Ltd., a company formed in Hong Kong, and (d) China Liberal (Beijing) Education Technology Co., Ltd., Beijing Oriental Wisdom Culture Development Co., Ltd., companies formed in the PRC, and (iv) the term operating entities refers to China Liberal Beijing and Oriental Wisdom.
+ 
+ Our Business
+ 
+ Our mission is to provide China s students with the tools to excel in a global environment. We strive to meet the needs of the ever-growing number of young talents in China.
+ 
+ We provide a wide variety of educational services and products intended to address the needs of schools and our students, mainly:
+ 
+ 
+ 
+ 
+ Technological consulting services provided to targeted Chinese universities to improve campus information and data management systems and optimize teaching, operating and management environment, creating a smart campus ; these consulting services include campus intranet solution buildout, school management software customization, smart devices (mainly Internet of things, or IoT devices, extending the Internet connectivity to physical devices) installation and testing, and school management data collection and analysis, all of which can be specifically tailored to meet a client s particular needs ( Technological Consulting Services for Smart Campus Solutions ); and
+ 
+
+ 
+ 
+ 
+ Tailored job readiness training to graduating students ( Integration of Enterprises and Vocational Education ), acting as the key bridge between our partner schools and employers
+
+ 
+ 
+ 
+ We started generating revenue in the year ended December 31, 2012 through our services provided under certain Sino-foreign Jointly Managed Academic Programs, giving us revenues of $2.7 million, $3.3 million and nil for the years ended December 31, 2021, 2022 and 2023. A vast majority of such revenue was derived from our two major partners prior to August 2022, FMP and Minjiang University. On September 2, 2022, we completed the acquisition of Wanwang. From September 2, 2022 to August 31, 2023, we operated FMP and Strait College through Wanwang. We generated revenue from course fees derived from providing educational programs, namely FMP and Strait College, to students from September 2022 to August 31, 2023, which generated revenue of $6.4 million and $7.6 million for the years ended December 31, 2022 and 2023, respectively. 
+ 
+ 
+ 4
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ We also started generating revenue from our Technological Consulting Services for Smart Campus Solutions business in 2017, with revenue of $1.1 million, $0.3 million and $0.7 million, representing 27.1%, 2.4% and 23.7% of our net revenue for the years ended December 31, 2021, 2022 and 2023, respectively.
+ 
+ Our Integration of Enterprises and Vocational Education business (tailored job readiness training services) only started generating revenue in the second half of 2019. In 2019, we generated de minimis revenue from this business line due to a limited number of students enrolled for our services. For the fiscal years ended December 31, 2021, 2022 and 2023, we generated revenue of $137,772, $1.3 million and $2.2 million from this business line, representing 3.5%, 10.9% and 76.3% of our net revenues in 2021, 2022 and 2023.
+ 
+ Additionally, we provided Overseas Study Consulting Services from 2017 to January 2022. We generated $36,174, $0.3 million and nil in revenue from our Overseas Study Consulting Services for the years ended December 31, 2021, 2022 and 2023, respectively, representing 0.9%, 2.8% and nil of our total revenue for those respective years. 
+ 
+ According to the administration guidelines issued by General Office of the Ministry of Education in December 2021, universities and colleges shall cease projects and cooperation with external parties and, as a result, after all of our existing contracts with Beijing Foreign Studies University came to completion, we discontinued our Overseas Study Consulting Services in January 2023.
+ 
+ For more details on the business operations and product portfolio of the Company and its subsidiaries, see Item 4. Information on the Company B. Business Overview Our Services and Products beginning on page 37 of the 2023 Annual Report.
+ 
+ Our Corporate Structure
+ 
+ We are a holding company incorporated in the Cayman Islands and not a Chinese operating company. As a holding company with no operations of its own, China Liberal conducts its operations through its wholly owned PRC subsidiaries, China Liberal Beijing and Oriental Wisdom. The former affiliated entities were consolidated for accounting purposes but were not entities in which we owned equity interest in. The consolidation of the former affiliated entities financial results is not equivalent to equity ownership in the business of the former affiliated entities. Our securities are shares of our offshore holding company instead of securities of our subsidiaries in China. Neither the investors in the holding company nor the holding company itself have an equity ownership in, direct foreign investment in, or control of, through such ownership or investment, the operating entities. As a result of our corporate structure, you may never directly hold equity interests in our subsidiaries, and investors are purchasing an interest in the Cayman Islands holding company.
+ 
+ We are also subject to the risks and uncertainties about any future actions of the PRC government in this regard that could disallow our holding structure, which would likely result in a material change in our operations, and the value of our Ordinary Shares may depreciate significantly or become worthless. See Item 3. Key Information D. Risk Factors Risks Relating to Doing Business in China. 
+ 
+ 
+ 5
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ The following diagram illustrates our corporate structure as of the date of this prospectus.
+ 
+ 
+ 
+ Risks Related to Doing Business in the PRC
+ 
+ We and our subsidiaries are subject to certain legal and operational risks associated with having our operations in China and the complex and evolving PRC laws and regulations. PRC laws and regulations governing the subsidiaries current business operations are sometimes vague and uncertain, and as a result these risks may result in material change in the operations of our subsidiaries, significant depreciation of the value of our Ordinary Shares, a complete hindrance of our ability to offer or continue to offer our securities to investors or cause the value of such securities to significantly decline or be worthless. See Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Ordinary Shares. 
+ 
+ 
+ 6
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus, we and our subsidiaries have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice or sanction. As of the date of this prospectus, we have not received any notice from any authorities identifying the PRC subsidiaries as critical information infrastructure operators ( CIIOs ) or requiring us to go through cybersecurity review or network data security review by the Cyberspace Administration of China (the CAC ). According to the Cybersecurity Review Measures, and if the Security Administration Draft is enacted as proposed, we believe that the operations of the PRC subsidiaries and our continued listing on the Nasdaq Stock Market LLC ( Nasdaq ) will not be affected and that we will not be subject to cybersecurity review by the CAC, given that the PRC subsidiaries possess personal data of fewer than one million individual clients and do not collect data that affects or may affect national security in their business operations as of the date of this prospectus and do not anticipate that they will be collecting over one million users personal information or data that affects or may affect national security in the near future. Additionally, we believe that we are compliant with the regulations and policies that have been issued by the CAC to date. See Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offerings. 
+ 
+ In addition, our securities may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act, or the HFCA Act, if the Public Company Accounting Oversight Board (United States), or the PCAOB, is unable to inspect our auditor for two consecutive years instead of three beginning in 2021, as amended. Our auditor, Audit Alliance LLP, is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is not subject to the determination issued by the PCAOB on December 16, 2021. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was signed into law on December 29, 2022, amending the HFCA Act and requiring the SEC to prohibit an issuer s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at any future time. On August 26, 2022, the China Securities Regulatory Commission (the CSRC ), the Ministry of Finance of the PRC (the MOF ), and the PCAOB signed a Statement of Protocol (the Protocol ) governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB s access in the future, the PCAOB Board will consider the need to issue a new determination. See Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China Our Ordinary Shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of trading of our Ordinary Shares, or the treat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections. 
+ 
+ Permissions Required from PRC Authorities
+ 
+ Based on PRC laws and regulations in effect as of the date of this prospectus, and subject to different interpretations of these laws and regulations that may be adopted by PRC authorities, the PRC subsidiaries were required to and have obtained the following licenses and approvals necessary to operate in China as of the date of this prospectus: each of the Company s PRC subsidiaries has obtained a business license from the governing local branches of State Administration for Market Regulations, which sets forth the scope of business operations each subsidiary is allowed to conduct. Currently, we, our subsidiaries are not required to obtain any other license or approval for our operations in China. However, the Standing Committee of the National people s Congress (the SCNPC ) or PRC regulatory authorities may in the future promulgate laws, regulations or implementing rules that requires us or our subsidiaries to obtain permissions from PRC regulatory authorities to approve their operations.
+ 
+ 
+ 7
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ We believe that we and our subsidiaries have obtained all licenses and approvals necessary to operate in China and that we do not need any other license or approval for our operations in China. We believe that we are not required to obtain approval from any PRC government authorities, including the CSRC, the CAC, or any other government entity, to issue of Ordinary Shares to foreign investors. Under the Cybersecurity Review Measures, if critical information infrastructure operators purchase network products and services, or network platform operators conduct data processing activities that affect or may affect national security, they will be subject to cybersecurity review. A network platform operator holding more than one million users/users individual information shall be subject to cybersecurity review before listing abroad. In the opinion of our PRC legal counsel, Zhongdun Law Firm, the business operations of our subsidiaries do not currently involve the procurement of network products and services or data processing as network platform operators. Zhongdun Law Firm has further advised us that the Cybersecurity Review Measures do not currently apply to our Company, and we are not required to conduct cybersecurity review. See D. Risk Factors Risks Related to Doing Business in China The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Ordinary Shares. 
+ 
+ On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the Trial Measures ) and five supporting guidelines, which became effective on March 31, 2023, and on May 16, 2023, the CSRC issued the sixth supporting guideline (collectively, the Overseas Listings Rules ). These rules propose to establish a new filing-based regime to regulate overseas offerings and listings by Chinese domestic companies. Under the Overseas Listings Rules, Chinese domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offering or listing application. Existing enterprises are not required to file immediately, and filing should be made as required if they conduct refinancing activities or other matters requiring filings in the future. In the opinion of our PRC legal counsel, Zhongdun Law Firm, as this offering constitutes a consequent offering by us, we are required to file with the CSRC in accordance with the Trial Measures within three days after this offering is completed. We cannot assure you that we can complete the filing procedures, obtain the approvals or complete other compliance procedures in a timely manner, or at all, or that any completion of filing or approval or other compliance procedures would not be rescinded. Any such failure would subject us to sanctions by the CSRC or other PRC regulatory authorities, including an order from the CSRC to rectify such non-compliance, issue of a warning, or imposition of a fine of not less than RMB1 million and not more than RMB10 million. Additionally, these regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects. Furthermore, the PRC government authorities may further strengthen oversight and control over listings and offerings that are conducted overseas. Any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to you and cause the value of such securities to significantly decline or be worthless. 
+ 
+ Since the recent regulatory actions are new, however, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, ability to accept foreign investments, and listing on the Nasdaq Stock Market. If we do not receive or maintain the approvals, or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, ordered to suspend our relevant business and rectify, prohibited from engaging in relevant business, or subject to an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Ordinary Shares. 
+ 
+ The PRC regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our Ordinary Shares. Furthermore, the PRC government authorities may further strengthen oversight and control over listings and offerings that are conducted overseas. Any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to you and cause the value of such securities to significantly decline or be worthless.
+ 
+ 
+ 8
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ Cash Transfers Through Our Organization and Dividend Policy
+ 
+ As of the date of this prospectus, there has been no transfer of cash or other assets, dividends or distributions between the holding company and its subsidiaries. As of the date of this prospectus, we have not declared any dividends or made any distributions to our shareholders or U.S. investors. 
+ 
+ We rely principally on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services of any debt we may incur. Our PRC subsidiaries ability to distribute dividends and earnings is based upon their respective distributable earnings.
+ 
+ Current PRC regulations permit the companies in the PRC to pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. Additionally, each of the companies in the PRC is required to set aside 10% of its after-tax profits to fund a statutory reserve until such reserve reaches 50% of its registered capital if it distributes its after-tax profits for the current financial year. In addition, cash transfers from our Cayman Islands holding company are subject to applicable PRC laws and regulations on loans and direct investment. See Item 3. Key Information D. Risk Factors Risk Related to Doing Business in China We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business. 
+ 
+ In addition, cash transfers from our PRC subsidiaries to entities outside of China are subject to PRC government controls on currency conversion. To the extent cash in our business is in the PRC or a PRC entity, such cash may not be available to fund operations or for other use outside of the PRC due to restrictions and limitations imposed by the governmental authorities on the ability of us, our PRC subsidiaries to transfer cash outside of the PRC. Shortages in the availability of foreign currency may temporarily delay the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. In view of the foregoing, to the extent cash in our business is held in China or by a PRC entity, such cash may not be available to fund operations or for other use outside of the PRC. For risks relating to the fund flows of our operations in China, see Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China 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. 
+ 
+ As of the date of this prospectus, we have not declared any dividends or made any distributions to our shareholders or U.S. investors. For details, see our consolidated financial statements and their related notes included elsewhere in this prospectus. Our board of directors has complete discretion on whether to distribute dividends, subject to applicable laws. We do not have any current plan to declare or pay any cash dividends on our Ordinary Shares in the foreseeable future. See Item 3. Key Information D. Risk Factors Risks Related to the Trading Market Because we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our Ordinary Shares for a return on your investment. Subject to certain contractual, legal and regulatory restrictions, cash and capital contributions may be transferred among our Cayman Islands holding company and our subsidiaries. U.S. investors will not be subject to Cayman Islands, British Virgin Islands, or Hong Kong taxation on dividend distributions, and no withholding will be required on the payment of dividends or distributions to them, while they may be subject to U.S. federal income tax for receiving dividends, to the extent that the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. See Item 10, Additional Information E. Taxation. Additionally, a withholding tax rate of 10% on dividends may be payable by our PRC subsidiaries to their non-PRC enterprise shareholders. See Item 3. Key Information D. Risk Factors Risk Related to Doing Business in China We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business. 
+ 
+ 
+ 9
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ In addition, the PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, we may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our Ordinary Shares. See Item 3. Key Information D. Risk Factors Risk Related to Doing Business in China PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of our offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business. Therefore, to the extent that cash is located in the PRC or within a PRC domiciled entity and may need to be used to fund operations outside of the PRC, the funds may not be available due to limitations placed to us by the PRC government.
+ 
+ Restrictions on Foreign Exchange and the Ability to Transfer Cash Between Entities, Across Borders and to U.S. Investors
+ 
+ The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. The majority of our income is received in Renminbi and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from SAFE, as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.
+ 
+ Relevant PRC laws and regulations permit the companies in the PRC to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, our PRC subsidiaries can only distribute dividends after they have met the PRC requirements for appropriation to the statutory reserves. As a result of these and other restrictions under the PRC laws and regulations, our PRC subsidiaries are restricted to transfer a portion of their net assets to us either in the form of dividends, loans or advances. Even though we currently do not require any such dividends, loans or advances from the PRC subsidiaries for working capital and other funding purposes, we may in the future require additional cash resources from our PRC subsidiaries due to changes in business conditions or to fund future acquisitions and developments.
+ 
+ 
+ 10
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ Holding Foreign Companies Accountable Act
+ 
+ Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect the workpapers prepared by our auditor, and that as a result an exchange may determine to delist our securities. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was signed into law on December 29, 2022, amending the HFCA Act and requiring the SEC to prohibit an issuer s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at any future time. On December 16, 2021, the PCAOB issued a report on its determination that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions. Our auditor, Audit Alliance LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded publicly in the U.S. and a firm registered with the PCAOB, is headquartered in Singapore and subject to laws in the U.S., pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is not subject to the determination issued by the PCAOB on December 16, 2021. On August 26, 2022, the CSRC, the MOF, and the PCAOB signed a Statement of Protocol (the Protocol ), governing inspections and investigations of audit firms based in China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. However, at PCAOB s annual reassessment by the end of each year, it could determine that it is still unable to inspect and investigate completely audit firms based in China and Hong Kong. See Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China Our Ordinary Shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of trading of our Ordinary Shares, or the treat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections. 
+ 
+ Summary of Risk Factors
+ 
+ Investing in our securities involves significant risks. You should carefully consider all of the information and the risks and uncertainties summarized below, the risks described under Item 3. Key Information D. Risk Factors that appears in the 2023 Annual Report, which is incorporated by reference herein, the Risk Factors section beginning on page 16 of this prospectus, and the risk factors contained in any applicable prospectus supplement or in the other documents that are filed after the date hereof and incorporated by reference in this prospectus before making an investment in our securities. Below is a summary of the principal risks and uncertainties we face, organized under relevant headings. These risks are discussed more fully in the section titled Risk Factors in this prospectus and Item 3. Key Information D. Risk Factors that appears in the 2023 Annual Report, which is incorporated by reference herein.
+ 
+ Risks Related to the Business and Industry of the Operating Entities (for a more detailed discussion, see Item 3. Key Information D. Risk Factors Risks Related to the Business and Industry of the Operating Entities on pages 12 to 20 of the 2023 Annual Report, which is incorporated by reference herein)
+ 
+ Risks and uncertainties related to our business include, but are not limited to, the following:
+ 
+ 
+ 
+ our revenues during the reporting periods were highly concentrated from two customers. If we are not able to generate significant revenues from other lines of business, our results of operations and financial condition may be materially and adversely affected. See page 12 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ our failure to obtain and maintain permit related to human resources services could have a material adverse impact on our business, financial conditions and results of operations. See page 16 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 11
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ 
+ 
+ 
+ delays or failures in responding to issues raised by end users of our SaaS platform could harm our operations. See page 17 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ if we fail to maintain and enhance recognition of our brand China Liberal, we may face difficulty enrolling new students, and our reputation and operating results may be harmed. See page 17 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ we face intense competition in our industry. See page 17 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ we rely heavily on Aliyun, a cloud-based server provider to provide server service to us. Any interruption to such service could significantly disrupt our operations. See page 17 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ privacy concerns could limit our ability to collect and leverage our user data and disclosure of user data could adversely impact our business and reputation. See page 17 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ if we fail to protect our intellectual property rights, our brand and business may suffer. See page 18 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ we have in the past granted, and may continue to grant share incentives, which may result in increased share-based compensation expenses. See page 20 of the 2023 Annual Report; and
+
+ 
+ 
+ 
+ 
+ 
+ increases in labor costs in the PRC may adversely affect our business and results of operations. See page 20 of the 2023 Annual Report.
+
+ 
+ 
+ 
+ Risks Related to Our Corporate Structure (for a more detailed discussion, see Item 3. Key Information D. Risk Factors Risks Related to Our Corporate Structure on pages 20 to 21 of the 2023 Annual Report, which is incorporated by reference herein)
+ 
+ Risks and uncertainties related to our corporate structure include, but are not limited to, the following:
+ 
+ 
+ 
+ you may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. See page 21 of the 2023 Annual Report;
+
+ 
+ 
+ 
+
+ 
+ 
+ you may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders. See page 21 of the 2023 Annual Report; and
+
+ 
+ 
+ 
+
+ 
+ 
+ certain judgments obtained against us by our shareholders may not be enforceable. See page 21 of the 2023 Annual Report.
+
+ 
+ 
+ 
+ Risks Related to Doing Business in China (for a more detailed discussion, see Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China on pages 22 to 30 of the 2023 Annual Report, which is incorporated by reference herein)
+ 
+ We face risks and uncertainties relating to doing business in China in general, including, but not limited to, the following:
+ 
+ 
+ 
+ changes in China s economic, political, or social conditions or government policies could have a material adverse effect on our business and operations. See page 22 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ the Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time. See pages 22 and 23 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 12
+ 
+
+ Table of Contents
+
+ 
+ 
+ 
+ 
+ 
+ uncertainties with respect to the PRC legal system could adversely affect us. See page 24 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ if we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. See page 27 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ our Ordinary Shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. See page 29 of the 2023 Annual Report; and
+
+ 
+ 
+ 
+ 
+ 
+ recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offerings. See pages 29 and 30 of the 2023 Annual Report.
+
+ 
+ 
+ 
+ Risks Related to the Trading Market (for a more detailed discussion, see Item 3. Key Information D. Risk Factors Risks Related to the Trading Market on pages 30 to 33 of the 2023 Annual Report, which is incorporated by reference herein)
+ 
+ We are subject to general risks and uncertainties relating to our ordinary shares and the trading market, including, but not limited to, the following:
+ 
+ 
+ 
+ the trading price of our Ordinary Shares is likely to be volatile. See page 30 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ the sale or availability for sale of substantial amounts of our Ordinary Shares could adversely affect their market price. See page 31 of the 2023 Annual Report;
+
+ 
+ 
+ 
+ 
+ 
+ because we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our Ordinary Shares for a return on your investment. See page 31 of the 2023 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 page 32 of the 2023 Annual Report; and
+
+ 
+ 
+ 
+ 
+ 
+ if we are classified as a passive foreign investment company, United States taxpayers who own our Ordinary Shares may have adverse United States federal income tax consequences. See page 33 of the 2023 Annual Report.
+
+ 
+ 
+ 
+ Risks Relating to this Offering (for a more detailed discussion, see page 16 of this prospectus)
+ 
+ 
+ 
+ we are selling this offering without an underwriter and may be unable to sell any Offering Shares. As a result, we may not be able to raise enough funds from this offering to commence and sustain our business, and future financing strategies may adversely affect holders of our Ordinary Shares;
+
+ 
+ 
+ 
+
+ 
+ 
+ the sale or availability for sale of substantial amounts of our ordinary shares could adversely affect their market price;
+
+ 
+ 
+ 
+
+ 
+ 
+ because
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001791963_forethough_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001791963_forethough_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..b9bc4286683278c2f579476a31b28475c52ea1c9
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001791963_forethough_prospectus_summary.txt
@@ -0,0 +1,1410 @@
+Summary Investment Schedule
+For the Year Ended December 31, 2023
+
+(Dollars in thousands)
+
+ 
+ 
+
+Gross Investment 
+Holdings*
+ 
+
+Admitted Assets as 
+Reported in the
+Annual Statement
+ 
+
+ 
+ 
+
+Amount
+
+ 
+
+Percentage
+of Total 
+Admitted
+Assets
+ 
+
+Amount
+
+ 
+
+Percentage
+of Total 
+Admitted
+Assets
+ 
+
+Investment Categories
+
+ 
+
+Long term bonds:
+
+ 
+
+U.S. governments
+
+ 
+
+$
+
+125,817
+
+ 
+ 
+
+ 
+
+0.24
+
+%
+
+ 
+
+$
+
+125,817
+
+ 
+ 
+
+ 
+
+0.24
+
+%
+
+ 
+
+All other governments
+
+ 
+
+ 
+
+76,411
+
+ 
+ 
+
+ 
+
+0.14
+
+%
+
+ 
+
+ 
+
+76,411
+
+ 
+ 
+
+ 
+
+0.14
+
+%
+
+ 
+
+U.S. states, territories and possessions, etc. guaranteed
+
+ 
+
+ 
+
+99,911
+
+ 
+ 
+
+ 
+
+0.19
+
+%
+
+ 
+
+ 
+
+99,911
+
+ 
+ 
+
+ 
+
+0.19
+
+%
+
+ 
+
+U.S. political subdivisions of states, territories, and possessions, guaranteed
+
+ 
+
+ 
+
+41,438
+
+ 
+ 
+
+ 
+
+0.08
+
+%
+
+ 
+
+ 
+
+41,438
+
+ 
+ 
+
+ 
+
+0.08
+
+%
+
+ 
+
+U.S. special revenue and special assessment obligations, etc. non-guaranteed
+
+ 
+
+ 
+
+1,304,074
+
+ 
+ 
+
+ 
+
+2.46
+
+%
+
+ 
+
+ 
+
+1,304,074
+
+ 
+ 
+
+ 
+
+2.46
+
+%
+
+ 
+
+Industrial and miscellaneous
+
+ 
+
+ 
+
+18,059,753
+
+ 
+ 
+
+ 
+
+34.01
+
+%
+
+ 
+
+ 
+
+18,059,753
+
+ 
+ 
+
+ 
+
+34.04
+
+%
+
+ 
+
+Hybrid securities
+
+ 
+
+ 
+
+55,969
+
+ 
+ 
+
+ 
+
+0.11
+
+%
+
+ 
+
+ 
+
+55,969
+
+ 
+ 
+
+ 
+
+0.11
+
+%
+
+ 
+
+Parent, subsidiaries and affiliates
+
+ 
+
+ 
+
+8,843,184
+
+ 
+ 
+
+ 
+
+16.65
+
+%
+
+ 
+
+ 
+
+8,843,184
+
+ 
+ 
+
+ 
+
+16.67
+
+%
+
+ 
+
+SVO identified funds
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+Unaffiliated bank loans
+
+ 
+
+ 
+
+482,443
+
+ 
+ 
+
+ 
+
+0.91
+
+%
+
+ 
+
+ 
+
+482,443
+
+ 
+ 
+
+ 
+
+0.91
+
+%
+
+ 
+
+Total long-term bonds
+
+ 
+
+ 
+
+29,089,001
+
+ 
+ 
+
+ 
+
+54.78
+
+%
+
+ 
+
+ 
+
+29,089,001
+
+ 
+ 
+
+ 
+
+54.83
+
+%
+
+ 
+
+Preferred stocks:
+
+ 
+
+Industrial and miscellaneous (unaffiliated)
+
+ 
+
+ 
+
+53,270
+
+ 
+ 
+
+ 
+
+0.10
+
+%
+
+ 
+
+ 
+
+53,270
+
+ 
+ 
+
+ 
+
+0.10
+
+%
+
+ 
+
+Parent, subsidiaries and affiliates
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+Total preferred stocks
+
+ 
+
+ 
+
+53,270
+
+ 
+ 
+
+ 
+
+0.10
+
+%
+
+ 
+
+ 
+
+53,270
+
+ 
+ 
+
+ 
+
+0.10
+
+%
+
+ 
+
+Common stocks:
+
+ 
+
+Industrial and miscellaneous publicly traded (unaffiliated)
+
+ 
+
+ 
+
+79,425
+
+ 
+ 
+
+ 
+
+0.15
+
+%
+
+ 
+
+ 
+
+79,425
+
+ 
+ 
+
+ 
+
+0.15
+
+%
+
+ 
+
+Industrial and miscellaneous other (unaffiliated)
+
+ 
+
+ 
+
+9,324
+
+ 
+ 
+
+ 
+
+0.02
+
+%
+
+ 
+
+ 
+
+9,324
+
+ 
+ 
+
+ 
+
+0.02
+
+%
+
+ 
+
+Parent, subsidiaries and affiliates Other
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+Total common stocks
+
+ 
+
+ 
+
+88,749
+
+ 
+ 
+
+ 
+
+0.17
+
+%
+
+ 
+
+ 
+
+88,749
+
+ 
+ 
+
+ 
+
+0.17
+
+%
+
+ 
+
+Mortgage loans:
+
+ 
+
+Farm mortgages
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+%
+
+ 
+
+Residential mortgages
+
+ 
+
+ 
+
+6,868,472
+
+ 
+ 
+
+ 
+
+12.93
+
+%
+
+ 
+
+ 
+
+6,868,472
+
+ 
+ 
+
+ 
+
+12.95
+
+%
+
+ 
+
+Commercial mortgages
+
+ 
+
+ 
+
+10,945,772
+
+ 
+ 
+
+ 
+
+20.61
+
+%
+
+ 
+
+ 
+
+10,945,772
+
+ 
+ 
+
+ 
+
+20.63
+
+%
+
+ 
+
+Mezzanine real estate loans
+
+ 
+
+ 
+
+447,256
+
+ 
+ 
+
+ 
+
+0.84
+
+%
+
+ 
+
+ 
+
+447,256
+
+ 
+ 
+
+ 
+
+0.84
+
+%
+
+ 
+
+Total mortgage loans
+
+ 
+
+ 
+
+18,261,500
+
+ 
+ 
+
+ 
+
+34.39
+
+%
+
+ 
+
+ 
+
+18,261,500
+
+ 
+ 
+
+ 
+
+34.42
+
+%
+
+ 
+
+Real estate:
+
+ 
+
+Properties held for sale
+
+ 
+
+ 
+
+2,882
+
+ 
+ 
+
+ 
+
+0.01
+
+%
+
+ 
+
+ 
+
+2,882
+
+ 
+ 
+
+ 
+
+0.01
+
+%
+
+ 
+
+Total real estate
+
+ 
+
+ 
+
+2,882
+
+ 
+ 
+
+ 
+
+0.01
+
+%
+
+ 
+
+ 
+
+2,882
+
+ 
+ 
+
+ 
+
+0.01
+
+%
+
+ 
+
+Cash
+
+ 
+
+ 
+
+403,419
+
+ 
+ 
+
+ 
+
+0.76
+
+%
+
+ 
+
+ 
+
+403,419
+
+ 
+ 
+
+ 
+
+0.76
+
+%
+
+ 
+
+Cash equivalents
+
+ 
+
+ 
+
+2,221,056
+
+ 
+ 
+
+ 
+
+4.18
+
+%
+
+ 
+
+ 
+
+2,221,056
+
+ 
+ 
+
+ 
+
+4.19
+
+%
+
+ 
+
+Short-term investments
+
+ 
+
+ 
+
+334,111
+
+ 
+ 
+
+ 
+
+0.63
+
+%
+
+ 
+
+ 
+
+334,111
+
+ 
+ 
+
+ 
+
+0.63
+
+%
+
+ 
+
+Contract loans
+
+ 
+
+ 
+
+3,605
+
+ 
+ 
+
+ 
+
+0.01
+
+%
+
+ 
+
+ 
+
+3,605
+
+ 
+ 
+
+ 
+
+0.01
+
+%
+
+ 
+
+Derivatives
+
+ 
+
+ 
+
+684,290
+
+ 
+ 
+
+ 
+
+1.29
+
+%
+
+ 
+
+ 
+
+684,290
+
+ 
+ 
+
+ 
+
+1.29
+
+%
+
+ 
+
+Other invested assets
+
+ 
+
+ 
+
+1,525,694
+
+ 
+ 
+
+ 
+
+2.87
+
+%
+
+ 
+
+ 
+
+1,525,694
+
+ 
+ 
+
+ 
+
+2.88
+
+%
+
+ 
+
+Receivables for securities
+
+ 
+
+ 
+
+434,355
+
+ 
+ 
+
+ 
+
+0.82
+
+%
+
+ 
+
+ 
+
+381,581
+
+ 
+ 
+
+ 
+
+0.72
+
+%
+
+ 
+
+Total invested assets
+
+ 
+
+$
+
+53,101,932
+
+ 
+ 
+
+ 
+
+100.00
+
+%
+
+ 
+
+$
+
+53,049,158
+
+ 
+ 
+
+ 
+
+100.00
+
+%
+
+ 
+
+* Gross investment holdings as valued in compliance with the NAIC Accounting Practices and Procedures Manual
+
+F-57
+
+Forethought Life Insurance Company
+
+(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)
+Supplemental Schedule of Reinsurance Disclosures
+For the Year Ended December 31, 2023
+
+(Dollars in thousands)
+
+The following information regarding reinsurance contracts is presented to satisfy the disclosure requirements in SSAP No. 61R, Life, Deposit-Type and Accident and Health Reinsurance, which apply to reinsurance contracts entered into, renewed or amended on or after January 1, 1996.
+
+1. Has the Company reinsured any risk with any other entity under a reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) that is subject to Appendix A-791, Life and Health Reinsurance Agreements, and includes a provision that limits the reinsurer's assumption of significant risks identified in Appendix A-791?
+
+Examples of risk-limiting features include provisions such as a deductible, 
+a loss ratio corridor, a loss cap, an aggregate limit or similar effect.
+ 
+
+ 
+ 
+
+Yes 
+ 
+
+No 
+ 
+
+If yes, indicate the number of reinsurance contracts to which such provisions apply: __________
+
+ 
+
+ 
+ 
+
+ 
+ 
+
+If yes, indicate if deposit accounting was applied for all contracts subject to 
+Appendix A-791 that limit significant risks.
+ 
+
+Yes 
+ 
+
+No 
+ 
+
+N/A 
+ 
+
+2. Has the Company reinsured any risk with any other entity under a reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) that is not subject to Appendix A-791, for which reinsurance accounting was applied and includes a provision that limits the reinsurer's assumption of risk?
+
+Examples of risk-limiting features include provisions such as a deductible, a loss ratio corridor, 
+a loss cap, an aggregate limit or other provisions that result in similar effects.
+ 
+
+ 
+ 
+
+Yes 
+ 
+
+No 
+ 
+
+If yes, indicate the number of reinsurance contracts to which such provisions apply: __________
+
+ 
+
+ 
+ 
+
+ 
+ 
+
+If yes, indicate whether the reinsurance credit was reduced for the risk-limiting 
+features.
+ 
+
+Yes 
+ 
+
+No 
+ 
+
+N/A 
+ 
+
+3. Does the Company have any reinsurance contracts (other than reinsurance contracts with a federal or state facility) that contain one or more of the following features which result in delays in payment in form or in fact:
+
+a. Provisions that permit the reporting of losses to be made less frequently than quarterly;
+
+b. Provisions that permit settlements to be made less frequently than quarterly;
+
+c. Provisions that permit payments due from the reinsurer to not be made in cash within ninety (90) days of the settlement date (unless there is no activity during the period); or
+
+d. The existence of payment schedules, accumulating retentions from multiple years, or any features inherently designed to delay timing of the reimbursement to the ceding entity.
+
+e.
+
+ 
+
+Yes 
+ 
+
+No 
+ 
+
+4. Has the Company reflected reinsurance accounting credit for any contracts that are not subject to Appendix A-791 and not yearly renewable term reinsurance, which meet the risk transfer requirements of SSAP No. 61R?
+
+Type of contract:
+
+ 
+
+Response:
+
+ 
+
+Identify reinsurance contract(s):
+
+ 
+
+Has the insured 
+event(s) triggering 
+contract coverage 
+been recognized?
+ 
+
+Assumption reinsurance new for 
+the reporting period
+ 
+
+Yes No 
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+N/A
+
+ 
+
+Non-proportional reinsurance, which 
+does not result in significant surplus 
+relief
+ 
+
+Yes No 
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+Yes No N/A 
+ 
+
+F-58
+
+Forethought Life Insurance Company
+
+(A wholly-owned subsidiary of Commonwealth Annuity and Life Insurance Company)
+Supplemental Schedule of Reinsurance Disclosures, continued
+For the Year Ended December 31, 2023
+
+(Dollars in thousands)
+
+5. Has the Company ceded any risk in a reinsurance agreement that is not subject to Appendix A-791 and not yearly renewable term reinsurance, under any reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) during the period covered by the financial statements, and either:
+
+a. Accounted for that contract as reinsurance under statutory accounting 
+principles (SAP) and as a deposit under generally accepted accounting 
+principles (GAAP); or
+ 
+
+Yes 
+ 
+
+No 
+ 
+
+N/A 
+ 
+
+b. Accounted for that contract as reinsurance under GAAP and as a 
+deposit under SAP?
+ 
+
+Yes 
+ 
+
+No 
+ 
+
+N/A 
+ 
+
+If the answer to item (a) or item (b) is yes, include relevant information regarding GAAP to SAP differences to explain why the contract(s) is treated differently for GAAP and SAP below:
+
+ 
+
+________________________________________________________________________________
+
+ 
+
+F-59
+
+ 
+
+APPENDIX A:
+STATE VARIATIONS
+
+ 
+
+The following
+information is a
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001798270_assure_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001798270_assure_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..cc4a9bc918bd34417cab9c6eaeb8a84faa066136
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001798270_assure_prospectus_summary.txt
@@ -0,0 +1,192 @@
+PROSPECTUS SUMMARY
+This summary highlights information contained elsewhere in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the sections entitled Risk Factors, Caution Regarding Forward-Looking Statements, Management Discussion and Analysis of Financial Condition and Results of Operations and in our consolidated financial statements and notes thereto.
+In this prospectus, unless we indicate otherwise or the context requires, Assure, Company, our Company, the Company, we, our, ours and us refer to Assure Holdings Corp. and its consolidated subsidiaries.
+Our Business
+Overview
+Assure is a provider of Intraoperative neuromonitoring ( IONM ). The Company delivers a turnkey suite of clinical and operational services to support surgeons and medical facilities during invasive surgical procedures. IONM has been well established as a standard of care and risk mitigation tool for various surgical verticals such as neurosurgery, spine, cardiovascular, orthopedic, ear, nose, and throat ( ENT ), and other surgical procures that place the nervous system at risk. Accredited by The Joint Commission, Assure s mission is to provide exceptional surgical care and help make invasive surgeries safer. Our strategy focuses on utilizing best of class personnel and partners to deliver outcomes that are beneficial to all stakeholders including patients, surgeons, hospitals, insurers, and stockholders.
+Disposition of Assets and Reduction in Operations
+In March of 2024, the Company divested the majority of its interoperative neuromonitoring (IONM) assets to a strategic competitor. See Our Strategy Sale of Assets below. Currently, the Company has 15 active employees, including full-time and contracted technologists conducting services. The Company operations are to provide IONM services in both Montana and Arizona. The Company plan for the business is to continue to operate in these markets while the Company is continuing to assess other strategic opportunities in the near term, which may include the acquisition of additional operational assets, acquiring new lines of business or engaging in other strategic transactions.
+Services
+During each procedure, Assure provides two types of services, the Technical Component and Professional Component of IONM. Our in-house Interoperative Neurophysiologists ( INP ) provide the Technical Component IONM services from the operating room throughout the procedure, while telehealth-oriented supervising practitioners provide a level of redundancy and risk mitigation in support of the onsite INPs and the surgical team. In addition, Assure offers a comprehensive suite of IONM services, including scheduling the INP and supervising practitioner, real time monitoring, patient advocacy and subsequent billing and collecting for services provided.
+Clinical leadership, surgeon support and patient care are Assure s cornerstones. We make substantial ongoing investments in our training and development of clinical staff and have created a training program to rigorously train new INPs to cost-effectively join the Assure team. In addition, we have partnered with the internationally renowned Texas Back Institute on clinical research relating to IONM safety and efficacy.
+Historically, the foundation of Assure s business has been providing the Technical Component of IONM via our INP staff. We employ highly trained INPs, which provide a direct point of contact in the operating room during the surgeries to relay critical information to the surgical team. In this one-to-one business model, Assure pairs a team of INPs with third-party surgeons to promote a level of familiarity, comfort and efficiency between the surgeon and the INP. Each INP can support approximately 200 cases annually. Our INPs monitor the surgical procedure using state of the art, commercially available, diagnostic medical equipment. Assure INP s are certified by a third-party accreditation board, ABRET Neurodiagnostic Credentialing and Accreditation ( ABRET ). The success of our service depends upon the timely recognition and successful interpretation of the data signals by our INPs and remote supervisors to quickly determine if the patient is experiencing a deficiency and advise the surgeon to determine if surgical intervention is required to positively impact the patient and surgery.
+
+1
+
+Table of Contents
+
+Our Strategy
+Current Strategy
+Assure has made substantial investments to make its revenue cycle management function more data-driven, analytical, and automated. This modernization facilitated successful state-level arbitrations in 2022 and federal arbitrations in 2023. Many IONM competitors, particularly smaller peers that remain reliant on third-party billing companies lack the analytics and transparency to similarly leverage opportunities presented by the arbitration process. The Company intends to continue to seek arbitration opportunities related to uncollected accounts receivable.
+During the fourth quarter of 2022 and throughout 2023, the Company exited the majority of business under Assure s legacy Managed Service Agreement ( MSA ) model in order to keep all revenue generated from services provided by the Professional Component of IONM. The Company expects the remaining MSA relationships to be terminated during 2024.
+During September 2023, the Company s Board of Directors initiated a process to explore strategic alternatives for the business. In consultation with financial and legal advisors, a comprehensive strategic review process began immediately and evaluated a broad range of options to maximize shareholder value. As part of this review process, Assure s board agreed to conduct an auction process for the sale of its clinical operations. Following its sale of certain assets in March of 2024 and the termination of its merger agreement (as described below) Assure s Board of Directors will continue the process of exploring strategic alternatives for the business.
+Recent Developments
+Termination of Merger Agreement
+During February 2024, Assure entered an Agreement and Plan of Merger (the Merger Agreement ) with Danam Health, Inc. ( Danam ). On June 11, 2024, Assure terminated the Merger Agreement based on the Company s assertion of certain misrepresentations by Danam regarding its representations and warranties set form in Article 4 of the Merger Agreement, including but not limited to, its representations regarding its financial condition and ability to complete the Acquisition Transactions, and the Company s assertion that Danam was failing to perform its covenants under the Merger Agreement, including but not limited to its covenant to meet the closing condition to complete the Acquisition Transactions prior to or concurrent with the closing of the Merger and such breaches could not be cured within the time periods set forth in Section 8.1(b) thereof.
+As a result of the termination of the Merger Agreement, in addition to reserving its right to seek other remedies, pursuant to Section 8.3(c) of the Merger Agreement, the Company is seeking reimbursement for all of its fees, costs and expenses (including all fees and expenses of counsel, accountants, investment bankers, experts and consultants) in relation to the Merger Agreement and its performance thereunder. Danam has asserted that it did not breach the Merger Agreement, that the Company s termination was not permitted under the terms of the Merger Agreement and that Danam is entitled to a $1 million break fee. Danam has also called due its $1 million convertible debenture, which Assure is seeking to cancel. Assure disagrees with Danam s assertions and plans to vigorously defend its rights under the Merger Agreement.
+Sale of Assets
+Asset Purchase Agreement and Amendment
+On March 11, 2023, Assure, and its subsidiaries, Assure Neuromonitoring, LLC, Assure Networks, LLC, Assure Networks Texas Holdings, LLC and Assure Networks Texas Holdings II, LLC (collectively, the Sellers ) entered into an asset purchase agreement (the APA ) with National Neuromonitoring Services, LLC ( Purchaser ). Upon the terms and subject to the satisfaction of the conditions described in the APA, Assure and the Sellers sold to Purchaser (or a subsidiary of Purchaser) certain assets of the Sellers, as described below, and Purchaser has agreed to assume certain liabilities and obligations of the Sellers, as described below (the Sale Transaction ).
+The assets acquired by Purchaser from each Seller (the Acquired Assets ) included: (a) all inventory and clinical supplies of such Seller; (b) all tangible personal property of such Seller; (c) subject to certain limitations set forth in the APA, all right, title and interest of such Seller in, to and under the contracts set forth on Schedule 2.1(c) (the Transferred Contracts ); (d) to the extent their transfer is permitted under applicable law, all Permits utilized by such Seller in the conduct of the business of the Sellers (the Business ) and all 
+
+2
+
+Table of Contents
+
+correspondence and records in respect of such permits; (e) all intangible assets of such Seller, including intellectual property, goodwill and going concern value, all other intangible rights of such Seller, all rights of such Seller to the names Assure Neuromonitoring , NervePro , Innovation Neuromonitoring , Sentry Neuromonitoring and/or all other relevant, related and/or derivative names and all telephone or facsimile numbers, domain names, websites, website content, e-mail addresses, social media accounts and passwords used or held for use in connection with the Business; (f) all data related to all surgical cases covered by such Seller and data related to all Accounts Receivable (as defined below) of the Business (including, without limitation, all explanation of benefits and health care financing administration forms), including such Seller s books and records (provided that the Accounts Receivable shall be an Excluded Asset (as defined below); (g) all express or implied guarantees, warranties, representations, covenants, indemnities and similar rights received or owing to such Seller from third parties relating to the Assumed Liabilities (as defined below) or the Acquired Assets, including third party warranties and guarantees and all related claims, credits, rights of recovery and set-off as to third parties which are held by or in favor of such Seller and relate to the Assumed Liabilities or the Acquired Assets; (h) all rights, causes of actions and claims of such Seller against third parties relating to the Acquired Assets or the Business, whether choate or inchoate, matured or unmatured, known or unknown, contingent or non-contingent; and (i) any other assets used or held for use exclusively in connection with the Business on either Closing Date that are not specifically listed above and are not Excluded Assets.
+The liabilities assumed by the Purchaser from each Seller (the Assumed Liabilities ) include: (a) to the extent relating to periods beginning on and after the applicable closing at which such Transferred Contracts were assigned to Purchaser, the liabilities of such Seller under the Transferred Contracts (provided that Purchaser shall not assume any liabilities for any breach or default under any Transferred Contract outstanding at either Closing relating to events occurring on or before such Closing); (b) except as specifically provided in the APA, all liabilities and obligations of Purchaser relating to employee benefits, compensation or other arrangements with respect to any transferred employee arising on or after the applicable closing at which such transferred employee was transferred to Purchaser; (c) all liabilities and obligations for (i) taxes relating to the Business, the Acquired Assets or the Assumed Liabilities for any taxable period ending on or prior to the First Closing Date and Second Closing Date, respectively, and (ii) taxes for which Purchaser is liable pursuant to the tax provisions in the APA; and (d) all liabilities arising out of or relating to Purchaser s ownership or operation of (i) the Business and the First Closing Assets (as defined below) on or prior to the First Closing Date or (ii) the Business and the Second Closing Assets (as defined below) on or prior to the Second Closing Date.
+On March 26, 2024, Assure and the Sellers entered into amendment number one (the Amendment ) to the APA with National Neuromonitoring Services, LLC. Upon the terms and subject to the satisfaction of the conditions described in the Amended APA, Assure and the Sellers sold to Purchaser (or a subsidiary of Purchaser) certain assets of the Sellers (the Sale Transaction ). 
+The Amendment amended the APA to (i) the amend the Purchase Price from $2.5 million plus the Earnout Amount to be $2.32 million minus the Debt Payoff Amount plus the Earnout Amount, (ii) add in procedures for determining the number of Post-Closing Business Employees and Post-Closing IONM Systems and dispute resolution in relation thereto, and (iv) add post-closing purchase price adjustments of (A) a decrease of $28,000 for each Post-Closing Business Employee less than the number 40 and (B) a decrease of $12,000 for each Post-Closing IONM System below the number 100.
+The Amendment to the APA to change the Earnout Payment from up to $2 million to up to $2.18 million and change the Case Volume thresholds at which the Earnout Payment is payable as follows:
+(i)If the Case Volume is less than 6,000, then Sellers will not receive any Earnout Payment and the Purchase Price shall be decreased by an amount equal to equal to One Hundred Eighty-Six Dollars ($193) for each surgical case less than 6,000 up to a maximum aggregate amount not to exceed One Hundred Ninety-Three Thousand Dollars ($193,000).
+(ii)If the Case Volume is at least 7,000 but less than 8,000, then Sellers will receive an Earnout Payment in an amount equal to Forty-Nine Thousand Six Hundred Thirty Dollars ($49,630); or
+(iii)If the Case Volume is at least 8,000 but less than 9,000, then Sellers will receive an Earnout Payment in an amount equal to Three Hundred Eighty-Eight Thousand One Hundred Forty-Nine Dollars ($338,149); or
+(iv)If the Case Volume is at least 9,000 but less than 10,000, then Sellers will receive an Earnout Payment in an amount equal to Seven Hundred Seventy-Six Thousand Two Hundred Ninety-Seven Dollars ($776,297); or
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+(v)If the Case Volume for the Earnout Period is at least 10,000 but less than 11,000, then Sellers will receive an Earnout Payment in an amount equal to One Million Four Hundred Fifty-Three Thousand Three Hundred Thirty-Four Dollars ($1,453,334); or
+(vi)If the Case Volume is more than 11,000, then Sellers will receive an Earnout Payment in an amount equal to Two Million One Hundred Eighty Thousand Dollars ($2,180,000).
+
+The first closing of the Sale Transaction closed on March 26, 2024 and Assure and Sellers received the initial cash payment of $2.32 million less the Debt Payoff Amount of approximately $1.23 million. Payment was made in cash by the Purchaser to Assure and Sellers from available capital.
+Nominee Agreement
+Pursuant to the terms of the Amended APA, in connection with the First Closing, Assure Neuromonitoring, LLC and Assure Telehealth Providers, LLC entered into a nominee agreement with the Purchaser (the Nominee Agreement ), pursuant to which the Assure Neuromonitoring agreed to, among other things, act, or cause its subsidiaries to act, as a Nominee for the benefit of the Purchaser for the purpose of (i) holding certain contractual rights arising under the agreements listed on Exhibit A attached thereto, subject to any limitations set forth therein (the Nominee Agreements ), and (ii) otherwise facilitating certain operational functions related to business operations in furtherance of the performance obligations arising under the Nominee Agreements, including, without limitation, those operational functions set forth on Exhibit B attached thereto (collectively, the Nominee Operational Functions ).
+Non-Competition Agreement
+Pursuant to the terms of the APA, in connection with the First Closing, the Sellers entered into a non-competition Agreement with the Purchaser (the Non-Competition Agreement ) pursuant to which Sellers agreed for a term of three (3) years (i) not to disclose certain confidential, proprietary or trade secret information, (ii) not to compete with the Purchaser in the markets of the Business of the Sellers as of the effective date of the Non-Competition Agreement, except for those markets subject to the Second Closing, being the States of Arizona and Montana, (iii) not to solicit the business of any patients, providers, clients, customers, suppliers, vendors or other business relations of the Purchaser with the restricted area, (iv) not induce any employee or contractor to terminate or reduce their employment, agency or contractor relationship with Purchaser and (v) not to hire or engage any individual who was an employee or contractor of Purchaser.
+Increase in Authorized Capital
+On April 8, 2024, the Board of Assure approved an amendment to the Company s articles of incorporation, as amended (the Articles to increase the number of authorized shares of common stock from 9,000,000 shares (pre-Reverse Split), par value $0.001, to 250,000,000 shares (pre-Reverse Split), par value $0.001 (the Authorized Share Increase ) and recommended that the Authorized Share Increase be presented to the stockholders of the Company for approval at a special meeting of the stockholders. On May 14, 2024, the stockholders approved the Authorized Share Increase at a special meeting of the stockholders.
+On May 17, 2024, the Company filed the Certificate of Amendment with the Secretary of State of the State of Nevada to effect the Authorized Share Increase. As a result, on May 17, 2024, the third paragraph of the Articles was amended to increase the number of shares of common stock authorized to be issued from 9,000,000 shares of common stock, par value $0.001 to 250,000,000 shares of common stock, par value $0.001.
+Nasdaq Delisting Notice
+On July 25, 2023, the Company received a written notice from Nasdaq that, because the closing bid price for the Company s common stock had fallen below $1.00 per share for 30 consecutive business days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq.
+The Bid Price Deficiency Letter has no immediate effect on the continued listing status of the Company s common stock on The Nasdaq Capital Market, and, therefore, the Company s listing remains fully effective.
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+The Company is provided a compliance period of 180 calendar days from the date of the Bid Price Deficiency Letter, or until January 22, 2024, to regain compliance with the minimum closing bid requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A). If at any time before January 22, 2024, the closing bid price of the Company s common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, subject to Nasdaq s discretion to extend this period pursuant to Nasdaq Listing Rule 5810(c)(3)(G) to 20 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the minimum bid price requirement, and the matter would be resolved. If the Company does not regain compliance during the compliance period ending January 22, 2024, then Nasdaq may grant the Company a second 180 calendar day period to regain compliance, provided the Company meets the continued listing requirement for market value of publicly-held shares and all other initial listing standards for The Nasdaq Capital Market, other than the minimum closing bid price requirement, and notifies Nasdaq of its intent to cure the deficiency.
+On August 16, 2023, the Company received notice from the Nasdaq that the Company no longer satisfies the $2.5 million stockholders equity requirement for continued listing on The Nasdaq Capital Market, or the alternatives to that requirement - a $35 million market value of listed securities or $500,000 in net income in the most recent fiscal year or two or the last three fiscal years - as required by Nasdaq Listing Rule 5550(b) (the Equity Requirement ).
+As with the Bid Price Deficiency Letter, the Staff s notification has no immediate effect on the Company s continued listing on The Nasdaq Capital Market.
+In accordance with the Nasdaq Listing Rules, the Company was provided 45 calendar days, or until October 2, 2023, to submit a plan to regain compliance with the Equity Requirement (the Compliance Plan ). The Company submitted its Compliance Plan on October 2, 2023. On November 1, 2023, the Staff provided notice to the Company that the Staff had granted an extension until January 22, 2024 to complete certain key steps of the Company s compliance plan.
+Based on the Company s representations made in its compliance plan submitted to the Staff, on November 1, 2023, the Staff granted the Company an extension until January 22, 2024, to regain compliance with the Equity Requirement. However, the Staff indicated in the Determination Letter that, pursuant to Listing Rule 5810(d)(2), this deficiency serves as an additional and separate basis for delisting, and as such, the Company should address its non-compliance with the Equity Requirement before the Panel, if it appeals the Staff s determination, which the Company has done.
+On January 24, 2024, the Company received a determination letter (the Determination Letter ) from the Staff stating that it had not regained compliance with Listing Rule 5550(a)(2) and is not eligible for a second 180 day period to regain compliance. The Company appealed the Staff s determination, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series and had a hearing with a Nasdaq Hearings Panel (the Panel ) on April 9, 2024. The Company still awaiting the Panel s decision on whether the Company s plan as presented to the Panel has been accepted.
+On May 16, 2024, the Company received a written notice from the Panel that it has granted the Company an extension to regain compliance with the continued listing requirements for The Nasdaq Capital Market (the Panel Decision ). The Hearings Panel granted the Company an extension until July 22, 2024, by which date the Company will be required to demonstrate compliance with all applicable initial listing requirements for the Nasdaq Capital Market in relation to its completion of its previously announced transaction with Danam.
+On June 11, 2024, the Company terminated its merger agreement with Danam. On June 14, 2024, the Company submitted a new plan of compliance to the Panel, which included (i) completing an equity offering, (ii) issuing shares of common stock in settlement of outstanding accounts payable, (iii) issuing shares of common stock pursuant to an issuer tender offer for the Company s outstanding convertible debentures, (iv) issuing shares of common stock on conversion of the debenture held by Centurion.
+On June 21, 2024, the Company received a written notice from the Panel that it has granted the Company an extension to regain compliance with the continued listing requirements for the Nasdaq Capital Market. The Panel s decision gives the Company until July 22, 2024 to demonstrate compliance with the continued listing standards by July 22, 2024. The Panel also imposed a Mandatory Panel Monitor for a period of one year regarding the Company s compliance with the periodic filing rules of the Nasdaq. This means that notwithstanding Rule 5810(c)(2), if the Company has a deficiency in filing its periodic reports in accordance with Nasdaq rules, the Company will not be permitted to provide the staff of Nasdaq with a plan of compliance with respect to that deficiency and the staff of Nasdaq will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, staff of Nasdaq will issue a delist 
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+determination letter and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable. The Company will have the opportunity to respond/present to the Hearings Panel as provided by Listing Rule 5815(d)(4)(C) regarding the periodic filing deficiency.
+As part of the Company s plan to regain compliance, the Company is conducting the following transactions:
+ This offering of shares of common stock and warrants to purchase shares of common stock pursuant the Company s registration statement on Form S-1 as filed with the SEC on June 24, 2024, as amended July 18, 2024, of which this prospectus forms a part;
+ An exchange offer for the Company s convertible debentures whereby each $1,000 principal face amount of the Company s 9% convertible debentures due and payable in 2023 and 2024 would be exchanged for shares of common stock at a per share price of $4.194 such exchange offer to expire at 11:59 pm Denver Time on July 19, 2024. See Exchange Offer for Convertible Notes below.
+ Issuing shares of common stock to holders of up to $6 million of the Company s outstanding accounts payable as part of subscriptions for shares of common stock to settle such accounts, such issuances to occur from time to time as a price per share equal to the Nasdaq Closing Price immediately prior to the signing of the binding agreements for such subscriptions. See Settlement of Accounts Payable below.
+ Exchanging up to $6 million of its outstanding principal amount of debenture with Centurion Financial Trust into shares of common stock at a price per share equal to the Nasdaq Closing Price immediately prior to the signing of the definitive agreement regarding such exchange.
+ A reverse stock split in the Company s outstanding shares of common stock and authorized capital which went effective on July 9, 2024, at a ratio of 1-for-18. See Reverse Stock Split below.
+
+There can be no assurance that the Company will be able to regain compliance with the applicable Nasdaq listing requirements, or that a Panel will stay the suspension of the Company s securities through July 22, 2024.
+If Nasdaq delists our common stock from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
+ a limited availability of market quotations for our securities;
+ reduced liquidity for our securities;
+ a determination that our common stock is a penny stock which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
+ a limited amount of news and analyst coverage; and
+ a decreased ability to issue additional securities or obtain additional financing in the future.
+
+Reverse Stock Split
+At 12:01 a.m. (Pacific Standard Time) on July 9, 2024 (the Effective Time ), the Company effected a reverse stock split of the Company s authorized and issued and outstanding common stock, par $0.001, on an eighteen (18) (old) for one (1) (new) share basis (the Reverse Split ), pursuant to Nevada Revised Statute ( NRS ) Section 78.207. At the Effective Time, the total number of shares of common stock authorized by the Corporation was reduced from 250,000,000 shares of common stock (pre-Reverse Split), par $0.001, to 13,888,888 shares of common stock, par $0.001, and the number of shares of common stock held by each stockholder of the Company 
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+was consolidated automatically into the number of shares of common stock equal to the number of issued and outstanding shares of common stock held by each such stockholder immediately prior to the Reverse Split divided by eighteen (18): effecting an eighteen (18) pre-split shares for one (1) post-split share reverse stock split. No fractional shares were issued in connection with the Reverse Split and all fractional shares will be rounded up to the next whole share, pursuant to NRS 78.205(2)(b).
+As of July 8, 2024, the Company had 10,602,306 shares of common stock issued and outstanding pre-Reverse Split, and after the Reverse Split on July 9, 2024, the Company had approximately 589,017 shares of common stock issued and outstanding.
+Also on the Effective Date, all options, warrants and other convertible securities of the Company outstanding immediately prior to the Reverse Split will be adjusted by dividing the number of shares of common stock into which the options, warrants and other convertible securities are exercisable or convertible by eighteen (18) and multiplying the exercise or conversion price thereof by eighteen (18), all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.
+Immediately after the Reverse Split, each stockholder s percentage ownership interest in the Company and proportional voting power will remain virtually unchanged, except for minor changes and adjustments that will result from rounding fractional shares into whole shares. The rights and privileges of the holders of shares of common stock will be substantially unaffected by the Reverse Split.
+All references to the number of common shares and price per common share, including all historical financial information and the financial statements included herein, have been adjusted to reflect the five-for-one reverse stock split effectuated on July 9, 2024.
+Exchange Offer for Convertible Notes
+On June 21, 2024, the Company filed a Schedule TO, as amended, with the SEC in connection with an offer (the Convertible Note Exchange Offer ) by Assure to exchange, for each $1,000 claim, consisting of principal amount, and accrued and unpaid interest through, and including, July 19, 2024, of the Company s 9% Convertible Debentures due 2023 and 2024 (the Assure Convertible Debentures ), 238.44 shares (4,291.85 shares on a pre-reverse split basis) of the Company s common stock equal to the quotient of $1,000 divided by a per share price of $4.194 ($0.233 on a pre-reverse split basis), as adjusted for a 1-for-18 reverse stock split which took effect on July 9, 2024. Assure is seeking to exchange any and all outstanding Assure Convertible Debentures in the Convertible Note Exchange Offer for the offered shares of common stock.
+The Convertible Note Exchange Offer commenced on June 21, 2024 and will expire at 11:59 p.m. (Denver time) on July 19, 2024, unless extended by the Company.
+As of July 17, 2024, Convertible Debentures with an aggregate total of $2.7 million in principal face value and $345 thousand of accrued interest had been tendered into the Convertible Note Exchange Offer representing and aggregate total of $3.1 million in principal amount plus accrued and unpaid interest through and including July 19, 2024, which are exchangeable into 736,617 shares of common stock at the expiration of the Convertible Note Exchange Offer.
+Settlement of Accounts Payable
+As of July 17, 2024, the Company has entered into subscription agreements to cancel an aggregate total of $668 thousand of outstanding accounts payable in exchange for the issuance of an aggregate total of 143,528 shares of common stock, representing an average exchange rate of $4.65 per share. All exchanges were conducted at the Nasdaq Minimum Price as of the date and time of the signing of the subscription agreement.
+Special Meeting of Stockholders
+The Company has called a special meeting of stockholders to be held on July 19, 2024, to consider (i) an amendment of the Company s Articles of Incorporation, to increase the number of authorized shares in the Company s common stock from 13,888,888 to 2,000,000,000 and (ii) an amendment of the Company s Articles of Incorporation to permit the issuance of 10,000,000 shares of preferred stock with rights and preferences to be determined by the Company s Board of Directors from time to time.
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+Corporate Structure
+Assure Holdings Corp.
+Assure Holdings Corp., formerly Montreux Capital Corp, a Canadian Capital Pool Company ( Montreux ), was formed under the British Columbia Business Corporations Act in British Columbia, Canada on September 24, 2007, is a Nevada corporation, existing under the laws of the State of Nevada pursuant to its Articles of Domestication filed with the Nevada Secretary of State on May 15, 2017. A Canadian Capital Pool Company is a special purpose acquisition company organized for the purposes of completing acquisition transactions, known as qualifying transactions, with operating companies for the purposes of taking the operating companies public in Canada. Qualifying transactions are subject to Canadian securities laws and exchange listing requirements.
+Our Common Stock
+Our common stock is listed on the Nasdaq under the symbol IONM .
+Implications of Being an Emerging Growth Company
+We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). We may remain an emerging growth company until as late as December 31, 2026 (the fiscal year-end following the fifth anniversary of the completion of our initial public offering, though we may cease to be an emerging growth company earlier under certain circumstances, including (1) if the market value of our common stock that is held by nonaffiliates exceeds $700 million as of any June 30, in which case we would cease to be an emerging growth company as of the following December 31, or (2) if our gross revenue exceeds $1.235 billion in any fiscal year. Emerging growth companies may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors could find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
+In addition, Section 102 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
+Available Information
+Our executive office address is 7887 E. Belleview Ave., Suite 240, Denver, Colorado 80111. The telephone number for our executive office is (720) 287-3093.
+We make available, free of charge, on or through our Internet website, at www.assureneuromonitoring.com, our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. Our Internet website and the information contained therein or connected thereto are not intended to be, and are not, incorporated into this prospectus.
+Summary Risk Factors
+We and our business are subject to material risks, which could cause actual results, performance and achievements to differ materially from those anticipated, and the risk factors set forth in the section entitled Risk Factors beginning on page 14 of this prospectus. These risks can be summarized as follows:
+Business Related Risks
+ We ve had historical negative operating results, and substantial doubt exists as to our ability to continue as a going concern.
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+ There is meaningful decrease in underlying commercial insurance reimbursement for IONM services provided.
+ We anticipate we will be required to raise additional capital to finance our operations; however, we may not be able to do so when necessary and/or on terms advantageous or acceptable to us.
+ We face significant competition from other health care providers.
+ We rely on key personnel, industry partners and our ability to hire experienced employees and professionals.
+ The intraoperative neuromonitoring industry is relatively new and is subject to risk associated with public scrutiny and gaps in technician oversight and formal board reviews.
+ We are subject to fluctuations in revenues and payor mix.
+ We depend on reimbursement from a small group of third-party payors which could lead to delays and uncertainties in the reimbursement rate and process.
+ Our performance is greatly dependent on decisions that Third-Party Payors make regarding their out-of-network benefits and alternatively, our ability to collect from these Third-Party Payors.
+ State and Federal surprise billing legislation could lead to lower reimbursement rates.
+ Our revenues will depend on our customers continued receipt of adequate reimbursement from private insurers and government sponsored health care programs.
+ Changes in accounting estimates due to changes in circumstances may require us to write off accounts receivables or write down intangible assets, such as goodwill, may have a material impact on our financial reporting and results of operations.
+ We may be subject to professional liability claims.
+ We may be subject to liability claims for damages and other expenses not covered by insurance that could reduce our earnings and cash flows.
+ We are subject to rising costs, including malpractice insurance premiums or claims may adversely affect our business.
+ We may incur unexpected, material liabilities as a result of acquisitions.
+ Our reliance on software-as-a-service ( SaaS ) technologies from third parties may adversely affect our business and results of operations.
+ Our reliance on third party providers of neurology oversight services may adversely affect our business and results of operations.
+ Our business depends on network and mobile infrastructure developed and maintained by third-party providers. Any significant interruptions in service could result in limited capacity, processing delays and loss of customers.
+ Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.
+ We have identified and disclosed in this Form 10-K material weaknesses in our internal control over financial reporting. If we are not able to remediate these material weaknesses and maintain an effective system of internal controls, we may not be able to accurately or timely report our financial results, which could cause our stock price to fall or result in our stock being delisted.
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+Health Care Industry Regulatory Risks
+ Our business is subject to substantial government regulation.
+ Our operations are subject to the nation s health care laws, as amended, repealed, or replaced from time to time.
+ A cyber security incident could cause a violation of HIPAA, breach of customer and patient privacy, or other negative impacts.
+ If we fail to comply with applicable laws and regulations, we could suffer penalties or be required to make significant changes to our operations.
+
+Risk Related to our Debenture
+ Restrictive covenants in our loan agreements with Centurion Financial Trust may restrict our ability to pursue our business strategies.
+ Our obligations to Centurion Financial Trust are secured by a security interest in substantially all of our assets, if we default on those obligations, the lender could foreclose on our assets.
+
+Risk Related to our Stock
+ We have not been in compliance with the requirements of the Nasdaq for continued listing and if Nasdaq does not concur that we have adequately remedied our non-compliance, our common stock may be delisted from trading on Nasdaq, which could have a material adverse effect on us and our stockholders.
+ The price of our common stock is subject to volatility.
+ Our bylaws designate the state and federal courts located in Denver, Colorado as the exclusive forum for certain types of actions and proceedings, which could limit a stockholder s ability to choose the judicial forum for disputes arising with Assure Holdings Corp.
+ There is a limited trading market for our common stock.
+ We qualify as an emerging growth company under the JOBS Act. As an emerging growth company we are subject to lessened disclosure requirements which could leave our stockholders without information or rights available to stockholders of more mature companies.
+
+The foregoing is a summary of significant risk factors that we think could cause our actual results to differ materially from expected results. However, there could be additional risk factors besides those listed herein that also could affect us in an adverse manner. You should read the risk factors set forth in the section entitled Risk Factors beginning on page 14 of this prospectus.
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+<a id="
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+PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere or incorporated by reference in this prospectus. This summary may not contain all the information that you should consider before determining whether to invest in our securities. You should read the entire prospectus carefully, including the information included in the Risk Factors section, as well as our consolidated financial statements, notes to the consolidated financial statements and the other information included in this prospectus, before making an investment decision. Business Overview We are a single state operator ( SSO ) in California and operates as a vertically integrated, licensed, group of cannabis companies. Our operations consist of Cultivation operated through our wholly-owned subsidiary, Black Lion Farms, LLC ( BLF ), BLF operates an approximately 200,000 square foot facility at the Desert Hot Springs campus ( DHS Campus ) dedicated to indoor cultivation, which includes 62,000 square feet of canopy. We have an additional 10,000 square feet of canopy at our San Jose Airfield location and 35,000 square feet of canopy at our San Jose, Caliva facility which also has cultivation operations. We are also in the process of adding an additional 53,000 square feet of canopy, bringing the total to 160,000 square feet of indoor grow. Manufacturing operated through our wholly-owned subsidiary, Black Lion Labs, LLC ( BLL ), BLL operates a 10,000 square foot facility at the DHS Campus dedicated to manufacturing. In addition, we have an additional 7,000 square feet of space at the DHS Campus through a management service agreement. Distribution operated through our majority held subsidiary, GF Distribution, LLC d b a Stately Distribution ( GFD ), GFD operates a California statewide distribution network with three core hubs in Desert Hot Springs, California, Costa Mesa, California and San Jose, California. Retail operated through a number of our wholly-owned subsidiaries, we operate 16 dispensaries in California. We anticipate opening a 17th dispensary in Costa Mesa in the first half of 2025. Business Combination On July 7, 2023, the Company consummated a business combination transaction (the Business Combination ) involving TPCO Holding Corp. ( TPCO ), Gold Flora, LLC, Stately Capital Corporation ( Stately ), a newly formed British Columbia corporation ( NewCo ), and Golden Grizzly Bear LLC ( US Merger Sub ), resulting in the combination of TPCO and Gold Flora, LLC, in an all-stock transaction. As part of the Business Combination (i) TPCO, Stately and Newco amalgamated to form a new corporation (the Resulting Issuer ) and all the shares in the capital of TPCO, Newco and Stately outstanding immediately prior to the amalgamation were cancelled in exchange for common shares in the capital of the Resulting Issuer pursuant to a court approved plan of arrangement under the Business Corporations Act (British Columbia) and (ii) the Resulting Issuer acquired all the issued and outstanding membership units of Gold Flora, LLC by way of a merger involving US Merger Sub and Gold Flora, LLC. As part of the Business Combination, the Resulting Issuer continued out of British Columbia, Canada and re-domiciled to Delaware, United States pursuant to Section 388 of the Delaware General Corporation Law under the name Gold Flora Corporation . Gold Flora Corporation serves as the parent entity for the Gold Flora group of companies. Development and Expansion of Gramlin Product Brand We developed a new, disruptive product brand, Gramlin, designed to appeal to high-volume consumers that frequently purchase flower, vape and pre-roll products. Gramlin was successfully launched in March 2024 through our first party retail outlets and Stately Distribution across California. Gramlin features proprietary genetic strains grown at Gold Flora s recently expanded cultivation capacity and is strategically priced to offer an unmatchable quality to price ratio, leveraging the competitive advantages provided by our vertical footprint. Gramlin products are now available across our 16 retail stores, through our commerce digital sites as well as more than 250 third-party retailers across the state through Stately Distribution. Since its initial launch in March 2024, Gramlin has become the 5th fastest growing brand in California. Restructuring Activities We have diligently and successfully accomplished targeted measures to streamline and integrate legacy operations into our vertically-integrated platform. In addition, we have nearly eliminated reliance on third-party vendors for biomass, manufacturing, and distribution. Company-Owned Branded Product Growth Having completed the Business Combination and also much of the cost and retail rationalization, we now benefit from a retail presence that contributes to knowledgeable expansion of company-owned branded product that now includes Aviation Cannabis, Cruisers, Current, Gold Flora, Gramlin, Jetfuel Cannabis, Mirayo by Santana, Monogram and Roll Bleezy. The availability of owned down-stream retail outlets has been instrumental in developing and launching new owned brands such as Gramlin. This enables us to be quick to market and nimble in responding to market trends. Cultivation We continue to increase our cultivation capacity at the DHS Campus and San Jose campus. With the expansion, annual flower production is estimated to exceed 40,000 pounds when all flower rooms are operating optimally. A majority of this flower will be utilized to produce our first party branded packaged products for sale in our retail stores and to third party stores through distribution. This represents a significant increase in capacity dedicated to fulfilling first party product demand internally improving consolidated margins and lowering risk. Excess flower outside of our Consumer Packaged Goods ( CPG ) sales channels is being sold through our bulk flower sales team. During the period ended June 30, 2024, we continued to improve our production performance, with a 36% production increase, reflecting higher yields and scheduling efficiencies. Manufacturing We have centralized our manufacturing at the DHS Campus and over 200 SKUs move through the operation on a monthly basis. Over the past quarter, Gold Flora Manufacturing has focused on two key productivity and margin-drivers that reinforce our vision of vertical integration and scale in the California market Operational efficiencies through automation New product commercialization of Gramlin All-in-One Vapes, Infused Pre-Rolls, and Live Rosin Products We have significantly improved operational efficiencies through the maximization of its flower bagging and jarring automated lines. The results of these efforts have enabled production to increase 70% since last quarter. Distribution Sales We have strategically increased the number of third party dispensary accounts buying from Stately Distribution contributing to better overall product management and successful brand launches. The expansion was accomplished by the hiring of more experienced sales professionals, a net 50% increase to the total number of sales representatives in the field and an increase in product availability and selection due to the efficiencies achieved post Business Combination. This has led to our enhanced market position which resulted in an increased demand of our products. Retail Sales With the addition of retail locations from the Business Combination, we have expanded our retail footprint and enhanced our market position for Gold Flora owned branded products increasing its first party product revenue generated at its owned retail stores to 30% of total first party retail store sales in June 2024. The J.J. Astor Transaction Pursuant to the Loan Documents, on the terms and subject to the conditions and limitations set forth therein, among other things, we agreed to issue and sell to J.J. Astor, in exchange for the payment by J.J. Astor of $6,864,000, the Initial Note with an aggregate principal amount of $9,295,000. The Loan Agreement also provides for the future issuance of up to three Additional Notes subject to certain conditions and on substantially the same terms as the initial closing. Each subsequent closing would result in the issuance of an Additional Note with an original principal amount of $2.78 million and a funded amount of $1.92 million. Under the Loan Agreement, subject to the pricing and dilution requirements of the Cboe (as set out herein), after acceleration for payment by J.J. Astor of any Notes following the occurrence and during the continuation of any event of default which shall not be timely cured by the Company the then outstanding principal amount of the Notes shall automatically increase to 110% of the outstanding principal amount, and upon the election of J.J. Astor, all or any portion of such increased outstanding principal amount of the loans may be converted by J.J. Astor into that number of shares of Common Stock of the Company (the Conversion Shares ) as determined by (a) dividing the then-increased outstanding principal amount of the loans by (b) the conversion price then in effect provided that (i) notwithstanding the election of J.J. Astor to convert all or any part of the then outstanding principal amount of the Notes, the Company shall have the right to pay in cash the entire then outstanding principal amount of all Notes being converted following J.J. Astor s notice of its election to convert the Notes and prior to any such conversion, and (ii) the maximum number of shares of Common Stock that may be issued pursuant to any such permitted conversion of the Notes (calculated on a fully-diluted basis) shall not be greater than 24.9% of the number of shares of Common Stock then issued and outstanding (calculated on a non-diluted basis) unless approval of the shareholders of the Company is obtained (the Maximum Conversion Percentage ). In addition, under the Loan Agreement, the conversion price is defined as 90% of the average of the four lowest volume weighted average closing prices of Common Stock on the Cboe over the twenty trading days immediately prior to each permitted conversion of the Notes (the Conversion Price ) provided, however, that (a) in the event that after the date hereof and prior to any conversion of any Note, we issue any securities, including convertible notes or debentures, Common Stock or common stock equivalents at a conversion price, exercise price or per share price that is less such Conversion Price, the Conversion Price will be reduced to the lowest conversion price, exercise price or per share price issued by us and (b) for so long as the Common Stock is listed for trading on the Cboe, the Conversion Price will not be less than the closing market price of the Common Stock on the Cboe on the trading day preceding the date J.J. Astor delivers a notice of conversion, less a discount of 10%. The Loan Documents impose certain customary affirmative and negative covenants on us, as well as covenants that (i) restrict us and our subsidiaries from incurring any additional indebtedness or suffering any liens, subject to specified exceptions, (ii) restrict the issuance or repurchase of shares of our common stock, subject to specified exceptions, and (iii) restrict the declaration of any dividends or other distributions, subject to specified exceptions. Concurrently with entering into the Loan Documents, we also entered the registration rights agreement with J.J. Astor (the Registration Rights Agreement ), in which we agreed to file one or more registration statements, as necessary, to register under the Securities Act the resale of the shares of our Common Stock issuable to J.J. Astor under the Loan Documents. We are filing the registration statement of which this prospectus is a part in accordance with our obligations under the Registration Rights Agreement. For further information, including copies of the Loan Documents, please refer to the Company s Form 8-K dated August 28, 2024, a copy of which has been filed and is available on the SEC s electronic data gathering, analysis and retrieval system ( EDGAR ) and the System for Electronic Document Analysis and Retrieval + ( SEDAR+ ). Limited Purpose Receivership On or about March 30, 2021, former directors and shareholders of Left Coast Ventures ( LCV ), our wholly-owned subsidiary, filed a complaint in Delaware Chancery Court against multiple defendant parties, including three former directors of LCV, alleging breach of duties to the company and shareholders and other business torts and requesting monetary damages. Subsequently, the plaintiffs filed a first amended complaint, adding new parties, including TPCO and a former TPCO director. LCV and the Company have certain indemnification obligations in connection with the defendant directors, which indemnification may be contested by LCV upon resolution of the action. LCV is subject to advancement actions brought with fees owed or claimed to be owed to counsel for the indemnified defendants. On October 4, 2024, the Court of Chancery of the State of Delaware granted an order advancing a motion for sanctions brought by the former directors. The order held us and LCV in contempt for violation of advancement orders with respect to indemnification obligations for fees owed to counsel and related expenses, which amount is currently estimated at approximately $1.65 million. Pursuant to the order, the court appointed Molly DiBianca of Clark Hill PLC (the Limited Receiver ) as a limited purpose receiver to take such action that the Limited Receiver determines in good faith is appropriate to cause us and LCV to satisfy the amounts due under the order, including accessing financial records and negotiation of a payment plan with the former directors (the Charge ) pursuant to Title 8, Section 322 of the Delaware General Corporation Law ( Section 322 ). The order does not create a full, general receivership over us, and the Limited Receiver s appointment is limited to the foregoing Charge. The order provides that the Limited Receiver should first attempt to resort to resolving the Charge through operating cash flow. The Limited Receiver will have all powers generally available to a receiver under Section 322 solely with respect to the Charge, and the Limited Receiver will not have authority over us except in connection with the Charge. The initial term for the Limited Receiver is 59 days from the date of the order. Additionally, we and LCV will incur a daily fine of $1,000 until the contempt is cured, provided that the fine will not become due and payable if the Charge is satisfied or a payment plan is in place by October 31, 2024. Issuers with U.S. Cannabis-Related Activities On February 8, 2018, the Canadian Securities Administrators revised their previously released Staff Notice 51-352 (Revised) Issuers with U.S. Marijuana-Related Activities ( Staff Notice 51-352 ), which provides specific disclosure expectations for Canadian issuers that currently have, or are in the process of developing, cannabis-related activities in the United States as permitted within a particular state s regulatory framework. All issuers with U.S. cannabis-related activities are expected to clearly and prominently disclose certain prescribed information in prospectus filings and other required disclosure documents. As a result of our existing operations in California, we are required to provide disclosure pursuant to Staff Notice 51-352. The required disclosure pursuant to Staff Notice 51-352 is incorporated by reference from United States Regulatory Environment under Item 1. Business and Risk Factors under Item 1A. Risk Factors from our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission and with the relevant Canadian securities regulatory authorities under its profile on SEDAR+.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001879717_key_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001879717_key_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001879717_key_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001892025_optimus_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001892025_optimus_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001892025_optimus_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001926314_ocean_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001926314_ocean_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001926314_ocean_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001932470_agiiplus_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001932470_agiiplus_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001932470_agiiplus_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001936756_next_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001936756_next_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..76d4ad4a3f852e843762064396279952ca66873b
--- /dev/null
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@@ -0,0 +1,5496 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+This
+summary highlights certain information contained elsewhere in this prospectus and may not contain all of the information that is important
+to you. To understand fully and for a more complete description of the terms and conditions of the offering, you should read this prospectus
+in its entirety, including the information presented under the section titled Risk Factors and the consolidated financial
+statements and related notes, and the documents to which you are referred. See Where You Can Find More Information. Except
+where the context otherwise requires, or where otherwise indicated, references to the Company, Next Bridge, NBH, 
+ we, us or our refer to Next Bridge Hydrocarbons, Inc. and where applicable, its consolidated
+subsidiaries, including Torchlight Hazel, LLC, a Texas limited liability company, Hudspeth Oil Corporation, a Texas corporation, Hudspeth
+Operating, LLC, a Texas limited liability company, Torchlight Energy, Inc., a Nevada corporation, Wolfbone Investments, LLC, a Texas
+limited liability company and Wildcat Panther LLC, Wildcat Valentine LLC, Wildcat Cowboy LLC, and Wildcat Packer LLC, all Texas limited
+liability companies.
+
+ 
+
+The
+Company
+
+ 
+
+We
+were incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed our name to Next Bridge Hydrocarbons, Inc. pursuant
+to our Amended and Restated Articles of Incorporation filed on June 30, 2022.
+
+ 
+
+We
+are an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the
+United States. Our primary focus has been the development of interests in an oil and gas project we hold in the Orogrande Basin in West
+Texas in Hudspeth County, Texas (the Orogrande Project ). In addition, we have minor interests in the Eastern edge of the
+Midland Basin in Texas (the Hazel Project ), two minor well interests in Oklahoma, and undeveloped oil and gas leases in
+Louisiana (the Wildcat Projects ).
+
+ 
+
+We
+spun-off from Meta Materials, Inc. ( Meta ) on December 14, 2022 pursuant to which we became an independent company. Prior
+to the spin-off, we were a wholly-owned subsidiary of Meta.
+
+ 
+
+We
+operate our business through nine wholly owned subsidiaries, Torchlight Energy, Inc., a Nevada corporation, Hudspeth Oil Corporation,
+a Texas corporation ( Hudspeth ), Torchlight Hazel, LLC, a Texas limited liability company, Hudspeth Operating, LLC, a Texas
+limited liability company, Wolfbone Investments, LLC, a Texas limited liability company ( Wolfbone ), and Wildcat Panther
+LLC, Wildcat Valentine LLC, Wildcat Cowboy LLC, and Wildcat Packer LLC, all Texas limited liability companies. In addition, we may consider
+strategic options, including partnering with, or the possible sale of any or all of our assets to, third parties. We currently have two
+part-time employees, and we employ consultants for various roles as needed.
+
+ 
+
+As
+of June 30, 2024, we had interests in four oil and gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project in
+Sterling, Tom Green, and Irion Counties, Texas, the Hunton wells in partnership with Kodiak in Central Oklahoma. (the Oklahoma
+Properties ) and the Wildcat Projects in Louisiana. See the description under Current Projects below under Note 4,
+ Oil & Natural Gas Properties, of the financial statements included with this prospectus for information and disclosure
+regarding these projects, which description is incorporated herein by reference.
+
+ 
+
+Emerging
+Growth Company Status
+
+ 
+
+We
+are an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended (the Securities
+Act ), as modified by the Jumpstart Our Business Startups Act of 2012 ( JOBS Act ). As an emerging growth company,
+we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public reporting
+companies that are not emerging growth companies. These provisions include:
+
+ 
+
+ 
+ 
+ 
+ Being
+ permitted to have only two years of audited financial statements and only two years of related selected financial data and management s
+ discussion and analysis of financial condition and results of operations disclosure;
+
+ 
+ 
+
+ 
+ 
+ 
+ An
+ exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting
+ pursuant to the Sarbanes-Oxley Act of 2002, as amended ( SOX );
+
+ 
+
+ 
+
+ 
+ 
+ 
+ Reduced
+ disclosure about executive compensation arrangements in our periodic reports, registration statements and proxy statements; and
+
+ 
+ 
+
+ 
+ 
+ 
+ Exemptions
+ from the requirements to seek non-binding advisory votes on executive compensation or golden parachute arrangements.
+
+ 
+
+ 
+
+We
+would cease to be an emerging growth company on the earliest of (i) the first fiscal year after our annual gross revenues are $1.235
+billion or more, (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity
+securities pursuant to an effective registration statement, (iii) the date on which we have, during the immediately preceding three-year
+period, issued more than $1.0 billion in non-convertible debt securities, or (iv) the end of any fiscal year in which the market value
+of our common stock held by non-affiliates is $700 million or more as of the end of the second quarter of that fiscal year. 
+
+ 5
+
+ 
+
+ 
+
+The
+JOBS Act additionally permits emerging growth companies to take advantage of an extended transition period to comply with new or revised
+accounting standards applicable to public reporting companies. We have elected to avail ourselves of the extended transition period.
+During the extended transition period, it may be difficult to compare our financial results with the financial results of a public reporting
+company that complies with accounting.
+
+ 
+
+Smaller
+Reporting Company
+
+ 
+
+We
+are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 (the Exchange Act ).
+As a smaller reporting company, the disclosure we will be required to provide in our SEC filings are less than it would
+be if we were not considered a smaller reporting company. Specifically, smaller reporting companies are able
+to provide simplified executive compensation disclosures in their filings; if annual revenue is less than $100 million, may be exempt
+from the provisions of Section 404(b) of SOX requiring that independent registered public accounting firms provide an attestation report
+on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC
+filings, including, among other things, being permitted to provide two years of audited financial statements in annual reports rather
+than three years. Decreased disclosures in our SEC filings due to our status as a smaller reporting company may make it
+harder for investors to analyze our results of operations and financial prospects. We will remain a smaller reporting company until the
+last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior
+June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock
+held by non-affiliates exceeds $700 million as of the prior June 30.
+
+ 
+
+Market
+Opportunity
+
+ 
+
+The
+market for oil and natural gas that we may produce depends on factors beyond our control, including the extent of domestic production
+and imports of oil and natural gas, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for
+oil and natural gas, the marketing of competitive fuels, and the effects of state and federal regulation. The oil and natural gas industry
+also competes with other industries in supplying the energy and fuel requirements of industrial, commercial, and individual consumers.
+
+ 
+
+Our
+oil production, if any, is expected to be sold at prices tied to the spot oil markets. Our natural gas production, if any, is expected
+to be sold under short-term contracts and priced based on first of the month index prices or on daily spot market prices. We will rely
+on our operating partners to market and sell our production, if any.
+
+ 
+
+Regulatory
+Framework
+
+ 
+
+Our
+oil and natural gas development operations are subject to stringent and complex federal, state, tribal, regional and local environmental,
+health and safety laws and regulations governing, among other factors, worker safety and health, the discharge and disposal of substances
+into the environment, and the protection of the environment and natural resources. Numerous governmental entities, including the Environmental
+Protection Agency ( EPA ) and analogous state and local agencies, (and, under certain laws, private individuals) have the
+power to enforce compliance with these laws and regulations and any permits issued under them. These laws and regulations may, among
+other things: (i) require permits to conduct exploration, drilling, water withdrawal, wastewater disposal and other production related
+activities; (ii) govern the types, quantities and concentrations of substances, including emissions of CO2, methane and certain other
+greenhouse gases ( GHG ), that may be disposed or released into the environment or injected into formations in connection
+with drilling or production activities, and the manner of any such disposal, release, or injection; (iii) limit or prohibit construction
+or drilling activities or require formal mitigation measures in sensitive areas such as wetlands, wilderness areas or areas inhabited
+by endangered or threatened species; (iv) require investigatory and remedial actions to mitigate pollution conditions arising from the
+Company s operations or attributable to former operations; (v) impose safety and health restrictions designed to protect employees
+and others from exposure to hazardous or dangerous substances; and (vi) impose obligations to reclaim and abandon well sites and pits.
+
+ 
+
+Certain
+existing environmental and occupational safety and health laws and regulations to which our business operations are subject include the
+Clean Air Act, as amended (the CAA ), the Comprehensive Environmental Response, Compensation, and Liability Act ( CERCLA ),
+the federal Resource Conservation and Recovery Act ( RCRA ), Federal Water Pollution Control Act of 1972 as amended by the
+Oil Pollution Act of 1990, EPA rules to reduce methane emissions from new, modified or reconstructed sources in the oil and natural gas
+sector, including implementation of a leak detection and repair ( LDAR ) program under the CAA s New Source Performance
+Standards in 40 C.F.R. Part 60, Subpart OOOOa ( Quad Oa ), the federal Occupational Safety and Health Act ( OSHA )
+and other state equivalent laws and regulations. For further discussion of the risks to our results of operations arising out of our
+environmental regulatory compliance, see Risks Relating to Our Business, including the following risk factors: Our
+operations are heavily dependent on current environmental regulation, changes in which we cannot predict, Government
+regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays, 
+and Climate change laws and regulations restricting emissions of GHGs could result in increased operating costs and
+reduced demand for the oil and natural gas that we produce. 
+
+ 
+
+ Corporate
+Information
+
+ 
+
+Our
+executive office is located at 6300 Ridglea Place, Suite 950, Fort Worth, TX 76116, and our telephone number is (432) 684-0018. We have
+filed or will file annual, quarterly and current reports, proxy statements and other documents with the SEC under the Exchange Act. The
+public can obtain any documents that we file with the SEC at www.sec.gov. We also make such information and documents available free
+of charge on our website (nextbridgehydrocarbons.com) as soon as reasonably practicable after we file such material with, or furnish
+it to, the SEC. Information contained on or accessible through our website shall not be deemed a part of this prospectus and shall not
+be incorporated by reference herein.
+
+ 6
+
+ 
+
+ 
+
+The
+Offering
+
+ 
+
+The
+following is a brief summary of some of the terms of this offering and is qualified in its entirety by reference to the more detailed
+information appearing elsewhere in this prospectus.
+
+ 
+
+ 
+ 
+ 
+
+ 
+ Number
+ of shares outstanding before the offering
+ 251,930,516
+ shares of common stock.
+
+ 
+ 
+ 
+
+ 
+ Number
+ of shares outstanding after the offering if all the shares are sold
+ 291,930,516
+ shares of common stock.
+
+ 
+ 
+ 
+
+ 
+ Purchase
+ price
+ The
+ purchase price of each share of common stock is $ .
+
+ 
+ 
+ 
+
+ 
+ Proceeds
+ to Us
+ $ ,
+ based on the maximum 40,000,000 shares being sold. There is no assurance that we will be successful in selling this entire amount. Furthermore,
+ there is no minimum amount of shares that may be sold under this offering, and we have no intention to return funds raised to investors
+ should we sell lesser amounts than the maximum, even if the amounts raised are not sufficient to fully undertake our plan as identified
+ in this prospectus.
+
+ 
+ 
+ 
+
+ 
+ Use
+ of proceeds
+ We
+ expect to use the proceeds from the offering to fund our drilling and exploration activities in order to meet our drilling obligations
+ as well as for general corporate purposes, which include funding working capital and operating expenses. See Use of Proceeds. 
+
+ 
+ 
+ 
+
+ 
+ Market
+ for our common stock
+ Our
+ common stock is not listed for trading on any stock exchange or market. The shares of common stock will not be eligible for electronic
+ transfer through the Depository Trust Company or any other established clearing corporation. Accordingly, there currently is no public
+ trading market for the common stock and there is no current expectation for a public market to develop.
+
+ 
+ 
+ 
+
+ 
+ Risk
+ factors
+ See
+ the Risk Factors section contained in this prospectus and in the documents we incorporate by reference in this prospectus
+ to read about factors you should consider before investing in our common stock.
+
+ 
+ 
+
+The
+number of shares of our common stock that will be outstanding immediately after this offering as shown above is based on 251,930,516
+shares outstanding as of June 30, 2024. 
+
+ 7
+
+ 
+
+ 
+
+RISK
+FACTORS
+
+ 
+
+You
+should carefully consider all of the information in this prospectus and each of the risks described below, which we believe are the principal
+risks that we face. Some of the risks relate to our business, others to the offering and the ownership of our common stock. The risks
+and uncertainties described below are not the only ones faced by us. Additional risks and uncertainties not presently known or that are
+currently deemed immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition,
+operating results and cash flows and the value of our common stock could be materially adversely affected.
+
+ 
+
+Risks
+Related to this Offering
+
+ 
+
+Our
+management will have broad discretion over the use of the net proceeds from this offering, you may not agree with how we use the proceeds
+and the proceeds may not be invested successfully.
+
+ 
+
+Our
+management will have broad discretion as to the use of the net proceeds from this offering and could use them for purposes other than
+those contemplated at the time of commencement of this offering. Accordingly, you will be relying on the judgment of our management regarding
+the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds
+are being used appropriately. It is possible that, pending their use, we may invest the net proceeds in a way that does not yield a favorable,
+or any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our business,
+financial condition, operating results and cash flows.
+
+ 
+
+You
+will experience immediate and substantial dilution in the net tangible book value per share of the common stock you purchase.
+
+ 
+
+Since
+the price per share of our common stock being offered is substantially higher than the net tangible book value per share of our common
+stock, you will suffer immediate and substantial dilution in the net tangible book value of the common stock you purchase in this offering.
+Based on an offering price of $ per share, if you purchase shares of common stock in this offering,
+you will suffer immediate and substantial dilution of $ per share with respect to the net tangible
+book value of the common stock. See the section entitled Dilution below for a more detailed discussion of the dilution
+you will incur if you invest in this offering.
+
+ 
+
+You
+may experience future dilution as a result of future equity offerings and other issuances of our common stock or other securities. 
+
+ 
+
+In
+order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into
+or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. The price per share
+at which we sell additional shares of our common stock or securities convertible into common stock in future transactions may be higher
+or lower than the price per share in this offering. You will incur dilution upon exercise of any outstanding stock options or upon the
+issuance of shares of common stock under our stock incentive programs. We cannot predict the effect, if any, that market sales of those
+shares of common stock or the availability of those shares for sale will have on the market price of our common stock.
+
+ 
+
+There
+is no public market for our common stock being offered in this offering.
+
+ 
+
+There
+is no established public trading market for the shares of common stock being offered in this offering, and we do not expect a market
+to develop. In addition, we do not intend to apply to list our common stock on any national securities exchange or other nationally recognized
+trading system. Without an active trading market, the liquidity of your shares will be limited.
+
+ 8
+
+ 
+
+ 
+
+Risks
+Relating to Our Business
+
+ 
+
+We
+have a limited operating history relative to larger companies in our industry and may not be successful in developing profitable business
+operations.
+
+ 
+
+We
+have a limited operating history relative to larger companies in our industry. Our business operations must be considered in light of
+the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industry. As of the
+date of this prospectus, we have generated limited revenues and have limited assets. We have an insufficient history at this time on
+which to base an assumption that our business operations will prove to be successful in the long-term. Our future operating results will
+depend on many factors, including:
+
+ 
+
+ 
+ 
+ 
+ our
+ ability to raise adequate working capital;
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ success of our development and exploration;
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ demand for oil and natural gas;
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ level of our competition;
+
+ 
+ 
+
+ 
+ 
+ 
+ our
+ ability to attract and maintain key management and employees; and
+
+ 
+ 
+
+ 
+ 
+ 
+ our
+ ability to efficiently explore, develop, produce or acquire sufficient quantities of marketable oil or natural gas in a highly competitive
+ and speculative environment while maintaining quality and controlling costs.
+
+ 
+ 
+
+To
+achieve profitable operations in the future, we must, alone or with others, successfully manage the factors stated above, as well as
+continue to develop ways to enhance our production efforts. Despite our best efforts, we may not be successful in our exploration or
+development efforts or obtain required regulatory approvals. There is a possibility that some, or all, of the wells in which we obtain
+interests may never produce oil or natural gas.
+
+ 
+
+We
+have limited capital and will need to raise additional capital in the immediate future.
+
+ 
+
+We
+continue to require additional capital to maintain operations and to expand our exploration and development programs. We may be unable
+to obtain additional capital when required or on favorable terms. Future acquisitions, exploration, development, production and marketing
+activities, as well as our administrative requirements (such as salaries, insurance expenses and general overhead expenses, as well as
+legal compliance costs and accounting expenses) will require a substantial amount of additional capital and cash flow.
+
+ 
+
+We
+may pursue sources of additional capital through various financing transactions or arrangements, including joint venturing of projects,
+debt financing, equity financing, or other means. We may not be successful in identifying suitable financing transactions in the time
+period required or at all, and we may not obtain the capital we require by other means. If we do not succeed in raising additional capital,
+our resources may not be sufficient to fund our planned operations.
+
+ 
+
+Our
+ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets (both generally and in the
+oil and natural gas industry in particular), our limited operating history, the location of our oil and natural gas properties and prices
+of oil and natural gas on the commodities markets (which will impact the amount of asset-based financing available to us, if any) and
+the departure of key employees. Further, if oil or natural gas prices on the commodities markets decline, our future revenues, if any,
+will likely decrease and such decreased revenues may increase our requirements for capital. If the amount of capital we are able to raise
+from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs (even to the extent
+that we reduce our operations), third parties may be reluctant to provide the services we need in order to operate and we may be required
+to cease our operations, divest our assets at unattractive prices or obtain financing on unattractive terms. 
+
+ 
+
+Any
+additional capital raised through the sale of equity may dilute the ownership percentage of our stockholders. Raising any such capital
+could also result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool
+of outstanding equity. The terms of securities we issue in future capital transactions may be more favorable to our new investors, and
+may include preferences, superior voting rights and the issuance of other derivative securities, and issuances of incentive awards under
+equity employee incentive plans, which may have a further dilutive effect.
+
+ 9
+
+ 
+
+ 
+
+We
+may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities
+law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection
+with certain securities we may issue, which may adversely impact our financial condition.
+
+ 
+
+We
+may not achieve or maintain profitable operations, and therefore, may not be able to continue as a going concern.
+
+ 
+
+The
+Company has a history of net losses from operations and negative cash flow from operating activities. We will need to raise
+additional working capital to continue our normal and planned operations. We will also need to generate and sustain significant
+revenue levels in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our
+level of profitability. During the six months ended June 30, 2024, we incurred a net loss of $1,821,763 and used cash of $4,333,317
+for operating activities for the six months ended June 30, 2024. At June 30, 2024, we had an accumulated deficit of
+$121,041,141 and had a working capital deficit of $48,578,905 compared with a working capital deficit of $47,094,367 as of December
+31, 2023. These factors raise doubt regarding our ability to continue as a going concern. Because we have incurred significant net
+losses, our auditors have issued a going concern audit qualification. A going concern qualification
+indicates that the financial statements have been prepared assuming we will continue as a going concern and do not include any
+adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and
+classification of liabilities that may result if we do not continue as a going concern. Therefore, you should not rely on our
+consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and
+potentially be available for distribution to stockholders, in the event of liquidation. 
+
+ 
+
+There
+can be no assurance that our financing strategy or strategic alternatives will result in a transaction satisfactory to holders of our
+common stock.
+
+ 
+
+We
+may consider various strategic alternatives, including partnering with third parties, a potential sale of some or all of our assets,
+a merger transaction, and potential financing alternatives. Even if a partnering transaction, sale, merger or financing transaction were
+to be consummated, it may not return any value to holders of our common stock. Regardless of whether we execute a partnership, sale,
+merger or financing transaction, the adverse pressures negatively impacting our business that we have been or are currently experiencing
+may continue or intensify, including the risk that we may not be able to continue as a going concern.
+
+ 
+
+We
+are mainly concentrated in one geographic area, which increases our exposure to many of the risks enumerated herein.
+
+ 
+
+Operating
+in a concentrated area increases the potential impact that many of the risks stated herein may have upon our ability to perform. For
+example, we have greater exposure to regulatory actions impacting Texas, natural disasters in the geographic area, competition for equipment,
+services and materials available in the area and access to infrastructure and markets. In addition, the effect of fluctuations on supply
+and demand may become more pronounced within specific geographic oil and natural gas producing areas such as the Permian Basin, which
+may cause these conditions to occur with greater frequency or magnify the effect of these conditions. Due to the concentrated nature
+of our portfolio of properties, a number of our properties could experience any of the same conditions at the same time, resulting in
+a relatively greater impact on our results of operations than they might have on other companies that have a more diversified portfolio
+of properties. Such delays or interruptions could have a material adverse effect on our financial condition and results of operations.
+
+ 
+
+Because
+of the speculative nature of oil and natural gas exploration, there is risk that we will not find commercially exploitable oil and natural
+gas and that our business will fail.
+
+ 
+
+The
+search for commercial quantities of oil and natural gas as a business is extremely risky. We cannot provide investors with any assurance
+that any properties in which we obtain a mineral interest will contain commercially exploitable quantities of oil and/or natural gas.
+The exploration expenditures to be made by us may not result in the discovery of commercial quantities of oil and/or natural gas. Problems
+such as unusual or unexpected formations or pressures, premature declines of reservoirs, invasion of water into producing formations
+and other conditions involved in oil and natural gas exploration often result in unsuccessful exploration efforts. If we are unable to
+find commercially exploitable quantities of oil and natural gas, and/or we are unable to commercially extract such quantities, we may
+be forced to abandon or curtail our business plan, and as a result, any investment in us may become worthless.
+
+ 10
+
+ 
+
+ 
+
+Litigation
+may adversely affect our business, financial condition, and results of operations.
+
+ 
+
+Certain
+of our subsidiaries are subject and from time to time in the normal course of our business operations, may become subject to litigation
+that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes
+to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources.
+There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless
+of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient
+amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage
+for any claims could adversely affect our business and the results of our operations. For additional discussion of pending litigation
+matters, see Management s Discussion and Analysis of Financial Condition and Results of Operations Legal Proceedings. 
+
+ 
+
+Strategic
+relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations.
+
+ 
+
+Our
+ability to successfully acquire oil and natural gas interests, to build our reserves, to participate in drilling opportunities and to
+identify and enter into commercial arrangements with customers will depend on developing and maintaining close working relationships
+with industry participants and our ability to select and evaluate suitable properties and to consummate transactions in a highly competitive
+environment. These realities are subject to change and our inability to maintain close working relationships with industry participants
+or continue to acquire suitable property may impair our ability to execute our business plan.
+
+ 
+
+To
+continue to develop our business, we will endeavor to use the business relationships of our management to enter into strategic relationships,
+which may take the form of joint ventures with other private parties and contractual arrangements with other oil and natural gas companies,
+including those that supply equipment and other resources that we will use in our business. We may not be able to establish these strategic
+relationships, or if established, we may not be able to maintain them. In addition, the dynamics of our relationships with strategic
+partners may require us to incur expenses or undertake activities we would not otherwise be inclined to in order to fulfill our obligations
+to these partners or maintain our relationships. If our strategic relationships are not established or maintained, our business prospects
+may be limited, which could diminish our ability to conduct our operations.
+
+ 
+
+Our
+acreage must be drilled before lease expiration in order to hold the acreage by production. In the highly competitive market for acreage,
+failure to drill sufficient wells in order to hold acreage will result in a substantial lease renewal cost, or if renewal is not feasible,
+loss of our lease and prospective drilling opportunities.
+
+ 
+
+Our
+leases on oil and natural gas properties typically have a primary term of four to five years, after which they expire unless, prior to
+expiration, drilling obligations are fulfilled or production is established within the spacing units covering the undeveloped acres.
+As of June 30, 2024, we had leases representing approximately 134,000 net acres in the Orogrande Basin in West Texas as part of the Orogrande
+Project. These oil and gas leases will expire on December 31, 2024 if we fail to drill five additional wells under our contractual obligations
+with University Lands. If we fail to drill the required five wells and are otherwise unable to negotiate an extension to drill the required
+wells, these leases are subject to expiration. We will require additional capital to drill these wells, and we may not be able to obtain
+additional capital when required in order to drill these wells, or on favorable terms. As of June 30, 2024, we also had leases representing
+645 net acres in the Eastern edge of the Midland Basin in West Texas, which are currently held by production by active wells. In the
+event that we fail to meet our drilling obligations in the Orogrande Basin, whether because we are unable to obtain additional capital
+when required or otherwise, or if production ceases in the Midland Basin, our leases will expire. If we have to renew such leases on
+new terms, we could incur significant cost increases, and we may not be able to renew such leases on commercially reasonable terms or
+at all. In addition, on certain portions of our acreage, third-party leases may become immediately effective if our leases expire. As
+such, our actual drilling activities may materially differ from our current expectations, which could adversely affect our business.
+
+ 11
+
+ 
+
+ 
+
+The
+price of oil and natural gas has historically been volatile. If it were to decrease substantially, our projections, budgets, and revenues
+would be adversely affected, potentially forcing us to make changes in our operations.
+
+ 
+
+Our
+future financial condition, results of operations and the carrying value of any oil and natural gas interests we acquire will depend
+primarily upon the prices paid for oil and natural gas production. Oil and natural gas prices historically have been volatile and likely
+will continue to be volatile in the future, especially given current world geopolitical conditions. Cash flows from operations are highly
+dependent on the prices that we receive for oil and natural gas. This price volatility could affect the amount of our cash flows available
+for capital expenditures and our ability to borrow money or raise additional capital. The prices for oil and natural gas are subject
+to a variety of additional factors that are beyond our control. These factors include:
+
+ 
+
+ 
+ 
+ 
+ the
+ level of consumer demand for oil and natural gas;
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ domestic and foreign supply of oil and natural gas;
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ ability of the members of the Organization of Petroleum Exporting Countries ( OPEC ) to agree to and maintain oil price
+ and production controls;
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ price of foreign oil and natural gas;
+
+ 
+ 
+
+ 
+ 
+ 
+ domestic
+ governmental regulations and taxes;
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ price and availability of alternative fuel sources;
+
+ 
+ 
+
+ 
+ 
+ 
+ weather
+ conditions;
+
+ 
+ 
+
+ 
+ 
+ 
+ market
+ uncertainty due to political conditions in oil and natural gas producing regions, including the Middle East; and
+
+ 
+ 
+
+ 
+ 
+ 
+ worldwide
+ economic conditions.
+
+ 
+ 
+
+These
+factors as well as the volatility of the energy markets generally make it extremely difficult to predict future oil and natural gas price
+movements with any certainty. Declines in oil and natural gas prices affect our revenues and could reduce the amount of oil and natural
+gas that we can produce economically. Accordingly, such declines could have a material adverse effect on our financial condition, results
+of operations, oil and natural gas reserves and the carrying values of our oil and natural gas properties. If the oil and natural gas
+industry experiences significant price declines, we may be unable to make planned expenditures, among other things. If this were to happen,
+we may be forced to abandon or curtail our business operations, which would cause the value of an investment in us to decline or become
+worthless.
+
+ 
+
+If
+oil or natural gas prices reverse again and go on a downward trend or drilling efforts are unsuccessful, we could be required to record
+additional write-downs of our oil and natural gas properties. Write-downs may occur when oil and natural gas prices are low, or if we
+have downward adjustments to our estimated proved reserves, increases in our estimates of operating or development costs, deterioration
+in drilling results or mechanical problems with wells where the cost to redrill or repair is not supported by the expected economics.
+
+ 
+
+Under
+the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion and net of deferred income
+taxes may not exceed an amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural
+gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated
+fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, an impairment
+would be recognized.
+
+ 12
+
+ 
+
+ 
+
+Because
+of the inherent dangers involved in oil and natural gas operations, there is a risk that we may incur liability or damages as we conduct
+our business operations, which could force us to expend a substantial amount of money in connection with litigation and/or a settlement.
+
+ 
+
+The
+oil and natural gas business involves a variety of operating hazards and risks such as well blowouts, pipe failures, casing collapse,
+explosions, uncontrollable flows of oil, natural gas or well fluids, fires, spills, pollution, releases of toxic gas and other environmental
+hazards and risks. These hazards and risks could result in substantial losses to us from, among other things, injury or loss of life,
+severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities,
+regulatory investigation and penalties and suspension of operations. In addition, we may be liable for environmental damages caused by
+previous owners of property purchased and leased by us. In recent years, there has also been increased scrutiny on the environmental
+risk associated with hydraulic fracturing, such as underground migration and surface spillage or mishandling of fracturing fluids including
+chemical additives. This hydraulic fracturing technology has evolved and continues to evolve and become more aggressive. We believe that
+recent designs have seen improvement in, among other things, proppant per foot, barrels of water per stage, fracturing stages, and clusters
+per fracturing stage. In addition, we will need to quickly adapt to the evolving technology, which could take time and divert our attention
+to other business matters. Even with improved hydraulic fracturing technology, substantial liabilities to third parties or governmental
+entities may be incurred, the payment of which could reduce or eliminate the funds available for exploration, development or acquisitions
+or result in the loss of our properties and/or force us to expend substantial monies in connection with cleanup, litigation or settlements.
+While we have insurance to cover some of such losses and liabilities, it may not be adequate to cover any losses or liabilities. We cannot
+predict the availability of insurance or the availability of insurance at premium levels that justify our purchase. The occurrence of
+a significant event not fully insured or indemnified against could materially and adversely affect our financial condition and operations.
+We may elect to self-insure if management believes that the cost of insurance, although available, is excessive relative to the risks
+presented. In addition, pollution and environmental risks generally are not fully insurable. The occurrence of an event not fully covered
+by insurance could have a material adverse effect on our financial condition and results of operations.
+
+ 
+
+The
+market for oil and natural gas is intensely competitive, and competition pressures could force us to abandon or curtail our business
+plan.
+
+ 
+
+The
+market for oil and natural gas exploration services is highly competitive, and we only expect competition to intensify in the future.
+Numerous well-established companies are focusing significant resources on exploration and are currently competing with us for oil and
+natural gas opportunities. Other oil and natural gas companies may seek to acquire oil and natural gas leases and properties that we
+have targeted. Additionally, other companies engaged in our line of business may compete with us from time to time in obtaining capital
+from investors. Competitors include larger companies which, in particular, may have access to greater resources, may be more successful
+in the recruitment and retention of qualified employees and may conduct their own refining and petroleum marketing operations, which
+may give them a competitive advantage. Actual or potential competitors may be strengthened through the acquisition of additional assets
+and interests. Additionally, there are numerous companies focusing their resources on creating fuels and/or materials which serve the
+same purpose as oil and natural gas but are manufactured from renewable resources.
+
+ 
+
+As
+a result, we may not be able to compete successfully and competitive pressures may adversely affect our business, results of operations,
+and financial condition. If we are not able to successfully compete in the marketplace, we could be forced to curtail or even abandon
+our current business plan, which could cause any investment in us to become worthless.
+
+ 
+
+Inflation
+may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to enter into future
+traditional debt financing.
+
+ 
+
+Inflation
+can adversely affect us by increasing costs of critical materials, equipment, labor, and other services. In addition, inflation is often
+accompanied by higher interest rates. Continued inflationary pressures could impact our profitability. Inflation may also affect our
+ability to enter into future traditional debt financing, as high inflation may result in an increase in cost.
+
+ 13
+
+ 
+
+ 
+
+We
+may not be able to successfully manage growth, which could lead to our inability to implement our business plan.
+
+ 
+
+Any
+growth of the Company may place a significant strain on our managerial, operational and financial resources, especially considering that
+we currently only have a small number of executive officers, employees and advisors. Further, as we enter into additional contracts,
+we will be required to manage multiple relationships with various consultants, businesses and other third parties. These requirements
+will be exacerbated in the event of our further growth or in the event that the number of our drilling and/or extraction operations increases.
+Our systems, procedures and/or controls may not be adequate to support our operations or that our management will be able to achieve
+the rapid execution necessary to successfully implement our business plan. If we are unable to manage our growth effectively, our business,
+results of operations and financial condition will be adversely affected, which could lead to us being forced to abandon or curtail our
+business plan and operations.
+
+ 
+
+Developing
+oil and natural gas wells and producing oil and natural gas are costly and high-risk activities with many uncertainties that could adversely
+affect future production from our oil and natural gas properties. Any delays, reductions or cancellations in development and producing
+activities could materially, adversely impact the value of your shares of common stock.
+
+ 
+
+Recovery
+of undeveloped reserves and the development of developed non-producing reserves requires substantial capital expenditures and successful
+drilling operations of our oil and natural gas properties. All of the recent development costs related to our Hazel Project were paid
+by Masterson Hazel Partners LP ( MHP ). Under the Option Agreement (as defined below), we granted MHP the option to acquire
+the Hazel Project in exchange for it conducting, and paying for, development activity sufficient to maintain the Hazel mineral leases
+in good standing (the Option Agreement ). The Option Agreement provided that if MHP declined to exercise the option to acquire
+the property, we would be obligated to reimburse them for their cost of the development activity to the extent that the wells produced
+revenues beyond the date of the option s lapse until the total amount of development expenses are reimbursed. MHP declined to exercise
+the option effective September 30, 2021. The 2021 reserve data included in the reserve report of our independent petroleum engineer assumes
+a certain amount of capital expenditures will be made to develop such reserves, and the present value of such reserves was adjusted based
+on our obligation to assign revenue from the Hazel Project to MHP.
+
+ 
+
+The
+development of such reserves may in the future take a long period of time and may require higher levels of capital expenditures than
+anticipated, which, for the Orogrande Project, are borne in part by the non-operating working interest owners of such properties. Delays
+in the development of the reserves, increases in drilling and development costs (including expenses related to secondary and tertiary
+recovery techniques) of such reserves or decreases or continued volatility in commodity prices will reduce the future net revenues of
+the estimated possible reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves
+could force us to reclassify certain of the proved reserves as unproved reserves.
+
+ 
+
+In
+addition, the process of developing oil and natural gas wells and producing oil and natural gas from our properties is subject to numerous
+risks beyond our control. The ability to carry out operations or to finance planned development expenses could be materially and adversely
+affected by any factor that may curtail, delay, reduce or cancel development and production, including:
+
+ 
+
+ 
+ 
+ 
+ delays
+ imposed by or resulting from compliance with environmental and other governmental or regulatory requirements, including permitting
+ requirements, limitations on or resulting from wastewater discharge and disposal of exploration and production wastes, including,
+ subsurface injections, as well as additional regulation with respect to GHG emissions;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ pressure
+ or irregularities in geological formations;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ restricted
+ access to land for drilling or to existing pipeline infrastructure;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ lack
+ of available gathering, transportation and processing facilities, including availability on commercially reasonable terms, or delays
+ in construction of gathering facilities;
+
+ 14
+
+ 
+
+ 
+
+ 
+ 
+ 
+ lack
+ of available capacity on interconnecting transmission pipelines;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ equipment
+ failures or accidents;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ failure
+ of secondary recovery operations to perform as expected;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ unexpected
+ operational events and drilling conditions;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ declines
+ in oil or natural gas prices;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ limitations
+ in the market for oil or natural gas;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ pipe
+ or cement failures;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ casing
+ collapses;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ shortages,
+ unavailability or high cost of drilling rigs, tubular materials, equipment, supplies, personnel and services;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ lost
+ or damaged drilling and service tools;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ loss
+ of drilling fluid circulation;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ uncontrollable
+ flows of oil and natural gas, water or drilling fluids;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ blowouts,
+ explosions fires and natural disasters;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ environmental
+ hazards, such as oil and natural gas leaks, pipeline and tank ruptures, encountering naturally occurring radioactive materials, and
+ unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface
+ environment;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ adverse
+ weather conditions, such as drought, floods, blizzards, tornados and ice storms; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ title
+ problems or legal disputes regarding leasehold rights.
+
+ 
+ 
+
+Our
+operations are heavily dependent on current environmental regulation, changes in which we cannot predict.
+
+ 
+
+Oil
+and natural gas activities that we will engage in, including production, processing, handling and disposal of hazardous materials, such
+as hydrocarbons and naturally occurring radioactive materials (if any), are subject to stringent regulation. We could incur significant
+costs, including cleanup costs resulting from a release of hazardous material, third-party claims for property damage and personal injuries
+fines and sanctions, as a result of any violations or liabilities under environmental or other laws. Changes in or more stringent enforcement
+of environmental laws could force us to expend additional operating costs and capital expenditures to stay in compliance.
+
+ 
+
+Various
+federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of
+the environment, directly impact oil and natural gas exploration, development and production operations, and consequently may impact
+our operations and costs. These regulations include, among others, (i) regulations by the EPA and various state agencies regarding approved
+methods of disposal for certain hazardous and non-hazardous wastes; (ii) CERCLA and analogous state laws which regulate the removal or
+remediation of previously disposed wastes (including wastes disposed of or released by prior owners or operators), property contamination
+(including groundwater contamination), and remedial plugging operations to prevent future contamination; (iii) the CAA and comparable
+state and local requirements which regulate air emissions; (iv) the Oil Pollution Act of 1990 which contains numerous requirements relating
+to the prevention of and response to oil spills into waters of the United States; (v) the RCRA which is the principal federal statute
+governing the treatment, storage and disposal of hazardous wastes; (vi) the Federal Water Pollution Control Act and comparable state
+and local requirements which regulate discharges to federal and state waters; and (vii) state regulations and statutes governing the
+handling, treatment, storage and disposal of naturally occurring radioactive material.
+
+ 15
+
+ 
+
+ 
+
+We
+believe that we will be in substantial compliance with applicable environmental laws and regulations. We cover all costs associated with
+the related insurance coverage for such environmental regulatory compliance. To date, other than the cost of insurance, we have not expended
+any amounts to comply with such regulations, and we do not currently anticipate that future compliance will have a materially adverse
+effect on our consolidated financial position, results of operations or cash flows. However, if we are deemed to not be in compliance
+with applicable environmental laws, we could be forced to expend significant funds to be in compliance, which would have a materially
+adverse effect on our financial condition.
+
+ 
+
+Government
+regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.
+
+ 
+
+Several
+states, including Texas, and local jurisdictions, have adopted, or are considering adopting, regulations that could restrict or prohibit
+hydraulic fracturing in certain circumstances, impose more stringent operating standards and/or require the disclosure of the composition
+of hydraulic fracturing fluids. The Texas Legislature adopted legislation, effective September 1, 2011, requiring oil and natural gas
+operators to publicly disclose the chemicals used in the hydraulic fracturing process. The Texas Railroad Commission adopted rules and
+regulations implementing this legislation that apply to all wells for which the Texas Railroad Commission issues an initial drilling
+permit after February 1, 2012. The law requires that the well operator disclose the list of chemical ingredients subject to the requirements
+of OSHA for disclosure on an internet website and also file the list of chemicals with the Texas Railroad Commission with the well completion
+report. The total volume of water used to hydraulically fracture a well must also be disclosed to the public and filed with the Texas
+Railroad Commission. Also, in May 2013, the Texas Railroad Commission adopted rules governing well casing, cementing and other standards
+for ensuring that hydraulic fracturing operations do not contaminate nearby water resources. The rules took effect in January 2014. Additionally,
+on October 28, 2014, the Texas Railroad Commission adopted disposal well rule amendments designed, among other things, to require applicants
+for new disposal wells that will receive non-hazardous produced water and hydraulic fracturing flowback fluid to conduct seismic activity
+searches utilizing the U.S. Geological Survey. The searches are intended to determine the potential for earthquakes within a circular
+area of 100 square miles around a proposed new disposal well. The disposal well rule amendments, which became effective on November 17,
+2014, also clarify the Texas Railroad Commission s authority to modify, suspend or terminate a disposal well permit if scientific
+data indicates a disposal well is likely to contribute to seismic activity. The Texas Railroad Commission has used this authority to
+deny permits and temporarily suspend operations for waste disposal wells and, in September 2021, the Texas Railroad Commission curtailed
+the amount of water companies were permitted to inject into some wells in the Permian Basin, and has since indefinitely suspended some
+permits there and expanded the restrictions to other areas. These restrictions on use of produced water and a moratorium on new produced
+water disposal wells could result in increased operating costs, requiring us or our service providers to truck produced water, recycle
+it or pump it through the pipeline network or other means, all of which could be costly. We or our service providers may also need to
+limit disposal well volumes, disposal rates and pressures or locations, or require us or our service providers to shut down or curtail
+the injection of produced water into disposal wells. These factors may make drilling and completion activity in the affected parts of
+the Permian Basin less economical and adversely impact our business, results of operations and financial condition.
+
+ 
+
+Climate
+change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil and
+natural gas that we produce.
+
+ 
+
+The
+EPA previously published its findings that emissions of GHGs present a danger to public health and the environment because such gases
+are, according to the EPA, contributing to warming of the Earth s atmosphere and other climatic changes. Based on these findings,
+the EPA has adopted various rules to address GHG emissions under existing provisions of the CAA. In June 2016, the EPA published final
+rules establishing new air emission controls for methane emissions from certain new, modified or reconstructed equipment and processes
+in the oil and natural gas source category, including production, processing, transmission and storage activities. The EPA s final
+rules include New Source Performance Standards under Quad Oa to limit methane emissions from equipment and processes across the
+oil and natural gas source category. The EPA announced a final rule on December 2, 2023, which, among other things, requires the phase
+out of routine flaring of natural gas from new oil wells and routine leak monitoring at all well sites and compressor stations. Notably,
+the EPA updated the applicability date for Quad Ob and Quad Oc to December 6, 2022, meaning that sources constructed prior to that date
+will be considered existing sources with later compliance dates under state plans. The final rule gives states, along with federal tribes
+that wish to regulate existing sources, two years to develop and submit their plans for reducing methane from existing sources. The final
+emissions guidelines under Quad Oc provide three years from the plan submission deadline for existing sources to comply. The regulations
+are subject to legal challenge and will also need to be incorporated into the states implementation plans, which will need to
+be approved by the EPA in individual rulemakings that could also be subject to legal challenge. As a result, future implementation
+of the standards is uncertain at this time. On March 8, 2024, the EPA published the final rule that includes additional standards for
+sources constructed, modified or reconstructed after December 6, 2022.
+
+ 16
+
+ 
+
+ 
+
+Additionally,
+in July 2023, the EPA issued a proposed rule to expand the scope of its Greenhouse Gas Reporting Program for certain petroleum and natural
+gas facilities. The proposed rule would make the reach of the program both broader and more granular, creating reporting obligations
+for a wider set of methane and other gas emissions events and requiring increased technical detail for certain other preexisting reporting
+obligations. The proposed rule indicated an intended effective date of January 1, 2025, but the final rule remains pending at this time
+and any final effective date thus remains uncertain. Should this rule go into effect without major changes, it could raise our costs
+of regulatory compliance.
+
+ 
+
+In
+addition, in November 2016, the U.S. Department of the Interior Bureau of Land Management ( BLM ) issued final rules to reduce
+methane emissions from venting, flaring, and leaks during oil and natural gas operations on public lands that are substantially similar
+to the EPA Quad Oa requirements. After several legal challenges and delays to the BLM methane rule, in November 2022, the BLM issued
+a proposed rule to reduce the waste of natural gas from venting, flaring, and leaks during oil and gas production activities on federal
+and American Indian leases. The comment period for this rule has closed and the rule is in the process of being finalized. We cannot
+predict the scope of any resulting legislation or new regulations, which may, in turn, affect our business.
+
+ 
+
+We
+may incur increasing attention to environmental, social and governance ( ESG ) matters that may impact our business.
+
+ 
+
+Businesses
+across all industries are facing increasing scrutiny from stakeholders related to their ESG practices. If we do not adapt to or comply
+with investor or stakeholder expectations and standards, which are evolving, or if we are perceived to have not responded appropriately
+to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage
+and the business, financial condition and/or the value of our common stock could be materially and adversely affected. Increasing attention
+to climate change, increasing societal expectations on businesses to address climate change, and potential consumer use of substitutes
+to energy commodities may result in increased costs, reduced demand for our hydrocarbon products, reduced profits, increased investigations
+and litigation, and negative impacts on our ability to access capital markets. For example, on March 6, 2024, the SEC issued a final
+rule that requires registrants to provide climate disclosures in their annual reports and registration statements, beginning with annual
+reports for the year ending December 31, 2025; however, on March 15, 2024, a U.S. appeals court issued an administrative stay on the
+application of the new rules requiring public companies to report climate-related risks. Although it is not possible at this time to
+predict how new laws or regulations that may be adopted or issued to address climate change would impact our business, any such future
+laws, regulations or legal requirements imposing additional reporting obligations on our business could require us to incur additional
+costs.
+
+ 
+
+In
+addition, organizations that provided information to investors on corporate governance and related matters have developed rating processes
+for evaluating business entities on their approach to ESG matters. Currently, there are no universal standards for such scores or ratings,
+but the importance of sustainability evaluations is becoming more broadly accepted by investors and shareholders. Such ratings are used
+by some investors to inform their investment and voting decisions. Additionally, certain investors use these scores to benchmark businesses
+against their peers. If we are perceived as lagging, our investors may engage with such third party organizations to require improved
+ESG disclosure or performance.
+
+ 17
+
+ 
+
+ 
+
+Our
+estimates of the volume of reserves could have flaws, or such reserves could turn out not to be commercially extractable. As a result,
+our future revenues and projections could be incorrect.
+
+ 
+
+Estimates
+of reserves and of future net revenues prepared by different petroleum engineers may vary substantially depending, in part, on the assumptions
+made and may be subject to adjustment either up or down in the future. Our actual amounts of production, revenue, taxes, development
+expenditures, operating expenses, and quantities of recoverable oil and natural gas reserves may vary substantially from the estimates.
+Oil and natural gas reserve estimates are necessarily inexact and involve matters of subjective engineering judgment. In addition, any
+estimates of our future net revenues and the present value thereof are based on assumptions derived in part from historical price and
+cost information, which may not reflect current and future values, and/or other assumptions made by us that only represent our best estimates.
+If these estimates of quantities, prices and costs prove inaccurate, we may be unsuccessful in expanding our oil and natural gas reserves
+base with our acquisitions. Additionally, if declines in and instability of oil and natural gas prices occur, then write downs in the
+capitalized costs associated with any oil and natural gas assets we obtain may be required. Because of the nature of the estimates of
+our reserves and estimates in general, reductions to our estimated proved oil and natural gas reserves and estimated future net revenues
+may not be required in the future, and/or that our estimated reserves may not be present and/or commercially extractable. If our reserve
+estimates are incorrect, we may be forced to write down the capitalized costs of our oil and natural gas properties.
+
+ 
+
+Decommissioning
+costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.
+
+ 
+
+We
+may become responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which we use for production
+of oil and natural gas reserves. Abandonment and reclamation of these facilities and the costs associated therewith is often referred
+to as decommissioning. We accrue a liability for decommissioning costs associated with our wells but have not established
+any cash reserve account for these potential costs in respect of any of our properties. If decommissioning is required before economic
+depletion of our properties or if our estimates of the costs of decommissioning exceed the value of the reserves remaining at any particular
+time to cover such decommissioning costs, we may have to draw on funds from other sources to satisfy such costs. The use of other funds
+to satisfy such decommissioning costs could impair our ability to focus capital investment in other areas of our business.
+
+ 
+
+We
+may have difficulty distributing production, which could harm our financial condition.
+
+ 
+
+In
+order to sell the oil and natural gas that we are able to produce, if any, the operators of the wells we obtain interests in may have
+to make arrangements for storage and distribution to the market. We will rely on local infrastructure and the availability of transportation
+for storage and shipment of our products, but infrastructure development and storage and transportation facilities may be insufficient
+for our needs at commercially acceptable terms in the localities in which we operate. This situation could be particularly problematic
+to the extent that our operations are conducted in remote areas that are difficult to access, such as areas that are distant from shipping
+and/or pipeline facilities. These factors may affect our and potential partners ability to explore and develop properties and
+to store and transport oil and natural gas production, increasing our expenses.
+
+ 
+
+Furthermore,
+weather conditions or natural disasters, actions by companies doing business in one or more of the areas in which we will operate, or
+labor disputes may impair the distribution of oil and/or natural gas and in turn diminish our financial condition or ability to maintain
+our operations.
+
+ 
+
+The
+marketability of any future production will be dependent upon transportation and other facilities, certain of which we do not control.
+When these facilities are unavailable, our operations can be interrupted and any revenues reduced.
+
+ 
+
+The
+marketability of any future production depends in part upon the availability, proximity and capacity of transportation facilities owned
+by third parties. The oil produced will be transported from the wellhead to our tank batteries by our gathering system. Our purchasers
+would then transport the oil by truck to a pipeline for transportation. Our natural gas production will generally be transported by our
+gathering lines from the wellhead to an interconnection point with the purchaser. We do not control these trucks and other third-party
+transportation facilities and our access to them may be limited or denied. Insufficient production from our wells to support the construction
+of pipeline facilities by our purchasers or a significant disruption in the availability of our or third-party transportation facilities
+or other production facilities could adversely impact our ability to deliver to market or produce our production and thereby cause a
+significant interruption in our operations.
+
+ 18
+
+ 
+
+ 
+
+We
+may be required to flare a portion of our natural gas production for a number of reasons, including the fact that (i) our wells are not
+yet tied into a third-party gathering system, (ii) the pressures on third-party gathering systems may be too high to allow additional
+production from our wells to be transported, or (iii) our production may be prorated due to high demand on third-party gathering systems.
+We may flare additional natural gas from time to time.
+
+ 
+
+Also,
+the transfer of our oil and natural gas through third-party pipelines may be curtailed or delayed if it does not meet the quality specifications
+of the pipeline owners. Our access to transportation options, including trucks owned by third parties, can also be affected by U.S. federal
+and state regulation of oil and natural gas production and transportation, general economic conditions and changes in supply and demand.
+If, in the future, we are unable, for any sustained period, to implement acceptable delivery or transportation arrangements or encounter
+production-related difficulties, we may be required to shut in or curtail production. Any such shut in or curtailment, or an inability
+to obtain favorable terms for delivery of our production, would adversely affect our financial condition and results of operations.
+
+ 
+
+Our
+business will suffer if we cannot obtain or maintain necessary licenses.
+
+ 
+
+Our
+operations will require licenses, permits and in some cases renewals of licenses and permits from various governmental authorities. Our
+ability to obtain, sustain or renew such licenses and permits on acceptable terms is subject to change in regulations and policies and
+to the discretion of the applicable governments, among other factors. Our inability to obtain, or our loss of or denial of extension
+of, any of these licenses or permits could hamper our ability to produce revenues from our operations.
+
+ 
+
+Challenges
+to our properties may impact our financial condition.
+
+ 
+
+Title
+to oil and natural gas interests is often not capable of conclusive determination without incurring substantial expense. While we have
+made and intend to make appropriate inquiries into the title of properties and other development rights we have acquired and intend to
+acquire, title defects may exist. In addition, we may be unable to obtain adequate insurance for title defects, on a commercially reasonable
+basis or at all. If title defects do exist, it is possible that we may lose all or a portion of our right, title and interests in and
+to the properties to which the title defects relate. If our property rights are reduced, our ability to conduct our exploration, development
+and production activities may be impaired. To mitigate title problems, common industry practice is to obtain a title opinion from a qualified
+oil and natural gas attorney prior to the drilling operations of a well.
+
+ 
+
+We
+rely on technology to conduct our business, and our technology could become ineffective or obsolete.
+
+ 
+
+We
+rely on technology, including geographic and seismic analysis techniques and economic models, to develop any reserve estimates and to
+guide our exploration, development and production activities. We and our operator partners will be required to continually enhance and
+update our technology to maintain its efficacy and to avoid obsolescence. The costs of doing so may be substantial and may be higher
+than the costs that we anticipate for technology maintenance and development. If we are unable to maintain the efficacy of our technology,
+our ability to manage our business and to compete may be impaired. Further, even if we are able to maintain technical effectiveness,
+our technology may not be the most efficient means of reaching our objectives, in which case we may incur higher operating costs than
+we would were our technology more efficient.
+
+ 
+
+The
+loss of key personnel would directly affect our efficiency and profitability.
+
+ 
+
+Our
+future success is dependent, in a large part, on retaining the services of our planned management team. Our executive officers possess
+a unique and comprehensive knowledge of our industry and related matters that are vital to our success within the industry. The knowledge,
+leadership and technical expertise of these individuals would be difficult to replace. The loss of one or more of our officers could
+have a material adverse effect on our operating and financial performance, including our ability to develop and execute our long-term
+business strategy. We do not maintain key-man life insurance with respect to any employees.
+
+ 19
+
+ 
+
+ 
+
+We
+have limited management and staff and are dependent upon partnering arrangements and third-party service providers.
+
+ 
+
+We
+have two part-time employees, including our Chief Executive Officer and Chief Financial Officer. The loss of these individuals would
+have an adverse effect on our business, as we have very limited personnel. We leverage the services of other independent consultants
+and contractors to perform various professional services, including engineering, oil and natural gas well planning and supervision, and
+land, legal, environmental and tax services. We also pursue alliances with partners in the areas of geological and geophysical services
+and prospect generation, evaluation and prospect leasing. Our dependence on third-party consultants and service providers create a number
+of risks, including but not limited to:
+
+ 
+
+ 
+ 
+ 
+ the
+ possibility that such third parties may not be available to us as and when needed; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ risk that we may not be able to properly control the timing and quality of work conducted with respect to our projects.
+
+ 
+ 
+
+If
+we experience significant delays in obtaining the services of such third parties or they perform poorly, our results of operations and
+stock price could be materially adversely affected.
+
+ 
+
+Certain
+of our directors and officers have significant duties with, and spend significant time serving, entities that may compete with us in
+seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business
+opportunities.
+
+ 
+
+Certain
+of our directors and officers, who are responsible for managing the direction of our operations and acquisition activities, hold positions
+of responsibility with other entities that are in the business of identifying and acquiring oil and natural gas properties. The existing
+positions held by these directors and officers may give rise to fiduciary or other duties that are in conflict with the duties they owe
+to us. These directors and officers may become aware of business opportunities that may be appropriate for presentation to us as well
+as to the other entities with which they are or may become affiliated. Due to these existing and potential future affiliations, they
+may present potential business opportunities to other entities prior to presenting them to us, which could cause additional conflicts
+of interest. They may also decide that certain opportunities are more appropriate for other entities with which they are affiliated,
+and as a result, they may elect not to present those opportunities to us. These conflicts may not be resolved in our favor.
+
+ 
+
+Terrorist
+attacks or cyber-incidents could result in information theft, data corruption, operational disruption and/or financial loss.
+
+ 
+
+Like
+most companies, we have become increasingly dependent upon digital technologies, including information systems, infrastructure and
+cloud applications and services, to operate our businesses, to process and record financial and operating data, communicate with our
+business partners, analyze mine and mining information, estimate quantities of coal reserves, as well as other activities related to
+our businesses. Strategic targets, such as energy-related assets, may be at greater risk of future terrorist or cyber-attacks than
+other targets in the United States. Deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or
+infrastructure of third parties, or cloud-based applications could lead to corruption or loss of our proprietary data and
+potentially sensitive data, delays in production or delivery, difficulty in completing and settling transactions, challenges in
+maintaining our books and records, environmental damage, communication interruptions, other operational disruptions and third-party
+liability. Our insurance may not protect us against such occurrences. Consequently, it is possible that any of these occurrences, or
+a combination of them, could have a material adverse effect on our business, financial condition, results of operations and cash
+flows. Further, as cyber incidents continue to evolve, we may be required to expend additional resources to continue to modify or
+enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents. We plan to adopt plans and
+policies to address precautions with respect to data security and appropriate responses in case of a reported breach.
+
+ 20
+
+ 
+
+ 
+
+The
+2021 Note with Mr. McCabe as successor-in-interest to Meta contains restrictive covenants that limit our operations.
+
+ 
+
+In
+2021, we borrowed $15 million, which we subsequently increased to $20 million, pursuant to the terms of the 2021 Note (defined below).
+As a result of the Loan Purchase (defined below) on August 7, 2023, Mr. McCabe replaced Meta as the lender and secured party under the
+2021 Note. The Company s obligations and responsibilities under the 2021 Note remain unchanged. The 2021 Note includes a restrictive
+covenant that, subject to certain exceptions and qualifications, restricts our ability to merge or consolidate with another person or
+entity, or sell or transfer all or substantially all of our assets, unless we are the surviving entity or the successor entity assumes
+all of obligations under the 2021 Note. This restriction may restrict our current and future operations, particularly our ability to
+respond to certain changes in our business or industry or take future actions. See the section titled Management s Discussion
+and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources for additional information.
+
+ 
+
+The
+2021 Note is secured by a security interest in a 25% working interest in the Orogrande Project held by Wolfbone. As part of the Loan
+Purchase, Meta assigned its lien on 25% of the Orogrande Prospect to Mr. McCabe. Any default that is not waived could permit Mr. McCabe,
+as lender, to exercise rights and remedies with respect to all of the collateral that is securing the 2021 Note, and/or other rights
+and remedies under applicable law.
+
+ 
+
+Our
+ability to meet these restrictive covenants or to avoid defaults can be impacted by events beyond our control. The 2021 Note provides
+that our breach or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence of an event of default,
+the lender could elect to declare all amounts outstanding under the 2021 Note to be immediately due and payable. If the outstanding debt
+under the 2021 Note was to be accelerated, we may not have sufficient cash on hand to repay it, which would have an immediate adverse
+effect on our business and operating results. This could potentially cause us to cease operations and result in a complete loss of your
+investment in our common stock.
+
+ 
+
+The
+2022 Note with Mr. McCabe contains restrictive covenants that limit our operations.
+
+ 
+
+On
+December 22, 2022, we borrowed $2 million pursuant to the terms of the 2022 Note (defined below), which has a maximum principal amount
+available for borrowing of $20 million. If we are not in compliance with the covenants of the 2022 Note, or if we are in default under
+the 2022 Note, it is possible that Mr. McCabe will not offer to extend any additional loans under the 2022 Note, which may affect our
+business as a going concern. The 2022 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts
+our ability to merge or consolidate with another person, or sell or transfer all or substantially all of our assets, unless we are the
+surviving entity or the successor entity assumes all obligations under the 2022 Note. This restriction may restrict our current and future
+operations, particularly our ability to respond to certain changes in our business or industry or take future actions. See Management s
+Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources for additional
+information.
+
+ 
+
+Our
+ability to meet these restrictive covenants or to avoid defaults can be impacted by events beyond our control. The 2022 Note provides
+that our breach or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence of an event of default,
+Mr. McCabe as our lender could elect to declare all amounts outstanding under the 2022 Note to be immediately due and payable. If the
+outstanding debt under the 2022 Note was to be accelerated, we may not have sufficient cash on hand to repay it, which would have an
+immediate material adverse effect on our business and operating results. This could potentially cause us to cease operations and result
+in a complete loss of your investment in our common stock.
+
+ 21
+
+ 
+
+ 
+
+Our
+Loan Agreement with Mr. McCabe as successor-in-interest to Meta contains restrictive covenants that limit our operations.
+
+ 
+
+In
+2022, we borrowed an aggregate principal amount of $5.0 million pursuant to the terms of the Loan Agreement (defined below), which is
+the maximum principal balance available under the Loan Agreement. The Loan Agreement contains various restrictive covenants and other
+restrictions, which include, among other things, restrictions on:
+
+ 
+
+ 
+ 
+ 
+ our
+ ability to transfer all or part of our business or property, except for inventory in the ordinary course of business, surplus or
+ obsolete equipment, permitted liens, and transfers of cash permitted by the agreement;
+
+ 
+ 
+
+ 
+ 
+ 
+ our
+ ability to liquidate or dissolve or merge or consolidate with another entity, or acquire another entity;
+
+ 
+ 
+
+ 
+ 
+ 
+ our
+ ability to incur additional debt beyond certain limits or encumber our assets; and
+
+ 
+ 
+
+ 
+ 
+ 
+ our
+ ability to pay dividends or make investments, other than permitted investments.
+
+ 
+ 
+
+These
+restrictions may restrict our current and future operations, particularly our ability to respond to certain changes in our business or
+industry or take future actions. See Management s Discussion and Analysis of Financial Condition and Results of Operations Liquidity
+and Capital Resources for additional information.
+
+ 
+
+Our
+ability to meet these restrictive covenants can be impacted by events beyond our control. The Loan Agreement provides that our breach
+or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence and during the continuance of an event of
+default, the lender could elect to (i) declare all outstanding principal and accrued and unpaid interest under the Loan Agreement immediately
+due and payable, (ii) terminate any remaining commitment to make loans under the Loan Agreement, and/or (iii) exercise certain other
+rights and remedies anticipated under the Loan Agreement. The events of default under the Loan Agreement include, among other things
+(subject to grace periods in certain instances), payment defaults, breaches of covenants or representations and warranties, a change
+in control or certain material adverse effects as defined in the Loan Agreement, material judgments and attachments, cross defaults with
+certain of our other material indebtedness, and bankruptcy and insolvency events with respect to us and our subsidiaries. If the outstanding
+debt under the Loan Agreement was to be accelerated, we may not have sufficient cash on hand to repay it, which would have an immediate
+adverse effect on our business and operating results. This could potentially cause us to cease operations and result in a complete loss
+of your investment in our common stock.
+
+ 
+
+We
+may have been able to receive better terms from unaffiliated third parties than the terms we received in our agreements with Meta.
+
+ 
+
+We
+negotiated agreements with Meta including the 2021 Note, Loan Agreement and Distribution Agreement (defined below), while we were still
+a subsidiary of Meta. Accordingly, these agreements may not reflect terms that would have resulted from arms-length negotiations between
+unaffiliated parties. The terms of the agreements relate to, among other things, loans for working capital, allocations of assets, liabilities,
+rights, indemnifications and other obligations between Meta and us. We may have received better terms from third parties because third
+parties may have competed with each other to win our business. See Certain Relationships and Related Party Transactions 
+for more information.
+
+ 
+
+Risks
+Relating to our Common Stock
+
+ 
+
+Our
+common stock is not eligible with the Depository Trust Company ( DTC ), which may result in brokerage firms being unwilling
+to hold or trade the stock.
+
+ 
+
+Our
+shares of common stock are not eligible with DTC to permit our shares of common stock to trade electronically. If an issuer is not DTC-eligible, 
+then its capital stock cannot be electronically transferred between brokerage accounts, which means that brokerage firms may be unwilling
+to hold or trade our common stock, restricting all trades by holders of our common stock.
+
+ 
+
+No
+trading market for our common stock is expected to develop.
+
+ 
+
+There
+is presently no public market for our shares of common stock and our shares are not expected to become DTC eligible for electronic trading
+to third parties. There is no expectation that a trading market will develop or be sustained. Accordingly, you may have to hold the shares
+of common stock indefinitely.
+
+ 22
+
+ 
+
+ 
+
+We
+do not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in our common stock must
+come from increases in the fair market value of the common stock.
+
+ 
+
+We
+do not intend to pay cash dividends on our common stock in the foreseeable future. We expect to retain future earnings, if any, for reinvestment
+in our business. Also, any credit agreements, which we may enter into, may restrict our ability to pay dividends. Whether we pay cash
+dividends in the future will be at the discretion of our board of directors (the Board ) and will be dependent upon our
+financial condition, results of operations, cash requirements, future prospects and any other factors our Board deems relevant. Therefore,
+any return on your investment in our common stock must come from increases in the fair market value of the common stock.
+
+ 
+
+We
+may issue preferred stock with terms that could adversely affect the voting power or value of our common stock.
+
+ 
+
+Our
+Board has the authority to cause us to issue, without any further vote or action by the stockholders, shares of preferred stock in one
+or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions
+thereof, including dividend rights, voting rights and terms of redemption, redemption price or prices and liquidation preferences of
+such series. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common
+stock. For example, we might afford holders of preferred stock the right to elect some number of our directors in all events or upon
+the occurrence of specified events or the right to vote on specified transactions. Similarly, the repurchase or redemption rights or
+liquidation preferences we might assign to holders of preferred stock could affect the residual value of our common stock.
+
+ 
+
+Risks
+Relating to Our Status as a Public Reporting Company
+
+ 
+
+We
+are an emerging growth company and a smaller reporting company, subject to less stringent reporting and regulatory requirements of other
+publicly reporting companies and this status may have an adverse effect on our ability to attract interest in our common stock.
+
+ 
+
+We
+are an emerging growth company as defined in the JOBS Act. As long as we remain an emerging growth company, we may take advantage of
+certain exemptions from various reporting and regulatory requirements that are applicable to other public reporting companies that are
+not emerging growth companies. We cannot predict if investors will find our common stock less attractive if we choose to rely on these
+exemptions.
+
+ 
+
+Additionally,
+we are a smaller reporting company as defined under the Exchange Act. Smaller reporting companies may take advantage of
+certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will
+remain a smaller reporting company provided: (1) the market value of our common stock held by non-affiliates is less than $250 million,
+calculated annually, as of the last business day of our second fiscal quarter, or (2) our annual revenues are less than $100 million
+during such completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million, calculated
+annually, as of the last business day of our second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations,
+it may also make comparison of our financial statements with other public reporting companies difficult or impossible.
+
+ 
+
+U.S.
+FEDERAL INCOME TAX CONSIDERATIONS OF NON-U.S. HOLDERS
+
+ 
+
+The
+following is a summary of certain material U.S. federal income and estate tax considerations relating to the acquisition, ownership
+and disposition of our common stock purchased in this offering by a non-U.S. holder (as defined below). This summary is based upon
+provisions of the Internal Revenue Code of 1986, as amended (the Code ), applicable U.S. Treasury Regulations
+promulgated thereunder, published administrative rulings of the U.S. Internal Revenue Service (the IRS ), judicial
+authority, and all other applicable authority all as in effect as of the date hereof, any of which may subsequently be
+changed, possibly retroactively, so as to result in U.S. federal income tax consequences different from those discussed
+below. 
+
+ 23
+
+ 
+
+ 
+
+This
+summary is general in nature and does not address all aspects of U.S. federal income taxation relevant to holders of common
+stock and does not address the so-called Medicare tax imposed on certain investment income, state, local, gift or non-U.S.
+taxes. This summary assumes that a prospective non-U.S. holder will hold shares of our common stock as a capital asset within the meaning
+of the Code (generally, property held for investment). In addition, this summary does not deal with all tax consequences
+that may be relevant to such holders in light of their personal circumstances or particular situations, such as: 
+
+ 
+
+ 
+ 
+ 
+ insurance
+ companies and financial institutions; 
+
+ 
+ 
+
+ 
+ 
+ 
+ tax-exempt
+ organizations; 
+
+ 
+ 
+
+ 
+ 
+ 
+ pension
+ plans; 
+
+ 
+ 
+
+ 
+ 
+ 
+ controlled
+ foreign corporations; 
+
+ 
+ 
+
+ 
+ 
+ 
+ passive
+ foreign investment companies; 
+
+ 
+ 
+
+ 
+ 
+ 
+ brokers
+ and dealers in securities; 
+
+ 
+ 
+
+ 
+ 
+ 
+ persons
+ that hold our common stock as part of a straddle, hedge, conversion transaction, or other integrated investment transactions;
+
+ 
+ 
+
+ 
+ 
+ 
+ persons
+ deemed to sell our common stock under the constructive sale provisions of the Code; and
+
+ 
+ 
+
+ 
+ 
+ 
+ former
+ citizens or residents of the United States subject to tax as expatriates. 
+
+ 
+ 
+
+This
+discussion does not address the tax treatment of partnerships or other entities treated as partnerships for U.S. federal income
+tax purposes or of persons that hold their common stock through such a partnership . If an entity or arrangement, domestic or foreign,
+that is treated as a partnership for U.S. federal income tax purposes holds shares of our common stock, the U.S. federal income
+tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership and the
+partner. If you are a partnership or partner in a partnership holding the shares of our common stock, you should consult your tax
+advisor. 
+
+ 
+
+We
+have not sought, nor will we seek, a ruling from the IRS with respect to the matters discussed below. There can be no assurance
+that the IRS will not take a different position concerning the tax consequences of the purchase, ownership or disposition of the
+shares of common stock or that any such position would not be sustained. 
+
+ 
+
+As
+used herein, the term U.S. holder means a beneficial owner of shares of common stock for U.S. federal income tax purposes: 
+
+ 
+
+ 
+ 
+ 
+ an
+ individual who is a citizen or resident of the United States; 
+
+ 
+ 
+
+ 
+ 
+ 
+ a
+ corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under
+ the laws of the United States, any state thereof or the District of Columbia; 
+
+ 
+ 
+
+ 
+ 
+ 
+ an
+ estate the income of which is subject to U.S. federal income taxation regardless of its source; or
+
+ 
+ 
+
+ 
+ 
+ 
+ a
+ trust, if it (i) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the
+ authority to control all substantial decisions of the trust, or (ii) has a valid election in effect under applicable U.S. Treasury
+ Regulations to be treated as a U.S. person. 
+
+ 
+ 
+
+A
+ non-U.S. holder is a beneficial owner of shares of our common stock (other than an entity treated as a partnership for
+U.S. federal income tax purposes) that is not a U.S. holder. Special rules may apply to certain non-U.S. holders. Consequently,
+non-U.S. holders should consult their tax advisors to determine the U.S. federal, state, local, non-U.S. and other tax consequences
+that may be relevant to them in light of their particular circumstances.
+
+ 24
+
+ 
+
+ 
+
+THIS
+SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE.
+NON-U.S. HOLDERS CONSIDERING THE PURCHASE OF SHARES OF COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
+THE APPLICATION OF U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE
+PURCHASE, OWNERSHIP, DISPOSITION AND CONVERSION OF SHARES OF OUR COMMON STOCK ARISING UNDER U.S. FEDERAL NON-INCOME, ESTATE,
+GIFT OR MEDICARE CONTRIBUTION TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, NON-U.S. OR ANY OTHER TAXING
+JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY. IN ADDITION, SIGNIFICANT CHANGES IN U.S. FEDERAL INCOME TAX LAWS WERE RECENTLY
+ENACTED. YOU SHOULD ALSO CONSULT WITH YOUR TAX ADVISOR WITH RESPECT TO SUCH CHANGES IN U.S. TAX LAW AS WELL AS
+POTENTIAL CONFORMING CHANGES IN STATE TAX LAWS. 
+
+ 
+
+Distributions
+on Our Common Stock
+
+ 
+
+Distributions,
+if any, on our common stock paid to non-U.S. holders will generally constitute a dividend for U.S. federal income tax purposes to the
+extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions
+in excess of our current and accumulated earnings and profits will generally constitute a return of capital to the extent of the non-U.S.
+holder s adjusted tax basis in our common stock, and will be applied against and reduce the non-U.S. holder s adjusted tax
+basis. Any remaining excess will be treated as capital gain, subject to the tax treatment described below in Gain on Sale,
+Exchange or Other Disposition of Our Common Stock. 
+
+ 
+
+Subject
+to the discussions below regarding backup withholding and FATCA, dividends paid to a non-U.S. holder that are not treated as effectively
+connected with the non-U.S. holder s conduct of a trade or business in the United States generally will be subject to withholding
+of U.S. federal income tax at a rate of 30% on the gross amount paid, unless the non-U.S. holder is entitled to an exemption from
+or reduced rate of withholding under an applicable income tax treaty. In order to claim the benefit of an income tax treaty, a non-U.S.
+holder must provide a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable (or successor form to either), certifying under
+penalties of perjury that such non-U.S. holder is entitled to benefits under the applicable income tax treaty and has complied with
+any special certification requirements prior to the payment of dividends. A non-U.S. holder eligible for a reduced rate of withholding
+pursuant to an income tax treaty may be eligible to obtain a refund of any excess amounts withheld by timely filing an appropriate
+claim for a refund with the IRS. Non-U.S. holders should consult their tax advisors regarding possible entitlements to benefits
+under any income tax treaty. 
+
+ 
+
+Dividends
+paid to a non-U.S. holder that are treated as effectively connected with a trade or business conducted by the non-U.S. holder within
+the United States (and, if an applicable income tax treaty so provides, are also attributable to a permanent establishment or a fixed
+base maintained within the United States by the non-U.S. holder) are generally exempt from the 30% withholding tax but instead are
+subject to U.S. federal income tax on a net income basis at the applicable graduated individual or corporate tax rate .
+To establish the exemption, a non-U.S. holder must provide a properly executed IRS Form W-8ECI (or successor form) prior to the
+payment of the dividend. A non-U.S. holder that is a corporation may, under certain circumstances, be subject to an additional branch
+profits tax imposed at a rate of 30%, or such lower rate as specified by an applicable income tax treaty between the United
+States and such non-U.S. holder s country of residence. 
+
+ 
+
+Gain
+On Sale, Exchange or Other Disposition of Our Common Stock
+
+ 
+
+Subject
+to the discussions below regarding backup withholding and FATCA, a non-U.S. holder generally will not be subject to any U.S. federal
+income tax or withholding on any gain realized from the non-U.S. holder s sale, exchange or other disposition of shares of our
+common stock unless: 
+
+ 
+
+ 
+ 
+ 
+ the
+ gain is effectively connected with the non-U.S. holder s conduct of a U.S. trade or business (and, if an applicable income
+ tax treaty so provides, is also attributable to a permanent establishment or a fixed base maintained within the United States by
+ the non-U.S. holder); 
+
+ 25
+
+ 
+
+ 
+
+ 
+ 
+ 
+ the
+ non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition
+ and certain other conditions are met; or
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ we
+ are, or have been at any time during the five-year period preceding such disposition (or the non-U.S. holder s holding
+ period, if shorter), a United States real property holding corporation ( USRPHC ) under Section 897
+ of the Code. 
+
+ 
+ 
+
+If
+you are a non-U.S. holder and you realize gain described in the first bullet point above, you will be subject to tax at regular
+graduated U.S. federal income tax rates on the net gain derived from the sale, exchange, redemption, or other taxable disposition
+of common stock, generally in the same manner as if you were a U.S. holder, and, if you are a foreign corporation, you additionally
+may be subject to a branch profits tax equal to 30% of your effectively connected earnings and profits, or at such lower
+rate as may be specified by an applicable income tax treaty. If you are described in the second bullet point above, you will
+be subject to a flat 30% tax (or lower applicable income tax treaty rate) on the gain recognized on the sale, exchange, redemption,
+or other taxable disposition of common stock (which gain may be offset by certain U.S.-source capital losses).
+
+ 
+
+Generally,
+we will be a USRPHC if the fair market value of our U.S. real property interests equals or exceeds 50% of the sum of the fair market
+values of our worldwide real property interests and other assets used or held for use in a trade or business, all as determined
+under applicable U.S. Treasury regulations. We believe that we currently are, and expect to be for the foreseeable future, a USRPHC.
+However, since our common stock will not be regularly traded on an established securities market, any non-U.S. holder (regardless
+of the percentage of stock owned) would be treated as disposing of a United States real property interest and would be subject
+to U.S. federal income tax on a taxable disposition of its common stock (as described in the preceding paragraph), and a 15%
+withholding tax would apply to the gross proceeds from such disposition. 
+
+ 
+
+Non-U.S.
+holders should consult their tax advisors with respect to the application of the foregoing rules to their ownership and disposition of
+shares of our common stock.
+
+ 
+
+Information
+Reporting and Backup Withholding
+
+ 
+
+Generally,
+we must report annually to the IRS and to non-U.S. holders the amount of distributions on our common stock paid to non-U.S. holders
+(including constructive dividends deemed paid) and the amount of tax, if any, withheld with respect to those payments. Copies of
+the information returns reporting such distributions (including constructive dividends deemed paid) and withholding may also
+be made available to the tax authorities in the country in which a non-U.S. holder resides under the provisions of an
+applicable income tax treaty. In general, a non-U.S. holder will not be subject to backup withholding, currently at a
+rate of 24%, with respect to payments of distributions that we make on our common stock, provided the non-U.S. holder
+certifies its non-U.S. status on a validly executed IRS Form W- 8BEN, IRS Form W-8BEN-E, or other applicable IRS Form W-8
+(and the applicable withholding agent does not have actual knowledge or reason to know that the holder is a U.S. person,
+as defined under the Code, that is not an exempt recipient). In addition, a non-U.S. holder will be subject to information
+reporting and, depending on the circumstances, backup withholding with respect to payments of the proceeds of the sale
+of a share of our common stock within the United States or conducted through certain U.S.-related financial intermediaries,
+unless the non-U.S. holder certifies its non- U.S. status or otherwise establishes an exemption (and we and the relevant financial
+intermediaries do not have actual knowledge or reason to know that a holder is a U.S. person, as defined under the Code,
+that is not an exempt recipient) or the non-U.S. holder otherwise establishes an exemption. Any amounts withheld under the
+ backup withholding rules will be allowed as a refund or a credit against a non-U.S. holder s U.S. federal income
+tax liability, if any, provided the required information is furnished timely to the IRS. 
+
+ 
+
+Backup
+withholding is not an additional tax. Rather, amounts withheld under the backup withholding rules from a payment to a non-U.S. holder
+can be refunded or credited against the non-U.S. holder s U.S. federal income tax liability, if any, provided that certain
+required information is furnished to the IRS in a timely manner. 
+
+ 
+
+U.S.
+Federal Estate Tax
+
+ 
+
+An
+individual non-U.S. holder who is treated as the owner, or who has made certain lifetime transfers, of an interest in our common
+stock will be required to include the value of the common stock in his or her gross estate for U.S. federal estate tax purposes
+and may be subject to U.S. federal estate tax, unless an applicable estate or other tax treaty provides otherwise. 
+
+ 26
+
+ 
+
+ 
+
+Foreign
+Account Tax Compliance Act
+
+ 
+
+Sections
+1471 through 1474 of the Code, and the regulations and administrative guidance thereunder (commonly referred to as FATCA )
+impose federal withholding at a tax 30% rate on payments of dividends (including constructive dividends deemed paid),
+if any, on our common stock, and, subject to the regulatory relief described below, the gross proceeds from the sale or
+other disposition of our common stock, in each case paid to a foreign financial institution or to a non-financial
+foreign entity (all as defined in the Code), whether such foreign financial institution or non-financial foreign
+entity is the beneficial owner or an intermediary, unless (i) the foreign financial institution undertakes certain diligence
+and reporting obligations, (ii) the nonfinancial foreign entity either certifies it does not have any substantial
+United States owners (as defined in the Code) or furnishes identifying information regarding each substantial United
+States owner or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption
+from these rules and provides appropriate documentation (such as an IRS Form W-8BEN-E). If the payee is a foreign financial
+institution and is subject to the diligence and reporting requirements in (i) above, it generally must enter into an agreement
+with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by
+ certain U.S. persons or U.S.-owned foreign entities (as defined in applicable U.S. Treasury Regulations), annually report
+certain information about such accounts and withhold 30% on payments to noncompliant foreign financial institutions and
+certain other account holders. 
+
+ 
+
+Foreign
+ governments may enter into, and many foreign governments have entered into, intergovernmental agreements with the
+United States to implement FATCA in a different manner. If a dividend payment is both subject to withholding under FATCA
+and subject to any other withholding tax, the withholding under FATCA may be credited against, and therefore reduce, such
+other withholding tax. While withholdable payments would have originally included payments of gross proceeds from the sale or other
+ disposition of our common stock on or after January 1, 2019, proposed U.S. Treasury regulations provide that such payments
+of gross proceeds do not constitute withholdable payments. Taxpayers may rely generally on these proposed U.S. Treasury regulations
+until they are revoked or final U.S. Treasury regulations are issued. Prospective investors should consult their own tax advisors
+ regarding the application of FATCA to the purchase, ownership, and disposition of the shares of our common stock .
+
+ 
+
+USE
+OF PROCEEDS
+
+ 
+
+We
+estimate that the net proceeds from the sale of the securities we are offering will be approximately $ ,
+assuming that we sell all of the securities we are offering, after deducting estimated offering expenses payable by us.
+
+ 
+
+We
+expect to use the proceeds from the offering to fund our drilling and exploration activities in order to meet our drilling obligations
+as well as for general corporate purposes, which include funding working capital and operating expenses. We have not determined the amounts
+we plan to spend on various categories of our operating and capital needs or the timing of these expenditures. As a result, our management
+will have broad discretion to allocate the net proceeds from this offering. Pending application of the net proceeds as described above,
+we intend to invest the net proceeds of this offering in short-term, investment-grade, interest-bearing securities.
+
+ 
+
+DETERMINATION
+OF OFFERING PRICE
+
+ 
+
+The
+offering price for shares sold pursuant to this offering is set at $ per common share.
+
+ 
+
+The
+$ price of the shares that are being offered, that being the direct issue shares, was
+determined after considering certain factors, including but not limited to the general condition of the securities market at the time
+of this offering, the history of, and the prospects for the industry in which we compete, our past and present operations and our prospects
+for future revenues.
+
+ 27
+
+ 
+
+ 
+
+The
+offering price bears no relationship whatsoever to our assets, earnings, book value or other criteria of value. Among the factors considered
+were:
+
+ 
+
+ 
+ 
+ 
+ our
+ cash requirements; the proceeds to be raised in the offering;
+
+ 
+ 
+
+ 
+ 
+ 
+ our
+ lack of operating history; and
+
+ 
+ 
+
+ 
+ 
+ 
+ the
+ amount of capital to be contributed by purchasers in this offering in proportion to the amount of stock to be retained by our existing
+ stockholders.
+
+ 
+ 
+
+The
+offering price stated in this prospectus should not be considered an indication of the actual value of the shares. That price is subject
+to change as a result of market conditions and other factors, and we cannot assure you that the shares can be resold at or above the
+public offering price.
+
+ 
+
+BUSINESS
+
+ 
+
+General
+
+ 
+
+We
+are an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the
+United States. Our primary focus has been the development of interests in an oil and natural gas project we hold in the Orogrande Basin
+in West Texas. In addition, we may consider various strategic options, including partnering with, or the possible sale of any or all
+of our assets to, third parties. We operate our business through our wholly owned subsidiaries, Torchlight Energy, Inc., Hudspeth Oil
+Corporation, Torchlight Hazel, LLC, Hudspeth Operating, LLC, Wolfbone Investments, LLC, Wildcat Panther LLC, Wildcat Valentine LLC, Wildcat
+Cowboy LLC, and Wildcat Packer LLC.
+
+ 
+
+Presently,
+our primary interests include the oil and natural gas leases for properties of the Orogrande Basin in Hudspeth County, Texas (the Orogrande
+Project ). In addition, we have minor interests in the Eastern edge of the Midland Basin in West Texas (the Hazel Project ),
+two minor well interests in Oklahoma (the Oklahoma Properties ), and the undeveloped oil and natural gas leases held in
+the Wildcat Projects in Louisiana.
+
+ 
+
+Rich
+Masterson, our consulting geologist, originated our Orogrande Project, as discussed below, based on his tenure as a geologist since 1974.
+He is credited with originating the Wolfbone shale play in the Southern Delaware Basin of West Texas and has prepared prospects totaling
+over 150,000 acres that have been leased, drilled and are currently being developed by Devon Energy Corp., Occidental Petroleum Corporation
+and Noble Energy, among others.
+
+ 
+
+The
+Company has drilled 18 test wells in the Orogrande Project in the basin in order to stay in compliance with the continuous drilling clause
+under the University Lands Development Unit Agreement (as amended, the DDU Agreement ), as well as, to test for potential
+shallow pay zones and deeper pay zones that may be present on structural plays. Development of the wells continued through June 30, 2024
+to further capture and document the scientific base in support of demonstrating the production potential of the Orogrande Project properties.
+
+ 
+
+We
+satisfied the 2022 and 2023 drilling obligations in the Orogrande Project and, in satisfying our drilling obligations, we identified
+new potential pay zones not previously discovered in the Orogrande Project.
+
+ 
+
+In
+addition to the Orogrande Project, we also have an interest in our Hazel Project in Tom Green County and Sterling County, Texas. In August
+2020, our subsidiaries entered into the Option Agreement with MHP (the Option Agreement ), under which, in exchange for
+satisfying certain drilling obligations, MHP had the option to purchase the entire Hazel Project. The option to purchase the entire acreage
+block was extended to September 30, 2021 and at such time MHP determined not to exercise the purchase option; however, MHP is entitled
+to receive, as its sole recourse for the recoupment of drilling costs, the revenue from production of the well attributable to our interest
+until such time as it has recovered its reasonable costs and expenses for drilling, completing and operating the well. Operations continue
+under the Option Agreement until such time as the revenue from the project equates to the dollars spent by, and shall be reimbursed to,
+MHP. At such time, any acreage held by production and all wells will revert back to our subsidiary, Torchlight Hazel, LLC.
+
+ 28
+
+ 
+
+ 
+
+Our
+principal executive offices are located at 6300 Ridglea Place, Suite 950, Fort Worth, TX 76116. The telephone number of our principal
+executive offices is (432) 684-0018.
+
+ 
+
+Key
+Business Attributes
+
+ 
+
+Experienced
+People. We have two part-time employees and we expect to engage consultants for various roles as needed including high quality exploration
+and technical partners. We plan to build on the expertise and experiences of our management team and seek guidance from outside advisors
+as well as our Board.
+
+ 
+
+Project
+Focus. We are focusing primarily on exploitation projects. We may pursue high risk exploration prospects which may appear less favored
+than low risk exploration. We will, however, consider these high risk- high reward exploration prospects in connection with exploitation
+opportunities in a project that would reduce the overall project economic risk. We will consider such high risk-high reward prospects
+on their individual merits.
+
+ 
+
+Lower
+Cost Structure. We will attempt to maintain the lowest possible cost structure, enabling the greatest margins and providing opportunities
+for investment that would not be feasible for higher cost competitors.
+
+ 
+
+Limit
+Capital Risks. Limited capital exposure is planned initially to add value to a project and determine its economic viability. Management
+has experience in successfully managing risks of projects, finance, and value.
+
+ 
+
+Business
+Processes
+
+ 
+
+We
+believe there are three principal business processes that we must follow to enable our operations to be profitable. Each major business
+process offers the opportunity for a distinct partner or alliance as we grow. These processes are:
+
+ 
+
+ 
+ 
+ 
+ Investment
+ Evaluation and Review;
+
+ 
+ 
+
+ 
+ 
+ 
+ Operations
+ and Field Activities; and
+
+ 
+ 
+
+ 
+ 
+ 
+ Administrative
+ and Finance Management.
+
+ 
+ 
+
+Investment
+Evaluation and Review. This process is the key ingredient to our success. Recognition of quality investment opportunities is the
+fuel that drives our engine. Broadly, this process includes the following activities: prospect acquisition, regional and local geological
+and geophysical evaluations, data processing, economic analysis, lease acquisition and negotiations, permitting, and field supervision.
+We expect these evaluation processes to be managed by our management team. Expert or specific technical support will be outsourced as
+needed.
+
+ 
+
+Operations
+and Field Activities. This process begins following management approval of an investment. Well site supervision, construction, drilling,
+logging, product marketing, and transportation are examples of some of these activities. We prefer to be the operator where possible.
+
+ 
+
+Administrative
+and Finance Management. This process coordinates our initial structuring and capitalization, general operations and accounting, reporting,
+audit, banking and cash management, regulatory agencies reporting and interaction, timely and accurate payment of royalties, taxes, leases
+rentals, vendor accounts and performance management that includes budgeting and maintenance of financial controls, and interface with
+legal counsel and tax and other financial and business advisors.
+
+ 
+
+Current
+Projects
+
+ 
+
+As
+of June 30, 2024, we had interests in four oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project
+in Sterling, Tom Green, and Irion Counties, Texas, the Oklahoma Properties, and the Wildcat Projects. See the description under Current
+Projects below under Note 4, Oil & Natural Gas Properties, of the financial statements included with this prospectus
+for information and disclosure regarding these projects, which description is incorporated herein by reference.
+
+ 29
+
+ 
+
+ 
+
+Our
+Properties
+
+ 
+
+Our
+principal executive office is located at 6300 Ridglea Place, Suite 950, Fort Worth, TX 76116. We have no formal lease for the use of
+these premises, which we believe are adequate for our current needs.
+
+ 
+
+The
+oil and natural gas projects consisting of unevaluated and undeveloped properties in progress of development for future production as
+of June 30, 2024 are summarized as follows:
+
+ 
+
+ 
+ 
+ 
+ Total
+ Acres
+ 
+ 
+ Developed
+ Acres
+ 
+ 
+ Undeveloped
+ Acres
+ 
+
+ 
+ 
+ 
+ Gross
+ 
+ 
+ Net
+ 
+ 
+ Gross
+ 
+ 
+ Net
+ 
+ 
+ Gross
+ 
+ 
+ Net
+ 
+
+ 
+ Texas 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Orogrande
+ Project
+ 
+ 
+ 134,000
+ 
+ 
+ 
+ 134,000
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 134,000
+ 
+ 
+ 
+ 134,000
+ 
+
+ 
+ Hazel
+ Project
+ 
+ 
+ 12,203
+ 
+ 
+ 
+ 9,762
+ 
+ 
+ 
+ 320
+ 
+ 
+ 
+ 256
+ 
+ 
+ 
+ 11,883
+ 
+ 
+ 
+ 9,506
+ 
+
+ 
+ Oklahoma 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Viking
+ 
+ 
+ 640
+ 
+ 
+ 
+ 192
+ 
+ 
+ 
+ 640
+ 
+ 
+ 
+ 192
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Louisiana 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Wildcat
+ projects
+ 
+ 
+ 1,392
+ 
+ 
+ 
+ 1,392
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 1,392
+ 
+ 
+ 
+ 1,392
+ 
+
+ 
+ Total
+ 
+ 
+ 148,235
+ 
+ 
+ 
+ 145,346
+ 
+ 
+ 
+ 960
+ 
+ 
+ 
+ 448
+ 
+ 
+ 
+ 147,275
+ 
+ 
+ 
+ 144,898
+ 
+
+ 
+ 
+
+Investments
+to support our oil and natural gas properties during the six months ended June 30, 2024 and 2023 were $31,769 and $7,853,902, respectively.
+
+ 
+
+ 
+ 
+ 
+ June
+ 30,
+
+ 
+
+ 2024
+
+ 
+
+ 
+ 
+ December
+ 31,
+
+ 
+
+ 2023
+
+ 
+
+ 
+
+ 
+ Evaluated
+ costs subject to amortization
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Unevaluated
+ costs
+ 
+ 
+ 109,586,181
+ 
+ 
+ 
+ 107,910,429
+ 
+
+ 
+ Total
+ capitalized costs
+ 
+ 
+ 109,586,181
+ 
+ 
+ 
+ 107,910,429
+ 
+
+ 
+ Less
+ accumulated depreciation, depletion and amortization
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Less
+ accumulated impairment
+ 
+ 
+ (109,368,390)
+ 
+ 
+ 
+ (107,910,429)
+ 
+
+ 
+ Total
+ oil and gas properties
+ 
+ $
+ 217,791
+ 
+ 
+ $
+ 
+ 
+
+ 
+ 
+
+Our
+cumulative investment in oil and natural gas properties from inception to June 30, 2024 totals $109 million. For financial statement
+purposes, impairment adjustments have been made in prior periods, and at June 30, 2024, to reduce the balance sheet value of the Orogrande
+Projects to $-0-.
+
+ 
+
+ 
+ 
+ 
+ Six
+ Months Ended
+ 
+
+ 
+ 
+ 
+ June
+ 30,
+ 
+
+ 
+ 
+ 
+ 2024
+ 
+ 
+ 2023
+ 
+
+ 
+ Property
+ acquisition costs
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Development
+ costs
+ 
+ 
+ 31,769
+ 
+ 
+ 
+ 7,853,902
+ 
+
+ 
+ Exploratory
+ costs
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Totals
+ 
+ $
+ 31,769
+ 
+ 
+ $
+ 7,853,902
+ 
+
+ 
+ 
+
+Property
+development costs presented above exclude interest capitalized into the full cost pool. For the year ended December 31, 2023, we capitalized
+$2,498,184 of interest on unevaluated properties. Capitalized interest for the six months ended June 30, 2024 was $1,438,571.
+
+ 30
+
+ 
+
+ 
+
+ The
+development costs include work in the Orogrande Project in West Texas and for 2023 and for the six months ended June 30, 2024. We made
+progress during 2023 to develop proved producing reserves in the Orogrande Project in the Permian Basin in West Texas, which has not
+yet resulted in hydrocarbon production. We incurred costs of $9.7 million in 2023 related to certain drilling activity carried out to
+remain in compliance with all aspects of our lease obligations and to satisfy the continuous drilling clause under the agreement with
+University Lands, whereby we are obligated to satisfy certain minimum yearly requirements that may be exceeded if desired. No development
+costs were incurred in 2023 or 2024 to date for the Oklahoma Properties. During the fiscal years ended December 31, 2023 and 2022, development
+and exploratory net wells were drilled as set forth in the table below.
+
+ 
+
+Drilling
+Activity Summary
+
+ 
+
+ 
+ 
+ 
+ December
+ 31,
+ 
+
+ 
+ 
+ 
+ 2023
+ 
+ 
+ 2022
+ 
+
+ 
+ Hazel
+ Project (Texas)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Dry
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+
+ 
+ Productive
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+
+ 
+ Orogrande
+ Project (Texas)
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Dry
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+
+ 
+ Productive
+ 
+ 
+ 10
+ 
+ 
+ 
+ 0
+ 
+
+ 
+ 
+
+During
+2022, we completed pre-drilling and development activity for our 2022 drilling program, including surveying, permitting, road and pad
+site work and initial drilling at an aggregate cost of $3,583,235 and satisfied our 2022 drilling obligations as of March 31, 2023, pursuant
+to an extension granted by University Lands for the 2022 drilling requirement.
+
+ 
+
+Effective
+as of October 6, 2023, the Company and certain investor participants (each a Participant and collectively the Participants )
+entered into twenty-five separate Participation Agreements (the Participation Agreements ) to conduct drilling of wells
+in the Company s approximately 17,000-acre Johnson Prospect in Hudspeth County, Texas, which is a portion of our Orogrande Project.
+The Participation Agreements and related Operating Agreement required, among other things, that Hudspeth and the Company drill and complete
+at least five (5) vertical wells by December 31, 2023, unless the term of the Participation Agreement is extended. The wells were
+completed by December 31, 2023 in full satisfaction of the 2023 drilling requirement.
+
+ 
+
+ 
+ 
+ 
+ June
+ 30, 2024
+ 
+ December
+ 31, 2023
+ 
+ December
+ 31, 2022
+ 
+
+ 
+ 
+ 
+ Gross
+ 
+ Net
+ 
+ Gross
+ 
+ Net
+
+ 
+
+ 
+ Gross
+ 
+ 
+ Net
+ 
+
+ 
+ Productive
+ Wells
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oil
+ 
+ 7.00
+ 
+ 2.67
+ 
+ 
+ 7.00
+ 
+ 
+ 2.67
+ 
+ 
+ 5.00
+ 
+ 
+ 
+ 2.67
+ 
+
+ 
+ Gas
+ 
+ 7.00
+ 
+ 2.66
+ 
+ 
+ 7.00
+ 
+ 
+ 2.66
+ 
+ 
+ 4.00
+ 
+ 
+ 
+ 2.66
+ 
+
+ 
+ Test
+ Wells
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Salt
+ Water Disposal
+ 
+ 3.00
+ 
+ 2.13
+ 
+ 
+ 3.00
+ 
+ 
+ 2.13
+ 
+ 
+ 3.00
+ 
+ 
+ 
+ 2.13
+ 
+
+ 
+ Fresh
+ Water Supply
+ 
+ 3.00
+ 
+ 2.00
+ 
+ 
+ 3.00
+ 
+ 
+ 2.00
+ 
+ 
+ 3.00
+ 
+ 
+ 
+ 2.00
+ 
+
+ 
+ Plug
+ & Abandon
+ 
+ 5.00
+ 
+ 3.87
+ 
+ 
+ 5.00
+ 
+ 
+ 3.87
+ 
+ 
+ 5.00
+ 
+ 
+ 
+ 3.87
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+Well
+status as of December 31, 2023 includes the five wells drilled under the Participation Agreements and which satisfied the 2023 drilling
+requirement. Since the Participants hold the working interest in those wells until payout, the Net Interest is unchanged from 2022.
+
+ 
+
+With
+the principal goal of gathering scientific data from a strategy of drilling test wells, all wells were drilled with the intent of being
+completed and productive for hydrocarbons. Two horizontal wells were successfully completed for hydrocarbons through the 2020 drilling
+program, however as of June 30, 2024 both wells remain shut-in waiting for hook-up to a gas pipeline. The various wells drilled on the
+Orogrande Project through 2023 confirmed that there are at least five potential distinct reservoirs under our acreage. While these wells
+may have potential to produce hydrocarbons to sell commercially in the future, due to capital constraints we have no immediate plans
+to deploy the capital necessary to sell production from these wells to third parties. Instead, we plan to use the results from these
+wells to determine our drilling plans for future wells, including well locations, target depths and designated acreage, in the Orogrande
+Project. The remaining wells can be used for future development for various applications such as re-entering the wellbores for horizontal
+unconventional development, fresh water supply, or salt water disposal and/or plugged and abandoned.
+
+ 31
+
+ 
+
+ 
+
+Production,
+Price, and Production Cost History
+
+ 
+
+Oklahoma
+Properties
+
+ 
+
+During
+the six months ended June 30, 2024, we produced and sold 42 Bbls net to our interest at an average sale price of $70.17 per Bbl. We produced
+and sold 1,448 Mcf of natural gas net to our interest at an average sales price of $1.56 per Mcf. Our average production cost including
+lease operating expenses and direct production taxes was $14.91 per BOE. Our depreciation, depletion, and amortization expense was $-0-
+per BOE.
+
+ 
+
+During
+the year ended December 31, 2023, we produced and sold 244 Bbls net to our interest at an average sale price of $76.50 per Bbl. We produced
+and sold 3,558 Mcf of gas net to our interest at an average sales price of $2.07 per Mcf. Our average production cost including lease
+operating expenses and direct production taxes was $18.90 per BOE. Our depreciation, depletion, and amortization expense was $-0- per
+BOE.
+
+ 
+
+Hazel
+Project
+
+ 
+
+During
+the six months ended June 30, 2024, 3,698 Bbls net to our interest were sold at an average sale price of approximately $79.85 per Bbl,
+although we received none of this revenue because all of it, after deducting expenses to produce the oil, was either received by MHP
+directly during the time that the Option Agreement was in effect or credited towards the recoupment of drilling costs incurred by MHP.
+We produced and sold -0- Mcf of natural gas net to our interest.
+
+ 
+
+During
+the year ended December 31, 2023, 10,860 Bbls net to our interest were sold at an average sale price of approximately $70.99 per Bbl,
+although we received none of this revenue because all of sit, after deducting expenses to produce the oil, was either received by MHP
+directly during the time that the Option Agreement was in effect or credited towards the recoupment of drilling costs incurred by MHP.
+We produced and sold -0- Mcf of natural gas net to our interest.
+
+ 
+
+ 
+ 
+ 
+ December
+ 31, 2023
+ 
+ 
+ December
+ 31, 2023
+ 
+
+ 
+ 
+ 
+ Reserves
+ 
+ 
+ Future
+ Net Revenue (M$)
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ Present
+ Value
+ 
+
+ 
+ Category
+ 
+ Oil
+ (Bbls)
+ 
+ 
+ Gas
+ (Mcf)
+ 
+ 
+ Total
+ (BOE)
+ 
+ 
+ Total
+ 
+ 
+ Discounted
+ at 10%
+ 
+
+ 
+ Net
+ Proved Producing
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 0
+ 
+ 
+ $
+ 0
+ 
+
+ 
+ Net
+ Proved Nonproducing
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Total
+ Net Proved
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Standardized
+ Measure of Future Net Cash Flows Related to Proved Oil and Gas Properties
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Probable
+ Undeveloped
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+
+ 
+
+During
+the year ended December 31, 2022, 22,511 Bbls net to our interest (21,647 for the predecessor period plus 864 for the successor period)
+were sold at an average sale price of approximately $55.98 per Bbl, although we received none of this revenue because all of it, after
+deducting expenses to produce the oil, was either received by MHP directly during the time that the Option Agreement was in effect or
+credited towards the recoupment of drilling costs incurred by MHP. We produced and sold -0- Mcf of natural gas net to our interest.
+
+ 
+
+ 
+ 
+ 
+ December
+ 31, 2022
+ 
+ 
+ December
+ 31, 2022
+ 
+
+ 
+ 
+ 
+ Reserves
+ 
+ 
+ Future
+ Net Revenue (M$)
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ Present
+ Value
+ 
+
+ 
+ Category
+ 
+ Oil
+ (Bbls)
+ 
+ 
+ Gas
+ (Mcf)
+ 
+ 
+ Total
+ (BOE)
+ 
+ 
+ Total
+ 
+ 
+ Discounted
+ at 10%
+ 
+
+ 
+ Net
+ Proved Producing
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 0
+ 
+ 
+ $
+ 0
+ 
+
+ 
+ Net
+ Proved Nonproducing
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Total
+ Net Proved
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Standardized
+ Measure of Future Net Cash Flows Related to Proved Oil and Gas Properties
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Probable
+ Undeveloped
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ 
+
+Net
+producing reserves from 2022 and 2023 were -0- BOE related to the Producing Hazel Wells due to the obligation to pass revenue through
+to MHP under the terms of the Option Agreement effective during both periods. Since we have no reserve value as of June 30, 2024 and
+December 31, 2023, Standardized Measure is not presented.
+
+ 
+
+Due
+to the inherent uncertainties and the limited nature of reservoir data, both proved and probable reserves are subject to change as additional
+information becomes available. The estimates of reserves, future cash flows, and present value are based on various assumptions, including
+those prescribed by the SEC, and are inherently imprecise.
+
+ 32
+
+ 
+
+ 
+
+For
+the six months ended June 30, 2024, we had production revenue of $5,206 compared to $15,765 of production revenue for the prior year
+period. The change in revenue was primarily due to revenue from production sold from the Oklahoma wells. Our cost of revenue, consisting
+of lease operating expenses and production taxes, was $112,547 and $27,645 for the six months ended June 30, 2024 and June 30, 2023,
+respectively. Refer to the table of production and revenue included below for changes in revenue:
+
+ 
+
+ 
+ 
+ 
+ 
+ 
+ Oil
+ 
+ 
+ Gas
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ Production
+ 
+ 
+ Production
+ 
+ 
+ Oil
+ 
+ 
+ Gas
+ 
+ 
+ Total
+ 
+
+ 
+ Property
+ 
+ Quarter
+ 
+ (Bbls)
+ 
+ 
+ (Mcf)
+ 
+ 
+ Revenue
+ 
+ 
+ Revenue
+ 
+ 
+ Revenue
+ 
+
+ 
+ Oklahoma
+ 
+ Q1
+ - 2022
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q1
+ - 2022
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q1-2022
+ 
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+ 
+ $
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q2
+ - 2022
+ 
+ 
+ 97
+ 
+ 
+ 
+ 1,267
+ 
+ 
+ $
+ 9,688
+ 
+ 
+ $
+ 7,716
+ 
+ 
+ $
+ 17,404
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q2
+ - 2022
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q2-2022
+ 
+ 
+ 
+ 
+ 97
+ 
+ 
+ 
+ 1,267
+ 
+ 
+ $
+ 9,688
+ 
+ 
+ $
+ 7,716
+ 
+ 
+ $
+ 17,404
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q3
+ - 2022
+ 
+ 
+ 43
+ 
+ 
+ 
+ 887
+ 
+ 
+ $
+ 4,635
+ 
+ 
+ $
+ 8,329
+ 
+ 
+ $
+ 12,964
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q3
+ - 2022
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q3-2022
+ 
+ 
+ 
+ 
+ 43
+ 
+ 
+ 
+ 887
+ 
+ 
+ $
+ 4,635
+ 
+ 
+ $
+ 8,329
+ 
+ 
+ $
+ 12,964
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q4
+ - 2022
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Predecessor
+ 
+ 
+ 
+ 
+ 28
+ 
+ 
+ 
+ 635
+ 
+ 
+ $
+ 2,473
+ 
+ 
+ $
+ 5,432
+ 
+ 
+ $
+ 7,905
+ 
+
+ 
+ Successor
+ 
+ 
+ 
+ 
+ 15
+ 
+ 
+ 
+ 242
+ 
+ 
+ 
+ 1,276
+ 
+ 
+ 
+ 1,285
+ 
+ 
+ 
+ 2,561
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q4
+ - 2022
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q4-2022
+ 
+ 
+ 
+ 
+ 43
+ 
+ 
+ 
+ 877
+ 
+ 
+ $
+ 3,749
+ 
+ 
+ $
+ 6,717
+ 
+ 
+ $
+ 10,466
+ 
+
+ 
+ Total
+ 2022
+ 
+ 
+ 
+ 
+ 183
+ 
+ 
+ 
+ 3,031
+ 
+ 
+ $
+ 18,072
+ 
+ 
+ $
+ 22,762
+ 
+ 
+ $
+ 40,834
+ 
+
+ 
+ Average
+ Commodity Price
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ $
+ 98.75
+ 
+ 
+ $
+ 7.51
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q1
+ - 2023
+ 
+ 
+ 107
+ 
+ 
+ 
+ 748
+ 
+ 
+ $
+ 8,141
+ 
+ 
+ $
+ 2,783
+ 
+ 
+ $
+ 10,924
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q1
+ - 2023
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q1-2023
+ 
+ 
+ 
+ 
+ 107
+ 
+ 
+ 
+ 748
+ 
+ 
+ $
+ 8,141
+ 
+ 
+ $
+ 2,783
+ 
+ 
+ $
+ 10,924
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q2
+ - 2023
+ 
+ 
+ 43
+ 
+ 
+ 
+ 867
+ 
+ 
+ $
+ 3,195
+ 
+ 
+ $
+ 1,646
+ 
+ 
+ $
+ 4,841
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q2
+ - 2023
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q2-2023
+ 
+ 
+ 
+ 
+ 43
+ 
+ 
+ 
+ 867
+ 
+ 
+ $
+ 3,195
+ 
+ 
+ $
+ 1,646
+ 
+ 
+ $
+ 4,841
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q3
+ - 2023
+ 
+ 
+ 79
+ 
+ 
+ 
+ 1,183
+ 
+ 
+ $
+ 6,184
+ 
+ 
+ $
+ 1,547
+ 
+ 
+ $
+ 7,731
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q3
+ - 2023
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q3-2023
+ 
+ 
+ 
+ 
+ 79
+ 
+ 
+ 
+ 1,183
+ 
+ 
+ $
+ 6,184
+ 
+ 
+ $
+ 1,547
+ 
+ 
+ $
+ 7,731
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q4
+ - 2023
+ 
+ 
+ 15
+ 
+ 
+ 
+ 760
+ 
+ 
+ $
+ 1,146
+ 
+ 
+ $
+ 1,389
+ 
+ 
+ $
+ 2,535
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q4
+ - 2023
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q4-2023
+ 
+ 
+ 
+ 
+ 15
+ 
+ 
+ 
+ 760
+ 
+ 
+ $
+ 1,146
+ 
+ 
+ $
+ 1,389
+ 
+ 
+ $
+ 2,535
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ 2023 
+ 
+ 
+ 
+ 
+ 244
+ 
+ 
+ 
+ 3,558
+ 
+ 
+ $
+ 18,666
+ 
+ 
+ $
+ 7,365
+ 
+ 
+ $
+ 26,031
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Average
+ Commodity Price
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ $
+ 76.50
+ 
+ 
+ $
+ 2.07
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q1
+ - 2024
+ 
+ 
+ 28
+ 
+ 
+ 
+ 809
+ 
+ 
+ $
+ 2,002
+ 
+ 
+ $
+ 1,565
+ 
+ 
+ $
+ 3,567
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q1
+ - 2024
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Wildcat
+ (LA)
+ 
+ Q1
+ - 2024
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q1-2024 
+ 
+ 
+ 
+ 
+ 28
+ 
+ 
+ 
+ 809
+ 
+ 
+ $
+ 2,002
+ 
+ 
+ $
+ 1,565
+ 
+ 
+ $
+ 3,567
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Oklahoma
+ 
+ Q2
+ - 2024
+ 
+ 
+ 14
+ 
+ 
+ 
+ 639
+ 
+ 
+ 
+ 945
+ 
+ 
+ 
+ 694
+ 
+ 
+ $
+ 1,639
+ 
+
+ 
+ Hazel
+ (TX)
+ 
+ Q2
+ - 2024
+ 
+ 
+ 0
+ 
+ 
+ 
+ 0
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ Q2-2024
+ 
+ 
+ 
+ 
+ 14
+ 
+ 
+ 
+ 639
+ 
+ 
+ $
+ 945
+ 
+ 
+ $
+ 694
+ 
+ 
+ $
+ 1639
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total
+ 2024 to date
+ 
+ 
+ 
+ 
+ 42
+ 
+ 
+ 
+ 1448
+ 
+ 
+ $
+ 2947
+ 
+ 
+ $
+ 2259
+ 
+ 
+ $
+ 5206
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Average
+ Commodity Price
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ $
+ 70.17
+ 
+ 
+ $
+ 1.56
+ 
+ 
+ 
+ 
+ 
+
+ 
+
+ 33
+
+ 
+
+ 
+
+Recent
+Developments
+
+ 
+
+Louisiana
+Projects
+
+ 
+
+In
+March 2024, we entered into a Contribution Agreement with Wildcat Partners SPV, LLC, a Delaware limited liability company ( Wildcat
+Partners ), under which Wildcat Partners transferred to us 100% of the issued and outstanding membership interests in each of (a)
+Wildcat Cowboy, LLC, a Texas limited liability company ( Cowboy ), (b) Wildcat Packer, LLC, a Texas limited liability company
+( Packer ), (c) Wildcat Panther, LLC, a Texas limited liability company ( Panther ) and (d) Wildcat Valentine,
+LLC, a Texas limited liability company ( Valentine ). As consideration, we issued to Wildcat Partners 2,500,000 shares of
+our common stock, under the terms and conditions of the Contribution Agreement.
+
+ 
+
+Concurrent
+with the closing of the above transaction with Wildcat Partners, we entered into and closed a Participation Agreement with an unrelated
+party under which we sold working interest in properties from two of the Wildcat entities.
+
+ 
+
+Industry
+and Business Environment
+
+ 
+
+We
+are experiencing a time of fluctuating, but higher oil prices caused by higher demand, lower U.S. supply, turmoil on the world stage
+and OPEC s policies on production. Unfortunately, this is the cyclical nature of the oil and natural gas industry. We experience
+highs and lows that seem to come in cycles. Fortunately, there exists plenty of demand for US onshore oil and natural gas. We believe
+advances in technology drive the US market and we feel this will drive the development costs down on our exploration and drilling programs
+while maintaining favorable economics.
+
+ 
+
+Competition
+
+ 
+
+The
+oil and natural gas industry is intensely competitive, and we will compete with numerous other companies engaged in the exploration and
+production of oil and natural gas. Some of these companies have substantially greater resources than we have. Not only do they explore
+for and produce oil and natural gas, but also many carry on midstream and refining operations and market petroleum and other products
+on a regional, national, or worldwide basis. The operations of other companies may be able to pay more for exploratory prospects and
+productive oil and natural gas properties. They may also have more resources to define, evaluate, bid for, and purchase a greater number
+of properties and prospects than our financial or human resources permit. Our larger or integrated competitors may have the resources
+to be better able to absorb the burden of current and future federal, state, and local laws and regulations more easily than we can,
+which would adversely affect our competitive position. Our ability to locate reserves and acquire interests in properties in the future
+will be dependent upon our ability and resources to evaluate and select suitable properties and consummate transactions in this highly
+competitive environment. In addition, we may be at a disadvantage in producing oil and natural gas properties and bidding for exploratory
+prospects because we have fewer financial and human resources than other companies in our industry. Should a larger and better financed
+company decide to directly compete with us, and be successful in its efforts, our business could be adversely affected.
+
+ 
+
+Marketing
+and Customers
+
+ 
+
+The
+market for oil and natural gas that we will produce depends on factors beyond our control, including the extent of domestic production
+and imports of oil and natural gas, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for
+oil and natural gas, the marketing of competitive fuels, and the effects of state and federal regulation. The oil and natural gas industry
+also competes with other industries in supplying the energy and fuel requirements of industrial, commercial, and individual consumers.
+
+ 
+
+Our
+oil production is expected to be sold at prices tied to the spot oil markets. Our natural gas production is expected to be sold under
+short-term contracts and priced based on first of the month index prices or on daily spot market prices. We will rely on our operating
+partners to market and sell our production.
+
+ 
+
+Governmental
+Regulation and Environmental Matters
+
+ 
+
+Our
+operations are subject to various rules, regulations, and limitations impacting the oil and natural gas exploration and production industry
+as a whole.
+
+ 
+
+Regulation
+of Oil and Natural Gas Production
+
+ 
+
+Our
+oil and natural gas exploration, production, and related operations, when developed, will be subject to extensive rules and regulations
+promulgated by federal, state, tribal, and local authorities and agencies. Certain states may also have statutes or regulations addressing
+conservation matters, including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum
+rates of production from wells, and the regulation of spacing, plugging, and abandonment of such wells. We cover all costs associated
+with the related insurance coverage for such environmental regulatory compliance. Failure to comply with any such rules and regulations
+can result in substantial penalties. The regulatory burden on the oil and natural gas industry will most likely increase our cost of
+doing business and may affect our profitability. Although we believe we are currently in substantial compliance with all applicable laws
+and regulations, because such rules and regulations are frequently amended or reinterpreted, we are unable to predict the future cost
+or impact of complying with such laws. Significant expenditures may be required to comply with governmental laws and regulations and
+may have a material adverse effect on our financial condition and results of operations.
+
+ 34
+
+ 
+
+ 
+
+Environmental
+Matters
+
+ 
+
+Our
+operations and properties are and will be subject to extensive and changing federal, state, and local laws and regulations relating to
+environmental protection, including the generation, storage, handling, emission, transportation, and discharge of materials into the
+environment, and relating to safety and health. In the future, environmental legislation and regulation may trend toward stricter standards.
+These laws and regulations may, for example:
+
+ 
+
+ 
+ 
+ 
+ require
+ the acquisition of a permit or other authorization before construction or drilling commences and for certain other activities;
+
+ 
+ 
+
+ 
+ 
+ 
+ limit
+ or prohibit construction, drilling, and other activities on certain lands lying within wilderness and other protected areas;
+
+ 
+ 
+
+ 
+ 
+ 
+ impose
+ substantial liabilities for pollution resulting from operations; or
+
+ 
+ 
+
+ 
+ 
+ 
+ restrict
+ certain areas from fracking and other stimulation techniques.
+
+ 
+ 
+
+The
+permits required for our operations may be subject to revocation, modification, and renewal by issuing authorities. Governmental authorities
+have the power to enforce their regulations, and violations are subject to fines or injunctions, or both. In the opinion of management,
+we are and will be in substantial compliance with current applicable environmental laws and regulations and have no material commitments
+for capital expenditures to comply with existing environmental requirements. Nevertheless, changes in existing environmental laws and
+regulations or in interpretations thereof could have a significant impact on our company, as well as the oil and natural gas industry
+in general.
+
+ 
+
+CERCLA
+and comparable state statutes impose strict, joint, and several liability on owners and operators of sites and on persons who disposed
+of or arranged for the disposal of hazardous substances found at such sites. It is not uncommon for the neighboring landowners
+and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into
+the environment. RCRA and comparable state statutes govern the disposal of solid waste and hazardous waste 
+and authorize the imposition of substantial fines and penalties for noncompliance. Although CERCLA currently excludes petroleum from
+its definition of hazardous substance, state laws affecting our operations may impose clean-up liability relating to petroleum
+and petroleum related products. In addition, although RCRA classifies certain oil field wastes as non-hazardous, such exploration
+and production wastes could be reclassified as hazardous wastes thereby making such wastes subject to more stringent handling and disposal
+requirements.
+
+ 
+
+The
+Endangered Species Act ( ESA ) seeks to ensure that activities do not jeopardize endangered or threatened animal, fish, and
+plant species, nor destroy or modify the critical habitat of such species. Under the ESA, exploration and production operations, as well
+as actions by federal agencies, may not significantly impair or jeopardize protected species or habitat. The ESA provides for criminal
+and civil penalties for violations. Other statutes that provide protection to animal and plant species and that may apply to our operations
+include, but are not necessarily limited to, the Fish and Wildlife Coordination Act, the Fishery Conservation and Management Act, the
+Migratory Bird Treaty Act and the National Historic Preservation Act. Although we believe that our operations are and will be in substantial
+compliance with such statutes, any change in these statutes or any reclassification of a species as endangered could subject us to significant
+expenses to modify our operations or could force us to discontinue certain operations altogether.
+
+ 
+
+Hydraulic
+fracturing is regulated by state and federal environmental and oil and gas regulatory authorities, including specifically the requirement
+to disclose certain information related to hydraulic fracturing operations. Operators must follow applicable legal requirements for groundwater
+protection and are subject to supervision by state and federal regulators (including the BLM on federal acreage). Furthermore, well construction
+practices require the installation of multiple layers of protective steel casing surrounded by cement that are specifically designed
+and installed to protect freshwater aquifers by preventing the migration of fracturing fluids into aquifers. Regulatory proposals in
+some states and local communities have been initiated to require or make more stringent the permitting and compliance requirements for
+hydraulic fracturing operations. Federal and state agencies have continued to assess the impacts of hydraulic fracturing, which could
+spur further action toward federal and/or state legislation and regulation of hydraulic fracturing activities. In addition, in light
+of concerns about seismic activity being triggered by the injection of produced waters into underground wells and hydraulic fracturing,
+certain regulators are also considering additional requirements related to seismic safety for hydraulic fracturing activities. Further
+restrictions on hydraulic fracturing could make it prohibitive to conduct our operations, and also reduce the amount of oil and natural
+gas that we or our operators are ultimately able to produce from our properties.
+
+ 35
+
+ 
+
+ 
+
+Climate
+Change
+
+ 
+
+Significant
+studies and research have been devoted to climate change and global warming, and climate change has developed into a major political
+issue in the United States and globally. Certain research suggests that greenhouse gas emissions contribute to climate change and pose
+a threat to the environment. Recent scientific research and political debate has focused in part on carbon dioxide and methane incidental
+to oil and natural gas exploration and production. Many states and the federal government have enacted legislation directed at controlling
+greenhouse gas emissions, and future legislation and regulation could impose additional restrictions or requirements in connection with
+our drilling and production activities and favor use of alternative energy sources, which could affect operating costs and demand for
+oil products. As such, our business could be materially adversely affected by domestic and international legislation targeted at controlling
+climate change.
+
+ 
+
+Legal
+Proceedings
+
+ 
+
+On
+April 30, 2020, the Company s wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
+( Cordax ). The suit, Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies,
+was filed in the 189th Judicial District Court of Harris County, Texas. The suit seeks the recovery of approximately $1.4 million in
+costs incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located in the
+Orogrande Field. Wolfbone, a subsidiary of the Company, is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral
+lien in the amount of $104,500 against the Orogrande Field and has sued the operator and counterclaimed against Hudspeth for breach of
+contract, seeking the same amount as the lien. Meta, as the Company s parent at the time, determined to add the manufacturer of
+one of the tool components that it contends was one of the causes of the tool failure. It was later disclosed that Cordax is the subsidiary
+of a Canadian parent company, who has also been added to the case. Cordax s current Chairman of the Board filed a special appearance
+after being served with a citation, alleging that he was a Canadian citizen with no meaningful ties to Texas. After discovery was conducted
+on this issue, a nonsuit without prejudice for this defendant was filed, dismissing him from the case. The remaining parties attended
+mediation on June 15, 2022, that was unsuccessful in resolving the case. Cordax filed a motion for summary judgment, attempting to dismiss
+Hudspeth and Wolfbone s claims. The Court denied Cordax s motion. Discovery is substantially complete. The Company is required
+to indemnify Meta in connection with this matter pursuant to the terms of the Distribution Agreement with Meta entered into in connection
+with the consummation of the Spin-Off. Prior to trial, in 2024, the parties settled the case. As soon as Cordax fulfills its payment
+obligations to Hudspeth (the amount of which is confidential), the Harris County case will be dismissed with prejudice. Cordax s
+releases of Hudspeth and Wolfbone were effective when the Settlement Agreement was signed, May 16, 2024.
+
+ 
+
+On
+March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in
+the amount of $104,500.01 and recover related attorney s fees. The foreclosure action, Datalog LWT Inc. d/b/a Cordax Evaluation
+Technologies v. Torchlight Energy Resources, Inc., was filed in the 205th Judicial District Court of Hudspeth County, Texas. The
+Company is contesting the lien in good faith and filed a Plea in Abatement on May 10, 2021, seeking a stay in the Hudspeth County lien
+foreclosure case pending final disposition of the related case currently pending in Harris County, Texas. The Company is required to
+indemnify Meta in connection with this matter pursuant to the terms of the Distribution Agreement with Meta. As part of the settlement
+in the Harris County case, Cordax has released the mineral lien, and the case has been dismissed with prejudice.
+
+ 
+
+During
+June 2024, $306,554 was received as the initial settlement payment arising from the Cordax matter. Additional settlement funds in an
+amount to be determined will be forthcoming.
+
+ 
+
+On March 15, 2024, a securities class action captioned Targgart v. Next Bridge Hydrocarbons,
+Inc., et al., No. 24-cv-1927, was filed in the U.S. District Court for the Eastern District of New York. The action is brought on
+behalf of a putative class of persons or entities that acquired the Company s shares in connection with the Company s spin-off
+from Meta, in December 2022. The complaint names as defendants the Company and certain of its current and former officers and directors.
+The complaint asserts claims under Sections 11 and 15 of the Securities Act, alleging that the Form S-1 that the Company filed with the
+SEC on July 14, 2022, which became effective on November 18, 2022, contained untrue statements or omissions. The complaint seeks, among
+other things, unspecified statutory and compensatory damages.
+
+ 
+
+On
+May 7, 2024, a stockholder derivative petition captioned Bartok v. Greg McCabe, et al., No. 017-352565-24, was filed in the District
+Court of Tarrant County, Texas. The petition names the Company as a nominal defendant and asserts breach of fiduciary duty and other
+assorted claims against current and former officers and directors of the Company and of Meta. The stockholder makes allegations about
+the defendants conduct in the Company s 2022 spin-off from Meta and alleges continuing breaches by failing to correct allegedly
+misleading statements made in connection with the spin-off.
+
+ 36
+
+ 
+
+ 
+
+MANAGEMENT S
+DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
+
+ 
+
+The
+following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited
+and unaudited financial statements and related notes that are included elsewhere in this prospectus. Some of the information contained
+in this discussion and analysis constitutes forward-looking statements that involve risks and uncertainties. Actual results could differ
+materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include,
+but are not limited to, those discussed below and elsewhere in this prospectus, particularly under the section titled
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001937692_goodfaith_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001937692_goodfaith_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001937692_goodfaith_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001937730_tesspay_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001937730_tesspay_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d89e7777f41fbe555a907e577c678b603852e682
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001937730_tesspay_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1 RISK FACTORS 10 INFORMATION REGARDING FORWARD-LOOKING STATEMENTS 27 INDUSTRY AND MARKET DATA 28 USE OF PROCEEDS 29 DIVIDEND POLICY 30 CAPITALIZATION 30 DILUTION 31 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33 BUSINESS 39 MANAGEMENT 49 EXECUTIVE AND DIRECTOR COMPENSATION 54 CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS 58 PRINCIPAL STOCKHOLDERS 59 DESCRIPTION OF CAPITAL STOCK 61 SHARES ELIGIBLE FOR FUTURE SALE 63 MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS OF OUR COMMON STOCK 64 UNDERWRITING 68 LEGAL MATTERS 73 EXPERTS 73 WHERE YOU CAN FIND MORE INFORMATION 73 INDEX TO FINANCIAL STATEMENTS F-1 We have not, and the underwriters have not, authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give to you. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common stock. You should rely only on the information contained in this prospectus. No dealer, salesperson or other person is authorized to give information that is not contained in this prospectus. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of these securities. All trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the and TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. PROSPECTUS SUMMARY The following summary highlights selected information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. It does not contain all the information that may be important to you and your investment decision. You should carefully read this entire prospectus, including the matters set forth under
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001939696_etao_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001939696_etao_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001939696_etao_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0001962144_brilliance_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001962144_brilliance_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..db45f7686b487485a97f8372c927a7564ff43854
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001962144_brilliance_prospectus_summary.txt
@@ -0,0 +1,63 @@
+Prospectus Summary Implications of Being an Emerging Growth Company and a Foreign Private Issuer for additional information.
+ 
+ Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
+ 
+ 
+ 
+ PER SHARE
+ 
+ TOTAL
+
+ Initial public offering price
+ 
+ $
+ $
+ 
+
+ Underwriting discounts(1)(2)
+ 
+ $
+ $
+ 
+
+ Proceeds, before expenses, to us(3)
+ 
+ $
+ $ 
+ 
+
+ ____________ 
+ (1) The underwriters will receive compensation in addition to the discounts. For a description of compensation payable to the underwriters, see Underwriting beginning on page 131. 
+ (2) Does not include a non-accountable expense allowance equal to one percent of the gross proceeds received by us from the sale of the shares, payable to the underwriters, or the reimbursement of certain expenses of the underwriters. 
+ For a description of other terms of compensation to be received by the underwriters, see Underwriting beginning on page 131. 
+ (3) In addition to the underwriting discounts listed above, we have agreed to issue, upon closing of this offering, warrants to Network 1 Financial Securities, Inc., as representative of the several underwriters (the Representative ), exercisable after the date of issuance and for a five-year period, entitling the representative to purchase 9% of the total number of Ordinary Shares sold in this offering (including any Ordinary Shares sold as a result of the exercise of the underwriters over-allotment option) at a per share price equal to 125% of the public offering price (the Representative s Warrants ). The registration statement of which this prospectus is a part also covers the Representative s Warrants and the Ordinary Shares issuable upon the exercise thereof. See Underwriting for additional information regarding total underwriter compensation.
+ 
+ We expect our total cash expenses for this offering (including cash expenses payable to our underwriters for their out-of-pocket expenses) to be approximately US$2,588,000, exclusive of the above discounts. These payments will further reduce proceeds available to us before expenses. See Underwriting. 
+ 
+ Upon closing of this offering, we have agreed to issue to the Representative as compensation Representative s Warrants to purchase up to 225,000 Ordinary Shares (9.0% of the aggregate number of Ordinary Shares sold in this offering, including any Ordinary Shares sold upon the exercise of the over- allotment option, if any). The Representative s Warrants will be exercisable at a per share exercise price equal to 125% of the public offering price per share in this offering. The Representative s Warrants are exercisable at any time and from time to time, in whole or in part, during five (5) year period after their issuance. The Representative s Warrants contain a cashless exercise provision. See Representative s Warrants. 
+ 
+ We will not consummate and close this offering without a listing approval letter from Nasdaq Capital Market. This offering is being conducted on a firm commitment basis. The underwriters are obligated to take and pay for all of the shares if any such shares are taken. We have granted the underwriters an option for a period of forty-five (45) days after the closing of this offering to purchase up to 15% of the total number of our Shares to be offered by us pursuant to this offering (excluding shares subject to this option), solely for the purpose of covering over-allotments, at the initial public offering price less the underwriting discounts and commissions. If we complete this offering, net proceeds will be delivered to us on the closing date. 
+ 
+ The underwriters expect to deliver the shares to purchasers against payment on [ ], 2024. 
+ 
+ 
+ Network 1 Financial Securities, Inc.
+ 
+ The date of this prospectus is , 2024. 
+ 
+ 
+ 2
+ 
+
+ 
+ 
+ TABLE OF CONTENTS
+ 
+ 
+ 
+ Page
+ 
+
+ PROSPECTUS SUMMARY
+ 
+ 7
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0001966494_cargo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001966494_cargo_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6fd1b31a26ec10bc1fd1e216e073634da63e7929
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001966494_cargo_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus summary 1
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0001969108_veg-house_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001969108_veg-house_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..64365102c043a0820c61d79045c0a29824c4b30e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001969108_veg-house_prospectus_summary.txt
@@ -0,0 +1,214 @@
+Prospectus Summary. These risks include, but are not limited to, the following:
+
+ 
+
+Risks Related to Our Business and Industry
+
+ 
+
+ Our
+ founder and special advisor, Sean Dollinger, has been the subject of a compliance review
+ that was initiated by the British Columbia Securities Commission, and has not formally been
+ concluded, in connection with the sale of a subsidiary by Namaste Technologies Inc. when
+ Mr. Dollinger was the Chief Executive Officer there, which was also the subject of a class
+ action proceeding settled in New York in 2019 and Ontario in 2020 for insurance value, and
+ if the British Columbia Securities Commission or any other regulatory agency takes additional
+ action against Mr. Dollinger, our business could be materially adversely affected.
+
+ 
+
+ If
+ we fail to successfully improve our customer experience, including by continuing to develop
+ new product offerings and enhancing our existing product offerings, our ability to attract
+ new customers and retain existing customers may be materially adversely affected.
+
+ 
+
+ If
+ the products we sell are not safe or otherwise fail to meet our customers expectations,
+ we could lose customers, incur liability for any injuries suffered by customers using or
+ consuming a product we sell or otherwise experience a material impact to our brand, reputation
+ and financial performance. We are also subject to reputational and other risks related to
+ third-party sales on our digital platforms.
+
+ 
+
+ Food
+ safety and food-borne illness incidents or advertising or product mislabeling may materially
+ adversely affect our business by exposing us to lawsuits, product recalls or regulatory enforcement
+ actions, increasing our operating costs and reducing demand for our product offerings.
+
+ 
+
+ Changes
+ in consumer tastes and preferences or in consumer spending due to inflation or otherwise,
+ and other economic or financial market conditions could materially adversely affect our business.
+
+ 
+
+ Our
+ ability to source quality ingredients and other products is critical to our business, and
+ any disruption to our supply or supply chain could materially adversely affect our business.
+
+ 
+
+ The
+ reliable and cost-effective storage, transport and delivery of ingredients and our other
+ product offerings is critical to our business, and any interruptions, delays or failures
+ could materially adversely affect our reputation, business, financial condition and operating
+ results.
+
+ 
+
+ Any
+ failure to adequately store, maintain and deliver quality perishable foods could materially
+ adversely affect our business, financial condition and operating results.
+
+ 
+
+ Our
+ growth strategy may involve mergers and acquisitions, which could be difficult to implement
+ and may disrupt our business or change our business profile significantly.
+
+ 
+
+ 
+ Our auditor has expressed substantial
+ doubt about our ability to continue as a going concern.
+
+ 
+
+ 
+
+Risks Related to Government Regulation and Being a Public Company
+
+ 
+
+ We
+ are subject to extensive governmental regulations, which require significant expenditures
+ and ongoing compliance efforts.
+
+ 
+
+ Even
+ inadvertent, non-negligent or unknowing violations of federal, state or local regulatory
+ requirements could expose us to adverse governmental action and materially adversely affect
+ our business, financial condition and operating results.
+
+ 
+
+ Changes
+ to law, regulation, or policy applicable to foods could leave us vulnerable to adverse governmental
+ action and materially adversely affect our business, financial condition and operating results.
+
+ 
+
+ Our
+ facilities and operations are governed by numerous and sometimes conflicting registration,
+ licensing and reporting requirements.
+
+ 
+
+ 17 
+
+ 
+
+ 
+
+ 
+
+ Government
+ regulation of the Internet, e-commerce and other aspects of our business is evolving, and
+ we may experience unfavorable changes in or failure to comply with existing or future regulations
+ and laws.
+
+ 
+
+ Our
+ business is subject to certain laws regarding data protection, privacy, and information security,
+ as well as confidentiality obligations under various agreements, and our actual or perceived
+ failure to comply with such obligations could damage our reputation, expose us to litigation
+ risk and adversely affect our business and operating results.
+
+ 
+
+ We
+ operate in non-United States markets and are subject to the United States Foreign Corrupt
+ Practices Act, or the FCPA, as well anti-corruption laws and regulations in other countries.
+ Violations of these laws and regulations could have a material adverse effect on our business,
+ financial condition and results of operations.
+
+ 
+
+ The
+ requirements of being a public company may strain our resources.
+
+ 
+
+ We
+ will incur increased costs as a result of operating as a public company, and our management
+ will be required to devote substantial time to new compliance initiatives and corporate governance
+ practices.
+
+ 
+
+Risks Related to This Offering and Ownership of Our Common Shares
+
+ 
+
+ There
+ has been no public market for our Common Shares prior to this Offering, and an active market
+ in which investors can resell their shares may not develop.
+
+ 
+
+ Certain
+ recent initial public offerings of companies with relatively small public floats comparable
+ to our anticipated public float have experienced extreme volatility that was seemingly unrelated
+ to the underlying performance of the respective company. Our Common Shares may potentially
+ experience rapid and substantial price volatility, which may make it difficult for prospective
+ investors to assess the value of our Common Shares.
+
+ 
+
+ You
+ will experience immediate and substantial dilution as a result of this offering.
+
+ 
+
+ We
+ are a Cayman Islands exempted company and, because judicial precedent regarding the rights
+ of shareholders is more limited under Cayman Islands law than that under U.S. law, you may
+ have less protection for your shareholder rights than you would under U.S. law.
+
+ 
+
+ You
+ may face difficulties in protecting your interests, and your ability to protect your rights
+ through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
+
+ 
+
+ There
+ are anti-takeover provisions in our post-offering amended and restated memorandum and articles
+ of association that may cause conflicts of interest with our shareholders.
+
+ 
+
+ As
+ we are incorporated under the laws of the Cayman Islands, and the Cayman Islands has recently
+ been added to the EU AML high-risk third countries list, it is unclear if and how this designation
+ will impact us.
+
+ 
+
+ As
+ we are a "foreign private issuer" and intend to follow certain home country corporate
+ governance practices, our shareholders may not have the same protections afforded to shareholders
+ of companies that are subject to all Nasdaq corporate governance requirements. There is a
+ risk that we will be a passive foreign investment company for any taxable year, which could
+ result in adverse U.S. federal income tax consequences to U.S. investors in our shares.
+
+ 
+
+ 18
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0001978111_naploy_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001978111_naploy_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..b5f41b064bb5b450d76f2df4547ca897ebe2b680
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001978111_naploy_prospectus_summary.txt
@@ -0,0 +1 @@
+II-4 SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, on February 02, 2024. Naploy Corp., Registrant By: /s/ Frederick Sidney Reinhard Arnold Frederick Sidney Reinhard Arnold, President, Secretary, Treasurer, Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer and Director By /s/ Rafael Angel Ulloa Bonilla Rafael Angel Ulloa Bonilla, Director Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Dated: February 02, 2024 By: /s/ Frederick Sidney Reinhard Arnold Frederick Sidney Reinhard Arnold, President, Secretary, Treasurer, Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer and Director By /s/ Rafael Angel Ulloa Bonilla Rafael Angel Ulloa Bonilla, Director II-5
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0001981334_innovex_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0001981334_innovex_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e0e306bd464513ff60d14160e0f32598e8d71ffc
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0001981334_innovex_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary provides a brief overview of information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before making an investment decision with respect to our common stock. You should read the entire prospectus carefully, including the financial statements and the notes to those financial statements included in this prospectus. Unless indicated otherwise, the information presented in this prospectus assumes (i) an initial public offering price of $ per share of common stock (the midpoint of the price range set forth on the cover page of this prospectus), (ii) that the underwriters do not exercise their option to purchase additional shares of common stock, and (iii) other than in the consolidated financial statements and related notes included elsewhere in this prospectus, the consummation of a stock split prior to the completion of this offering pursuant to which each share of common stock held of record by the holder thereof will be reclassified into approximately shares of common stock (the Stock Split ). You should read Risk Factors for more information about important risks that you should consider carefully before buying our common stock. Unless the context otherwise requires or as otherwise indicated, references in this prospectus to the Company, Innovex, we, our and us, or like terms, refer to Innovex Downhole Solutions, Inc. and its consolidated subsidiaries. We have provided definitions for some of the terms we use to describe our business and industry and other terms used in this prospectus in the Glossary of Selected Terms beginning on page A-1 of this prospectus. Overview Innovex designs, manufactures, sells and rents mission critical engineered products to the global oil and natural gas industry. Our vision has been to create a global leader in well-centric products and technologies through organic, customer-linked innovations and disciplined acquisitions to drive leading returns for our investors. Our products are used across the lifecycle of the well (during the construction, completion, production and intervention phases) and are typically utilized downhole and consumable in nature. Our products perform a critical well function, and we believe they are chosen due to their reliability and capacity to save our customers time and lower costs during the well lifecycle. We believe that our products have a significant impact on a well s performance and economic profile relative to the price we charge, creating a Big Impact, Small Ticket value proposition. The majority of our 2022 revenue came from product families that we believe hold a top three competitive position in their primary markets based on our total addressable market ( TAM ) estimates. We estimate that our TAM for our applicable products across the NAM (as defined herein) market was approximately $2.0 billion in 2022 and $1.6 billion in 2021. We have a growing presence across our International and Offshore (as defined herein) markets and estimate that the TAM for our applicable products across these regions was approximately $2.2 billion in 2022 and $2.0 billion in 2021. Please see Business Our Organic Growth Strategy for an explanation of how we calculate our TAM. Many of our products can be used in a significant portion of our customers wells globally, with our most advanced products providing mission critical solutions for some of the most challenging and complex wells in the world. We have a track record of developing proprietary products to address our customers evolving needs, and we maintain an active pipeline of potential new products across various stages of development. Our business is high margin and capital-light, enabling us to generate strong returns on invested capital. We have a disciplined history of successfully sourcing and integrating strategic acquisitions. Table of Contents About this Prospectus We have not, and the underwriters have not, authorized any other person to provide you with information different from that contained in this prospectus and any free writing prospectus. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are not, and the underwriters are not, making an offer to sell the securities described herein in any jurisdiction where an offer or sale is not permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date. This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. See Risk Factors and Cautionary Statement Regarding Forward-Looking Statements. Presentation of Financial and Operating Data Results of interim periods are not indicative of the results expected for a full year or for future periods. Historical financial and operating information is not indicative of the results that may be expected in any future periods. For more information, please see the historical consolidated financial statements and related notes thereto included elsewhere in this prospectus. Industry and Market Data The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, government publications and other published independent sources, including Rystad Energy and the International Energy Agency ( IEA ), as well as publicly available information. The Rystad Energy forecasts for oil and natural gas production, E&P capital spending and well drilling activity used throughout this prospectus are based on Rystad Energy s expected outlook as of January 2024, assuming Brent crude oil per barrel prices of $85 in 2024 and 2025, respectively. In some cases, we do not expressly refer to the sources from which this data is derived. Although we believe that these third-party sources are reliable as of their respective dates, neither we nor the underwriters have independently verified the accuracy or completeness of this information. Some data is also based on our good faith estimates. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled Risk Factors. These and other factors could cause results to differ materially from those expressed in these publications. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. Trademarks and Trade Names We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply, a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the , TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names. Table of Contents The Innovex Wellbore Innovex Overview Note: Not to scale; not inclusive of all products sold by Innovex. We are a global company, and in 2022, we sold products in approximately 65 countries. The U.S. and Canadian onshore market (together, NAM ) made up approximately 71% of our 2022 revenue, while the international and offshore markets (together, International and Offshore ) constituted 29%. Within the NAM market, we have a strong presence in the United States and a growing presence in Canada. The Permian Basin is our largest operating region within this market, making up over half of our 2022 NAM revenue. The NAM market is core to us, and we maintain a robust sales and distribution infrastructure across the region. Our products have broad applicability in this market, particularly for horizontal or unconventional wells that have become prevalent methods of oil and natural gas development across the region. We are focused on significantly increasing our revenue from the International and Offshore markets as these regions are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. The Middle East, and in particular Saudi Arabia, has been a key source of growth for the Company and has become our largest International and Offshore market. We also operate across Latin America, Europe and the U.S. Gulf of Mexico, among other regions. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners. Table of Contents 2022 Percentage of Revenue by Market Global Geographic Footprint Note: Above locations do not represent an exhaustive list. Strategic Partners include our network of distribution, sales and manufacturing partners. We are an innovator and have a development process and culture focused on creating proprietary products for our customers. Approximately 51% of our 2022 revenue was derived from products that we developed internally. We seek to work with our customers to solve their operational challenges. We believe that these collaborations have been a source of growth as they have allowed us to develop new products with anchor customers that have served as an initial revenue base from which to scale. We have a unique culture that we view as having been critical to our success in the commercialization of new products. We define our culture as No Barriers. Our goal is to remove internal barriers that slow the pace of innovation and empower our employees to be responsive to our customers needs, while maintaining a focus on returns for the Company. As a result of our culture and our commitment to customer responsiveness, we believe that we are more agile and able to innovate faster than our larger competitors based on publicly available information. Table of Contents Based on our TAM estimates, we believe that we have been successful in capturing market share across both of our geographic markets. In 2022, as compared to 2021, we estimate that we grew our NAM market share to 16% from 13%. Across the International and Offshore markets, we estimate our market share grew to 6% from 4% over the same time period. We believe that we are well positioned to continue to capture market share across both geographic markets and view the International and Offshore markets as a significant growth opportunity. Our organic growth has been complemented by a disciplined acquisition strategy. We view acquisitions as a core competency and have identified a rich opportunity set of acquisition targets that we believe are seeking to transact. We aim to execute a disciplined acquisition strategy for high-quality opportunities that meet our stringent investment criteria. We have a broad customer base, ranging from the largest international oil companies ( IOCs ), national oil companies ( NOCs ) and exploration and production ( E&P ) companies as well as multinational and regional oilfield service companies. Once a new product has been commercialized or acquired, our global sales and distribution infrastructure enables us to scale and drive customer adoption quickly. We were formed in 2016 through the combination of three consumable products companies with long operating histories. Since our inception, we have achieved strong financial results. Our revenues have grown from approximately $97.9 million in 2016 to $467.2 million in 2022, a compound annual growth rate ( CAGR ) of approximately 30%. Our business is high margin and capital-light, which enables us to generate strong returns on invested capital. In 2022, our net income, operating profit and Adjusted EBITDA were equivalent to approximately 14%, 16% and 22% of revenue, respectively. Over the same period, investments in property and equipment accounted for only approximately 2% of revenue, we earned approximately $76.6 million in income from operations and our Return on Capital Employed ( ROCE ), a metric which we utilize to assess the effectiveness of our capital allocation over time, was approximately 24%. We believe that our global sales and distribution network as well as our manufacturing capacity and vendor network position us well to drive revenue growth and margin expansion. Please see Summary Historical Financial Data Non-GAAP Financial Measures for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin and ROCE and a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin and ROCE to our most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America ( GAAP ). We believe that we can create value for our stockholders across the industry cycle and view our through-cycle playbook as having helped us outperform in all market environments. We prioritize protecting the long-term health of the Company through investments in research and development ( R&D ) and sustaining engineering in our existing portfolio in all market environments. We seek to maintain a conservative balance sheet to preserve operational and financial flexibility through the industry cycle. We believe that we have a strong track record of creating stockholder value by successfully sourcing, executing and integrating strategic acquisitions in all market environments, while preserving a strong balance sheet. Table of Contents The Innovex Through-Cycle Playbook Our Technology Development Process and Product Portfolio We view our new technology development and ongoing product advancement initiatives as key to our strategy and believe that we have a repeatable process to drive organic product innovation to meet our customers well design needs. We maintain an engineering team of approximately 50 individuals that are focused on R&D as well as ongoing product enhancements. The engineering team is based in our Humble, Texas headquarters and has representatives that sit across our global offices in the Middle East, Latin America and Europe. Having a presence near our customers enables us to better understand their challenges, which helps identify and prioritize our market opportunities and maximizes the value of our engineering resources. We focus on maintaining an active pipeline of potential new products across various stages of development. We intend to grow our presence in the International and Offshore markets and believe there is a large opportunity to develop new products to meet customer needs in these regions. At the end of 2022, a significant portion of our new product development pipeline was oriented towards the International and Offshore markets. Our products provide a critical well function, and we believe that their costs represent a small fraction of the total spend on a well but have a significant impact on the well s performance and economic profile, creating a Big Impact, Small Ticket value proposition. We estimate that if all our applicable products were employed over the life of a typical Permian Basin shale well, it would constitute less than 2% of the total cost to drill, construct, complete and produce the well (based on Rystad Energy s analysis of the cost of a typical Permian Basin shale well). We believe that our products are chosen due to their reliability and ability to save our customers time and costs during the well lifecycle, such as a reduction in the number of runs downhole or the elimination of an otherwise necessary product or service, rather than solely for their price. Table of Contents Cost of a Typical Permian Basin Shale Well in Relation to an Illustrative Innovex Ticket Source: Rystad Energy, excludes facility costs. The majority of our 2022 revenue came from product families that we believe hold a top three competitive position in their primary markets based on our TAM estimates. Our products are highly engineered, and we utilize a robust intellectual property strategy to maintain and protect our proprietary technology and market position. As of September 30, 2023, we held approximately 300 U.S. and international patents across our product portfolio and 28 U.S. patent applications. We generate our revenue from three primary sources: sales of consumable, single-use products and other associated revenues, such as freight ( Consumable Product Sales ); rentals of proprietary tools that are used to deploy our consumable products or to provide a critical well function ( Proprietary Rental Tools ); and services that are typically connected to the well-site deployment of our engineered products and other field services ( Product Connected Services ). Of our 2022 revenue, approximately 86% was generated from Consumable Product Sales, approximately 7% was generated from Proprietary Rental Tools and approximately 7% was generated from Product Connected Services. As we believe that demand for our products is primarily activity-driven (i.e., correlated with global spending on exploration and production of oil and natural gas and with general industry activity), we are not exposed to the highly cyclical capital equipment build cycle for the oil and natural gas industry. 2022 Revenue Type Product Offering and Business Model Highlights Our products are used across the lifecycle of our customers wells. In 2022, well construction phase products were 44% of revenue, well completion phase products were 32% and well production and intervention phase products made up the remaining 24%. Our diverse spectrum of products and services enables us to generate revenue from the initial drilling and completion of a well through the Table of Contents production and intervention phase of the asset s life. Our product portfolio consists of fourteen major product families, comprised of over 10,000 stock keeping units ( SKUs ). We believe that we are not dependent on any single technology. We are a single point of contact for many of our customers needs. Our product offerings position us to support our customers in solving a range of well-site challenges and diversify our revenue base. 2022 Revenue by Well Lifecycle Phase Product Diversity We define the well lifecycle phases and describe how our product families are used below: Well Construction (44% of 2022 Revenue). The well construction phase covers the equipment and services necessary to create and ensure the structural integrity of the borehole. Within this well phase, Innovex generally provides cementing products that are utilized to provide effective placement of cement in between the wellbore and casing as well as specialty drilling enhancement products. The primary product families Innovex provides in this segment are centralizers, float equipment, inflatable packers, stage tools, swivel tools, reamers and other related products. Well Completion (32% of 2022 Revenue). The well completion phase consists of products used to enable a well to be stimulated and put on production. The primary product families Innovex provides in this phase include liner hangers, toe sleeves, frac plugs and completion packers. Well Production and Intervention (24% of 2022 Revenue). The well production and intervention phase consists of products and services that enable artificial lift and intervention in wells. Within this well phase, we generally provide accessory products and services to artificial lift equipment as well as specialized intervention products. The primary product families Innovex provides in this segment are wellhead penetrators, wellhead hangers and adapters, spooling services and well intervention tools. Table of Contents We believe that we have curated a portfolio of families and product brands that in aggregate have created brand equity in Innovex. The Innovex Wellbore Note: Not to scale, not inclusive of all products sold by Innovex. Our Customers We principally sell or market directly to the ultimate end user of our products, the E&P operator. As of December 31, 2022 and December 31, 2021, we had 1,582 and 1,651, respectively, unique customers that have made at least one purchase in the preceding 12-month period, or active customers. In 2022, our top ten accounts constituted only 28% of revenue. Our top ten customer list includes: NOCs such as Saudi Aramco (our largest end-user in 2022); IOCs such as ExxonMobil, Chevron, BP and ConocoPhillips; leading independent E&P operators such as Occidental Petroleum, Pioneer Natural Resources and EOG Resources; and multinational oilfield service companies such as Schlumberger and Baker Hughes. When we sell to service companies, it is typically to fill a gap in their product portfolio or because they have been directed by the E&P operator to utilize our products. The breadth of our customer base reduces the impact of significant spending changes by any one customer and allows us to better determine global market activity. Table of Contents 2022 Customer Base as Percentage of Revenue Customer Base Highlights How We Add Value to Our Customers Our goal is to develop products that exhibit clear value creation upside for our customers, including the ultimate end user of our products, typically by saving time and costs during the well lifecycle, while also reducing operational risks. We operate an integrated business model, whereby we design, engineer, manufacture, sell, rent and supervise the onsite deployment of our products. We believe this business model is one of our critical drivers of success as we seek to collaborate directly with our customers to solve some of their most complex challenges. We believe that our customer collaborations have been a source of growth as they have allowed us to develop new products with anchor customers that have served as an initial revenue base from which to scale. We have a track record of developing proprietary products to address our customers evolving needs, and we maintain an active pipeline of potential new products across various stages of development. Approximately 51% of our 2022 revenue was derived from products that we developed internally. We believe that our unique No Barriers culture has also helped to enable our success. We seek to remove internal barriers between us and our customers, such as unnecessary bureaucracy and layers of management, that slow the pace of innovation. We enable our employees to be highly responsive to the needs of our customers and prioritize direct and transparent interaction between our employees and the end user of our products. We promote a culture of innovation and seek to incentivize our employees for the value they create for our organization and the customer. We believe that our rate of product development is faster relative to many of our larger competitors. Once a customer s need has been identified, our engineering and R&D team of approximately 50 individuals employ a rapid design process utilizing our internal manufacturing capacity to develop a prototype. An iterative process of engineering, manufacturing and field trials is then undertaken with the end user until commercialization is achieved. We believe this feedback loop from the end user to the field and our No Barriers culture enable and promote an environment for us to add value for our customers. While we seek to collaborate with our customers to help solve their operational challenges, we are a returns focused company and look to participate on projects that we believe are mutually beneficial for both Innovex and the customer. Table of Contents Innovex s No Barriers Culture The Technology Feedback Loop Product Development Profile Our Markets We believe demand for our products is correlated with global spending on exploration and production of oil and natural gas and with general industry activity, such as the number of wells drilled and oil and natural gas production volumes. According to the global energy consulting firm Rystad Energy, global E&P capital spending (excluding Russia and China) is expected to rise 13% in 2023 relative to 2022. We believe that our diverse product portfolio, operating track record and global footprint position us well to benefit from increased E&P investment activity. In the NAM market, Rystad Energy is forecasting growth in E&P capital spending of 12% from 2022 through 2025. NAM market unconventional resources have emerged as a flexible, short-cycle source of oil and natural gas production for E&P operators and a critical component of the global hydrocarbon supply mix. This is a core market for us as our products have broad applicability and we maintain a robust sales presence as well as service and distribution infrastructure across the region. We view the NAM market as relatively service intensive and believe E&P operators are prone to adopt the latest technologies. Successfully competing in these markets requires high levels of customer responsiveness, nimble product development capabilities and a robust sales, distribution and service infrastructure. There is a proliferation of E&P operators who seek to offset the costs of the service intensity by utilizing innovative products and techniques to maximize well economics through Table of Contents productivity gains. These dynamics have provided a fertile environment for us to innovate and commercialize new technologies in the NAM market that can be exported to our International and Offshore markets. In the International and Offshore markets, Rystad Energy is forecasting E&P capital spending to grow by 34% from 2022 through 2025, excluding Russia and China. We are focused on significantly increasing our market presence in these regions as they are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. In addition, we believe that we benefit from higher barriers to entry that exist for product and service companies that support the primary end users in our International and Offshore markets, IOCs and NOCs, relative to the NAM market. Examples of these entry barriers include higher technical capabilities, more established track records for product performance and reliability and, at times, rigorous product qualification requirements. Established physical and administrative infrastructure and sales channels, often in remote locations, also act as entry barriers to the International and Offshore markets. Global E&P Capex Spending ($ in billions) Source: Rystad Energy Note: Excludes Russia and China. Excludes exploratory capex and facilities capex. Our Global Footprint To support our global operations, we operate a flexible manufacturing and supply chain model that balances responsiveness with cost and efficiency. We maintain approximately 425,000 square feet of internal manufacturing and production facilities in Humble, Texas; Houston, Texas; Mineral Wells, Texas; Amelia, Louisiana and Dammam, Saudi Arabia. These facilities are co-located with our engineering teams to enable rapid prototyping, testing and design iterations of new products and enhancements for our existing products. Our internal manufacturing capacity is reserved for R&D, as well as quick-turn products, to provide high levels of responsiveness to our customers. We supplement these facilities with a responsive network of third-party machining resources in the United States to enhance our capital efficiency. We also maintain strategic relationships with multiple, low-cost manufacturing partners in Asia, and in particular Vietnam, to support our highest volume products. Table of Contents These relationships allow us to achieve a competitive cost structure, while preserving high levels of product quality and customer responsiveness. Going forward, we envision increasing our spend with our low-cost international vendors with an aim of improving our margins and enhancing our competitiveness. In addition, we have entered into a non-binding letter of intent, and are currently engaged in discussions, with respect to a proposed acquisition of one of our manufacturing partners that has operations in Vietnam. The proposed acquisition is consistent with our strategy to maintain a hybrid manufacturing model and would increase our manufacturing capacity and allow us to further capitalize on vertical integration opportunities. See Business Manufacturing. We maintain capital-light service centers near our customers operations. This strategy facilitates the effective installation of our products, provides strong market intelligence about our customers most significant challenges and enables a rapid feedback loop for our product development initiatives. We operate 26 service centers across the United States and Canada, which are located near key onshore oil and natural gas producing regions, including the Permian, Mid Continent, Marcellus, Utica, Eagle Ford, Haynesville, Bakken and the Rockies, among other areas. Across our International and Offshore markets, we sell through 12 service centers in Saudi Arabia, Oman, Abu Dhabi, the United Kingdom, Norway, Brazil, Ecuador, Argentina, Colombia, Mexico, Angola and Amelia, Louisiana to support the U.S. Gulf of Mexico as well as through a network of approximately 20 distribution and sales partners. Our Organic Growth Strategy We employ a multifaceted organic growth strategy comprised of (i) market share capture, (ii) new product development and (iii) market driven growth. Market share capture. We believe that we are well positioned to capture market share across our applicable markets. In the NAM market, we have a strong presence in the United States and growing presence in Canada. We estimate that our TAM for our applicable products across the NAM market was approximately $2.0 billion in 2022 and $1.6 billion in 2021. Please see Business Our Organic Growth Strategy for an explanation of how we calculate our TAM. We generated approximately $329.7 million and $207.1 million, respectively, in revenue across the NAM market over the same time periods, implying a market share of approximately 16% and 13%, respectively. Revenue grew across all of our product families in 2022. Our dedicated sales force, innovative engineering organization and responsive service culture enabled us to capture more of our customers spend on their oil and natural gas well development, defined as wallet share, as well as gain new customers. Our market share also benefited from the acquisition of Pride Energy Services, LLC ( Pride ) in August of 2022. We are excited about our prospects to continue to capture more of our TAM and surpass our implied 2022 market share. Within the United States, we believe that there are many opportunities to cross sell our products throughout our diverse customer base and enhance our presence in select oil and natural gas basins. We also plan to expand our presence in Canada as we believe that many of our product families that have strong adoption in the United States will benefit our Canadian market position in the near term. Table of Contents Innovex NAM Market Revenue, Implied Market Share and Illustrative TAM ($ in billions) Within the International and Offshore markets, we have well established sales and distribution channels across our geographic markets, such as the Middle East, Latin America, the U.S. Gulf of Mexico and throughout other global regions, including Europe and Africa. We have a growing presence across our International and Offshore markets and estimate that the TAM for our applicable products across these regions was approximately $2.2 billion in 2022 and $2.0 billion in 2021. In contrast, we generated approximately $137.4 million and $87.8 million, respectively, in revenue across the International and Offshore markets over the same time periods, implying a market share of approximately 6% and 4%, respectively. Revenue increased across all of our geographic markets in 2022, and we believe that we were able to grow our market share by utilizing our sales and distribution channels to capture wallet share and push further into geographies where we were underrepresented. We are excited about our prospects to continue to capture more of our TAM and surpass our implied 2022 market share. Innovex 2021 and 2022 International and Offshore Markets Revenue, Implied Market Share and Illustrative TAM ($ in billions) Across our International and Offshore markets, we estimate that the Middle East accounted for over half of our 2022 TAM. Within the Middle East, particularly Saudi Arabia, we are focused on growing our wallet share with leading NOCs, such as Saudi Aramco. In many of our International and Offshore markets, particularly Saudi Arabia, we are typically required by our customer base to undergo a stringent and lengthy qualification process for each product we seek to sell in country. The groundwork for our existing operations in Saudi Arabia has taken years to develop and we have considerable experience achieving these technical product qualification requirements. We believe that the time required to establish a scaled presence in Saudi Arabia and the product qualification process Table of Contents represent high barriers to entry to operate in country. In Saudi Arabia, we sell several qualified products that have specialty applications in the market and that provide a consistent level of revenue, defined as our Aramco Base Business. In addition, we have qualified four products that we view as strategic given the very large addressable market they serve in country, which we estimate to be over $50.0 million per product in 2022. These products were qualified in 2016, 2019, 2020 and 2022. All of these qualified strategic products (2016, 2019, 2020 and 2022 vintages) are producing revenue and have yielded or are expected to yield strong growth in the years following qualification. We believe that the fourth qualified strategic product (2022 vintage) has strong applicability in Saudi Arabia, and we are excited for its prospects in 2024. We expect to have a pipeline of additional product qualifications within the country over the coming years. Strong Record of Saudi Aramco Adoption (Revenue, $ in millions) Latin America and, in particular, Brazil and Guyana have been identified as emerging areas of global production growth, and we are focused on expanding our presence in these markets. Rystad Energy is forecasting growth in E&P capital spending of 129% between 2022 and 2027 in Brazil and Guyana. We have established a foothold today with major NOCs and IOCs in these regions, such as Petrobras and ExxonMobil, by leading with some of our most technologically advanced product families that exhibit strong value propositions. We are now seeking to cross sell other applicable product families to capture additional share in these high growth markets. Table of Contents Guyana and Brazil Capex Spending ($ in billions) Source: Rystad Energy Across our other regions of operation, specifically the North Sea, West Africa, the U.S. Gulf of Mexico and certain regions in Latin America, we have a more established presence and are focused on further penetrating our existing customer base by cross selling applicable product families to grow wallet share. We also believe our existing sales and distribution infrastructure will enhance our ability to acquire new customers within these regions. New Product Development. New product development is a key part of our organic growth strategy. We seek to expand our addressable market by introducing new products to our portfolio. Once a new product has been commercialized, we believe that our global sales and distribution infrastructure enables us to scale and drive customer adoption quickly. We have an active pipeline of new initiatives across various stages of development. Across the NAM market, we are pursuing various initiatives related to new product development, including specialty, high-margin products that complement our existing product families, among others. These products have applicability across various International and Offshore markets, and we will seek to leverage our global infrastructure and customer relationships to drive sales outside of the NAM market once full commercialization has been achieved. Within the International and Offshore markets, we are in active conversations with IOCs and NOCs regarding several newly developed products for the global deepwater and offshore markets. We expect to start field trials with these customers for some of these products in 2023 and are optimistic that we will ultimately achieve commercialization. Historically, our customer collaborations have been a source of growth as they have allowed us to develop new products to meet customer needs and have provided us with an initial revenue base from which to scale market adoption. At the end of 2022, a significant portion of our new product development pipeline was oriented towards the International and Offshore markets. Market driven growth. We see several trends in the NAM market increasing the demand for our products. We believe that the quality or productivity of acreage in the NAM market has deteriorated over Table of Contents the last several years. For example, Rystad Energy estimates that the average 30-day IP per 1,000 feet of lateral length for a Permian Basin oil well declined by 13% from 103 barrels of oil per day in 2021 to 90 barrels of oil per day in 2023. As a result of E&P operators migrating from more productive Tier 1 acreage to less productive Tier 2 acreage, we believe that we will see an increase in the number of wells needing to be drilled if oil and natural gas production is to be held flat. Furthermore, as the recent cost to develop an oil well has increased due to service and product cost inflation, the 30-day IP per 1,000 feet of lateral length per $1.0 million of well development cost has decreased by 39% from 17 barrels of oil per day in 2021 to 10 barrels of oil per day in 2023. We believe that these trends will increase demand for our products if more wells and greater spending per well are required to compensate for lost production. Permian Basin Oil Wells Normalized 30-day IP per 1,000ft Lateral Length (Oil Recovery, bpd) Permian Basin Oil Wells Normalized 30-day IP per 1,000ft Lateral Length per $1.0 million of Well Development Cost (Oil Recovery, bpd) Source: Rystad Energy Note: Well development costs include tangible drilling and completion costs and tangible costs. We have also benefited from E&P operators focus on maximizing well productivity and return on investment through new technologies and operating efficiencies, including through drilling longer wellbore lateral lengths. For example, Rystad Energy estimates that the average lateral length for a U.S. well in the Permian Basin has increased from 6,785 feet in 2016 to 9,509 feet in 2022, representing a 40% increase. Rystad Energy expects this trend in well construction intensity to continue in the near term. As many of our products are consumed downhole, we believe a continuation in this trend will result in increased demand for our products on a per well basis. Average Permian Basin Wellbore Lateral Length (feet) Source: Rystad Energy Table of Contents Our Approach to Acquisitions We believe that we have a strong track record of creating stockholder value by successfully sourcing, executing and integrating strategic acquisitions, while preserving a strong balance sheet. We view executing acquisitions as a core competency of the Company, including our ability to integrate acquisitions by implementing a thoughtful and bespoke approach to consolidation. Innovex was formed in 2016 through the combination of three consumable products companies with long operating histories, and we have complemented our organic growth profile with a disciplined and contrarian acquisition strategy. These acquisitions have ranged in scope and size and have been the result of deliberate targeting and rigorous diligence processes. In 2018, we acquired Buckhorn Casing Equipment, LLC, which enhanced our existing Well Construction product offering in the Permian Basin. In 2019, we acquired Quick Connectors, Inc. ( QCI ), a company that provided products used during the production phase of a well s lifecycle, in order to create a foothold in a new targeted area of our customers spending. This acquisition formed the basis of our well production and intervention product group, which we have since supplemented with organic growth initiatives and product development. In 2021, we acquired Rubicon Oilfield International, LLC ( Rubicon ), a large internationally oriented business to complement the international sales channels that we built organically. This acquisition accelerated our efforts to grow and balance our revenue towards some of the most active sources of global production, such as the Middle East, Latin America and Europe, among other regions. In 2021, we also acquired Applied Oil Tools, which complemented the product lines we acquired in the Rubicon acquisition. In 2022, we acquired Pride to fill a gap in our well production and intervention product group portfolio. The Pride acquisition has also led to material cross-selling opportunities. In May 2023, we acquired 20% of Downhole Well Solutions, LLC ( DWS ). The company manufactures and rents engineered downhole tools designed to improve the performance of directional and horizontal drilling operations. DWS has a strong presence in the NAM market and we believe DWS product families have strong applicability in the International and Offshore markets. We plan to assist DWS in expanding into the International and Offshore markets by leveraging our global infrastructure and customer relationships. We have an option to acquire the remaining 80% of DWS until April 30, 2024. Additionally, we have a second option to acquire the remaining 80% of DWS based on a multiple of EBITDA for the twelve-month period from May 1, 2024 through April 30, 2025. We manage a deliberate acquisition sourcing effort as a core part of our operations, at times cultivating priority targets over multiple years. Our global footprint allows us to review opportunities across both the NAM market and International and Offshore markets. We view our global infrastructure and customer relationships as key assets when evaluating acquisition targets as they represent established distribution channels through which we can sell additional products and technologies. We have developed a stringent investment framework through which we evaluate acquisition targets. From a qualitative perspective, we focus on acquisition targets that complement our existing business, provide products consistent with our Big Impact, Small Ticket value proposition and have a demonstrated competitive moat. We prioritize companies with products that are sold to our existing customer base or alternatively can sell existing Innovex products to their customer base to reinforce and grow our market position. We favor acquisition targets operating at scale and prioritize businesses with a strong presence in International and Offshore markets or capacity to benefit from our global distribution channels. From a quantitative standpoint, we seek to transact with businesses that would be accretive to our margins, valuation or both metrics. We prioritize acquisition targets with a strong history of generating ROCE and that have a capital-light business model. We seek to maintain a conservative balance sheet and a strong liquidity position after executing any acquisition to preserve operational flexibility. We believe our balance sheet conservatism coupled with our acquisition evaluation framework produce a disciplined culture for sourcing the highest quality opportunities at attractive valuations. Table of Contents Innovex s Acquisition Target Review Framework We have identified a rich opportunity set of acquisition targets that we believe are seeking to transact, including certain competitors seeking consolidation and some smaller peers seeking a broader footprint. We believe a number of these opportunities have been created by a decline in energy-focused private equity investments and financial sponsorships in the NAM market, which positions certain private companies without capital resources to grow or operate optimally throughout industry cycles. We have targeted several global businesses that possess technologies that are complementary to our product offerings and could increase our presence in markets where we may be underrepresented. We also have identified several single-product family acquisitions that could benefit from our global distribution and sales network. We aim to execute a disciplined acquisition strategy for high-quality opportunities that meet our stringent investment criteria. We believe access to public capital markets will further enhance our marketability as a consolidation platform for sellers seeking liquidity and could facilitate strategic, accretive and self-sourced acquisition opportunities. Our Competitive Strengths We believe that the following characteristics differentiate us from our competitors and uniquely position us to execute on our strategies to create value for our stakeholders: Product innovator for the global oil and natural gas industry. A significant driver of our growth has been attributable to new product development and sustaining engineering efforts for our existing portfolio. Approximately 51% of our 2022 revenue was derived from products that we developed internally. We maintain an engineering team of approximately 50 individuals that are focused on R&D as well as ongoing product enhancements. The engineering team is based in our Humble, Texas headquarters, and has representatives that sit across our global offices in the Middle East, Latin America and Europe. Having a presence near our customers enables us to better understand their challenges, which helps prioritize our market opportunities and maximizes our engineering resources. We seek to work with our customers to solve their operational challenges. We believe that our customer collaborations have been a source of growth as they have allowed us to develop new products with anchor customers that have served as an initial revenue base from which to scale. We have an active pipeline of potential new products across various stages of development, a significant portion of which are oriented towards the International and Offshore markets. We have a robust global intellectual property strategy to formally protect the value that we have created through our innovations. We maintain, as of September 30, 2023, approximately 300 U.S. and international patents and continue to review additional filings as our technology and intellectual property develop in response to our customers needs. Table of Contents No Barriers culture. Our culture is a key factor in our success. We seek to remove internal barriers between us and our customers that would otherwise slow the pace of innovation. We enable our employees to be highly responsive to the needs of our customers and prioritize direct and transparent interaction between our employees and the end user of our products. We promote innovative behavior and seek to incentivize our employees to create mutual value for our organization and the end user. We have structured our organization to be customer facing, with strong execution capabilities. From the first contact our customers have with our sales team, to the collaborative new product development process we employ and to the ultimate installation of our products, we strive to meet our customers needs rapidly and efficiently. Our culture extends across our organization, and we believe it is unique in our industry. We believe our focus on customer responsiveness has been, and will continue to be, a key factor in our success. Portfolio levered to Big Impact, Small Ticket and consumable products. Our products provide a critical well function, and we believe that their costs represent a small fraction of the total spend on a well but have a significant impact on the well s performance and economic profile, creating a Big Impact, Small Ticket value proposition. We believe our products are chosen due to their reliability and capacity to save our customers time and lower costs during the well lifecycle, such as a reduction in the number of runs downhole or the elimination of an otherwise necessary product or service, rather than solely for their price. As our product portfolio is levered to consumable activity-driven products, we are not exposed to the capital equipment build cycle for the oil and natural gas industry. Capital-light business model with proven ability to generate strong returns. We focus on products and geographies that are high margin and do not require large investments in fixed costs and capital expenditures, enabling us to generate strong results, scale quickly and preserve operating flexibility through industry cycles. In 2022, we earned $63.3 million in net income and $102.1 million in Adjusted EBITDA, equivalent to approximately 14% and 22% of revenue, respectively. Our capital expenditure profile is modest, as we employ a hybrid manufacturing strategy that supplements our in-house manufacturing capacity with low-cost third-party resources. In 2022, investments in property and equipment accounted for only approximately 2% of revenue. We have a returns focused culture and seek to optimize our invested capital. We earned approximately $76.6 million in operating profit, and our ROCE, which we utilize to assess the effectiveness of our capital allocation over time, was approximately 24% in 2022. Please see Summary Historical Financial Data Non-GAAP Financial Measures for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin and ROCE and a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin and ROCE to our most directly comparable financial measures calculated and presented in accordance with GAAP. Revenue growth and margin expansion enabled by existing infrastructure. As a global company, we sold products in approximately 65 countries in 2022. Our operating footprint is comprised of 38 service centers and seven manufacturing locations across the globe and we have relationships with approximately 20 distribution and sales partners. We have a portfolio of approximately 650 master services agreements with our customers, that were secured over many years of successful operations. We have invested in our manufacturing capacity and a vendor network to produce thousands of products cost effectively. We believe that our distribution and sales infrastructure and supply chain position us well to execute our growth strategy and achieve strong incremental gross margins. We also benefit from having an operating infrastructure in place that enables us to drive margin expansion through operating leverage as revenues increase. Strong balance sheet with flexibility to support our strategic objectives. We are dedicated to maintaining a prudent balance sheet that provides financial and operational flexibility to achieve our strategic objectives. We believe that access to liquidity and low leverage aided in the growth we Table of Contents experienced through the industry cycle. We have been able to invest in employee talent and make investments to ensure deliverability and our high service quality standards are maintained. We believe that our cash flows, borrowing capacity under the Credit Facility (as defined herein) and a moderate leverage profile will allow us to meet our organic growth objectives in the near term. Our conservative capital structure has also enabled us to complete several strategic acquisitions. For example, in early 2021 during a still challenged industry recovery period coming out of the COVID-19 pandemic, we acquired Rubicon, which materially increased our presence in the International and Offshore markets. We believe that we would not have been able to complete this transaction with a highly levered balance sheet. We are focused on maintaining financial flexibility to take advantage of strategic acquisition opportunities. Highly experienced management team. We believe our culture and track record of success have enabled us to hire and retain top industry talent. Our senior management team has experience managing large-scale businesses that operate across multiple countries and basins. Innovex is led by Adam Anderson, our Chief Executive Officer. Mr. Anderson oversaw the formation of Innovex in 2016. Previously, he was the Chief Executive Officer of a completions focused products business and served in various senior management roles with Baker Hughes, including Vice President of the U.S. Completions Division, Country Manager for Saudi Arabia, Vice President of the Western U.S. Division and President of Latin America. In addition to Mr. Anderson, the Innovex senior management team is composed of eight key leaders, many of whom have worked with Mr. Anderson for over a decade. Our management team has expertise in engineering, manufacturing, sales, finance, accounting and acquisitions, as well as domestic and international experience across the Middle East, Latin America and Europe, among other regions of global hydrocarbon production. We believe the strength of our management team is evidenced by our ability to grow our revenues over time while growing our common share count at a much lower rate. Since Innovex was formed in 2016, our revenues have grown from approximately $97.9 million in 2016 to $467.2 million in 2022, a CAGR of approximately 30%, while our common share count has grown from approximately 10.8 million in 2016 to 15.4 million in 2022, a CAGR of approximately 6%. Our revenue per share over this time period has increased from approximately $9.06 in 2016 to approximately $30.79 in 2022, a CAGR of approximately 23%. Our Strategies We intend to achieve our primary business objectives by successfully executing on the following strategies: Pursue disciplined growth in the International and Offshore markets. We believe that the International and Offshore markets are poised for a multi-year growth cycle and estimate that our TAM across these regions will grow. We are focused on materially expanding our presence across these regions and believe we can grow our market share. In 2022, we estimate that our market share was approximately 6%. Within the Middle East, we are focused on growing our wallet share with leading NOCs, such as Saudi Aramco. In Saudi Arabia, our Aramco Base Business of specialty products provides consistent revenue. We have also formally qualified four other products that we define as strategic given their large addressable markets and strong applicability in country. These four products were qualified in 2016, 2019, 2020 and 2022. All of these qualified strategic products (2016, 2019, 2020 and 2022 vintages) are producing revenue in country and have yielded or are expected to yield strong growth in the years following qualification. We believe that the fourth qualified strategic product (2022 vintage) has strong applicability in Saudi Arabia, and we are excited for its prospects in 2024. We are also focused on expanding our presence in new areas of expected global production growth, specifically Brazil and Guyana. We have entered these markets by marketing some of our most technologically advanced product families to leading IOCs and NOCs, such as ExxonMobil and Table of Contents Petrobras. Once established, we will seek to grow wallet share with these operators by cross selling our other products to them. In other International and Offshore markets where we have a more established presence, such as the North Sea, West Africa, select regions in Latin America and the U.S. Gulf of Mexico, we are focused on cross selling additional applicable technologies from our existing portfolio through our extensive distribution and sales channels and acquiring new customers. Increase market share in the NAM market. Unconventional resources across the NAM market have emerged as a flexible, short-cycle source of oil and natural gas production to E&P operators and a critical component of the global hydrocarbons supply mix. This is a core market for us as our products have broad applicability across the region. We believe that we can provide value to our customers in this region and capture additional market share by focusing on deliverability, customer service and product innovation. We estimate that our implied 2022 market share in the NAM market was approximately 16% and we are excited about the prospects of capturing more of our TAM. We plan to leverage our existing service and distribution infrastructure across the major U.S. oil and natural gas basins, our dedicated sales force, innovative engineering organization and responsive service culture to further increase U.S. market share. We are also focused on growing our presence in Canada as we believe that many of our product families that have strong adoption in the United States will benefit our market position in the country in the near term. Continue to grow our addressable market through new product introductions. We expect to maintain a robust development pipeline across both a near-term and multi-year development timeline. We will seek to balance our R&D focus between: (i) incremental product innovations with clear value propositions to our customers; and (ii) long-term investments to add new product families to our portfolio to grow our addressable market. We believe that our No Barriers culture will be core to our ability to remain an industry innovator, and we will seek to remain an employer of choice for top talent. Execute a disciplined acquisition strategy for high-quality opportunities. We manage a deliberate acquisition sourcing effort as a core part of our operations and have identified a rich opportunity set of acquisition targets across both the NAM and International and Offshore markets. We intend to focus on opportunities that meet our rigorous qualitative and quantitative acquisition review framework. Our targets include several large global businesses that possess technologies that are complementary to our offering and could increase our presence in markets where we may be underrepresented as well as several single-product family acquisitions that could benefit from our global distribution and sales network. We aim to execute a disciplined acquisition strategy for high-quality opportunities that meet our stringent investment criteria. We believe access to public capital markets will further enhance our marketability as a consolidation platform for sellers seeking liquidity and could facilitate strategic, accretive and self-sourced acquisition opportunities. Optimize our supply chain to further enhance our cost structure. We are dedicated to enhancing our manufacturing process. We believe that we can maintain our high-quality standards while lowering the cost of several product families by augmenting our flexible supply chain strategy with low-cost, high-quality foreign manufacturing capabilities. We maintain internal manufacturing capacity in the United States for R&D as well as to meet customer needs for rapid turnaround times and substantial third-party capacity in the United States to meet normal course product demand. In addition, we have developed relationships with key third-party vendors in Asia, and in particular Vietnam, to supply certain high-volume component parts and products at lower costs relative to domestic manufacturers. This high-quality and low-cost, third-party capacity can be expanded with minimal impact on our capital expenditures. We plan to further scale our spending with these foreign supply chain partners for select high-volume and long-lead time items with an aim of increasing our margins as well as improving our competitiveness. In addition, we have entered into a non-binding letter of intent, and are currently Table of Contents engaged in discussions, with respect to a proposed acquisition of one of our manufacturing partners that has operations in Vietnam. The proposed acquisition is consistent with our strategy to maintain a hybrid manufacturing model and would increase our manufacturing capacity and allow us to further capitalize on vertical integration opportunities. See Business Manufacturing. Maintain a focus on returns and a conservative balance sheet. We will continue to prioritize proprietary products and geographies that do not require large fixed-cost capital investments. We plan to maintain our focus on consumable products and will seek to increase revenue in high margin and growing regions within our markets. We believe prioritizing returns on the capital we employ will maximize our operational and financial flexibility. We do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future. We currently intend to retain all future earnings, if any, to finance the growth and development of our business. However, subject to our future liquidity and capitalization, investment opportunities and other factors our board of directors may deem relevant, in the future, we will consider a defined policy to return excess Free Cash Flow (as defined herein) to our stockholders. We have historically employed a disciplined financial strategy, with the goal of maintaining robust liquidity, minimizing capital intensity and limiting the use of leverage. We believe this approach provides us with the flexibility to execute our strategies and allows us to take advantage of acquisitions or organic opportunities through industry cycles. We intend to maintain this conservative approach to managing our balance sheet. Following completion of this offering, we expect to be in a net cash position. Recent Developments Preliminary Financial Results The following results reflect our preliminary expectations of results for the year ended December 31, 2023, based on currently available information. We have provided ranges, rather than specific amounts, for the financial results below, primarily because our financial closing procedures for the year ended December 31, 2023 have just commenced and, as a result, we expect that our final results upon completion of our closing procedures may vary from the preliminary estimates included herein. Inclusion of Preliminary Financial Results The preliminary financial results included in this prospectus reflect management s estimates based solely upon information available to us as of the date of this prospectus and are the responsibility of management. The preliminary consolidated financial results presented above are not a comprehensive statement of our financial results for the year ended December 31, 2023 and have not been audited, reviewed or compiled by our independent registered public accounting firm, Grant Thornton LLP. Accordingly, Grant Thornton LLP does not express an opinion and assumes no responsibility for and disclaims any association with such preliminary financial results. The preliminary condensed consolidated financial results presented above are subject to the completion of our financial closing procedures, which have not yet been completed. Our actual results for the year ended December 31, 2023 will not be available until after this offering is completed and may differ materially from these estimates. Accordingly, you should not place undue reliance upon these preliminary financial results. For example, during the course of the preparation of the respective financial statements and related notes, additional items that would require material adjustments to be made to the preliminary condensed consolidated financial results presented below may be identified. There can be no assurance that these estimates will be realized, and estimates are subject to risks and uncertainties, many of which are not within our control. See Risk Factors and Cautionary Statement Regarding Forward-looking Statements. Table of Contents Preliminary Financial Results Although the financial results for the year ended December 31, 2023 are not yet finalized, based upon information and data currently available, we estimate that the financial results will fall within the following ranges, as compared to the year ended December 31, 2022: Preliminary Estimated Year Ended December 31, 2023 Year Ended December 31, 2022 (in thousands) Low High Actual (unaudited) Revenues $ $ $ 467,189 Income from operations 76,552 Net income 63,278 Comprehensive income 63,741 Total debt 89,119 Total debt to net income 1.4x Cash and restricted cash 8,416 Non-GAAP Financial Measures Adjusted EBITDA(1) 102,105 Net Income % Revenue 14 % Adjusted EBITDA Margin(2) 22 % Total Debt to Adjusted EBITDA(3) 0.9x (1) We define Adjusted EBITDA as net income before interest expense, income tax expense, depreciation and amortization, and other expense, net, further adjusted to exclude certain items which we believe are not reflective of our ongoing performance or which are non-cash in nature. See the section titled Non-GAAP Financial Measures for more information. (2) Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenue. See Summary Historical Financial Data Non-GAAP Financial Measures for more information. (3) Total Debt to Adjusted EBITDA is the ratio of Total Debt (defined as the sum of long-term debt and finance lease obligations plus the current portion of long-term debt and finance lease obligations as presented in the Consolidated Balance Sheets) to Adjusted EBITDA. See the section titled Summary Historical Financial Data Non-GAAP Financial Measures for more information. For the year ended December 31, 2023, we expect revenue will be between $ million and $ million, compared to $467.2 million for the year ended December 31, 2022. The expected in revenue is primarily due to . For the year ended December 31, 2023, we expect income from operations will be between $ million and $ million, compared to $76.6 million for the year ended December 31, 2022. The expected in income from operations is primarily due to . For the year ended December 31, 2023, we expect net income will be between $ million and $ million, compared to $63.3 million for the year ended December 31, 2022. The expected in net income is primarily due to . For the year ended December 31, 2023, we expect comprehensive income to be between $ million and $ million, compared to comprehensive income of $63.7 million for the year ended December 31, 2022. The expected in comprehensive income is primarily due to . Table of Contents For the year ended December 31, 2023, we expect our Adjusted EBITDA to be within the range of $ million and $ million. For the year ended December 31, 2023, we expect our Total Debt to Adjusted EBITDA to be between and , compared to 0.9x for the year ended December 31, 2022. The expected in Total Debt to Adjusted EBITDA is primarily due to . The following table provides reconciliation of our preliminary estimates of Adjusted EBITDA and Adjusted EBITDA Margin for the year ended December 31, 2023, and reconciliations of actual Adjusted EBITDA and EBITDA Margin for the year ended December 31, 2022. Preliminary Estimated Year Ended December 31, 2023 Year Ended December 31, 2022 (in thousands) Low High Actual (unaudited) Revenue $ $ $ 467,189 Net income $ $ 63,278 Interest expense, net $ $ 4,034 Income tax expense 9,651 Depreciation and amortization $ $ 18,468 EBITDA $ 95,431 Other non-operating (income) expense, net(1) (411 ) Equity method investment adjustment(2) Stock based compensation 907 IPO preparation expenses(3) 2,274 Transaction related expenses(4) 461 Acquisition integration expenses(5) 3,443 Adjusted EBITDA $ 102,105 Total debt 89,119 Total debt to net income 1.4x Total Debt to Adjusted EBITDA 0.9x Net income % revenue 14 % Adjusted EBITDA Margin 22 % (1) Primarily represents foreign currency exchange gain/loss, gain/loss related to disposal of assets and other non-operating items. (2) Reflects the elimination of our percentage of interest expense, depreciation, amortization and other nonrecurring expenses included within Equity method earnings relating to our unconsolidated investment in DWS. (3) Reflects legal, consulting and accounting fees and expenses related to IPO preparation. (4) For the twelve months ended December 31, 2023, transaction related expenses of $ million consist of associated with . For the twelve months ended December 31, 2022, transaction related expenses of $0.5 million consist of legal and accounting advisory fees associated with the Pride acquisition. These transaction expenses are one-time in nature and expenses that we do not view as normal operating expenses necessary to operate our business. (5) For the twelve months ended December 31, 2023, acquisition integration expenses were $ million, primarily consisting of $ million in for . The remaining expenses are related to multiple immaterial integration fees for . For the twelve months Table of Contents ended December 31, 2022, acquisition integration expenses were $3.4 million, primarily consisting of $1.3 million in facility shutdown and integration costs for Rubicon facilities after the acquisition and $1.0 million of impairment charges to a facility as a result of integrating QCI after the acquisition. The remaining expenses are related to multiple immaterial integration fees for the Rubicon and Pride acquisitions. These acquisition integration expenses are one-time in nature and expenses that we do not view as normal operating expenses necessary to operate our business. Downhole Well Solutions, LLC Acquisition In May 2023, we acquired 20% of DWS. DWS manufactures and rents engineered downhole tools designed to improve the performance of directional and horizontal drilling operations. DWS has a strong presence in the NAM market and we believe that DWS product families have strong applicability in the International and Offshore markets. We plan to assist DWS in expanding into the International and Offshore markets by leveraging our global infrastructure and customer relationships. We have an option to acquire the remaining 80% of DWS until April 30, 2024. Additionally, we have a second option to acquire the remaining 80% of DWS based on a multiple of EBITDA for the twelve-month period from May 1, 2024 through April 30, 2025. Principal Stockholders Funds affiliated with Amberjack Capital Partners, L.P. ( Amberjack Capital Partners or Amberjack ) are our principal stockholders (referred to in this prospectus as the Amberjack Funds ). Amberjack Capital Partners is a specialized private equity investor that provides growth capital and strategic assistance to manufacturing and service companies operating in energy, industrial and infrastructure end markets. As an active investor, Amberjack seeks to partner with visionary entrepreneurs and talented management teams to build high performing and innovative companies that create enduring value. In connection with this offering, we intend to enter into a nomination and information agreement with Amberjack Capital Partners and the Amberjack Funds. Under the nomination and information agreement, Amberjack Capital Partners will have the right to nominate and designate (and, subject to applicable law and the fiduciary duties of our board of directors where board action is required, as applicable, we will be required to support the election of): (i) four individuals to our board of directors if Amberjack Capital Partners (together with the Amberjack Funds and their affiliates) beneficially owns, holds and/or votes by proxy more than 50% of our outstanding shares of common stock; (ii) three individuals to our board of directors if Amberjack Capital Partners (together with the Amberjack Funds and their affiliates) beneficially owns, holds and/or votes by proxy 50% or less but more than 40% of our outstanding shares of common stock; (iii) two individuals to our board of directors if Amberjack Capital Partners (together with the Amberjack Funds and their affiliates) beneficially owns, holds and/or votes by proxy 40% or less but more than 25% of our outstanding shares of common stock; and (iv) one individual to our board of directors if Amberjack Capital Partners (together with the Amberjack Funds and their affiliates) beneficially owns, holds and/or votes by proxy 25% or less but more than 10% of our outstanding shares of common stock. If the size of the board of directors increases, the number of individuals Amberjack Capital Partners is entitled to nominate and designate shall automatically be increased to a number of individuals that would provide Amberjack Capital Partners the same proportionate amount of designees, relative to the increased board size, rounded up to the nearest whole number of individuals. See Certain Relationships and Related Party Transactions Nomination and Information Agreement. Upon completion of this offering, Amberjack Capital Partners will beneficially own approximately % of our common stock, representing approximately % of the voting power of the Company. Table of Contents Summary of Risk Factors Investing in our common stock involves risks. You should carefully read the section of this prospectus entitled Risk Factors and the other information in this prospectus for an explanation of these risks before investing in our common stock. In particular, the following considerations may offset our competitive strengths or have a negative effect on our strategies or operating activities, which could cause a decrease in the price of our common stock and a loss of all or part of your investment. Risks Related to Our Business Our business and financial performance depends primarily upon the general level of activity in the oil and natural gas industry, including the number of drilling rigs in operation, the number of oil and natural gas wells being drilled, the volume of production, the number of well completions and the level of well remediation activity and the corresponding capital expenditures by oil and natural gas companies within North America, the Middle East, Latin America and Europe, among other global markets. A decline in prices for oil and natural gas may have an adverse effect on our revenue, cash flows, profitability and growth. The cyclical nature of the oil and natural gas industry may cause our operating results to fluctuate. We are subject to risks relating to existing international operations and expansion into new geographical markets. We must comply with export and import controls, economic sanctions and embargoes, and other international trade laws and regulations and any failure to comply with such laws and regulations could subject us to liability and have a material adverse impact on our business, financial condition and results of operations. Our operations outside the United States must comply with a number of U.S. and international regulations, violations of which could have a material adverse effect on our business, results of operations, and financial condition. The scope of our international operations subjects us to risks from currency fluctuations that could adversely affect our liquidity, financial position and results of operations. Policy changes affecting international trade could adversely impact the demand for our products and our competitive position. Our business, financial condition and results of operations may be affected by economic sanctions and export controls, including those targeting Russia. Changes in U.S. and international tax rules and regulations, or interpretations thereof, may materially and adversely affect our cash flows, results of operations and financial condition. We face significant competition that may cause us to lose market share. Our business depends upon our ability to obtain specialized equipment, parts and key raw materials from third-party suppliers, and we may be vulnerable to delayed deliveries and future price increases. We are subject to the risk of supplier concentration for certain product lines. We could lose customers or generate lower revenue, operating profits and cash flows if there are significant increases in the cost of raw materials or if we are unable to obtain raw materials. Table of Contents We are exposed to counterparty credit risk. Nonpayment and nonperformance by our customers, suppliers or vendors could adversely impact our operations, cash flows and financial condition. Growth in drilling and completion activity, and our ability to benefit from such growth, could be adversely affected by any significant constraints in equipment, labor or takeaway capacity in the regions in which we operate. Equipment failures or production curtailments or shutdowns at our manufacturing and production facilities could adversely affect our manufacturing capability. We rely on a few key employees whose absence or loss could adversely affect our business. If we are unable to employ a sufficient number of skilled and qualified workers, our capacity and profitability could be diminished and our growth potential could be impaired. A negative shift in investor sentiment of the oil and natural gas industry has had and could in the future have adverse effects on our customers operations, our business and on our access to investors and financing. Our ability to access capital and credit markets or borrow on affordable terms to obtain additional capital could be limited. The growth of our business through recently completed acquisitions and potential future acquisitions may expose us to various risks, including those relating to difficulties in identifying suitable, accretive acquisition opportunities and integrating businesses, assets and personnel, as well as difficulties in obtaining financing for targeted acquisitions and the potential for increased leverage or debt service requirements. Inflation could adversely impact our ability to control costs, including operating expenses and capital costs. Disruptions in our supply chain for materials and components and the resulting increase in equipment and logistics costs could adversely affect our financial performance. Our indebtedness and liquidity needs could restrict our operations and make us more vulnerable to adverse economic conditions. Restrictions in our debt agreements and any future financing agreements may limit our ability to finance future operations, meet capital needs or capitalize on potential acquisitions and other business opportunities. An increase in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability, decrease our liquidity and impact our solvency. Our operations and our customers operations are subject to unforeseen interruptions and hazards inherent in the oil and natural gas industry, for which we or our customers may not be adequately insured and which could cause us to lose customers and substantial revenue. A terrorist attack or armed conflict could harm our business. We design, manufacture, sell, rent and install products that are used in oil and natural gas exploration, development and production activities, which may subject us to liability, including claims for personal injury, property damage, environmental contamination and other regulatory fines and penalties should such equipment fail to perform to specifications. Oilfield anti-indemnity provisions enacted by many U.S. states may restrict or prohibit a party s indemnification of us. Table of Contents We do not carry insurance against all potential risks and losses, and our insurance might be inadequate to cover all of our losses or liabilities or may not be available on commercially reasonable terms. Seasonal weather conditions, natural disasters, public health crises, and other catastrophic events outside of our control could severely disrupt normal operations and harm our business. Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate. We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future, or otherwise fail to maintain effective internal control over financial reporting, which could result in a restatement of our financial statements or cause us to fail to meet our reporting obligations. Risks Related to Environmental and Regulatory Matters Our operations and the operations of our customers are subject to environmental, health and safety laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows. Our operations, and those of our customers, are subject to a series of risks arising from climate change. Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews and investment practices for such activities may serve to limit future oil and natural gas exploration and production activities and could have a material adverse effect on our results of operations and business. Conservation measures, commercial development and technological advances could reduce demand for oil and natural gas and our products. Additional restrictions on drilling activities intended to protect certain species of wildlife may adversely affect our ability to conduct completion activities. Risks Related to Technology Advancement New technology may cause us to become less competitive. To compete in our industry, we must continue to develop new technologies and products to support our operations, secure and maintain patents related to our current and new technologies and products and protect and enforce our intellectual property rights. If we are unable to obtain patents, licenses and other intellectual property rights covering our products, our operating results may be adversely affected. Technology disputes could negatively impact our operations or increase our costs. Our failure to protect our proprietary information and any successful intellectual property challenges against us could materially and adversely affect our competitive position. We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property. We may be adversely affected by disputes regarding intellectual property rights of third parties. Table of Contents If we are not able to design, develop, and produce commercially competitive products, our business and consolidated results of operations and the value of our intellectual property could be materially and adversely affected. We are subject to cyber security risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss. We have experienced information technology ( IT ) system disruptions and cyberattacks in the past, and a failure of our IT infrastructure and cyberattacks could adversely impact us in the future. Risks Related to this Offering and Our Common Stock Amberjack Capital Partners has the ability to direct the voting of a majority of our voting stock, and its interests may conflict with those of our other stockholders. The requirements of being a public company, including compliance with the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act ) and the requirements of the Sarbanes-Oxley Act of 2002 ( Sarbanes-Oxley Act ), may strain our resources, increase our costs, and we may be unable to comply with these requirements in a timely or cost-effective manner. There is no existing market for our common stock. The initial public offering price of our common stock may not be indicative of the market price of our common stock after this offering. In addition, an active, liquid and orderly trading market for our common stock may not develop or be maintained, and our stock price may fluctuate significantly, and you could lose all or part of your investment. A significant reduction by the Amberjack Funds of their ownership interests in us could adversely affect us. Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and under Delaware law could make an acquisition of the Company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management. Amberjack Capital Partners is not limited in its ability to compete with us. Pursuant to the terms of our amended and restated certificate of incorporation, Amberjack Capital Partners and its affiliates are not required to communicate or offer corporate opportunities to us, and our directors and officers may be permitted to offer certain corporate opportunities to Amberjack Capital Partners or its affiliates before us. Our amended and restated certificate of incorporation will designate specific courts as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us, our directors, officers or employees. Investors in this offering will experience immediate and substantial dilution of $ per share. We have discretion in the use of the net proceeds from this offering and may not use them effectively. Future sales of our common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us. The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of our common stock. Table of Contents Changes in effective tax rates, or adverse outcomes resulting from other tax increases or an examination of our income or other tax returns, could adversely affect our results of operations and financial condition. We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock. Future offerings of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future offerings of equity securities that may be senior to our common stock for the purposes of dividend and liquidation distributions, may adversely affect the market price of our common stock. We expect to be a controlled company within the meaning of the NYSE rules and, as a result, will qualify for and intend to rely on exemptions from certain corporate governance requirements. For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies, which may make our common stock less attractive to investors. If securities or industry analysts do not publish research reports or publish unfavorable research about our business, the price and trading volume of our common stock could decline. Principal Executive Offices and Internet Address Our principal executive offices are located at 19120 Kenswick Drive, Humble, Texas 77338, and our telephone number is (346) 398-0000. Following the closing of this offering, our website will be located at www.innovex-inc.com. We expect to make our periodic reports and other information filed with or furnished to the Securities and Exchange Commission ( SEC ) available, free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. Emerging Growth Company Status As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). As an emerging growth company, we may, for up to five years, take advantage of specified exemptions from reporting and other regulatory requirements that are otherwise applicable generally to public companies. These exemptions include: in contrast to our Exchange Act reports after we are public, the presentation in this prospectus includes only two years of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition and Results of Operations; deferral of the auditor attestation requirement on the effectiveness of our system of internal control over financial reporting; exemption from the adoption of new or revised financial accounting standards until they would apply to private companies; exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the Table of Contents auditor s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; and reduced disclosure about executive compensation arrangements. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the Securities Act ), for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of this extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies. We may take advantage of these provisions until we are no longer an emerging growth company, which will occur on the earliest of (i) the last day of the fiscal year following the fifth anniversary of this offering, (ii) the last day of the fiscal year in which we have equal to or more than $1.235 billion in annual revenue, (iii) the date on which we issue more than $1 billion of non-convertible debt over a three-year period or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Rule 12b-2 promulgated under the Exchange Act. Controlled Company Status Because Amberjack Capital Partners will initially beneficially own shares of common stock, representing approximately % of the voting power of the Company following the completion of this offering, we expect to be a controlled company as of the completion of the offering under the Sarbanes-Oxley Act and rules of the NYSE. A controlled company is not required to have a majority of independent directors or to maintain an independent compensation or nominating and governance committee. As a controlled company, we will remain subject to rules of the Sarbanes-Oxley Act that require us to have an audit committee composed entirely of independent directors. Under these rules, we must have at least one independent director on our audit committee by the date our common stock is listed on the NYSE, at least two independent directors on our audit committee within 90 days of the listing date, and at least three independent directors on our audit committee within one year of the listing date. We expect to have three independent directors upon the closing of this offering. If at any time we cease to be a controlled company, we will take all action necessary to comply with the Sarbanes-Oxley Act and rules of the NYSE, including by appointing a majority of independent directors to our board of directors and ensuring we have a compensation committee and nominating and governance committee composed of independent directors, subject to a permitted phase-in period. See Management Status as a Controlled Company. Table of Contents
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@@ -0,0 +1,229 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+This
+summary highlights certain information appearing elsewhere in this prospectus. This summary is not complete and does not contain all
+of the information you should consider prior to investing. After you read this summary, you should read and consider carefully the more
+detailed information and financial statements and related notes that we include in this Prospectus, including the sections entitled
+ Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations. 
+If you invest in our common stock, you are assuming a high degree of risk.
+
+ 
+
+Unless
+otherwise indicated or the context otherwise requires, references in this Prospectus to the Company, we, 
+ us and our or similar terms are to Carbon Conversion Group, Inc., a Wyoming corporation.
+
+ 
+
+Background
+
+ 
+
+We
+are a research and development company that commercializes
+technologies for processing organic wastes into hydrogen and high-value carbon products economically and sustainably.
+
+ 
+
+Our
+company was formed on August 30, 2022, as a limited liability company under the laws of the State of Wyoming,
+as "CarbonMeta Green Building Materials, LLC," in furtherance of an existing joint venture between CarbonMeta
+Technologies, Inc. (CarbonMeta) and Salvum Corporation (Salvum).
+
+ 
+
+On June 16, 2023, the Company s
+former parent, CarbonMeta, filed a Certificate of Conversion with the State of Wyoming to convert our company from a limited
+liability company to a corporation and, in conjunction therewith, filed our Articles of Incorporation, which became effective July
+28, 2023. Our corporate name changed to Carbon Conversion Group, Inc., upon the filing of our Articles of
+Incorporation.
+
+ 
+
+The Distribution
+
+ 
+
+On June 12, 2023, the respective Boards
+of Directors of CarbonMeta and Salvum determined to "spin-off" the Distribution Shares as a dividend to their respective
+shareholders of record as of the close of business on June 23, 2023 (the "Record Date").
+
+ 
+
+Each CarbonMeta shareholder will
+receive one (1) Distribution Share for every 3,000 shares of CarbonMeta held on the Record Date, and each Salvum shareholder will
+receive 0.5067 of a share of the Distribution Shares for every one (1) share of Salvum held on the Record Date. 
+
+ 
+
+Corporate
+Information
+
+ 
+
+Our
+principal executive office is located at 925 South Church Street, Suite B200-123, Murfreesboro, Tennessee 37130; our telephone
+number is (615) 747-2523; our website address is www.carbonconversiongroup.com. Information on our website is not
+a part of this prospectus.
+
+ 
+
+ 5
+
+ 
+
+ 
+
+ 
+
+The
+Offering
+
+ 
+
+ The
+ Distribution Shares
+ 
+ A total of 13,014,451
+ shares of our common stock, par value $0.0001 per share (the Distribution Shares), are to be distributed by (a) CarbonMeta, as to
+ 6,520,240 Distribution Shares, and (b) Salvum, as to 6,494,211 Distribution Shares, to their respective shareholders of record as of
+ the close of business on June 23, 2023 (the Record Date).
+
+ 
+ 
+ 
+
+ Offering
+ Amount
+ 
+ No securities of our company are being offered for sale pursuant to this Prospectus.
+
+ 
+ 
+ 
+
+ Terms
+ of the Offering
+ 
+ As
+ soon as is practicable following the effectiveness of the Registration Statement of which
+ this Prospectus forms a part, the Distribution of the 13,014,451 Distribution Shares to the respective shareholders of CarbonMeta
+ and Salvum as of the Record Date will be effected. (See 
+ Plan of Distribution").
+
+ 
+ 
+ 
+
+ Common
+ Stock Issued and Outstanding Before This Offering
+ 
+ 36,694,731 shares
+
+ 
+ 
+ 
+
+ Common
+ Stock Issued and Outstanding After This Offering
+ 
+ 
+
+ 
+
+ 
+
+36,694,731 shares
+
+ 
+ 
+ 
+
+ Use of Proceeds
+ 
+ Neither our company, CarbonMeta nor Salvum will derive any proceeds from the Distribution of the Distribution Shares
+to the respective shareholders of CarbonMeta and Salvum.
+
+ 
+ 
+ 
+
+ Risk
+ Factors
+ 
+ See
+ Risk Factors, beginning on page 7 of this Prospectus, and the other information set forth in this Prospectus
+ for a discussion of factors you should consider before deciding to invest in our common stock.
+
+ 
+ 
+ 
+
+ Disparate Voting Rights
+ 
+ Each of our Chief Executive
+ Officer, Robert C. Doherty, and our Chairman of the Board of Directors, Lloyd T. Spencer, owns 500,000 shares of our
+ company s Series A Preferred Stock, which has voting rights equal to 5,000,000 votes for each share of Series A Preferred
+ Stock held. As such, Messrs. Doherty and Spencer would control any item brought before our shareholders requiring a vote, including
+ the election of directors, any merger, consolidation or sale of all or substantially all of our assets. (See "Risk
+ Factors," "Description of Securities–Series A Preferred Stock" and "Security Ownership of Certain
+ Beneficial Owners and Management").
+
+ 
+ 
+ 
+
+ Market
+ for Common Stock
+ 
+ As
+ of the date of this Prospectus, there is no trading market for our common stock, and we cannot assure you that a trading market will
+ develop. Our common stock is currently not listed on any national securities exchange, the NASDAQ stock market, or any trading
+ platform of OTC Markets, including the OTCQB Marketplace or OTC Pink Open Market. We intend to retain Glendale Securities, Inc. as
+ the market maker who will file a Rule 211 application with the FINRA to obtain a trading symbol for our common stock. Such efforts
+ may not be successful and our common stock may never be listed for trading on any trading platform. In such circumstance, owners of
+ our common stock will not have a market in which to sell their shares. 
+
+ 
+ 
+ 
+
+ Dividends
+ 
+ We
+ have not declared or paid any cash dividends on our common stock since our inception, and we do not anticipate paying any such dividends
+ for the foreseeable future. 
+
+ 
+ 
+ 
+
+ Transfer Agent
+ 
+ Empire Stock Transfer, Inc., 1859
+ Whitney Mesa Drive, Henderson, Nevada 89014.
+
+ 
+
+ 6
+
+ 
+
+ 
+
+ 
+
+RISK
+FACTORS
+
+ 
+
+An
+investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together
+with the other information contained in this Prospectus, before purchasing our common stock, including the Distribution Shares.
+Any of the following factors could harm our business, financial condition, results of operations or prospects, and could result in
+a partial or complete loss of your investment. Some statements in this Prospectus, including statements in the following risk
+factors, constitute forward-looking statements. Please refer to the section entitled
\ No newline at end of file
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@@ -0,0 +1 @@
+S-1/A 1 afbs1a7.htm S-1/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1/A AMENDMENT NO. 7 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT AFB Limited (Exact name of registrant as specified in its charter) Date: June 24, 2024 Nevada 7389 37-2109250 (State or Other Jurisdiction of Incorporation) (Primary Standard Classification Code) (IRS Employer Identification No.) R27 3/F, New Timely Building, 497 Castle Peak Road, Lai Chi Kok, Kowloon, Hong Kong Issuer's telephone number: +852 60923608 Company email: Afbltd87@gmail.com (Address, including zip code, and telephone number, including area code, of registrant s principal mailing address) Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. 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. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, 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(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |X| Smaller reporting company |X| Emerging growth company |X| If an emerging growth company, 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. |_| CALCULATION OF REGISTRATION FEE Title of Class of Securities to be Registered Proposed Maximum Offering Price Per Share (1) Underwriting Discounts and Commissions Shares to be Offered Pursuant to Offering Maximum Net Proceeds Amount of Registration Fee (2) Common Stock, $0.0001 par value (Direct Public Offering) $0.05 none 2,000,000 100,000 14.76 (1) The offering price has been arbitrarily determined by the Company and bears no relationship to assets, earnings, or any other valuation criteria. No assurance can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price. (2) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933. The Registrant hereby amends this Registration Statement (the "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 the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale is not permitted. There is no minimum purchase requirement for the offering to proceed. PRELIMINARY PROSPECTUS AFB Limited 2,000,000 SHARES OF COMMON STOCK $0.0001 PAR VALUE PER SHARE Prior to this Offering, no public market has existed for the common stock of AFB Limited. Upon completion of this Offering, we will attempt to have the shares quoted on the OTC Pink Open Market, also known as the "Pink Sheets," operated by OTC Markets Group, Inc. There is no assurance that the Shares will ever be quoted on the Pink Sheets. To be quoted on the Pink Open Market, a market maker must apply to make a market in our common stock. As of the date of this Prospectus, we have not made any arrangement with any market makers to quote our shares. Additionally, there is the possibility a market maker may not apply to make a market in our common stock. If this were to occur, your investment may be negatively impacted as you may be unable to sell your shares. In this public offering we, "AFB Limited" are offering 2,000,000 shares of our common stock. The offering is being made on a self-underwritten, "best efforts" basis. There is no minimum number of shares required to be purchased by each investor. The shares offered by the Company will be sold on our behalf by our Chief Executive Officer and Director, Mr. Tak Chun Wong. There is uncertainty that we will be able to sell any of the 2,000,000 shares being offered herein by the Company. Tak Chun Wong will not receive any commissions or proceeds for selling the shares on our behalf. All of the shares being registered for sale by the Company will be sold at a fixed price of $0.05 per share for the duration of the Offering. Assuming all of the 2,000,000 shares (100%) being offered by the Company are sold, the Company will receive $100,000 in net proceeds. Assuming 1,500,000 shares (75%) being offered by the Company are sold, the Company will receive $75,000 in net proceeds. Assuming 1,000,000 shares (50%) being offered by the Company are sold, the Company will receive $50,000 in net proceeds. Assuming 500,000 shares (25%) being offered by the Company are sold, the Company will receive $25,000 in net proceeds. There is no minimum amount we are required to raise from the shares being offered by the Company and any funds received will be immediately available to us. There is no guarantee that we will sell any of the securities being offered in this offering. Additionally, there is no guarantee that this Offering will successfully raise enough funds to further our Company's business plan going forward, and additional funding avenues may be necessary. This primary offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this Prospectus, unless extended by our director for an additional 90 days. We may however, at any time and for any reason terminate the offering. AFB Limited is an entity, with no subsidiaries, incorporated in Nevada, US and is conducting business primarily in Hong Kong. Investors purchasing an interest in the Company are doing so directly in AFB Limited. Currently, we have 3,000,000 shares of common stock, $0.0001 par value, issued and outstanding. As of the date of this Registration Statement, Tak Chun Wong is able to control approximately 100% of the voting power of the Company. As such, Mr. Wong has the ability to control matters requiring shareholder approval, including the election of directors, amendment of organizational documents, and approval of major corporate transactions, such as a change in control, merger, consolidation, or sale of assets. If Tak Chun Wong sells all of the shares being offered, pursuant to the offering by the Company herein, then he will be able to control approximately 60% of the voting power of the Company, which still constitutes controlling interest of the Company. AFB Limited is an e-commerce advisory firm specializing in helping businesses navigate the complex world of online commerce. With our expertise and industry insights, we strive to empower companies to develop and execute successful e-commerce strategies, enabling them to thrive in the digital marketplace. AFB Limited is a Nevada-based company with no subsidiaries, conducting operations in Hong Kong. This structure presents unique risks to investors. The Chinese government has the potential to prohibit a U.S. company from operating in the Hong Kong market through various regulatory measures and decisions. All references herein to Hong Kong, refer to specifically Hong Kong only. All references herein to China/PRC refer to mainland China, excluding Hong Kong. There are legal and operational risks associated with being based in or having the majority of the company's operations in Hong Kong, which are described in more detail below. If such an event were to transpire, it would likely result in a material change in our operations and/or the value of the securities we are registering for sale. In a worst-case scenario, such action could result in a substantial decline in the value of these securities or render them worthless. Government regulations which are reasonably likely to materially impact our operations are discussed in more complete detail under the Government Regulations section on page 17. AFB Limited has no subsidiaries, is an entity incorporated in Nevada, US, and is conducting business primarily in Hong Kong. Investors purchasing an interest in the Company are doing so directly in AFB Limited. The Company is subject to following Hong Kong laws and regulations: The Personal Data (Privacy) Ordinance (PDPO), is a fundamental regulation governing the collection, use, and handling of personal data. Non-compliance with PDPO can lead to fines and legal actions, with potential repercussions on the company's reputation and customer trust. Intellectual property protection, governed by trademark, copyright, and patent laws, is essential to prevent infringement issues and legal disputes that could compromise the company's business exclusivity. Cybersecurity and data security regulations, guided by local guidelines and international standards, aim to safeguard against breaches that may result in data loss, financial losses, and regulatory penalties. E-commerce regulations under the Electronic Transactions Ordinance address legal aspects of digital transactions, with non-compliance potentially leading to legal challenges, customer disputes, and reputational harm. Consumer protection laws, such as the Trade Descriptions Ordinance, are crucial for safeguarding consumer rights, and violations can result in legal actions and damage to the company's reputation. General contract laws govern commercial transactions, emphasizing the importance of well-drafted contracts to avoid disputes and legal consequences. The Competition Ordinance prohibits anti-competitive conduct, and adherence is critical to avoid fines, legal actions, and damage to market reputation. Tax laws, outlined in the Inland Revenue Ordinance, govern corporate taxation, and non-compliance may lead to penalties, audits, and legal consequences. Employment laws, including the Employment Ordinance, establish regulations for employment relationships, and failure to comply may result in legal actions, fines, and damage to employer reputation. Each of the above regulations play a crucial role in shaping the legal framework for digital services operations in Hong Kong, and adherence is paramount to ensuring sustainable and compliant business practices in the region. The enforceability of civil liabilities in Hong Kong is a cornerstone of the region's legal system, rooted in the principles of the common law. Hong Kong's legal framework provides a robust and transparent environment for addressing civil disputes, ensuring that contractual agreements and legal obligations are upheld. The common law system, inherited from the British legal tradition, operates on established legal precedents and principles, contributing to clarity and consistency in legal interpretations. Parties involved in civil disputes in Hong Kong have access to an independent and impartial judiciary, and the court system is structured to handle a diverse range of civil cases. Once a judgment is obtained from a Hong Kong court, various enforcement measures, such as asset seizure and wage garnishment, can be employed. Hong Kong also has reciprocal enforcement agreements with numerous jurisdictions, facilitating the recognition and enforcement of foreign judgments. Arbitration, as an alternative dispute resolution method, is widely utilized, and arbitral awards enjoy enforceability similar to court judgments. While the legal framework in Hong Kong is well-established, businesses should be mindful of associated costs and timelines in legal proceedings. Clear contractual terms, legal advice, and consideration of alternative dispute resolution mechanisms contribute to effective dispute resolution. In addition, the Company has assessed the enforceability of China's Enterprise Tax Law. Although the Enterprise Tax Law itself does not directly apply to Hong Kong, indirectly, in the case of cross-border transactions, failure to adhere to withholding taxes may lead to increased scrutiny and potential disputes with tax authorities. Non-compliance may result in penalties, fines, and legal actions initiated by the tax authorities in both mainland China and Hong Kong. While we believe Hong Kong's legal system is renowned for its stability and adherence to the common law principles, the ongoing political uncertainties in both China and Hong Kong could potentially pose challenges to this established legal framework. The "one country, two systems" principle, which delineates a high degree of autonomy for Hong Kong, has faced increasing scrutiny and challenges in recent years. The political landscape and evolving relations between the Chinese central government and Hong Kong authorities have led to concerns about potential impacts on the legal system. Political uncertainties, particularly those arising from changes in the interpretation and application of the Basic Law by the National People's Congress Standing Committee in Beijing, have created an environment where the autonomy and independence of Hong Kong's legal system may be subject to reassessment. The imposition of national security laws in Hong Kong and other legislative changes has raised questions about the potential influence of mainland China on Hong Kong's legal processes. While the legal system in Hong Kong remains distinct, the broader political context has raised concerns about potential implications for judicial independence, the rule of law, and the enforceability of civil liabilities. The perceived erosion of autonomy in Hong Kong could impact the overall business environment, introducing uncertainties for companies operating in the region. Potential impact from VIE uncertainty VIE structures are commonly used by Chinese companies, including those in Hong Kong, to bypass industry restrictions on foreign ownership and access overseas capital markets. Any regulatory changes or crackdowns on VIEs could create uncertainty and risk for businesses in Hong Kong that rely on these structures to attract foreign investment or list on foreign exchanges. Uncertainty surrounding the legality and enforceability of VIE structures can erode investor confidence. Foreign investors may become more cautious about investing in companies with VIE structures due to concerns about regulatory risks and potential legal challenges. This could make it more challenging for businesses in Hong Kong to attract foreign investment or access international capital markets. Business in Hong Kong may face increased regulatory scrutiny and compliance requirements related to VIE structures in response to actions by China's government. Companies may need to invest additional resources in legal and regulatory compliance to ensure that their VIE arrangements are in line with evolving regulations and mitigate potential risks. This could increase operational costs and administrative burdens for businesses operating in Hong Kong, particularly those with significant exposure to mainland China's market. Potential impact from data security In response to China's data security regulations, businesses in Hong Kong may need to invest in enhancing their cybersecurity capabilities. Companies may need to invest additional resources, involve upgrading IT infrastructure, implementing data encryption technologies, or enhancing employee training on data security practices. Failure to comply could result in penalties, fines, or other regulatory actions, impact businesses' access to the Chinese market, limiting their growth opportunities and market prospects, which may deter foreign investors from engaging with the business. Adherence to data security regulations is crucial for maintaining access to both domestic and international markets and enhancing investor confidence. Potential impact from anti-monopoly Companies operating in Hong Kong that have significant market share or operate in sectors targeted by anti-monopoly regulations may face the risk of regulatory intervention by Chinese authorities. This could include investigations, fines, or other penalties for alleged anti-competitive behavior. The threat of regulatory action could deter foreign investors. Compliance with anti-monopoly regulations may require businesses in Hong Kong to adjust their market strategies, pricing policies, or corporate structures to ensure compliance with Chinese regulatory requirements. This could affect their competitiveness in the Chinese market and their ability to attract foreign investment or list on foreign exchanges. Companies may need to reassess their market positioning and business models to navigate regulatory challenges effectively while maintaining market share and profitability. Non-compliance with anti-monopoly regulations could negatively impact businesses' access to the Chinese market and their reputation among investors and stakeholders. Regulatory scrutiny and enforcement actions could result in reputational damage, legal repercussions, or market exclusion, limiting growth opportunities and market prospects. Data security impact towards business and offering Hong Kong's data security law primarily revolves around the Personal Data (Privacy) Ordinance (PDPO), which governs the collection, use, and handling of personal data in the region, serves as the foundational legislation for data protection in Hong Kong. It outlines principles and requirements for the lawful collection, processing, and use of personal data. These principles include obtaining consent, ensuring data accuracy, limiting data use to the purpose for which it was collected, and implementing security measures to protect personal data from unauthorized access, disclosure, alteration, or destruction. The PDPO sets out six data protection principles that organizations must adhere to when handling personal data. These principles include the purpose and manner of collection, accuracy and duration of retention, use of data, security measures, openness about policies and practices, and individuals' rights to access and correct their personal data. Organizations are required to implement appropriate technical and organizational measures to safeguard personal data against unauthorized or unlawful access, processing, or disclosure. These measures may include encryption, access controls, regular security assessments, staff training, and data breach response plans. The PDPO restricts the transfer of personal data outside of Hong Kong unless certain conditions are met, such as obtaining consent from the data subject or ensuring that the receiving jurisdiction offers an adequate level of data protection. The Office of the Privacy Commissioner for Personal Data (PCPD) oversees compliance with the PDPO and investigates complaints related to personal data privacy breaches. Non-compliance with the PDPO can result in penalties, fines, and even imprisonment for serious violations. Non-compliance with data security regulations can result in significant regulatory penalties, fines, or legal actions, impact businesses' performance and limiting growth opportunities and market prospects. Data breaches or violations of data security regulations can damage a company's reputation and erode investor confidence. This could result in a material change in our operations and/or the value of the securities we are registering for sale or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Hong Kong cybersecurity and data security regulations In addition, we are not covered by the permissions requirements from the regulation or policy issued by Cyberspace Administration of China (CAC) due to "one country, two systems" framework, which grants Hong Kong a high degree of autonomy and we have no operations or services that extend into mainland China or involve interactions with Chinese users. Due to the uncertainty over Hong Kong and Chinese legal framework, we might be required to obtained and maintain approval from authority in the future. This would cause a material change in our operations and/or the value of the securities we are registering for sale or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Cybersecurity and data security regulations primarily prioritize the protection of companies' digital assets rather than solely imposing fines on non-compliant entities. These regulations are designed to establish comprehensive frameworks that enhance the resilience of organizations against cyber threats and data breaches. By implementing robust security measures and compliance standards, companies can better safeguard sensitive information, mitigate risks, and maintain the trust of their stakeholders. The occurrence of unauthorized access to company computer systems or data, typically characterized by criminal or dishonest intent aimed at securing personal gain or inflicting loss upon others, represents a significant concern for organizational security. This may involve the misuse of computer programs and data stored within the company's infrastructure. In response to these threats, the company has implemented several robust security measures. These include the deployment of two-factor authentication for email logins to fortify access controls, encryption of passwords associated with client data to safeguard sensitive information, and the utilization of physical data storage shelves secured by keys and locks. These strategies collectively serve to mitigate the risk of unauthorized access and protect the integrity of the company's digital assets. Compliance with these regulations require the company to implement appropriate data protection measures, including data encryption, access controls, and regular audits. Companies must adopt stringent data handling practices to protect the confidentiality, integrity, and availability of personal and sensitive information. This includes obtaining consent from individuals before collecting their data, limiting data collection to what is necessary for the intended purpose, and securely storing and processing data. The above precautions and daily practices are currently carried out, if we impose extra precautions measures, it might incur extra costs and be time-consuming, which our CEO, as the sole officer, might not be able to afford. Consequently, our CEO might not be able to fully allocate time to implementing the company's business plan. Additionally, if any incidents occur, such as fines and penalties imposed by regulatory authorities due to non-compliance with the regulations, it could affect our company's reputation and erode investor trust. This could lead to a loss of business opportunities and negatively impact investor interest in participating in this offering. Permission from Hong Kong or Chinese authorities The CSRC (China Securities Regulatory Commission) trial measurement, officially known as the "Administrative Measures for the Overseas Issuance of Securities and Listing by Domestic Enterprises," is a set of regulations introduced by the CSRC to regulate and oversee fundraising activities of Chinese companies in global markets. These measures aim to govern the issuance and listing of securities by Chinese companies on overseas stock exchanges, such as the Hong Kong Stock Exchange (HKEX), New York Stock Exchange (NYSE), or NASDAQ. Currently, this rule specifically applies to Domestic Enterprises in mainland China, does not extend to companies based in other regions, such as Hong Kong or Macau. As of the time of this prospectus, we are not covered by the permissions requirements from the regulation or policy issued by Cyberspace Administration of China (CAC) and China Securities Regulatory Commission (CSRC). According to Section 15 of trial measure, if the Domestic Enterprise meets any of the following conditions, must obtain approval from CSRC: 1. The ratio of any of the following indicators for a Domestic Enterprise in the most recent fiscal year—operating income, total profits, total assets, or net assets—to the corresponding audited consolidated financial statement data of the issuer exceeds 50%; 2. The primary operational activities are conducted within mainland China or the main premises are located in mainland China, or the majority of senior management personnel responsible for operational management are Chinese citizens or have a habitual residence within mainland China. AFB Limited is a Nevada entity with no subsidiaries in Hong Kong or China, and is conducting business primarily in Hong Kong. We have not relied upon an opinion of counsel as we believe we do not need any permissions or approvals from Hong Kong or Chinese authorities to operate our business or conduct our offering to foreign investors, as such no opinion from counsel was obtained for this purpose. Currently, there is no limitation on the use of our funds, however, it is crucial to highlight that due to political uncertainty, there might be limitations imposed, by the PRC, in the future. The regulatory environment and government policies in Hong Kong may evolve and we recognize the potential for future changes that could impact the ability to freely transfer funds. As a result, we may not be available to fund our operations, and in such an event we may not be able to use funds for any other uses outside of Hong Kong. Currently, all of our cash is in Hong Kong and there is no limitation on the ability to transfer cash across borders of our funds, however, it is crucial to highlight that due to political uncertainty, there might be limitations imposed, by the PRC, in the future. The regulatory environment and government policies in Hong Kong may evolve and we recognize the potential for future changes that could impact the ability to freely transfer funds. As a result, we may not be available to fund our operations, and in such an event we may not be able to use funds for any other uses outside of Hong Kong. It should be highlighted that, we have no current intention to distribute dividends. Due to our limited operating history and deployable resources to comply with these regulations, coupled with political uncertainty, pose uncertainty in regards to the company's ability to conduct its business, accept foreign investment, or list on a U.S. or foreign exchange, and could result in a material change in our operations and/or the value of the securities we are registering for sale or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. All shares being offered pursuant to this Registration Statement will be sold at a fixed price of $0.05 per share for the duration of the offering. The Company estimates the costs of this offering at about $22,500. All expenses incurred in this offering are being paid for by the Company. The Company may use proceeds from this offering to pay for offering expenses. At this time, we have no cash management policies that dictate how funds are transferred. The proceeds from the sale of the securities sold on behalf of the Company will be placed directly into the Company s account or a designated account to be used as escrow; any investor who purchases shares will have no assurance that any monies, beside their own, will be subscribed to the prospectus. All proceeds from the sale of the securities are non-refundable, except as may be required by applicable laws. No arrangement has been made for escrow currently, and we are not aware, at this time, of any potential impact this may have on investors. If we are to utilize the services of an escrow agent, it is our intent to have arrangements with an escrow agent established before commencing this offering. As indicated throughout, however, we may not utilize the services of an escrow agent. The Company qualifies as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, which became law in April 2012 and will be subject to reduced public company reporting requirements. THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS OF YOUR INVESTMENT. PLEASE REFER TO , ' ': RISK FACTORS BEGINNING ON PAGE 4. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely on it. The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus. TABLE OF CONTENTS PART I PROSPECTUS PAGE PROSPECTUS SUMMARY 1 RISK FACTORS 4 SUMMARY OF OUR FINANCIAL INFORMATION 12 MANAGEMENT S DISCUSSION AND ANALYSIS 14 INDUSTRY OVERVIEW 15 FORWARD-LOOKING STATEMENTS 16 DESCRIPTION OF BUSINESS 16 USE OF PROCEEDS 18 DETERMINATION OF OFFERING PRICE 18 DILUTION 19 PLAN OF DISTRIBUTION 20 DESCRIPTION OF SECURITIES 21 INTERESTS OF NAMED EXPERTS AND COUNSEL 22 REPORTS TO SECURITIES HOLDERS 22 DESCRIPTION OF FACILITIES 22 LEGAL PROCEEDINGS 23 PATENTS AND TRADEMARKS 23 DIRECTORS AND EXECUTIVE OFFICERS 23 EXECUTIVE COMPENSATION 24 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 26 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 26 PRINCIPAL ACCOUNTING FEES AND SERVICES 26 MATERIAL CHANGES 26 FINANCIAL STATEMENTS F1-F17 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 27 INDEMNIFICATION OF OFFICERS AND DIRECTORS 27 RECENT SALES OF UNREGISTERED SECURITIES 28 EXHIBITS TO THE REGISTRATION STATEMENT 28 UNDERTAKINGS 29 SIGNATURES 30 You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus filed with the Securities and Exchange Commission. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date. Through June 30, 2025 all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. The date of this prospectus is June 24, 2024. Table of Contents PROSPECTUS SUMMARY In this Prospectus, "AFB," "the Issuer," the "Company," "we," "us," and "our," refer to AFB Limited, unless the context otherwise requires. Unless otherwise indicated, the term ''fiscal year'' refers to our fiscal year ending November 30th. Unless otherwise indicated, the term ''common stock'' refers to shares of the Company's common stock. This Prospectus, and any supplement to this Prospectus include "forward-looking statements". To the extent that the information presented in this Prospectus discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as "intends", "anticipates", "believes", "estimates", "projects", "forecasts", "expects", "plans" and "proposes". Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the "Risk Factors" section and the "Management s Discussion and Analysis" section in this Prospectus. This summary only highlights selected information contained in greater detail elsewhere in this Prospectus. This summary may not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire Prospectus, including
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary provides a brief overview of key information found in this prospectus. It is essential to note that this summary does not encompass all the necessary details for making an informed investment decision. Prior to making any investment choices, it is imperative that you thoroughly review the complete contents of this prospectus, including sections such as "Risk Factors," "Description of Business," "Management s Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements. Your investment decision should be based on a comprehensive understanding of all disclosed information within this prospectus. Unless the context otherwise requires, we use the terms "we", "us," "our," "Company," and "corporation" in this prospectus to refer to E-Smart Corp., a Nevada incorporated entity. To refer to Company s website, we use the terms "website", "platform," "digital platform". As of the current date, our common stock is not publicly traded, and there is no guarantee that a trading market will be established in the future or sustained if it does develop. We have not authorized anyone to provide information other than what is presented in this prospectus, and it is important not to rely on any unauthorized sources. We are not making an offer to sell these securities in any jurisdiction where it is prohibited. This document should only be used in jurisdictions where the sale of these securities is legal. The information provided in this prospectus is accurate only as of the date indicated on the front page, regardless of the delivery date or any subsequent sale of our common stock. Since the date on the front page, there may have been changes to our business, financial condition, and results of operations. We urge you to carefully read this prospectus before deciding whether to invest in any of the common stock being offered. Under U.S. federal securities legislation, our common stock will be "penny stock". Penny stock is any equity that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. E-SMART CORP. E-Smart is an innovative digital platform that aims to revolutionize the tattoo industry by efficiently connecting tattoo artists and clients. Our platform is designed to enhance efficiency, simplifying the client-artist interaction process to meet the requirements of both clients and tattoo studios. Our platform ensures a seamless experience for all users, providing a comprehensive database of skilled tattoo artists. Artists can easily showcase their exceptional work, and expand their client base. By including essential information and direct links to their social media profiles, we facilitate convenient access for users to view portfolios and initiate contact with their preferred artists. Masters interested in joining our platform shall contact us through our designated contacts and apply for inclusion in the database. As of the current moment, E-Smart Corp. has engaged in preliminary discussions with nine tattoo artists regarding potential collaboration on its platform. The details of the agreements, including terms and conditions, compensation structure, and other material terms are being negotiated and are subject to further refinement. Until formal contracts are established, these agreements remain non-binding, allowing both parties the flexibility to adjust or reconsider their participation. To assist clients in finding their ideal tattoo design, we offer a diverse gallery featuring a range of designs across various artistic styles. This enables clients to explore different options and make informed decisions that align with their personal preferences. Moreover, our commitment to staying ahead of industry trends is evident through our tattoo blog, which serves as a valuable resource for both enthusiasts and professionals. This blog provides users with up-to-date news, guides, and insights related to tattoos. We also ensure that tattoo artists are equipped with the latest information on tools and materials, catering to their evolving needs in this dynamic industry. Embracing the power of artificial intelligence, we have integrated an advanced AI-powered textual tattoo idea generator into our platform. This cutting-edge technology employs sophisticated algorithms to create unique and personalized descriptions of tattoo designs. Clicking the "Generate Ideas" button provides users with up to 10 AI-generated tattoo ideas. Utilizing the AI tattoo idea generator allows users to explore diverse design descriptions and push creative boundaries. This tool proves particularly beneficial for users who are in the early stages of considering a tattoo and want to explore ideas in a textual format before moving on to visual designs. As part of our commitment to transparency and convenience, our AI functionality estimates the approximate cost of a tattoo. By considering factors such as size, design complexity, and artist skill level, we provide users with an average cost by States, helping gauge the typical pricing for tattoos in various regions. This empowers clients to plan their budget effectively and make informed decisions before engaging with a tattoo artist, eliminating any potential surprises or uncertainties. The management of E-Smart Corp. believes that these AI technologies contribute to the platform's competitive strengths, offering users innovative tools and features in the tattoo industry. We're a newly established tattoo industry Company, launching operations without prior user engagement. Looking ahead, we have identified several key enhancements to further optimize our platform's functionality. Firstly, we plan to implement a clear and distinct separation between the platform for artists and clients. Our tattoo blog will feature distinct sections for tattoo masters and clients. Tattoo masters can access articles on tattoo technology, trends, and tools, aiding in skill enhancement. Meanwhile, clients will find content on design inspiration, artist selection, aftercare, and tattoo removal. This segregation optimizes user experience, delivering tailored information to each group. In the near future, we aim to introduce a chatbot assistant, known as the Tattoo Bot, to elevate the user experience to new heights. This conversational agent will possess a wide range of functionalities, including assisting users with frequently asked questions, simplifying the artist selection process, and providing guidance in identifying the most suitable tattoo styles based on individual preferences. Furthermore, the Tattoo Bot will ensure seamless navigation throughout our website, fostering a user-friendly journey that eliminates confusion and frustration. The automation capabilities of the Tattoo Bot will ensure its availability around the clock, offering a dependable source of assistance beyond regular business hours, which can instill trust and reliability in our Company. E-Smart is a dynamic and forward-thinking digital platform that connects tattoo artists and clients seamlessly. By leveraging advanced technologies, offering comprehensive services, and prioritizing user convenience, we provide an unparalleled experience for all stakeholders in the tattoo industry. Employees We are a development stage Company and currently have no employees, other than our board of directors, Diana Vasylenko, who takes the positions of the Director, President, Treasurer, Secretary and Director (Principal Executive, Financial and Accounting Officer). Implications of Being an Emerging Growth Company We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, as amended, and therefore we intend to take advantage of certain exemptions from various public Company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in this prospectus, our periodic reports and our proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of our Common Stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year s second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1.00 billion in non-convertible debt in the prior three-year period. We are not a "shell Company" within the meaning of Rule 405, promulgated pursuant to the Securities Act, because we have developed business plan and real business operations. Corporate information E-Smart Corp. is a US-based Company incorporated in the state of Nevada on June 6, 2023. Our primary executive office is located at 7311 Oxford Ave Philadelphia, PA 19111, and we can be reached via phone at +16203079197. Our Web-site Our website is located at https://e-smart.io. E-Smart Corp. is currently in the developmental stage, focusing on the development, and marketing of the online platform. To carry out our business plan, we require a minimum of $25,313 over the next twelve months as detailed in our Plan of Operations. The net proceeds from this offering will be used for business operations. While we expect to generate revenues within the first year of completing this offering, there is no guarantee that we will generate any revenue within the first twelve months or ever. Without a minimum funding of $25,313 our business may fail. In addition, we may require additional financing after the twelve-month period. Our independent registered public accounting firm has expressed doubt regarding our ability to continue as a going concern. As of the date of this prospectus, our common stock is not publicly traded, and there is no assurance that a trading market will develop. The Company is offering its shares publicly to raise funds for business development and increase the probability of commercial success.
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0002004906_galleinphi_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002004906_galleinphi_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0002004906_galleinphi_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0002006971_deerhorse_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002006971_deerhorse_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..c10a00331d5c520a59b62b6241c6bc688c4e4efb
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0002006971_deerhorse_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included herein. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our ordinary shares discussed under "Risk Factors" before deciding whether to buy our ordinary shares. Company Overview Currently, we have one wholly owned subsidiary, Deerhorse One Zero Eight Holding Limited, a Hong Kong limited company, referred to herein as, "Deerhorse HK". Presently, Deerhorse HK does not have any material operations. We intend to primarily operate through our Hong Kong subsidiary. While such plans have not yet materialized and while we currently have no formal agreements in place, through our wholly owned subsidiary, Deerhorse HK, we seek to acquire or enter into an undetermined business combination, with Jiangxi Luma 108 Information Technology Group Co., Ltd. referred to herein as, "Luma 108". Luma 108 is a Chinese Company established in the People s Republic of China (or the "PRC"). Its core business revolves around serving as a central hub or online platform connecting individuals who provide charging solutions at their locations for electric scooters, bicycles, and similar modes of transportation. Upon accessing these charging stations, customers can conveniently buy goods from these hosts, who offer the charging facilities, all made possible through Luma 108's developed platform. Luma 108 shares common management with the Company s and directors, Huibin Jiang and Xiang Liu. Corporate History On September 20, 2023, DeerHorse One Zero Eight Group Holding Limited was incorporated under the laws of the Cayman Islands as an exempted company with limited liability. On September 20, 2023, Mr. Huibin Jiang and Mr. Xiang Liu were both appointed as Directors to the Company. On September 20, 2023, 180,000,000 ordinary shares were issued to Mr. Huibin Jiang, and 20,000,000 ordinary shares were issued to Mr. Xiang Liu. These ordinary shares were issued at par value, $0.00025 per ordinary share, to each respective individual. On November 15, 2023, we acquired 100% of Deerhorse One Zero Eight Holding Limited, a Hong Kong limited company, referred to herein as, "Deerhorse HK". Deerhorse HK does not have any material operations. On December 1, 2023, Mr. Huibin Jiang agreed to cancel and return to treasury, as unissued ordinary shares, 44,000,000 shares, leaving him with a total of 136,000,000 ordinary shares. Consideration exchange pursuant to this transaction was $1.00 which was paid by the Company to Mr. Huibin Jiang. Our Corporate Structure On December 11, 2023, Huibin Jiang was appointed Chief Executive Officer of the Company and on the same date, Xiang Liu was appointed Chief Operating Officer of the Company. Huibin Jiang and Xiang Liu are our only officers and directors. The ordinary shares offered in this prospectus are shares of the Cayman Islands holding company. Table of Contents In this Prospectus, "DeerHorse One Zero," "the Issuer," "the Registrant," the "Company," "we," "us," and "our," refer to DeerHorse One Zero Eight Group Holding Limited, a Cayman Islands Company, unless the context otherwise requires. Unless otherwise indicated, the term "fiscal year'" refers to our fiscal year ending December 31st. Unless otherwise indicated, the term "ordinary shares" refers to shares of the Company's ordinary shares, with each ordinary share having a par value of $0.00025. PRELIMINARY PROSPECTUS Ordinary Shares We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are offering ______________ordinary shares pursuant to this initial public offering. This is the initial public offering of ordinary shares of DeerHorse One Zero Eight Group Holding Limited. The offering price per share of our ordinary shares in this offering is undetermined at this time, however it is expected to be no more than $4.00 per share. Prior to this offering, there has been no public market for our ordinary shares. We have applied to list our ordinary shares on the Nasdaq Capital Market under the symbol "LUMA". This application only relates to reservation of the ticker symbol for a period of twenty four months. On January 8, 2024, the application was approved. Investing in our ordinary shares involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our ordinary shares in "Risk Factors". We are an "emerging growth company" as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. We are a company incorporated under the laws of the Cayman Islands. At present, we are a holding company with no material operations. Our Articles of Association were filed with the Cayman Islands government on September 20, 2023. Currently, we have one wholly owned subsidiary, Deerhorse One Zero Eight Holding Limited, a Hong Kong limited company, referred to herein as, "Deerhorse HK". Presently, Deerhorse HK does not have any material operations. We intend to primarily operate through our Hong Kong subsidiary. While such plans have not yet materialized and while we currently have no formal agreements in place, through our wholly owned subsidiary, Deerhorse HK, we seek to acquire or enter into an undetermined business combination, with Jiangxi Luma 108 Information Technology Group Co., Ltd. referred to herein as, "Luma 108". Luma 108 is a Chinese Company established in the People s Republic of China (or the "PRC"). Its core business revolves around serving as a central hub or online platform connecting individuals who provide charging solutions at their locations for electric scooters, bicycles, and similar modes of transportation. Upon accessing these charging stations, customers can conveniently buy goods from these hosts, who offer the charging facilities, all made possible through Luma 108's developed platform. Luma 108 shares common management with the Company s directors, Huibin Jiang and Xiang Liu. Our current corporate structure is below: The ordinary shares offered in this prospectus are shares of the Cayman Island holding company. There is a possibility that we are unable to acquire or enter into a business combination with Luma 108. Additionally, should we acquire or engage in a business combination with Luma 108, it might be on terms that are considered not to be in the best interest of the company. If any of these events are to occur, the value of our ordinary shares may significantly decline or may become worthless. Table of Contents We intend to primarily operate through our Hong Kong subsidiary. While such plans have not yet materialized and while we currently have no formal agreements in place, through our wholly owned subsidiary, Deerhorse HK, we seek to acquire or enter into an undetermined business combination, with Jiangxi Luma 108 Information Technology Group Co., Ltd. referred to herein as, "Luma 108". Luma 108 is a Chinese Company established in the People s Republic of China (or the "PRC"). Its core business revolves around serving as a central hub or online platform connecting individuals who provide charging solutions at their locations for electric scooters, bicycles, and similar modes of transportation. Upon accessing these charging stations, customers can conveniently buy goods from these hosts, who offer the charging facilities, all made possible through Luma 108's developed platform. Luma 108 shares common management with the Company s directors, Huibin Jiang and Xiang Liu. There is a possibility that we are unable to acquire or enter into a business combination with Luma 108. Additionally, should we acquire or engage in a business combination with Luma 108, it might be on terms that are considered not to be in the best interests of the company. If any of these events are to occur, the value of our ordinary shares may significantly decline or may become worthless. Industry Overview While we are currently a holding company with no material operations, we aim to acquire or enter into an undetermined business combination with Luma 108 via our wholly owned subsidiary, Deerhorse HK. If successful, we would operate through Luma 108 in some capacity, although specifics are presently undetermined. Luma 108 acts as an online platform, accessible by computer or phone, connecting hosts offering charging solutions for electric scooters, bicycles, and similar transportation. This alignment with the growing demand for eco-friendly transportation aligns with consumer trends driving the shift towards sustainable modes of travel. According to Shanghai iResearch Market Consulting Co., Ltd., the Chinese market specifically demonstrates significant growth of two wheeled electric vehicles, with approximately 50.1 million units sold in 2022 and an expected increase to 54 million by the end of 2023. The cumulative number of electric vehicles is estimated at 340 million, with an expected rise to 400 million by 2025. Luma 108's business also spans various other sectors. The company caters to evolving market demand by fostering an ecosystem integrating e-commerce, and community group buying via its platform. Table of Contents We expect our total cash expenses for this offering (including cash expenses payable to our underwriters, whom we have yet to identify, for their out-of-pocket expenses) to be approximately $__________, exclusive of the below commissions. In addition, we will pay additional items of value in connection with this offering that are viewed by the Financial Industry Regulatory Authority, or FINRA, as underwriting compensation. These payments will further reduce the proceeds available to us before expenses. See "Underwriting." PER SHARE TOTAL Initial public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ (1) Does not include accountable and non-accountable expense allowance payable to underwriters. Please see the section of this prospectus entitled "Underwriting" for additional information regarding underwriter compensation. Neither we nor any of the underwriters of this offering authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor any of the underwriters of this offering take responsibility for, nor can provide any assurance regarding the reliability of, any other information that others may provide to you. This prospectus is an offer to sell only the shares offered herein, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our ordinary shares. For investors outside the United States: Neither we nor any of the underwriters of this offering have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our ordinary shares and the distribution of this prospectus outside the United States. Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Table of Contents According to Huajing Information Network, an affiliate of Huajing Industrial Research Institute, community group buying has emerged as a prominent e-commerce model in China since 2015, leveraging social e-commerce platforms and the nation's unique business culture. The growth of internet giants like Alibaba, JD.com, and Pinduoduo underscores China's consumer-driven demand and market potential. Key aspects of China's business culture, including a vast population, diverse city landscapes, high e-commerce adoption, and expanding income levels, shape the trajectory of community group buying. E-commerce Culture Penetration: China boasts a massive online population and a thriving e-commerce culture, evidenced by extensive netizen numbers and a robust e-commerce transaction volume, providing a fertile ground for community e-commerce growth. E-commerce Development Space: While witnessing income growth, China remains a developing country. Lower-tier cities offer growth opportunities, with their ability to meet savings-oriented consumer needs while improving quantity, speed, and quality in line with the country's basic conditions. Community group buying primarily offers cost-effective goods or services, fulfilling consumers core needs for quality, low-priced items. Luma 108, for example, leverages customer subsidies and community activities to align with this demand. The Luma 108 model focuses on popular, updated daily goods and services, particularly targeting price-sensitive users sensitive to the costs of charging stations, a common concern in residential communities. According to Huajing Information Network, the market for community group buying has surged, witnessing a significant increase in user numbers from 212 million in 2017 to 626 million in 2022. Future trends highlight a focus on cost reduction, efficiency improvements, and expanding penetration into lower-tier cities. URL source (iResearch): https://www.iresearch.com.cn/Detail/report?id=3969&isfree=0 URL Source (Huajing Information Network): https://www.huaon.com/channel/trend/929526.html Table of Contents
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0002008267_juheying_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002008267_juheying_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0002008267_juheying_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0002009460_job-aire_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002009460_job-aire_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8e3b7fdf4e5b87f477ccc66e3bf12feb1f15fb51
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0002009460_job-aire_prospectus_summary.txt
@@ -0,0 +1,5 @@
+PROSPECTUS SUMMARY
+ 
+ This summary highlights, and is qualified in its entirety by, the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information that may be important to you in making your investment decision. You should read this entire prospectus carefully, especially the Risk Factors, Special Note Regarding Forward-Looking Statements, Management s Discussion and Analysis of Financial Condition and Results of Operations and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision.
+ 
+ If our listing application is not approved by NYSE American, we will not be able to consummate
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0002011627_neighpart_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002011627_neighpart_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..bd7058b7b28328c93ec800a6ec82dfc4294442c5
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0002011627_neighpart_prospectus_summary.txt
@@ -0,0 +1,1359 @@
+SUMMARY
+
+ 
+
+This summary highlights information
+contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in shares of our
+common stock. You should read this entire prospectus carefully, including the section entitled "Risk Factors," "Business,"
+"Management s Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements
+and the related notes thereto included elsewhere in this prospectus, before you decide to invest in shares of our common stock.
+
+ 
+
+Neighpart International Corporation
+
+ 
+
+ Neighpart International Corporation ("NIC"
+or the "Company") was founded in 2019 as the first act of internationalization of the Neighpart S.A. Neighpart S.A was founded
+in 1991 as Madrigal Pharmacies, S.A. Neighpart S.A. distributed medicines, both prescription and over the counter, medical devices and
+medical equipment. Both companies have Mr. Claudio A. Escobar as their majority shareholder. On August 1, 2024 NIC completed the negotiations
+for the acquisition of 100% of the outstanding shares of Neighpart S.A., Kaizen Energy S.A.E.C.A. and Cevima S.A. in exchange for Series
+B Preferred Shares. Closing will occur within 7 days after the effectiveness of this offering or within 30 days after the withdrawal
+of this offering. Closing of the transactions is not dependent on the successful qualification of this offering. 
+
+ 
+
+ NIC s development plan is to integrate
+a group of wholly owned healthcare companies 
+
+ 
+
+ initially focused on servicing the Republic
+of Paraguay. During the first three years of activity, NIC was able to provide Neighpart S.A. with equipment that allowed them to grow
+their business and position themselves to negotiate the acquisitions. NIC identified and provided to Neighpart S.A, with: (i) oxygen
+generating equipment, (ii) medical equipment, (iii) modular operating rooms and components, (iii) oxygen compressors, and (iv) diesel
+power electric generators. According to management's vision, in a world where technology is concentrated in a few countries bringing
+those technologies to developing markets, such as Paraguay, is a key to NIC s future growth. 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 3 
+
+ 
+
+ 
+
+ On
+ May 31, 2024 NIC executed a memorandum of understanding for a distribution agreement with
+ Comitas Telesalud S.A., a Spanish company, that developed an advanced telemedicine equipment
+ technology. The distribution agreement will close in October, 2024 upon the completion of
+ due diligence. Closing is not dependent upon the success of this offering. The distribution
+ agreement grants NIC the exclusive distribution and manufacturing rights of the telemedicine
+ equipment technology for the Argentina, Brazil and Paraguay markets. The commercialization
+ of this distribution agreement could allow NIC to be the leader in telemedicine technology
+ in the region. To create synergy with the telemedicine technology NIC is in negotiations
+ for the acquisition of an alternative energy company with advanced electrical storage capacity,
+ Kaizen Energy S.A.E.C.A. NIC is also negotiating with a specialty cleaning and sanitization
+ company, Cevima, S.A. which can operate within NIC facilities and provide services to other
+ healthcare providers. These companies are all based in the Republic of Paraguay with solid
+ business models and provide a synergy for NIC in the Paraguayan healthcare industry. 
+
+ 
+
+ The future divisions of NIC are: 
+
+ 
+
+Neighpart S.A, is a long-time healthcare provider
+for : (i) oxygen plants, (ii) medical equipment, (iii) modular operating rooms and its parts, (iii) oxygen compressors, (iv) diesel power
+electric generator, among others, for the private and especially the governmental sector in Paraguay, mostly of the operation is based
+on national or sometime may be international tenders, then the level of services and products awarded is a clear example of the high-quality
+products and reliability on the installation and operational capabilities Neighpart S.A, has demonstrated for several years, so far.
+
+ 
+
+ Kaizen Energy S.A.E.C.A: this is Public Limited
+Company, qualified for the issuance of shares or debt securities, traded through the Stock Exchange registered in the Paraguayan stock
+market. Is a new company acting in the solar energy industry, with the support from Huawei limited to solar energy products and services,
+and Longi Solar Technology. 
+
+ 
+
+Cevima S.A. is a maintenance, cleaning, and related
+service provider for the private but especially the government sector in Paraguay. The services provided are awarded under national tenders,
+competing with other qualified companies in that industry.
+
+ 
+
+ As part of NIC s continued expansion the
+company plans to pursue additional partnerships or acquisitions for the ability to import intellectual property, business operations
+and/or trade secrets into Paraguay to improve the healthcare system. 
+
+ 
+
+ NIC will either own 100% of the subsidiaries or
+at least a 51% interest in any joint ventures or partnerships and control the operations in Paraguay. 
+
+ 
+
+ On August 1, 2024 NIC executed acquisition agreements
+with Neighpart S.A., Kaizen Energy S.A.E.C.A. and Cevima S.A. which will close within 7 days of the qualification of this offering or
+within 30 days of the withdrawal of this offering. 
+
+ 
+
+ All acquisitions will have a PCAOB audit reports
+prepared within 75 days of qualification of this offering. 
+
+ 
+
+IMPLEMENTATION PLAN
+
+ 
+
+ NIC will consolidate technology, services and
+products via acquisitions and partnership ventures within Paraguay to improve the healthcare in the Country. 
+
+ 
+
+ Since its creation, NIC s activity has focused
+on introducing technologies and operational improvements to the medical infrastructure of the Republic of Paraguay. As an example, NIC
+provided oxygen generating equipment to Neighpart S.A., which had the ability to have the equipment installed in hospital units in Paraguay
+including INGAVI, Regional Hospital of Ciudad del Este, Pilar Regional Hospital and Luque Hospital. This equipment provide a reliable
+replacement to older technology, oxygen tubes. NIC plans to continue to introduce other technologies such as modular operating rooms
+to reduce sepsis, improve cleaning and sterilization and continuous power supplies. 
+
+ 
+
+ Neighpart s initial objective is to grow
+its operations throughout Paraguay then South America and the Caribbean Islands then further expanding affordable healthcare support
+components to developing countries that will benefit from the reliability, convenience and lower cost. 
+
+ 
+
+ NIC will provide strong financials to provide
+cashflow for growth and expansion to its shareholders. 
+
+ 
+
+ 
+
+ 
+
+ 4 
+
+ 
+
+ 
+
+ 
+
+MARKET OVERVIEW
+
+ NIC s
+ business plan is to focus on development and improvement of healthcare services and infrastructure
+ to provide reliability to the industry in Paraguay. Investors should consider the general
+ Republic of Paraguay outlook, the nature of the healthcare industry in Paraguay and the weaknesses
+ of the electrical infrastructure that affect the reliability of the country s healthcare
+ industry.1 
+
+ 
+
+Republic of Paraguay Outlook:
+
+ 
+
+Sound macroeconomic policies have benefited Paraguay s
+economy over the past two decades. From 2004 to 2019, Paraguay grew faster, recorded smaller fiscal deficits, and borrowed less than
+its peer countries. Much of this growth reflected favorable terms of trade that supported agriculture and hydropower exports, but institutional
+reforms such as the inflation targeting mechanism and fiscal responsibility legislation (FRL) helped to safeguard macro stability and
+sustain growth.
+
+ 
+
+The Paraguayan government publicly encourages
+private foreign investment, but U.S. companies often struggle with practices that inhibit or slow their activities. Paraguay guarantees
+equal treatment of foreign investors and permits full repatriation of capital and profits. Paraguay has historically maintained the lowest
+tax burden in the Latin American region, with a 10 percent corporate tax rate and a 10 percent value added tax (VAT) on most goods and
+services.
+
+ 
+
+The Ministry of Industry and Commerce (MIC) signed
+in February 2021 an MOU with the Ministry of Justice to strengthen the rule of law and provide additional legal security to foreign investments
+in the country. Foreign and domestic private entities may establish and own business enterprises. Foreign businesses are not legally required
+to be associated with Paraguayan nationals for investment purposes, though this is strongly recommended on an unofficial basis, by national
+authorities. There is no restriction on repatriation of capital and profits. Private entities may freely establish, acquire, and dispose
+of business interests.
+
+ 
+
+Under the Investment Incentive Law (60/90) and the
+maquila program, the government has an approval mechanism for foreign investments that seeks to estimate the proposed investment s
+economic impact in areas including employment, incorporation of new technologies, and economic diversification.
+
+ 
+
+Paraguay has a floating exchange rate. Because
+of close ties to its two big neighbors in the Mercosur, the Paraguayan currency (Guaran ) depends on economic development and
+currency rates (measured against the U.S. dollar) in Paraguay and Brazil. The central bank (Banco Central del Paraguay, BCP) coordinates
+monetary policy, taking into account the baseline of government economic policy. The BCP s independence from political pressures
+has been strengthened over time. It is now relatively autonomous in its decisions.
+
+ 
+
+Healthcare in Paraguay: In recent years, Paraguay
+has improved its infant mortality rate, healthcare facility spending and health care resources. Yet, there is still much to do to improve
+healthcare in Paraguay. Here are seven ways the Paraguayan government is working to improve healthcare in Paraguay.
+
+ 
+
+1.
+Paraguay has far fewer healthcare workers than needed to provide adequate care for patients in rural areas. In fact, 70% of
+healthcare workers are allocated in the city of Asunci n despite only 30% of the population living in that area.
+
+ 
+
+2.
+The World Bank approved a loan to Paraguay to help improve its healthcare structure. In May of 2019, the World Bank approved a $115
+million loan to allow Paraguay to develop health treatments for mothers, new-born children and people who suffer from chronic health
+conditions. With the help of this loan, the quality of healthcare will increase in Paraguay in the coming years.
+
+ 
+
+ 
+
+___________________________
+
+1 htps://hia.paho.org/en/countries-22/paraguay-country-profile
+
+Directorate
+of Surgical Specialties-Medical Department-Operating Room Service-Central Hospital of the Social Security Institute/Unified Public Information
+Portal.
+
+National
+Observatory of the Social Security Institute (Observatorio Nacional del Instituto de Previsi n Social).
+
+https://www.bnamericas.com/en/news/paraguay-faces-potential-blackouts-itaipu-breaks-record
+
+https://www.iea.org/countries/paraguay
+
+https://www.worldbank.org/en/country/paraguay/overview
+
+https://www.imf.org/en/Countries/PRY
+
+https://www.oecd.org/en/publications/government-at-a-glance-latin-america-2024-country-notes_6ece9d93-en/paraguay_681a56fc-en.html
+
+ 
+
+ 5 
+
+ 
+
+ 
+
+ 
+
+3.
+The current life expectancy for people in Paraguay is 74.1 years. In 1990, the life expectancy in Paraguay was 68.5 years.
+Innovations in medicine, an increase in healthcare spending and resources have all contributed to the increase in the Paraguayan
+life expectancy. Although Paraguay has increased its life expectancy in the last 30 years, the country still has a long way to go to
+meet the life expectancy of more developed nations.
+
+ 
+
+4. The
+average amount spent on healthcare per capita in Paraguay is cause for great concern. In 2017, the average healthcare spending per
+capita for one year was $381. This number is a fraction of what developed nations spend on healthcare. As middle and lower-income
+Paraguayans do not have the financial resources to pay for healthcare, they do not go to doctors or hospitals unless it is
+necessary. Lack of doctor visits and preventative care will cause further health issues and the onset of chronic health conditions
+for Paraguayans in the future.
+
+ 
+
+5. Paraguay
+has very few hospital beds compared to the beds needed to care for the sick population. Paraguay has about one hospital bed per 1000
+people, which is almost a third of the hospital beds the United States has. Having enough hospital beds is essential to caring for
+the vulnerable population, especially during the COVID-19 pandemic. Because of the COVID-19 pandemic, Paraguay is in urgent need of
+more hospitals. Paraguay is building contingent hospitals to help care for more sick patients, but these hospitals will only help
+with the hospital bed shortage in the short term.
+
+ 
+
+6.
+Paraguay still has a relevantly high infant mortality rate. As of 2019, the infant mortality rate in Paraguay was 16.6 infant deaths
+per 1000 live births. This is almost three times the infant mortality rate of the United States. Most of the infants died of
+diseases such as pneumonia, the flu and diarrheal diseases.
+
+ 
+
+7.
+Paraguay does not have sufficient mental health resources. In Paraguay, there are only two mental health hospitals, no mental
+healthcare plan for adolescents and no stand-alone laws for mental health issues. Currently, 908,117 people in Paraguay suffer from
+mental health issues. To help the mentally ill population, Paraguay needs more resources to finance more mental health institutions.
+Paraguay also needs to create mental health plans and institute laws to help the mentally ill.
+
+ 
+
+Overall, Paraguay has made many improvements over
+the years, including infant mortality rate, healthcare spending and resources. However, Paraguay is still far from being caught up with
+higher-income nations. With the help of foreign aid and instituting more health care policies, Paraguay may develop a stronger healthcare
+system.
+
+ 
+
+The Paraguayan Energy Infrastructure: Paraguay
+is one of the world s largest exporters of electricity. The Country consumes only 16% of the electricity it produces; the rest
+is exported as a commodity to countries such as Brazil. This energy is sold at lower than the market price due to international agreements.
+
+ 
+
+Despite generating and exporting a great deal of hydroelectricity,
+Paraguay heavily relies on biomass for domestic consumption. "Wood from forest plantations and native forests supplies 51% of households
+for cooking," explains Guillermo Achucarro, an environmental engineer specializing in climate change. "The remainder is used
+by agricultural industries, which find it cheaper to use firewood than to pay for electricity."
+
+ 
+
+Although Paraguay s domestic demand is mostly
+supplied by biomass, the generation capacity of the country s three hydroelectric plants – Acaray, Yacyret and Itaip 
+– has been considerably impacted by two consecutive years of historic drought along the Paran River, on which all three
+are located. Due to the low flow, little water has reached the reservoirs of the three power plants, which has considerably reduced production.
+
+ 
+
+The vast majority of Paraguayans believes that, faced
+with constant power cuts, they will have no choice but to buy a generator. Disadvantages include noise, pollution, and fuel consumption,
+but they have no choice. They cannot rely on the current quality of service: their income depends on it. A lack of adequate infrastructure
+is compounded by an energy mix that fails to take advantage of renewable energy sources and the advance of the climate crisis, which promises
+to exacerbate the problems. In the not-too-distant future, one of the world s largest energy exporters may not be able to turn on
+the lights.
+
+ 
+
+The electrical infrastructure short-comings lead
+to rolling blackouts which include healthcare facilities. NIC has identified improvement of the electrical infrastructure surrounding
+the healthcare industry as an opportunity for operational improvement and generating profits.
+
+ 
+
+ 
+
+ 
+
+ 6 
+
+ 
+
+ 
+
+ 
+
+FINANCIAL PERFORMANCE SUMMARY
+
+ 
+
+For the year ended December 31, 2023, we
+generated $3,802,754 of revenue, with a $1,004,000 in net profit.
+
+ For
+ the six months ended June 30, 2024, we generated $445,000 of revenue, with a net income loss
+ of $127,068. 
+
+ 
+
+ 
+
+SUMMARY OF THE OFFER
+
+ 
+
+ 
+ Securities offered
+ 
+ Class A Common Stock
+
+ 
+ 
+ 
+ 
+
+ 
+ Class A Stock Common outstanding before the Offering*
+ 
+ 15,744,000 shares of Class A Common Stock
+
+ 
+ 
+ 
+ 
+
+ 
+ Class A Stock Common offered
+ 
+ 20,000,000 shares of Class A Common Stock
+
+ 
+ 
+ 
+ 
+
+ 
+ Class A Stock Common outstanding after the Offering, assuming full
+ subscription
+
+ 
+
+ 
+ 35,744,000 shares Class A Common Stock
+
+ 
+ Share Price
+ 
+ $1 per share
+
+ 
+ 
+ 
+ 
+
+ 
+ Minimum Investment 
+ 
+ $50,000
+
+ 
+
+ 
+
+ 
+
+USE OF PROCEEDS 
+
+ 
+
+See "Use of Proceeds to Issuer" section
+of this Offering Circular.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 7 
+
+ 
+
+ 
+
+ 
+
+RISK FACTORS
+
+ 
+
+An investment in shares of our
+common stock involves substantial risks and uncertainties that may adversely affect our business, results of operations and financial
+condition. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific
+factors set forth in the section titled "Risk Factors" immediately following this prospectus summary in deciding whether to
+invest in our common stock. These risks include, among others, the following:
+
+ 
+
+Summary of Risk Factors:
+
+ 
+
+Any Future Economic and
+political instability in Paraguay may adversely and materially affect our business, results of operations and financial condition.
+
+ 
+
+Due to the Company s
+operations in Paraguay, the Company is exposed to the risk of changes in foreign exchange rates.
+
+ 
+
+The Paraguayan economy could
+be adversely affected by economic developments in other global markets.
+
+ 
+
+Restrictions on the supply
+of energy could negatively affect Paraguay s economy.
+
+ 
+
+We are exposed to risks
+in relation to compliance with foreign and domestic anti-corruption and anti-bribery laws and regulations.
+
+ 
+
+ U.S. companies often
+struggle with practices that inhibit or slow their activities within Paraguay due to the international nature and Latin American operations 
+
+ 
+
+We have limited operating
+history and face many of the risks and difficulties which are frequently encountered by companies in the developmental stage. Our limited
+operating history may make evaluating our prospects difficult.
+
+ 
+
+ We are not yet listed
+on a public trading exchange and failure to obtain a listing could affect the liquidity of investor s shares. 
+
+ 
+
+ The offering price of
+$1.00 is arbitrarily set without the input of an investment banker. There is not market price established at this time. 
+
+ 
+
+We have very limited financial
+resources. We have included a note to our financial statements expressing substantial doubt about our ability to continue as a going concern.
+
+ 
+
+We do not currently have
+a fully developed marketing plan, and as such we may not generate as much revenue as we anticipate.
+
+ 
+
+Our business and marketing
+plans may be unsuccessful, which means that we may not be able to continue operations as a going concern.
+
+ 
+
+ The Company has
+applied for quotation on the OTCQB exchange but acceptance to this exchange is not guaranteed and could affect the business liquidity
+and the ability of shareholders to trade their stock. 
+
+ 
+
+We will incur increased
+costs as a result of being a public company. These costs will adversely impact our results of operations.
+
+ 
+
+We have not established
+disclosure controls and procedures and controls over financial reporting. Without these controls, we may not accurately account for our
+financial transactions and report material transactions on a timely basis.
+
+ 
+
+ 
+
+ 
+
+ 8 
+
+ 
+
+ 
+
+ 
+
+If inflation increases significantly
+the results of operations, financial condition and prospects could be materially and adversely affected.
+
+ 
+
+Currency exchange rate fluctuations
+may increase our costs.
+
+ 
+
+If you invest in our stock,
+your investment may be disadvantaged by future funding, if we need and are able to obtain it.
+
+ 
+
+Voting control by management
+means it is unlikely you and other stockholders will be able to elect our directors and you will have little influence over our management.
+
+ 
+
+ If Claudio Escobar,
+our CEO and President were leave the company prior to securing suitable replacements, we will be left with a significant gap in our management
+and our business operations might need to be suspended or cease entirely all together. 
+
+ 
+
+If we are unable to effectively
+manage our growth, our ability to implement our business strategy and our operating results will likely be materially adversely affected.
+
+ 
+
+If we are unable to hire
+qualified personnel and retain or motivate key personnel, we may not be able to grow effectively.
+
+ 
+
+We will engage in a highly
+competitive and sophisticated market in which we have limited prior experience. If we are unable to compete successfully in our market
+place, our business may fail or be less successful.
+
+ 
+
+Security and privacy breaches
+in our digital marketing platform may expose us to additional liability and result in the loss of customers, either of which events could
+harm our business and cause our stock price to decline.
+
+ 
+
+We could incur substantial
+losses from employee fraud and, as a result, our business would suffer.
+
+ 
+
+Our digital platform might
+be used for illegal or improper purposes, which could expose us to additional liability and harm our business.
+
+ 
+
+We may experience breakdowns
+in our digital platform that could damage customer relations and expose us to liability, which could affect adversely our ability to become
+profitable.
+
+ 
+
+We may not protect our proprietary
+technology effectively, which would allow competitors to duplicate our digital platform. This would make it more difficult for us to compete
+with them.
+
+ 
+
+Shares sold by the selling
+shareholders may limit the amount of proceeds raised in the primary offering
+
+ 
+
+You may find it difficult
+to sell our shares because there is no public market for our shares and you have no assurance a public market will develop.
+
+ 
+
+"Penny stock"
+rules may make buying and selling our common stock difficult.
+
+ 
+
+We are an "emerging
+growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make
+our common stock less attractive to investors.
+
+ 
+
+ 
+
+ 
+
+ 9 
+
+ 
+
+ 
+
+ 
+
+We may not eligible quoted
+on OTCQB marketplace.
+
+ 
+
+We do not currently have
+invention assignment agreements with all of our employees. If we are unable to protect the confidentiality of our other proprietary information,
+our business and competitive position may be harmed.
+
+ 
+
+We rely on, and in the future
+we may rely on, third-party contractors and components for certain of our technology, software, information systems and products and our
+disaster recovery plan.
+
+ 
+
+Unexpected changes in vendor
+payment terms may weaken our financial position.
+
+ 
+
+If our trademarks and trade
+names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may
+be adversely affected.
+
+ 
+
+Our capitation arrangement
+may prove unprofitable if actual utilization rates exceed our assumptions.
+
+ 
+
+We are highly dependent
+upon senior management; our failure to attract and retain key members of senior management could have a material adverse effect on us.
+
+ 
+
+Limitations on the availability
+of capital or other financing sources on reasonable terms, as well as losses due to existing bad or uncollectible debts, could have an
+adverse impact on our business, results of operations, financial condition and prospects.
+
+ 
+
+Changes in tax laws may
+adversely affect us, and the Internal Revenue Service or a court may disagree with tax positions taken by us, which may result in adverse
+effects on our financial condition or the value of our common stock.
+
+ 
+
+Natural disasters or other
+catastrophic events could materially disrupt and have a negative effect on our business, results of operations, financial condition and
+prospects.
+
+ 
+
+There has been no prior
+public market for our common stock and there may not be an active trading market for shares of our common stock following this offering,
+which may cause shares of our common stock to trade at a discount from their initial offering price and make it difficult to sell the
+shares of common stock you purchase.
+
+ 
+
+The market price of shares
+of our common stock may be volatile or may decline and our operating results may fluctuate significantly, which makes our future operating
+results difficult to predict and could cause our operating results to fall below expectations and could cause the value of your investment
+to decline.
+
+ 
+
+ We are a parent company
+with no operations of our own and we are accordingly dependent upon distributions from our subsidiaries to pay taxes and pay dividends. 
+
+ 
+
+If securities or industry
+analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock,
+our stock price and trading volume could decline.
+
+ 
+
+Investors in this offering
+will suffer immediate and substantial dilution.
+
+ 
+
+ 
+
+ 
+
+ 10 
+
+ 
+
+ 
+
+ 
+
+You may be diluted by the
+future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.
+
+ 
+
+Participation in this offering
+by our existing stockholders and their affiliated entities may reduce the public float for our common stock.
+
+ 
+
+Each of our Principal Stockholders
+and their affiliates control us and their individual interests may conflict with ours or yours in the future.
+
+ 
+
+A significant portion of
+our total outstanding shares is and will be restricted from immediate resale following this offering, but if we or our pre-IPO owners
+sell additional shares of our common stock in the near future or are perceived by the public markets as intending to sell them, the market
+price of our common stock could decline significantly.
+
+ 
+
+Because we have no current
+plans to pay dividends on our common stock following this offering, you may not receive any return on your investment unless you sell
+your common stock for a price greater than that which you paid for it.
+
+ 
+
+Our management may spend
+the proceeds of this offering in ways with which you may disagree or that may not be profitable.
+
+ 
+
+We could be subject to securities
+class action litigation.
+
+ 
+
+We will incur increased
+costs and become subject to additional regulations and requirements as a result of becoming a public company, which could lower our profits,
+make it more difficult to run our business or divert management s attention from our business.
+
+ 
+
+Our internal controls over
+financial reporting currently do not meet all of the standards contemplated by Section 404 of the Sarbanes-Oxley Act, and failure
+to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley
+Act could have a material adverse effect on our business and the market price of the common stock.
+
+ 
+
+We are an "emerging
+growth company," and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less
+attractive to investors.
+
+ 
+
+Anti-takeover provisions
+in our organizational documents and Florida law might discourage or delay acquisition attempts for us that you might consider favorable.
+
+ 
+
+Our amended and restated
+certificate of incorporation will designate the Court of Chancery of the State of Florida and the federal district courts of the United
+States of America as the sole and exclusive forums for certain types of actions and proceedings that may be initiated by our stockholders,
+which could limit our stockholders ability to obtain a favorable judicial forum for disputes with the Company or the Company s
+directors, officers or other employees.
+
+ 
+
+Please see "Risk Factors" for a discussion of these and other factors you should consider before making an investment in shares of our common
+stock.
+
+ 
+
+ 
+
+ 
+
+ 11 
+
+ 
+
+ 
+
+ 
+
+OUR ORGANIZATIONAL STRUCTURE
+
+ The
+ following diagram depicts our organizational structure and equity ownership at the current
+ time. This diagram is provided for illustrative purposes only and does not show all of our
+ operations, legal entities or ownership percentages of these entities:
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ After the completion of
+this offering and the acquisitions, assuming full subscription to the Offering, our Principal Stockholders will beneficially own 35.4%
+of our outstanding common stock and acquisition shareholders and public stockholders will own 64.6% of our outstanding common stock assuming
+a fully subscribed offering price of $1.00 per share of common stock,. See "Principal Stockholders."
+Mr. Claudio A. Escobar currently holds 100% of the Series A Preferred Shares which provide for voting control over the operations of
+the Company. 
+
+ 
+
+ In connection with this
+offering we intend to provide registration rights to the pre-IPO stockholders demand registration rights and customary "piggyback"
+registration rights. See the section titled "Description of Common Stock—Registration Rights"
+for a description of these registration rights. 
+
+ 
+
+ 
+
+ 12 
+
+ 
+
+ 
+
+ 
+
+EMERGING GROWTH COMPANY
+
+ 
+
+We are an "emerging growth
+company" as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"). An emerging growth company may
+take advantage of specified reduced reporting requirements that are otherwise generally applicable to public companies. These reduced
+reporting requirements include:
+
+ 
+
+ 
+ 
+ 
+ the requirement to present only two years of audited financial statements and only two years of related management s discussion and analysis in this prospectus;
+
+ 
+ 
+
+ 
+ 
+ 
+ the ability to elect to delay compliance with new or revised accounting standards until they are made applicable to private companies;
+
+ 
+ 
+
+ 
+ 
+ 
+ an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal control over financial reporting;
+
+ 
+ 
+
+ 
+ 
+ 
+ reduced disclosure about our executive compensation arrangements; and
+
+ 
+ 
+
+ 
+ 
+ 
+ an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or shareholder approval of any golden parachute arrangements.
+
+ 
+ 
+
+We may take advantage of these
+provisions until we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest to occur
+of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify
+as a large accelerated filer, which would occur as of the last day of the fiscal year in which we have been subject to SEC reporting requirements
+for at least 12 months, we have filed at least one Annual Report on Form 10-K, and we have at least $700 million of equity securities
+held by non-affiliates as of the end of the second quarter of that fiscal year; (iii) the date on which we have, in any three-year
+period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after
+the fifth anniversary of the listing of our common stock on Nasdaq. We may choose to take advantage of some but not all of these reduced
+reporting burdens. We have taken advantage of certain reduced reporting burdens in this prospectus. Accordingly, the information contained
+herein may be different than the information you receive from other public companies in which you hold stock.
+
+ 
+
+The JOBS Act permits an emerging
+growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable
+to public companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until
+we affirmatively and irrevocably opt out of the extended transition period. As a result, our consolidated financial statements may not
+be comparable to the financial statements of companies that comply with new or revised accounting pronouncements as of public company
+effective dates.
+
+ 
+
+For certain risks related to our
+status as an emerging growth company, see the section titled "Risk Factors—Risks Related to this Offering
+and Ownership of Our Common Stock—We are an "emerging growth company," and the reduced disclosure requirements applicable
+to emerging growth companies may make our common stock less attractive to investors."
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 13 
+
+ 
+
+ 
+
+SUMMARY OF CONSOLIDATED
+FINANCIAL AND OTHER DATA
+
+ 
+
+ The following tables summarize,
+for the periods and as of the dates indicated, our consolidated financial data. We have derived the summary consolidated statements of
+operations data for the years ended December 31, 2022 and 2023 and the six months ending June 30, 2024 (unaudited) from our
+audited consolidated financial statements included elsewhere in this prospectus. 
+
+ 
+
+ Any unaudited condensed
+consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion
+of our management, reflect all normal recurring adjustments necessary for the fair statement of our consolidated results for these periods.
+The results for any interim period are not necessarily indicative of the results that may be expected for the full year. Our historical
+results are not necessarily indicative of the results expected for any future period. 
+
+ 
+
+ You should read the summary
+consolidated financial data below, together with the consolidated financial statements and related notes thereto appearing elsewhere
+in this prospectus, as well as "Selected Consolidated Financial and Other Data," "Management s
+Discussion and Analysis of Financial Condition and Results of Operations," and the other financial information included elsewhere
+in this prospectus. 
+
+ 
+
+ 
+ 
+ Year Ended December 31, 
+ Six Months Ending June 30, 
+
+ 
+ 
+ 2022 
+ 2023 
+ 2024 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Summary Statement of Operations Data: 
+ 
+ 
+ 
+
+ 
+ REVENUES 
+ $ 1,866,355 
+ $ 3,802,754 
+ $ 445,000 
+
+ 
+ COST OF SALES 
+ 1,850,098 
+ 2,602,755 
+ 434,157 
+
+ 
+ GROSS PROFIT 
+ 16,258 
+ 1,199,999 
+ 10,843 
+
+ 
+ General and Administrative expenses 
+ 347,303 
+ 192,285 
+ 137,599 
+
+ 
+ Board Member Fees 
+ (6,621 ) 
+ 3,749 
+ 312 
+
+ 
+ Total operating expense 
+ 340,682 
+ 196,034 
+ 137,911 
+
+ 
+ Profit (Loss) from operations 
+ (324,425 ) 
+ 1,003,965 
+ (127,068 ) 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ OTHER INCOME (EXPENSES) 
+ 
+ 
+ 
+
+ 
+ Write-off 
+ 25,771 
+ – 
+ – 
+
+ 
+ Interest Income 
+ – 
+ – 
+ – 
+
+ 
+ Other Operational Income 
+ 90 
+ 35 
+ – 
+
+ 
+ Management Income 
+ – 
+ – 
+ – 
+
+ 
+ Total other income (expense) 
+ 25,861 
+ 35 
+ 0 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Income (Loss) from continuing operations 
+ (298,563 ) 
+ 1,004,000 
+ (127,068 ) 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ NET INCOME (LOSS) 
+ (298,563 ) 
+ 1,004,000 
+ (127,068 ) 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Net income (loss) per share applicable to common stockholders
+ – basic 
+ (2.11 ) 
+ 0.07 
+ (0.01 ) 
+
+ 
+ Net income (loss) per share applicable to common stockholders – diluted 
+ (2.11 ) 
+ 0.07 
+ (0.01 ) 
+
+ 
+ Weighted average shares outstanding: 
+ 
+ 
+ 
+
+ 
+ Basic and diluted (1) 
+ 141,435 
+ 14,144,000 
+ 15,744,000 
+
+ 
+
+ 
+
+ 
+ 
+ (1)
+ Net income per share represents net income divided by the common shares issued and outstanding.
+
+ 
+ 
+
+ 
+
+ 
+
+ 
+
+ 14 
+
+ 
+
+ 
+
+ 
+
+CORPORATE INFORMATION
+
+ 
+
+NEIGHPART INTERNATIONAL CORP.
+was incorporated in Florida on August 22, 2022 as a conversion of Neighpart International, LLC which was registered in Florida on June
+4, 2019. Our principal executive offices are located at 20301 SW 106th Ave, Miami, Florida 33189 and our telephone number is (305)
+439-4139.
+
+ 
+
+Our website address is https://nic-usa.net/.
+The information on, or that can be accessed through, our website is not part of this prospectus and is not incorporated by reference herein.
+We have included our website address as an inactive textual reference only.
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 15 
+
+ 
+
+ 
+
+ 
+
+THE OFFERING
+
+ 
+
+Common stock offered by us:
+
+ 
+
+ The Company is qualifying 20,000,000
+shares of Class A Common Stock under this Offering Statement. 
+
+ 
+
+Common stock outstanding immediately after this offering
+
+ The
+ Company has authorized with the State of Florida up to 1,000,000,000 shares of Common Stock
+ at a par value of $0.001 and 20,000,000 shares of Preferred "Blank Check" Shares
+ at a par value of $0.001. The Company currently has 15,744,000 Common Stock issued and outstanding,
+ 1,000,000 of preferred shares issued and outstanding in the form of Series A Preferred Shares
+ and 3,000,000 Series B Preferred Shares. Upon full subscription to this Offering the Company
+ will have 35,744,000 Common Stock issued and outstanding. See "Our Organizational Structure." 
+
+ 
+
+Use of proceeds
+
+ 
+
+ The
+ estimated net proceeds to NIC from the sale of these common shares in this offering will
+ be approximately $19 million, based on the public offering price of $1.00 per share, after
+ deducting estimated underwriting discounts and commissions and estimated offering expenses
+ payable by us. We currently intend to use the net proceeds from this offering, together with
+ our existing cash and cash equivalents, to (i) repay all amounts outstanding under the
+ Neighpart Healthcare Holdings Credit Facility, listed on the Balance Sheet as "Shareholders 
+ Loan", and (ii) for general corporate purposes, including working capital, operating
+ expenses and capital expenditures. We may also use a portion of the net proceeds from this
+ offering for the acquisition of other businesses or other assets that we believe are complementary
+ to our own. Our Principal Stockholders and/or their respective affiliates are lenders under
+ the Neighpart Healthcare Holdings Credit Facility and therefore will receive a portion of
+ the net proceeds to us from the offering. See "Use of Proceeds" for additional
+ information.
+
+ 
+
+Risk factors
+
+ 
+
+Investing in shares of our common stock involves
+risks. See "Risk Factors" for a discussion of risks you should carefully consider before deciding to invest
+in our common stock.
+
+ 
+
+Proposed Trading Symbol
+
+ 
+
+"NIDV"
+
+ 
+
+ 
+
+ 
+
+ 16 
+
+ 
+
+ 
+
+ 
+
+RISK FACTORS
+
+ 
+
+An investment in shares of
+our common stock involves risks. You should carefully consider the following information about these risks, together with the other information
+contained in this prospectus, before investing in shares of our common stock. If any of the following risks occur, our business, results
+of operations, financial condition and future growth prospects could be materially and adversely affected. In these circumstances, the
+market price of our common stock could decline, and you may lose all or part of your investment. This prospectus also contains forward-looking
+statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking
+statements as a result of a number of factors, including the risks described below. See "
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/CIK0002016420_chenghe_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002016420_chenghe_prospectus_summary.txt
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@@ -0,0 +1 @@
+This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus or the context otherwise requires, references to: amended and restated memorandum and articles of association refers to the amended and restated memorandum and articles of association of the company which will be adopted prior to the consummation of this offering; we, us, company or our company are to Chenghe Acquisition II Co., a Cayman Islands exempted company; CCM are to Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, a representative of the underwriters in this offering; Companies Act refers to the Companies Act (Revised) of the Cayman Islands as the same may be amended from time to time; completion window refers to the period following the completion of this offering at the end of which, if we have not completed our initial business combination, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions and as further described herein. The completion window ends (i) 24 months from the closing of this offering; or (ii) such other time period in which we must consummate an initial business combination pursuant to an amendment to our amended and restated memorandum and articles of association; directors are to our current directors and director nominees; founder shares are to Class B ordinary shares initially purchased by our sponsor in a private placement prior to this offering and the Class A ordinary shares that will be issued upon (i) the automatic conversion of the Class B ordinary shares at the time of our initial business combination or (ii) the conversion at any time prior to our initial business combination, at the option of the holder, in each case as described herein; initial shareholders are to holders of our founder shares prior to this offering; management or our management team are to our executive officers and directors; ordinary shares are to our Class A ordinary shares and our Class B ordinary shares; permitted withdrawals means amounts withdrawn to pay our taxes (excluding U.S. federal excise tax), provided that all permitted withdrawals can only be made from interest and not from the principal held in the trust account; private placement shares are to the Class A ordinary shares sold as part of the private placement units; private placement units are to the units issued to our sponsor in a private placement simultaneously with the closing of this offering, which private placement units are identical to the units sold in this offering, subject to certain limited exceptions as described in this prospectus; private placement warrants are to the warrants sold as part of the private placement units; public shares are to our Class A ordinary shares sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); 1 Table of Contents public shareholders are to the holders of our public shares, including our initial shareholders and management team to the extent our initial shareholders and/or members of our management team purchase public shares, provided that each initial shareholder s and member of our management team s status as a public shareholder will only exist with respect to such public shares; public warrants are to the warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); Seaport are to Seaport Global Securities LLC, a representative of the underwriters in this offering; and sponsor are to Chenghe Investment II Limited, a Cayman Islands limited liability company. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. Any share dividends described in this prospectus will take effect as a share capitalization as a matter of Cayman Islands law. General We are a blank check company newly incorporated as a Cayman corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities, which we refer to throughout this prospectus as our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target. While we may pursue an initial target business in any industry, geography, or sector, we intend to focus our search on growing companies in Asian markets or global companies with a presence or focus in Asia. Our sponsor is affiliated with Chenghe Group Ltd. ( Chenghe Group ), an investment holding company with an advisory practice, and a repeat SPAC sponsor which has backed and led multiple SPAC vehicles from the formation of such vehicles to consummation of their initial business combinations. Our Company and Sponsor Our company is led by our CEO, Ms. Anna Zhou, and supported by our Chairman, Shibin Wang, Chairman of the Advisory Board, Mr. Richard Qi Li, and our CFO, Mr. Lyle Wang. Mr. Li is the Founder of Chenghe Group, and both Ms. Zhou and Mr. Wang serve on Chenghe Group s investment team. These members of our management played a critical role in the formation, initial public offerings and business combinations of prior SPACs sponsored by Chenghe Group. Chenghe Group is an investment holding company with multiple lines of business: including financial advisory, asset management, private equity investing and other services. Within its advisory practice, Chenghe Group provides a full spectrum of services, including capital raising, financial advisory on mergers and acquisitions ( M&A ) and public listing services across a broad range of sectors and companies at different growth stages. Within its Asset Management and Private Equity practice, Chenghe Group is committed to creating value for investors by identifying and investing in visionary management teams and growing companies with disruptive innovations. The group s current major investment areas include green technology, TMT (technology, communications, and media), healthcare, consumer, ecommerce, and other new economic industries. In addition, through its Private Equity practice, Chenghe Group has been actively involved in SPAC investments, sponsoring and leading multiple US-Listed SPACs including Chenghe Acquisition Co. (Nasdaq: CHEA) and Chenghe Acquisition I Co. (Nasdaq: LATG). Business Strategy We intend to capitalize on the experience of our team to identify and acquire one or more growing companies in Asian markets or global businesses with a presence or focus in Asia, that demonstrate a strong potential for expansion and value creation. Leveraging our sponsor affiliate and management team, we have a unique vantage point in assessing deal flow, and sourcing proprietary opportunities and potential investment targets through the connectivity of Chenghe Group and our partners. Our management team has extensive experience and deep networks both globally and within the APAC region, and we well positioned to effectively source and evaluate promising investment opportunities which can benefit from the expertise and capabilities of our management team to create long-term shareholder value. 2 Table of Contents Asia is one of the most active regions when it comes to the volume of growing and public ready unicorn companies. Asia-based companies spearheaded the emergence of new unicorns in January 2024. For the first time in over a year, a double digit number of new companies received private funding that put them at an increased valuation of $1.0+ billion. Out of the eleven companies recorded in January, six of them are based in Asia, with three companies domiciled in PRC, and one each from Singapore, Hong Kong and India, according to Crunchbase. Southeast Asia also has shown robust performance in the creation of new unicorns, with developing countries showing more ambitions towards the creation of unicorns as macroeconomic tailwinds in consumer income and favorable structural and regulatory changes continues on an upward trajectory in the region, according to Crunchbase. In addition to new and attractive business combination targets continuing to emerge in the region, Asia remains to be a robust market for new issuance and is primed for an uptick in new issuance in 2024. In 2023, 732 companies went public in Asia-Pacific raising $69.4 Billion. Despite the healthy public equity activity within the Asia region, this represented a year over year decline of 18% in number of companies going public and 44% fall in primary capital raised. Within the Asia-Pacific IPO sector, financially robust enterprises, supported by private equity and venture capital firms, possess the financial flexibility to delay their listing until market conditions become more favorable. With a focus on realistic pricing and post-IPO performance, it is anticipated that many of these well-prepared and public ready companies which delayed 2023 IPO plans, may choose to pursue a go-public strategy in 2024. Asia is expected to represent approximately 50% of the global GDP and is on track to represent 40% of global consumption by 2040. Much of the growth being seen in the Asian markets is driven directly by the consumer and ecommerce verticals, as consumer income continues to increase, and robust digital ecosystems and infrastructures rise across Asia. The ecommerce and consumer markets have witnessed rapid growth in the Asia Pacific region over the past decade, and the trend is projected to further continue over the next three to four years. As internet access expands throughout the region, consumers are increasingly turning to online shopping, drawn by its rapid, efficient, and reliable distribution of goods. Ecommerce is anticipated to demonstrate consistent growth throughout the forecast period, with a Compound Annual Growth Rate (CAGR) of 6.39% from 2023 to 2027. The gross merchandise value of Ecommerce in this region is projected to rise from $3,855.8 billion in 2022 to $5,108.8 billion by 2027, according to Yahoo Finance. There are two main drivers of the growth within the Asia ecommerce and consumer markets. The first is the rapid adoption of digital technologies with increasing internet penetration attached to it is one of the forces behind the rapid expansion of the E-commerce market. Nations across the Asia-Pacific region are experiencing a notable surge in Internet users, thereby establishing a broad customer base for online retailers. According to Practical Ecommerce, the number of ecommerce buyers in Asia is also projected to increase by approximately 52% from 2023 to 2028, rising from approximately 1.33 billion to 2.03 billion. Specifically, PRC accounted for 884 million online shoppers in 2023, while the U.S. only had 254 million, according to PracticalEcommerce. The other factor is the growing popularity of the smart homes concept in Asia, with a focus on integrating AI technology and voice control systems. Based on Statista s estimates, the Smart Home market in Asia is forecasted to expand at an annual growth rate of 12.12% between 2024 and 2028, resulting in a projected market volume of $95.8 billion by 2028, according to Statista. In the next decade, the E-commerce market in the Asia-Pacific region will continue to represent a substantial growth opportunity for businesses given the swiftly growing consumer base in the region. In PRC alone, there were 1.05 billion internet users at the beginning of 2023, representing a penetration rate of 73.7%, according to DataReportal. Southeast Asia also stands out as one of the global leaders in rapid digital device adoption, with a particular emphasis on mobile devices driving its internet usage. By 2023, the proportion of internet users in Southeast Asia who also utilize smartphones will reach 88.9%, surpassing rates observed in more economically developed regions such as North America and Western Europe, according to EMarketer. Our business combination target selection process will leverage our team s broad and deep network of relationships, unique industry expertise and proven deal-sourcing capabilities to provide us with a strong and differentiated pipeline of potential targets. Our team s expertise includes: sourcing, structuring, acquiring, and selling businesses; investing in businesses globally and enabling them to build and/or grow their business in the Greater China or other Asian markets, applying our unique market, policy, and government insights; 3 Table of Contents helping target companies gain access to the Greater China or other Asian markets as well as secure funding from other reputable investors and lenders, managing and operating companies, devising strategic operational initiatives, and identifying, mentoring and recruiting top-notch talent; developing and growing companies, both organically and via mergers and acquisitions; fostering relationships with sellers, capital providers and target management teams; and accessing public and private capital markets to optimize capital structure, including financing businesses and helping companies transition ownership structures. Immediately following the completion of this offering, we intend to begin the process of communicating with the network of relationships within our team to search for a potential target for our initial business combination and begin the process of pursuing and reviewing potential opportunities. Our Management Our SPAC leadership team, consisting of Ms. Anna Zhou, Dr. Shibin Wang, Mr. Richard Li, and Mr. Lyle Wang has decades of combined investment, transaction, and operational experience. Out team has an extensive track record advising and investing in some of the largest transactions in Asia. Our Board is comprised of industry leading investors and entrepreneurs to help bolster our connectivity and value add with potential business combination targets. Anna Zhou CEO Anna Zhou serves as our CEO and has considerable experience in equity research and finance, currently working at the investment team at Chenghe Group. Ms. Zhou currently serves as the CEO and CFO of Chenghe Acquisition I Co. and was previously the CFO of Chenghe Acquisition Co. from 2021 to 2024. Ms. Zhou began her career in 2011 focusing on equity research and specialized in China and US TMT, including covering smartphones, digital consumer products, internet services and emerging platform. She was a senior associate at Mighty Divine Investment Management Limited from 2019 to 2021, the research associate of the long-only portfolio of China Great Wall AMC (International) Holdings Company Limited from 2017 to 2019 and the QDII fund of Anbang Asset Management (Hong Kong) Co. Limited from 2016 to 2017. She also spent two years in BOCOM International Holdings Company Limited ( BOCOM International ) as a data analyst in its market strategy team from 2014 to 2016. Ms. Zhou received a bachelor s degree in mathematics, information and application from Universit Paris 5 and a master s degree in financial mathematics and statistics from The Hong Kong University of Science and Technology. Lyle Wang CFO Lyle Wang serves as our CFO, and currently serves as a member of Chenghe Group investment team. Mr. Wang obtained a bachelor s degree in engineering from Northwestern Polytechnical University and a master s degree in finance from The University of Hong Kong. Prior to joining Chenghe Group, Mr. Wang served as a client manager of retail finance department at China Merchants Bank. Lyle Wang has in-depth knowledge of financial products and market analysis. Richard Qi Li Chairman of the Advisory Board Richard Qi Li will serve as the Chairman of our Advisory Board, has more than two decades of experience in the financial service industry. Mr. Li is the Founder of Chenghe Group, and served as the CEO of HH&L Acquisition Co., Chairman of Chenghe Acquisition Co., and currently serves as the Chairman of the Advisory Board for Chenghe Acquisition I Co. From 2017 to 2021 Mr. Li served as the chief investment officer and chief operating officer of China Great Wall AMC (International) Holdings Company Limited, and from 2018, was the chief executive officer of Great Wall Pan Asia Asset Management Ltd., both subsidiaries of China Great Wall Asset Management Co. Ltd., a leading asset management company based in China. Mr. Li was previously a managing director and the Head of China Securities at Goldman Sachs Asia, and a managing director and the Head of North Asia Capital Markets and Treasury Solutions at Deutsche Bank Hong Kong. Prior to joining Deutsche Bank, Mr. Li worked at Merrill Lynch, the World Bank, and the Ministry of Finance of the PRC. 4 Table of Contents Mr. Li has worked with or advised many financial institutions in Greater China on capital markets activities, sales and trading of fixed income products and structured equities, investment, risk management, and/or building up trading or asset management platforms. His clients or counterparts have included leading sovereign wealth funds (State Administration of Foreign Exchange and China Investment Corporation), large banks (Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and China Merchants Bank), insurers (China Life, PICC, Ping An Insurance) and asset managers (National Social Security Fund, China Asset Management and Harvest Fund). Mr. Li also advised Shanghai Pudong Development Bank in connection with the formation of a business alliance and the establishment of a credit card joint venture with Citibank in 2002. Mr. Li obtained a bachelor s degree in mathematics and a master s degree in economics from Nankai University in China and a Master of Business Administration from Columbia Business School. He was also a visiting scholar at Harvard University in 2019. Dr. Shibin Wang Chairman of the Board Dr. Shibin Wang will serve as our Chairman of the Board of Directors and has over 15 years of experience in sales and trading of structured financial products, cross-border financing and other capital market activities. Dr. Wang was the CEO of Chenghe Acquisition Co., and currently serves as the Chairman of the Board to Chenghe Acquisition I Co. Over his career, Dr. Wang held clientele including, major banks (China Development Bank, Industrial and Commercial Bank of China, Agriculture Bank of China, and China Construction Bank), leading organizations (China National Offshore Oil Corporation and GCL-Poly Energy) and leading private equity firms (Hillhouse Capital and Greenwoods Asset Management). Dr. Wang was an executive director and Head of China Structured Solutions at Deutsche Bank Hong Kong from 2010 to 2015. Prior to Deutsche Bank, he worked at FICC Goldman Sachs from 2008 to 2010 and at China Development Bank managing a fixed-income portfolio from 2003 to 2008. Since April 2019, Dr. Wang has served as a co-founder and the chief executive officer of Hong Kong Digital Asset Ex Ltd. (or HKbitEX ), a regulated digital asset exchange in Hong Kong dedicated to providing a regulatory-compliant and safe digital asset spot trading and over-the-counter trading services to professional investors in Asia. Under Dr. Wang s leadership, the company was among the first organizations in Asia-Pacific to apply for a virtual asset trading platform license from the Securities and Futures Commission in Hong Kong and was recognized as one of China s top 50 fintech companies in the 2020 KPMG China Fintech 50. Dr. Wang obtained a bachelor s degree in international trading from Dongbei University of Finance & Economics, as well as a master of economics degree and a Ph.D, both from the Finance Institute of the People s Bank of China. Ning Ma Director Nominee Ning Ma in 2015 founded Lingfeng Capital Partners, Limited ( Lingfeng ), a private equity firm focusing on investing in fintech companies in Asia, in sub-sectors such as artificial intelligence, blockchain, cloud, big data, lending technology, insurance technology, health care services, investment technology, payment and credit rating, and digital assets. Mr. Ma has served as a partner at Lingfeng since 2015. Prior to founding Lingfeng, Mr. Ma worked at Goldman Sachs (Asia) L.L.C. ( Goldman Sachs ) for thirteen years from 2002 to 2015 where, among other roles, he served as co-head of the Asia Pacific Financial Institutions Equity Research. He was also a member of the Goldman Sachs China Operating Committee and a member of the Asia Pacific Client and Business Standards Committee. He held various positions with Beijing Gao Hua Securities Company Limited and served as the deputy general manager and managing director from 2010 to 2015. Prior to Goldman Sachs, Mr. Ma was a regulator at the headquarters of the People s Bank of China from 1996 to 2000, where he was actively involved in the regulation, financial reform and policy-making relating to foreign banks and non-bank financial institutions including trust companies, asset management companies, finance companies and leasing companies in China. Mr. Ma currently serves as an independent director for several financial institutions in Asia including Ant Consumer Finance Company, China Renaissance Securities and BOCOM International. He has been teaching at Tsinghua University PBC School of Finance since 2010. Mr. Ma received a bachelor s degree from Renmin University of China, a master s degree in business administration from London Business School and a master s degree in international finance from Tsinghua University PBC School of Finance. Kwan Sun Director Nominee Kwan Sun founded Millburn Advisory LLC, a real estate fund manager, in 2018 and has served as its managing partner since then. From 2015 to 2018, Mr. Sun served as the vice chairman of Nan Fung Group s US businesses to help develop Nan Fung Group s US real estate business. Mr. Sun served as a director at Deutsche Bank in structured products department from 1997 to 2003, and as a director at Morgan Stanley in structured products department from 5 Table of Contents 2003 to 2007. Thereafter, Mr. Sun served as a managing director at Deutsche Bank in structured products department from 2007 to 2009 and as a managing director at Morgan Stanley in the investment banking department from 2009 to 2014. Prior to joining Deutsche Bank in 1997, he served as a vice president the capital markets department of Merrill Lynch, where he focused on trading fix income derivatives. He joined Merrill Lynch in 1992. Mr. Sun graduated with a bachelor s degree from Ohio State University. Dr. James Zhang Director Nominee Dr. James Zhang has extensive experience in entrepreneurship and venture capitalist in both the US and greater China. Since August 2021, Dr. Zhang has been the Chief Investment Officer of Technologies and Venture Capital of Great Eagle Holdings Limited (HKSE: 00041), a multinational corporation with rich experiences in technology investment, property development, and hotel and property management. Dr. Zhang has been an Adjunct Associate Professor of Finance since August 2019 and an Associate Professor of Science Practice since February 2022 at Hong Kong University of Science and Technology, where he teaches venture capital and entrepreneurship. Dr. Zhang has also been an advisor of Venture University since 2020, where he cofounded the Asian Office based in Hong Kong. Dr. Zhang also serves as co-founder and director of WaterCare Technologies Limited, director of Base Therapeutics Group Holding Limited, and director of Great Eagle Venture Capital (HK) Limited. Dr. Zhang also serves as independent director of Chenghe Acquisition I Co. Dr. Zhang was a venture partner of the GRC Fund from 2014 to 2021, co-founder, chief executive officer and director of Modular Bioscience Inc. from 2018 to 2021, founding partner of Formation 8 (currently named 8VC) from 2012 to 2016, venture partner of Softbank China Venture Capital from 2010 to 2012, and entrepreneur in residence at Khosla Ventures from 2009 to 2010. Prior to becoming a venture capitalist, Dr. Zhang was an entrepreneur in Silicon Valley for over ten years, and co-founder of several startup companies. Dr. Zhang received his PhD in Genetics from the University of California, Davis, and has completed post-doctoral and business trainings from Stanford University and Stanford Graduate School of Business, respectively. With respect to the foregoing experiences of our management, our Sponsor and Chenghe Group, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical record of our management s, our Sponsor s or Chenghe Group s performance as indicative of our future performance. For more information on the experience and background of our management team and the Operating Partners, see below and the sections entitled Management and Advisory Board and Proposed Business. Competitive Strengths We believe that through the networks and relationships of our management and board, along with the financial and deal expertise, and the sourcing, valuation, diligence and execution capabilities of our leadership team and Chenghe Group, we will have a significant pipeline of differentiated opportunities which are ready to go public. Our competitive strengths include: Leading Industry Insights and Proprietary Sourcing Channels. We believe our team s global insights and experience will allow us to identify suitable public ready companies with solid fundamentals that are primed for growth and multiple expansion. Our team s extensive sector and transaction experience as well as our other corporate relationships have helped us develop a broad array of contacts with both potential DeSPAC targets and strategic investors. In addition, through our sponsor affiliate, Chenghe Group, we will have unique access to a proprietary pipeline of acquisition opportunities in Asia through our active advisory and investment businesses. We believe that these factors will give us an edge over other market participants in terms of sourcing targets for our initial business combination. Deep Geographic Connectivity and Expertise. Our management team has deep connectivity and strategic relationships within the broader Asian market opportunity set and poised to identify and the blue chip targets ready to publicly list on the US markets, as well as unique access to global capital through Non-US investor relationships. Demonstrated track records in SPAC Transactions. Chenghe Group and our SPAC management team have had success shepherding multiple companies through a DeSPAC process to the US public markets. Our team s experience and ability to enter into and close transactions, while also successfully raising capital amidst a challenged new issuance backdrop will be an attractive value add for top targets assessing potential SPAC partners. 6 Table of Contents Investment Experience. We believe that our team s track record of identifying, sourcing and advising on transactions positions us well to appropriately evaluate potential business combinations that have a strong potential to be well received by the public markets. Execution and Deal Structuring Capability. We believe that our team s combined expertise and reputation will allow us to source and complete transactions possessing structural attributes that create an attractive investment thesis. These types of transactions are typically complex and require creativity, industry knowledge and expertise, rigorous due diligence, and extensive negotiations and documentation. We believe that by focusing our investment activities on these types of transactions, we will be able to generate investment opportunities that have attractive risk-reward profiles. Long-term Value and Strategic Partnership. We believe that our team can create long-term value by collaborating with target management teams, forming strategic partnerships, and enhancing performance. Business Combination Criteria Consistent with our business strategy, we have identified the following general and non-exclusive criteria and guidelines that we believe are important in evaluating prospective target businesses. We intend to use these criteria and guidelines in evaluating initial business combination opportunities, although we may enter into our initial business combination with target business or businesses that do not strictly meet any or all of these criteria and guidelines. Exceptional Management Teams. We will be focusing on seasoned blue-chip management teams comprised of industry leaders which are public ready and have demonstrated a history of driving growth for the company and delivering on operational and financial metrics for investors. To the extent we believe it will enhance shareholder value, we would seek to selectively supplement the existing management team of the business with proven leaders and executives from our network. Capabilities to leverage the compelling market trends in Asian markets. We will target one or more businesses that have gained sustainable competitive advantages, demonstrated potential for strong growth in the future, and have significant opportunities in and/or synergies with Asian markets. We believe this approach will enable us to effectively leverage our strong network to identify attractive opportunities and that the larger market capitalization and public float of the resulting company will be more attractive to our investors. Large addressable market and high growth prospects. We intend to focus on companies with fundamentally sound business models today, that operate in a large underlying addressable market with strong tail winds that we believe will support significant growth and superior returns over time This would include companies with embedded or underexploited growth opportunities or those that may benefit from capital infusion to execute on from synergistic add-on acquisitions, increased production capacity, expense reductions, technology upgrades and increased operating leverage. Resilient financial profiles. We will prioritize companies that are appropriately capitalized today, and in a strong liquidity position to continue to operate the business. Capital infusions tied to the business combination would look to augment operational metrics and growth. Potential to further improve with expertise and partnership. Our management team has a history of accelerating growth of companies with strong historical performance. We believe our team s experience in our target sectors and network of industry contacts have the potential to generate opportunities to enhance the financial and operational efficiencies of the target businesses, through identifiable catalysts that could transform the value of these investments, and potentially offer an attractive return for our shareholders. Targets which are public ready and would benefit from access to the public capital markets. We intend to seek targets that have robust corporate governance, with existing reporting polices that would exemplify preparedness for the scrutiny of public markets, and that would benefit from being a public company with an increased public profile, and increased access to a more diversified pool of capital. These criteria are not intended to be exhaustive. We will also utilize our operational and capital allocation experience. Any evaluation relating to the merits of a particular initial business combination may be based on these general guidelines as well as other considerations, factors, and criteria that our management may deem relevant. In evaluating a prospective 7 Table of Contents target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will be made available to us. Sourcing of Potential Business Combination Targets Our robust pipeline of business combination targets will be fueled by the extensive connectivity, networks, and relationships cultivated by our seasoned management team, board of directors, our affiliated sponsor Chenghe Group, and lead underwriter and advisor Cohen & Co. Capital Markets.Our team s sourcing activities are driven by access to high-quality deal flow from our internal networks, strategic partners, and trusted advisors, all of which are rigorously evaluated against our stringent acquisition criteria. Leveraging our team s collective technical, operational, and transactional expertise, we will meticulously identify and assess acquisition targets poised to deliver substantial value to our shareholders through our initial business combination. Our Acquisition Process In evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us. We have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. From the period commencing with our formation through the date of this prospectus, there have been no communications or discussions between any of our officers, directors or our sponsor and any of their potential contacts or relationships regarding a potential initial business combination. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact a target business. Initial Business Combination NYSE rules require that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes paid or payable on the income earned on the trust account) at the time of the execution of a definitive agreement for such business combination. Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of the target s assets or prospects. We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, 8 Table of Contents depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% fair market value test described above. If the business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses. We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions stating that such an initial business combination is fair to our company from a financial point of view and a majority of our disinterested and independent directors approve such transaction. Members of our management team (including our independent directors) will directly or indirectly own founder shares and/or private placement units following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. The low price that our sponsor and/or our executive officers and directors (directly or indirectly) paid for the founder shares creates an incentive whereby our officers and directors could potentially make a substantial profit even if we select an acquisition target that subsequently declines in value and is unprofitable for public shareholders. If we are unable to complete our initial business combination within the completion window, the founder shares and private placement units may expire worthless, except to the extent the holders thereof receive liquidating distributions from assets outside the trust account, which could create an incentive for our sponsor and our executive officers and directors to complete any transaction, regardless of its ultimate value. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us, and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination. 9 Table of Contents Corporate Information Our executive offices are located at 38 Beach Road #29-11, South Beach Tower, Singapore, 189767 and our telephone number is (65) 9851 8611. We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. We are an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended (the Securities Act ), as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act ). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company will have the meaning associated with it in the JOBS Act. Additionally, we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30th, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination. 10 Table of Contents THE OFFERING In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled Risk Factors in this prospectus. Securities offered 7,500,000 Units, at $10.00 per unit, each unit consisting of: one Class A ordinary share; and one-half of one redeemable warrant. NYSE symbols Units: CHEB.U Class A ordinary share: CHEB Warrants: CHEB.WS Trading commencement and separation of Class A ordinary shares and warrants The units are expected to begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless the Representatives inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the Class A ordinary shares and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into Class A ordinary shares and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. Any rounding down and extinguishment may be done with or without any in lieu cash payment or other compensation being made to the holder of the relevant warrants. Separate trading of the Class A ordinary shares and warrants is prohibited until we have filed a Current Report on Form 8-K. In no event will the Class A ordinary shares and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering, including, if the underwriters exercise the over-allotment option simultaneously with the initial closing, the proceeds of the over-allotment. We will file the Current Report on Form 8-K promptly after the closing of this offering, which closing is anticipated to take place three business days from the date of this prospectus. Units: Number outstanding before this offering 0 Number outstanding after this offering 7,787,500(1) ____________ (1) Assumes no exercise of the underwriters over-allotment option and the forfeiture of 375,000 founder shares by our initial shareholders for no consideration and includes 287,500 shares underlying the private placement units. 11 Table of Contents Ordinary Shares: Number outstanding before this offering 2,875,000(2)(3) Number outstanding after this offering 10,287,500(1)(3)(4) Warrants: Number of warrants outstanding before this offering 0 Number of warrants to be outstanding after this offering and the private placement 3,893,750(1)(5) Exercisability Each whole warrant offered in this offering is exercisable to purchase one Class A ordinary share. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. We structured each unit to contain one-half of one warrant, with each whole warrant exercisable for one Class A ordinary share, as compared to units issued by some other similar special purpose acquisition companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of a business combination as compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses. Exercise price $11.50 per share, subject to adjustments as described herein. In addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our initial shareholders or their affiliates, without taking into account any founder shares held by our initial shareholders or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price ), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination, and (z) the volume weighted average trading price of our Class A ordinary shares during the 10 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the Market Value ) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under Redemption of warrants will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. ____________ (2) Includes up to 375,000 founder shares that will be forfeited by our initial shareholders depending on the extent to which the underwriters over-allotment option is exercised. (3) Founder shares are currently classified as Class B ordinary shares, which shares (unless otherwise provided in our initial business combination agreement) will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, and may be converted at any time prior to our initial business combination, at the option of the holder, on a one-for-one basis, subject to adjustment as described below adjacent to the caption Founder shares conversion and anti-dilution rights. (4) Includes 7,500,000 public shares, 2,500,000 founder shares and 287,500 private placement shares. (5) Includes 3,750,000 public warrants and 143,750 private placement warrants underlying the private placement units. 12 Table of Contents Exercise period The warrants will become exercisable 30 days after the completion of our initial business combination; provided that we have an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. We are registering the Class A ordinary shares issuable upon exercise of the warrants in the registration statement of which this prospectus forms a part because the warrants will become exercisable 30 days after the completion of our initial business combination, which may be within one year of this offering. However, because the warrants will be exercisable until their expiration date of up to five years after the completion of our initial business combination, in order to comply with the requirements of Section 10(a)(3) of the Securities Act following the consummation of our initial business combination, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement with the SEC and have an effective registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation; provided, however, that the private placement warrants issued to the underwriters will not be exercisable more than five years from the commencement of sales in this offering in accordance with FINRA Rule 5110(g)(8). On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account. 13 Table of Contents Redemption of warrants for cash Once the warrants become exercisable, we may redeem the outstanding warrants for cash: in whole and not in part; upon a minimum of 30 days prior written notice of redemption, which we refer to as the 30-day redemption period; and at a price of $0.01 per warrant if, and only if, the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like and for certain issuances of Class A ordinary shares and equity-linked securities for capital raising purposes in connection with the closing of our initial business combination as described elsewhere in this prospectus) on each of 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. We will not redeem the warrants for cash unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Cashless exercise If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In determining whether to require all holders to exercise their warrants on a cashless basis, our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our shareholders of issuing the maximum number of Class A ordinary shares issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the fair market value of our Class A ordinary shares (defined below) over the exercise price of the warrants by (y) the fair market value. The fair market value will mean the average reported closing price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Please see Description of Securities Warrants Public Shareholders Warrants for additional information. 14 Table of Contents Founder shares In February 2024, our sponsor paid $25,000 to cover certain expenses on our behalf in consideration of 2,875,000 founder shares for a purchase price of approximately $0.009 per share. Up to 375,000 founder shares are subject to forfeiture depending on the extent to which the underwriters over-allotment option is exercised. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. In March 2024, our sponsor transferred an aggregate of 90,000 of its founder shares to our independent director nominees and advisory board member, for their board and advisory services, in each case for no cash consideration, including 20,000 shares to each of Kwan Sun, James Zhang and Ning Ma, and 30,000 shares to Richard Li, respectively. The founder shares transferred to Kwan Sun, James Zhang, Ning Ma and Richard Li will not be subject to forfeiture in the event the underwriters over-allotment option is not exercised. The number of founder shares outstanding was determined based on the expectation that the total size of this offering would be a maximum of 8,625,000 units if the underwriters over-allotment option is exercised in full, and therefore that such founder shares would represent approximately 25% of the outstanding shares after this offering (assuming they do not purchase any units in this offering, and excluding the private placement shares). Up to 375,000 of the founder shares will be forfeited depending on the extent to which the underwriters over-allotment option is not exercised. The founder shares are identical to the Class A ordinary shares included in the units being sold in this offering, except that: only holders of Class B ordinary shares will have the right to vote on the appointment of directors prior to the completion of our initial business combination and on a vote to continue our company in a jurisdiction outside of the Cayman Islands; the founder shares are subject to certain transfer restrictions, as described in more detail below; the founder shares are entitled to registration rights; our initial shareholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to any founder shares and public shares they hold in connection with the completion of our initial business combination, (ii) waive their redemption rights with respect to any founder shares and public shares they hold in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within the completion window or with respect to any other material provisions relating to 15 Table of Contents shareholders rights or pre-initial business combination activity and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within the completion window (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public shareholders for a vote, our initial shareholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination (subject to the limitations described in this prospectus). As a result, in addition to our initial shareholders founder shares, we would need 2,393,751, or approximately 31.9% of the 7,500,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted, the over-allotment option is not exercised and applicable law does not require approval by a greater majority than an ordinary resolution). Assuming that the holders of only one-third of our issued and outstanding ordinary shares are present in person or by proxy, representing a quorum under our amended and restated memorandum and articles of association, and all such shares are voted, we would not need any of the 7,500,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming the overallotment option is not exercised and applicable law does not require approval by a higher threshold than an ordinary resolution); and the founder shares are automatically convertible into our Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, and may be converted at any time prior to our initial business combination, at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, or to the terms of our initial business combination agreement, in each case as described below adjacent to the caption Founder shares conversion and anti-dilution rights. 16 Table of Contents Transfer restrictions on founder shares Our initial shareholders have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issuable upon conversion thereof until the earlier to occur of: (i) six months after the completion of our initial business combination or (ii) the date on which we complete a liquidation, merger, share exchange or other similar transaction after our initial business combination that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property; except to certain permitted transferees and under certain circumstances as described herein under Principal Shareholders Transfers of Founder Shares and Private Placement Units . Any permitted transferees will be subject to the same restrictions and other agreements of our initial shareholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if (1) the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (2) if we consummate a transaction after our initial business combination which results in our shareholders having the right to exchange their shares for cash, securities or other property, the founder shares will be released from the lock-up. Founder shares conversion and anti-dilution rights The founder shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, and may be converted at any time prior to our initial business combination, at the option of the holder, on a one-for-one basis, subject to adjustment (unless otherwise provided in our initial business combination agreement) for share sub-divisions, share dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, approximately 25% of the total number of Class A ordinary shares outstanding after such conversion, including the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by our company in connection with or in relation to the consummation of an initial business combination, excluding any Class A ordinary shares or equity-linked securities or rights exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement units issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis. 17 Table of Contents Appointment of directors; voting Holders of record of our Class A ordinary shares and Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by such shareholders. Unless specified in our amended and restated memorandum and articles of association or as required by the Companies Act or stock exchange rules, an ordinary resolution under our amended and restated memorandum and articles of association and Cayman Islands law, which is a resolution passed by a simple majority of the shareholders as, being entitled to do so, vote at a general meeting of the company and includes a unanimous written resolution, is generally required to approve any matter voted on by our shareholders. Approval of certain actions require a special resolution under our amended and restated memorandum and articles of association and Cayman Islands law, which is a resolution passed by at least two-thirds of the shareholders as, being entitled to do so, vote in person or by proxy at a general meeting of the company and includes a unanimous written resolution, and pursuant to our amended and restated memorandum and articles of association, such actions include amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. There is no cumulative voting with respect to the appointment of directors, meaning, following our initial business combination, the holders of more than 50% of our ordinary shares which vote for the appointment of directors can appoint all of the directors. Only holders of Class B ordinary shares will have the right to appoint directors prior to the completion of our initial business combination. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. This provision of our amended and restated memorandum and articles of association relating to the rights of holders of Class B ordinary shares to appoint directors may be amended by a special resolution passed by at least 90% of such members as, being entitled to do so, vote at a general meeting or by way of unanimous written resolution. In addition, only the Class B ordinary shares will be entitled to vote to continue our company in a jurisdiction outside of the Cayman Islands. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of the founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote. If we seek shareholder approval of our initial business combination, we will complete our initial business combination only if we receive an ordinary resolution under our amended and restated memorandum and articles of association and Cayman Islands law, which is a resolution passed by a simple majority of the shareholders as, being entitled to do so, vote at a general meeting of the company and includes a unanimous written resolution. In such case, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. As a result, in addition to our initial shareholders founder shares, we would need 2,393,751, or approximately 31.9%, of the 7,500,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). 18 Table of Contents Private placement units and underlying securities Our sponsor has agreed to purchase an aggregate of 250,000 units (or 266,875 units if the underwriters over-allotment option is exercised in full) at a price of $10.00 per unit, for an aggregate purchase price of $2,500,000 (or $2,668,750 if the underwriters over-allotment option is exercised in full). The underwriters have committed to purchase an aggregate of 37,500 units (or 43,125 units if the underwriters over-allotment option is exercised in full) at a price of $10.00 per unit, for an aggregate purchase price of $375,000 (or $431,250 if the underwriters over-allotment option is exercised in full). These private placement units will be purchased in a private placement that will close simultaneously with the closing of this offering. The private placement units are identical to the units sold in this offering except that private placement units (including the underlying securities) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of our initial business combination and will be entitled to registration rights. A portion of the purchase price of the private placement units will be added to the proceeds from this offering to be held in the trust account such that at the time of closing $75,000,000 (or $86,250,000 if the underwriters exercise their over-allotment option in full) will be held in the trust account. If we do not complete our initial business combination within the completion window, the private placement units (and the underlying securities) will expire worthless. Our sponsor has agreed to (i) waive its redemption rights with respect to its private placement shares in connection with the completion of our initial business combination, (ii) waive its redemption rights with respect to its private placement shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity and (iii) waive its rights to liquidating distributions from the trust account with respect to its private placement shares if we fail to complete our initial business combination within the completion window. In addition, our sponsor has agreed to vote any private placement shares held by it in favor of our initial business combination. Transfer restrictions on private placement units The private placement units (including the underlying private placement warrants, the private placement shares and the Class A ordinary shares issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described herein under Principal Shareholders Transfers of Founder Shares and Private Placement Units . The private placement units to be purchased by the underwriters and/or their permitted designees, are deemed underwriters compensation by FINRA and are subject to limitations in accordance with FINRA Rule 5110. 19 Table of Contents Conflicts of Interest Certain members of our management team may have potential conflicts of interest as identified below: Members of our management team (including our independent directors) may directly or indirectly own founder shares and/or private placement units following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. The low price that the members of our management team paid for the founder shares could result in a scenario where they stand to gain or lose financially, depending on the post-business combination performance of the acquisition target they select. Our directors and officers could potentially secure a substantial return even if the value of the acquisition target declines, affecting the profitability for public investors. In the event we do not consummate a business combination within the completion window, the founder shares, private placement units and their underlying securities will expire worthless, which could create an incentive our officers and directors to complete any transaction, regardless of its ultimate value. Each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Our sponsor, officers and directors may in the future sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Our officers, directors, shareholders or affiliates may be paid fees upon the successful completion of our initial business combination as described under Payments to Insiders , below. 20 Table of Contents Our officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, may have conflicts of interest in allocating management time among various business activities, including selecting a business combination target and monitoring the related due diligence. See Risk Factors Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination. CCM and Seaport, as the representatives to the underwriters, and the underwriters are also entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial business combination. The underwriters or their respective affiliates financial interests tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination. The underwriters are under no obligation to provide any further services to us in order to receive all or any part of the deferred underwriting commissions. See Risk Factors We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, which may include acting as M&A advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred underwriting commissions that will be released from the trust account only upon a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination. Proceeds to be held in trust account NYSE rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement units be deposited in a trust account. Of the proceeds we will receive from this offering and the sale of the private placement units described in this prospectus, $75,000,000, or $86,250,000 if the underwriters over-allotment option is exercised in full ($10.00 per unit in either case), will be deposited into a segregated trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee, after deducting $1,500,000 (or $1,725,000 if the underwriters over-allotment option is exercised in full) in underwriting discounts and commissions payable upon the closing of this offering and an aggregate of $1,375,000 to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering. The proceeds to be placed in the trust account include up to $3,000,000 (or up to $3,450,000 if the underwriters over-allotment option is exercised in full) in deferred underwriting commissions. 21 Table of Contents Except with respect to permitted withdrawals, the proceeds from this offering and the sale of the private placement units will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law, and (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within the completion window or with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders. Anticipated expenses and funding sources Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except permitted withdrawals and/or to redeem our public shares in connection with an amendment to our amended and restated memorandum and articles of association, as described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations, and (no later than 24 months after the closing of this offering) will be held as cash or cash items, including in demand deposit accounts. Additionally, when we determine (no later than 24 months after the closing of this offering) to hold the funds in the trust account as cash or in demand deposit accounts, the amount of interest we may receive would likely be less than this amount. Unless and until we complete our initial business combination, we may pay our expenses only from: permitted withdrawals; the net proceeds of this offering and the sale of the private placement units not held in the trust account, which initially will be approximately $675,000 in working capital after the payment of approximately $700,000 in expenses relating to this offering; and any working capital loans or additional investments from our sponsor, members of our management team or their affiliates or other third parties, although they are under no obligation to advance funds or invest in us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement units, at a price of $10.00 per unit, at the option of the lender. 22 Table of Contents Conditions to completing our initial business combination NYSE rules require that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes paid or payable on the income earned on the trust account) at the time of the execution of a definitive agreement for such business combination. Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions as to the fair market value of the target business. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of the target s assets or prospects. We will complete our initial business combination only if the post-transaction company in which our public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% fair market value test described above, provided that in the event that the business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as our initial business combination for purposes of a seeking shareholder approval or conducting a tender offer, as applicable. 23 Table of Contents Permitted purchases of public shares and public warrants by our affiliates If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial shareholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial shareholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and NYSE rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See Proposed Business Permitted purchases of our securities for a description of how our sponsor, initial shareholders, directors, executive officers, advisors or any of their affiliates will select which shareholders to purchase securities from in any private transaction. The purpose of any such purchases of shares could be to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met, or to reduce the number of shares being submitted for redemption. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public float of our Class A ordinary shares or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. 24 Table of Contents Redemption rights for public shareholders upon completion of our initial business combination We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of permitted withdrawals), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial shareholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. Manner of conducting redemptions We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) without a shareholder vote by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company (other than with a 90% subsidiary of ours) and any transactions where we issue more than 20% of our outstanding Class A ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. So long as we obtain and maintain a listing for our securities on the NYSE, we will be required to comply with the NYSE s shareholder approval rules. The requirement that we provide our public shareholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in provisions of our amended and restated memorandum and articles of association and will apply whether or not we maintain our registration under the Exchange Act or our listing on the NYSE. Such provisions may be amended if approved by a special resolution of our shareholders, which is a resolution passed by at least two-thirds of the shareholders as, being entitled to do so, vote in person or by proxy at a general meeting of the company and includes a unanimous written resolution. 25 Table of Contents If we provide our public shareholders with the opportunity to redeem their public shares in connection with a general meeting, we will: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. If we seek shareholder approval, we will complete our initial business combination only if we receive the approval of an ordinary resolution under our amended and restated memorandum and articles of association and Cayman Islands law, which is a resolution passed by a simple majority of the shareholders as, being entitled to do so, vote at a general meeting of the company and includes a unanimous written resolution. In accordance with our amended and restated memorandum and articles of association, a quorum for such meeting will be present if the holders of at least one-third of our issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. Our initial shareholders will count toward this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial shareholders founder shares, we would need 2,393,751, or approximately 31.9% of the 7,500,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted, the over-allotment option is not exercised and applicable law does not require approval by a greater majority than an ordinary resolution). Assuming that the holders of only one-third of our issued and outstanding ordinary shares are present in person or by proxy, representing a quorum under our amended and restated memorandum and articles of association, and all such shares are voted, we would not need any of the 7,500,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming the overallotment option is not exercised and applicable law does not require approval by a higher threshold than an ordinary resolution). These quorum and voting thresholds, and the voting agreements of our initial shareholders, may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against or abstain from voting on the proposed transaction or whether they were a public shareholder on the record date for the general meeting held to approve the proposed transaction. 26 Table of Contents If a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will: conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination. Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act. We intend to require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to, at the holder s option, either deliver their share certificates to our transfer agent or deliver their shares to our transfer (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public shareholders to satisfy such delivery requirements. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public shareholders, which could delay redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates or shares delivered by public shareholders who elected to redeem their shares. 27 Table of Contents Our amended and restated memorandum and articles of association provide that we will only consummate an initial business combination if our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination. In addition, our proposed initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements. Limitation on redemption rights of shareholders holding 20% or more of the shares sold in this offering if we hold shareholder vote Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. By limiting our shareholders ability to redeem to no more than 20% of the shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders ability to vote all of their shares (including all shares held by those shareholders that hold more than 20% of the shares sold in this offering) for or against our initial business combination. 28 Table of Contents Release of funds in trust account on closing of our initial business combination On the completion of our initial business combination, the funds held in the trust account will be used to pay amounts due to any public shareholders who exercise their redemption rights as described above under Redemption rights for public shareholders upon completion of our initial business combination, to pay the underwriters the deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. Redemption of public shares and distribution and liquidation if no initial business combination Our amended and restated memorandum and articles of association provide that we will have only until the end of the completion window to complete our initial business combination. If we are unable to complete our initial business combination within such the completion window, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject, in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the completion window. Our initial shareholders have entered into agreements with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the completion window. However, if our initial shareholders or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted completion window. 29 Table of Contents The underwriters have agreed to waive all rights to the deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within the completion window and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares. Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination the completion window or with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of permitted withdrawals), divided by the number of then outstanding public shares, subject to the limitations described above under Limitations on redemptions. For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking shareholder approval of such proposal, and in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment. Payments to insiders We are not prohibited from paying any fees (including advisory fees), reimbursements or cash payments to our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, including the following payments, all of which, if made prior to the completion of our initial business combination, will be paid from (i) funds held outside the trust account or (ii) permitted withdrawals: Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses; Payment to our sponsor of $15,000 per month for office space, secretarial and administrative services provided to members of our management team; upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees; Reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; 30 Table of Contents Payment of a finder s fee, advisory fee, consulting fee or success fee for any services they render in order to effectuate the completion of our initial business combination; and Repayment of non-interest bearing loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into units of the post-business combination entity at a price of $10.00 per units at the option of the lender. The units would be identical to the private placement units. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Audit Committee We will establish and maintain an audit committee. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled Management Committees of the Board of Directors Audit Committee. 31 Table of Contents
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+This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. General Mission Space Acquisition Corp. is a blank check company newly incorporated in the Cayman Islands as an exempted company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. Mission Space Acquisition Corp. is an affiliate of our sponsor, Mission Space Sponsor, LLC. Formed in February 2024, Mission Space Sponsor, LLC is a U.S.-based limited liability company with the purpose of engaging with companies looking for access to capital and or public markets and deploy sponsor equity investment capital in operating businesses and any other actions as are reasonably incidental to the foregoing. Business Strategy Our acquisition and value creation strategy is to identify, acquire and, after our initial business combination, further accelerate the growth of a company in the aerospace and defense services industries, and to contribute to the global aerospace and defense economy. We believe our management team s knowledge, decades of experience and relationships across these industries can effect a positive transformation or augmentation of an existing business model through implementing proven business strategies within the aerospace and defense industries. Our team is well positioned to originate attractive investment opportunities and has a history of executing various business transactions in multiple geographies and under varying economic and financial market conditions. Once we have completed our initial public offering, our team will identify potential acquisition targets by leveraging existing relationships in combination with the market research data that aligns with the company s strategic goals and priorities. Market size, growth potential, competition, and barriers to entry are all essential factors to consider as we identify the acquisition target. Our team intends to utilize an in-depth evaluation process of potential acquisition targets based on financial performance, strategic fit, and potential synergies as well as the company s products, and services to ensure our target is aligned. Although, the global aerospace and defense economy is highly regulated, and there are many legal and regulatory considerations that companies must consider, such as licensing requirements, export controls, and liability issues; our Sponsor s expertise and track record in the aerospace and defense ecosystem will help mitigate these factors by proactively advising potential target companies on navigating these issues. Overall, an acquisition and value creation strategy impacting the global aerospace & defense economy requires a careful and strategic approach, the potential benefits can be significant for companies with the ability to identify and acquire complementary businesses and technologies with synergies through effective integration. Our management team believes that the global aerospace and defense economy has significant market growth potential, related to the development and use of innovative technologies, including the design, manufacturing, launch, and operation of satellites, spacecraft, and other space-related systems. It also includes activities such as space exploration, space tourism, and the development of space-based services and applications such as telecommunications, Earth observation, and navigation. Over the last decade, there has been a steady increase in the demand for space-based services and applications for both the private sector as well as various government agencies. Some of the key drivers of market growth in the global aerospace and defense economy are further detailed below: Communications: The demand for global connectivity and high-speed internet is rapidly increasing, driving growth in satellite-based communications services. Satellites are used for everything from broadband internet to television and radio broadcasts, and the demand for these services is only set to increase. 1 Table of Contents Earth observation: Earth observation satellites are used for a wide range of applications, including weather forecasting, natural resource management, and disaster response. As the demand for these services continues to grow, so too will the demand for Earth observation satellites. Navigation: Global navigation satellite systems such as GPS are used for everything from transportation to agriculture. As these systems become more sophisticated and the demand for precise navigation and timing increases, so too will the demand for satellite-based navigation services. Space tourism: The development of space tourism has the potential to open a completely new market in the global space economy. Private companies such as Virgin Galactic, SpaceX, and Blue Origin are already developing space tourism programs, and there is significant interest in this market from high-net-worth individuals and governments. Space exploration: Space exploration has long been a driver of innovation and technological progress. As governments and private companies continue to invest in space exploration, there will be opportunities for companies involved in everything from spacecraft manufacturing to space mining. The global aerospace and defense economy has significant market potential, with opportunities for both established companies and new market entrants. As the cost of accessing space continues to decrease, we can expect to see continued growth and the development of new and innovative space-based services and applications. The aerospace and defense economy also has important economic, social, and strategic implications with a history of contributing to technological innovation, which generates high-skilled jobs, and creates opportunities for new businesses and industries. It also plays a crucial role in national security and defense, as well as in addressing global challenges such as climate change, disaster management, and sustainable development. Related to national security and defense, the United States sent a message to its strategic adversaries, most notably China and Russia, when it established the United States Space Force ( Space Force ) in December 2019, indicating that the United States is serious about building an authoritative presence in orbit. Defense officials and senior members of the Executive Branch portrayed the establishment of the Space Force as an essential step in a growing fight against Chinese influence in international relations. This was done despite the fact that various domestic groups condemned the creation of the Space Force as being premature in proportion to its real capabilities. There are over 70 commercial space businesses currently active in China, with more than half of them having been established after the year 2014. China s presence and capabilities in space have expanded quickly in recent years. This is in addition to the country s previous accomplishments, which include landing a rover on the opposite side of the moon, launching the first module of its national space station, and announcing its plans to send taikonauts to both the moon and Mars. Antisatellite missiles and signal-jamming lasers based on the ground are two examples of China s space-based military capabilities. In order to maintain a competitive edge, various branches of the federal government of the United States promote the significance of commercial partnerships to advance U.S. goals. This is a strong indicator that funding for space supremacy initiatives will most likely be included in the federal budget. In his proposal for the federal budget for the year 2025, President Biden allocated over $25 billion to NASA which includes an increase in financing for the commercial development of LEO programs and an approximately 4% increase in the budget of the Office of Space Commerce. U.S. private sector space employment grew approximately 30% since 2016, meaningfully outpacing private sector employment as a whole and highlighting the growing emphasis in the U.S. on the aerospace and defense economy. Global Aerospace and Defense Economy We will focus on all subsectors within the global aerospace and defense services markets, and our prospective targets will largely include businesses that encompass the global space economy, specifically the subsectors with the projected areas of growth. According to recent Federal Aviation Administration ( FAA ) reports, one such subsector that has strong growth prospects is the satellite communications subsector, specifically satellite services, manufacturing, ground equipment, and launch services lead the space sector in the United States, and this will be our target market. According to Euroconsult s Space Economy Report, despite the rising geopolitical tensions and operational challenges caused by inflation, high interest rates and the impacts of the previous years pandemic lockdowns on supply chains, the global space market grew by 8% in 2022, and the World Economic Forum s Insight Report 2 Table of Contents projects the global space economy to reach over $1.8 trillion by 2035, growing at an average of 9% per year. The space economy is projected to roughly match the size of the semiconductor industry by 2035 with space technologies becoming increasingly ubiquitous in every aspect of life. We believe that the continued growth of the global aerospace and defense economy will provide opportunities for privately held aerospace and defense service provider companies to meet the current and projected demand that exists in the market more effectively with a successful business combination and that such companies will be well received by the public investors. Given the experience, personal and professional networks, and resources of our management team, board of directors, and advisors, we believe that we will be able to successfully identify and partner with a company that can meet the current demand in the industry. Satellite demand set to quadruple over the next decade. A large portion of the market value for the global space economy is currently concentrated on space-based end-user applications, which include satellite communications, Earth observation, and businesses that employ satellite navigation to provide services to their clients. The need for high-speed internet and global connectivity, and remote sensing capabilities is increasing quickly, which is fueling the expansion of satellite-based communications services. Broadband internet, television, and radio broadcasts all employ satellites and demand for them is expected to continue to grow. Non-Geostationary Satellite Orbit ( NGSO ) constellations continue to be the largest market driver in terms of satellite counts, with 83% of all satellites expected to be launched between 2022 and 2031 being a part of a constellation, even though this only accounts for 30% of the market value for manufacturing and launch. These NGSO constellation entrants are challenging established supply capabilities while still being led by legacy customers, including both governments and commercial GEO operators. Defense and civil government clients will continue to be pillars of the business driving approximately 75% of the demand for manufacture and launch. Two thirds of the total demand in terms of value is expected be met by the six major space-faring countries or organizations (the U.S., China, Russia, Japan, India, and European states, EU and ESA). According to Euroconsult, the number of satellites are expected to expand by a factor of four because of commercial constellations. Between 2022 and 2031, market intelligence estimates that approximately 2,500 satellites will be launched annually on average, or seven satellites per day with a combined mass of three tons. Civil government and defense customers will almost certainly continue to occupy the largest share of the industry, with an annual market value of $29 billion and three-quarters of the demand in manufacturing and launch. 3 Table of Contents There are numerous applications for Earth observation satellites, including weather forecasting, natural resource management, and disaster response. We believe that Earth observation satellites will be increasingly in demand as the demand for these services continues to grow. Demand for applications such as disaster management, agriculture, cartography, and natural resources survey has resulted in a rapid expansion of the market for Earth observation data and related services. Earth observation satellite operators seek to expand markets for data analytics to new types of users, whereas we believe telecom constellations will face intense competition from terrestrial rivals and price pressure on bandwidth. Further, we believe that constellations have not yet solved the fundamental issue of convenient and cost-effective ground infrastructure. Navigation Global navigation satellite systems such as GPS are used for everything from transportation to agriculture. As these systems become more sophisticated and the demand for precise navigation and timing increases, so too should the demand for satellite-based navigation services. The Allied Market Research Organization indicates that the expansion of the use of autonomous cars across a variety of applications as well as an increasing reliance on location-based services are the primary factors driving the growth of the global navigation satellite market. This subsector is expected to produce $552.2 billion by 2031, growing at a CAGR of 9.5%. Space Exploration The exploration of space has, for a very long time, been a primary impetus for technological advancement and creativity that would not have been possible without the continued investments made by governments and commercial corporations in space exploration. The recent success of the Artemis mission, which aims to return humans to the moon by 2025, presents enormous prospects for commercial expansion. Many large lunar missions, including Artemis II and others backed by start-up enterprises, are anticipated to occur in 2024. NASA s Commercial Lunar Payload Services ( CLPS ) program has fourteen businesses vying for task orders to launch specific research payloads or sensors to the moon as part of the CLPS program. We believe that NASA s Artemis program will continue to provide on-ramps and opportunities throughout the duration of the decade, as the agency strives to establish a permanent lunar presence. As NASA and other space-faring nations continue their preparations for the colonization of the moon, in-situ services have become increasingly important. This has led to a growing interest in commercial on-orbit servicing, assembly, and manufacturing (OSAM) technologies and markets, which include life extension, debris removal, and in-space transportation. Spacecraft that are capable of debris removal, orbital transfers, satellite deployments, satellite refueling, and other life extension services are now being designed and developed by private companies and in some cases, these spacecrafts are already in operation. 4 Table of Contents Space Tourism While we do not anticipate facilitating a business combination with a target company in the Space Tourism sub-sector due to the inherent risks associated with space travel and the prohibitive cost per person, we do believe it is important to prospective investors to understand the current and future trajectory of this rapidly growing sub-sector. As the decade progresses, space tourism is expected to increase with the advent of cheaper launch solutions and eventually, commercial space stations that will be accessible to the future space travelers. As more rockets are being developed, the manufacture of spacecrafts will benefit from economies of scale that will naturally reduce the cost per launch over time. Global Aerospace and Defense Economy The global aerospace and defense economy has significant market potential, and we believe there are opportunities in this industry for both well-established businesses and new entrants. We anticipate that the cost of accessing space will continue to decrease, which should lead to the development of new and creative space-based services and applications as well as continuing expansion. The global aerospace and defense economy has enormous economic, social, and strategic ramifications as well. It has a track record of contributing to technological innovation, which in turn creates chances for new enterprises and sectors and generates jobs requiring high levels of education and training. In addition to this, the global space economy plays an essential part in the nation s security and defense, as well as in the effort to solve global concerns such as the management of natural disasters, climate change, and sustainable development. Our Team We have assembled a strong management team with a broad network of connections and corporate relationships across the aerospace and defense industries. We are confident that we will be able to use our individual experiences as well as our networks to achieve success. Together, we will formulate an all-encompassing plan for growth, one that accounts for both organic expansion and expansion via mergers and acquisitions. In the end, we will attempt to transform our target company into a widely respected industry leader by leveraging the benefits of becoming a public company, including access to finance and equity for expansion. At the same time, we will endeavor to generate excellent returns for our shareholders. Any experience or performance of our management team and their respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination that we may consummate. You should not rely on the historical record of our management team or their respective affiliates as an assurance of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. Moreover, although some of our key personnel may remain with a target business in senior management or advisory positions following a business combination, it is likely that some or all of the management of the target business will remain in place. Additionally, our management team members are subject to certain conflicts of interest. For more information, please refer to Risk Factors Risks Related to Our Sponsor and Management Team and their Respective Affiliates. Executive Team Kira Blackwell serves as our Chief Executive Officer and as a director. Ms. Blackwell is a seasoned executive with over 25 years of experience in both the private and public sectors. Since September 2021, Ms. Blackwell has managed her own consulting business which focuses on helping innovative startups succeed. From September 2015 to September 2021, Ms. Blackwell served as an iTech Program Executive within the Space Technology Mission Directorate at NASA. In this role, she was responsible for creating and implementing NASA iTech. Ms. Blackwell served as the senior NASA official responsible for the strategic oversight and management of all aspects of the NASA iTech Program as well as the primary communications channel for NASA iTech on behalf of the agency. While at NASA, Ms. Blackwell was also responsible for the strategic development, implementation, and management of the Industry Engagement Activities for the Commercialization, Innovation and Synergies (CIS) Office at Goddard Space Flight Center (GSFC). As the primary interface between Industry, Other Government Agencies (OGA), and NASA stakeholders, she assisted with ScaN s mission of commercializing 90% of NASA s Near Space Network (NSN) in a rapidly expanding market. Ms. Blackwell brought years of experience in identifying gaps in technology needed for future NASA missions, evaluations of external technologies for both space and commercial market applications, as well as the facilitation of strategic national and international partnerships with 5 Table of Contents NASA and OGAs, corporations, entrepreneurs, investors, and academia. Prior to her time at NASA, Ms. Blackwell served as the Executive Director of Operations at Chyrsalis BioTherapeutics Inc., the Director of Strategic Relations for the Houston Technology Center (HTC) at NASA s Johnson Space Center (JSC), and the Director of Strategic Relations at Jacobs Technology. Andrew Allen serves as our Chief Financial Officer and as a director. Since 2006, Mr. Allen has served as the Chief Executive Officer of Aerodyne Industries LLC, a service-disabled veteran-owned small business and award-winning engineering and IT solutions company. Additionally, since November 2022, Mr. Allen has served as Vice President of Jacobs Critical Mission Solutions at Jacobs Solutions Inc., where he represents the company in industry partnerships focused on NASA and space exploration and supports other strategic activities and business pursuits. From March 2013 to December 2020, Mr. Allen served as Vice President and General Manager of Jacobs Space Operations Group at NASA s Kennedy Space Center (KSC). From July 2008 to January 2013, Mr. Allen served as President and Chief Executive Officer of Global Safety Labs, Inc., a leading-edge provider of new technologies and products to the fire suppression and safety industry. From 2004 to 2007, Mr. Allen held various roles at Honeywell, including Vice President of Space Programs and Requirements, Vice President of International Military Aircraft Programs, and Vice President of Space Systems Sales and Marketing. From 1998 to 2004, he worked for the United Space Alliance, the prime contractor for NASA operations and maintenance of the space shuttle fleet, astronaut training and Mission Control. Mr. Allen also previously served as a NASA Astronaut from 1987 until 1997 and is a three-time space flight veteran and Space Shuttle Commander with over 900 hours in space. Mr. Allen received his commission in the United States Marine Corps at Villanova University. As a Marine Corps aviator, he flew F-4 and F-18 aircraft and graduated from each of the following: the Marine Weapons and Tactics Instructor Course, the Naval Fighter Weapons School (Top Gun) and the United States Navy Test Pilot School. Nominees for our Board of Directors Richard Ambrose will serve as one of our independent directors. Mr. Ambrose has over four decades of experience in the defense and the aerospace industry. He has served as the President of Ambrose Advisors, LLC since September 2022. From April 2013 to March 2022, Mr. Ambrose served as the Executive Vice President of Lockheed Martin Space, and as an officer of the Lockheed Martin Corporation. From 2006 until 2010, he served as Vice President and General Manager of Surveillance and Navigation Systems at Lockheed Martin Space. Before joining Lockheed Martin in 2000, Mr. Ambrose was Vice President of Space Systems for Raytheon s Command, Control and Communications business segment and formerly served as President and General Manager for Space Systems, Hughes Information Technology Systems. Mr. Ambrose currently serves on the Board of Directors of Textron, and is a Senior Director at SDR Ventures. He earned a B.S. in electrical engineering technology from the DeVry Institute of Technology, an MBA from the University of Denver, Daniels College of Business, and also completed the Wharton Executive Development Program. We believe Mr. Ambrose is well-qualified to serve as a member of our board of directors due to his extensive experience and network of contacts and relationships in the aerospace and defense industry. Thomas Zelibor will serve as one of our independent directors. Mr. Zelibor has an extensive space background and most recently served as the Chief Executive Officer of the Space Foundation from May 2017 until June 2023. There he led the world s premier organization to inspire, educate, connect, and advocate on behalf of the global space community. From April 2011 to July 2017, Mr. Zelibor served as a Director, Chairman, and Chief Executive Officer of Lightwave Logic, Inc., a publicly traded corporation (NASDAQ: LWLG) that conducts research and development and production of advanced, high-speed electro-optic materials for use in devices in the telecommunications, data center, and high-speed computing markets. He served as Board Chair until September 2022. Also, during this time, from July 2011 to December 2012, Mr. Zelibor served as the Director of the eSpace Incubator at the Center for Space Entrepreneurship, helping newly formed space companies navigate the global space ecosystem. From July 2008 to April 2011, Mr. Zelibor was President and Chief Executive Officer of Flatirons Solutions, Inc. a high-tech IT professional services and systems engineering company, where he was responsible for the overall strategic guidance and direction of business operations. Mr. Zelibor also previously served as a Vice President at Science Applications International Corporation (SAIC) working programs related to US Strategic Command s space and network operations. During his 30-year military career he served as Director of Global Operations (J-3) at U.S. Strategic Command. While in that role he was responsible for integrating Space, network operations, and information warfare into US Strategic Command s portfolio of newly assigned operational missions. While on the Navy staff he was the N-61/N-6F where he was responsible for the integration of space and information networks 6 Table of Contents into Navy capabilities, at the time known as FORCEnet. During this time, he was also assigned duties as the Navy Chief Information Officer, responsible for all Navy network operations and implementation of the Navy-Marine Corps Intranet. His first assignment as an Admiral was commander of Naval Space Command where he was responsible for Naval space operations, the control of DoD s UHF satellite constellation as well as operation of the space fence, tracking objects in low earth orbit and cataloguing them for human space flight. His other affiliations and Board service include: the National Association of Corporate Directors; Chairman, Baker Street Scientific Inc.; and Director, REE Medical. Previous Board and Committee roles included: Director, National Cyber Center (Member of the Space ISAC Committee); Director, Dienen Corp.; and Member, Defense Innovation Board, Space Advisory Committee. Mr. Zelibor earned his B.S. in Oceanography from the United States Naval Academy in 1976 and retired as a Navy Rear Admiral and Naval Aviator with over 30 years of significant leadership experience. We believe Mr. Zelibor is well-qualified to serve as a member of our board of directors due to his public company experience. Steven Wasserman will serve as one of our independent directors. Mr. Wasserman has been a principal in MSP Sports Capital, LP., an investment fund specializing in professional sports businesses, since 2019. He served as Vice Chairman of The Roosevelt Investment Group, Inc., an investment advisory firm, from 2018 to 2021 and was previously Chief Executive Officer of Seaport Investment Management, LLC, an investment management firm, from 2014 to 2018. He is the co-founder and managing partner of Alchemy Investment Management. He currently serves on the board of byNordic Acquisition Corporation and Alchemy Investments Acquisition Corp. 1, both of which are special purpose acquisitions companies. Since 2017, Mr. Wasserman has been a senior advisor to a New York based hedge fund with respect to special situations/credit opportunity investments and has been an advisor to BlockWorks Group, LLC, a blockchain communications company. From 2011 to 2014, he was also Senior Managing Director of Beige Group, LLC, a family office where he was responsible for identifying, analyzing, and executing investment opportunities. He has also served as a principal for various other special purpose acquisition companies, including, but not limited to, Energy Infrastructure Acquisition Corp., Seanergy Acquisition Corp., and Starbulk Acquisition Corp. Mr. Wasserman is also a licensed attorney. We believe Mr. Wasserman is well-qualified to serve as a member of our board of directors due to his executive leadership and management experience particularly with other special purpose acquisition companies. Investment Criteria Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective targets for our initial business combination. We will leverage these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target that does not meet these criteria and guidelines. We intend to acquire a target business that has: Proven industry leader: We will seek to acquire a business that is an industry leader that has demonstrated consistent top-line growth and/or is benefiting from secular tailwinds. Defensible and established business models: We will seek to acquire a target with sustainable competitive advantages. Though many companies in our industries of interest likely experienced substantial challenges related to the COVID-19 pandemic, we seek companies with fundamentally sound business models that will recover well. Multiple avenues for long-term growth: We intend to acquire a company that exhibits long-term growth prospects, with the potential to grow both organically and inorganically through acquisitions, and demonstrates the ability to drive growth through the enablement or scaling of technology. Sustainable financial profile: We intend to target companies that generate stable free cash-flow and are not reliant on financial leverage to generate returns. Compelling value proposition: We intend to acquire a fundamentally sound business that is underperforming its potential but presents a compelling value proposition relative to its peers that may result in an attractive risk-adjusted return for our shareholders. Appropriate size: We will pursue targets with an aggregate enterprise value between $300 million and $1.0 billion. 7 Table of Contents Potential for add-on acquisitions: We will actively consider target companies that would serve as a strong platform for post-closing add-on acquisitions. Given our extensive industry networks and collective experience, we believe we will have unique access to a large number of private assets operating in the global aerospace, space, and space services sectors. Such add-on acquisitions can expedite growth for the target and help to amplify returns for our shareholders. Benefit from our unique capabilities: We seek to acquire a business that will benefit from and capitalize on our team s unique operating expertise, extensive industry network and financing experience. Qualified management team: We seek to acquire a business that allows our team to partner with proven and established management teams or business owners to achieve long-term strategic and operational excellence. Benefit from being a public company: We intend to acquire a company at the point in its lifecycle at which going public, with the support of our highly experienced management team and access to our robust industry networks, is a natural next step and that will benefit from access to a public currency to accelerate growth. Services provided: Based on our team s unique experience and skillset, we intend to source and evaluate companies focused on one or more of the following product or services: Aerospace and defense companies Satellite-based communication services Global navigation systems Remote Sensing Autonomy, mobility and robotics Relevant end market: We will focus on companies that service one or more of the following end markets with customers in USG defense and civil, commercial space and aerospace: Technology Manufacturing Defense Aerospace Information Services This non-exclusive list of criteria is not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender offer materials that we would file with the SEC. Our Acquisition Process While we have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us, we have engaged in an extensive research effort to identify a large number of potential targets. 8 Table of Contents We intend to leverage our resources and network for efficient outreach to commence immediately after the date of this prospectus. Our effort will be focused on creating proprietary transaction opportunities. We believe personal relationships built over time are critical not just in generating transaction opportunities, but also in consummating a business combination. In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us. We are not prohibited from pursuing an initial business combination with a company that is affiliated with any of our initial shareholders or members of our management team. In the event we seek to complete our initial business combination with a business that is affiliated with any of our initial shareholders or members of our management team, we, or a committee of independent and disinterested directors, may engage independent advisors to assist with the evaluation and will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, or from an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view. Our initial shareholders and members of our management team will directly or indirectly own our securities following this offering, and accordingly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our initial shareholders, officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such initial shareholders, officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. The nominal purchase price paid by our sponsor for the founder shares may significantly dilute the implied value of your public shares in the event we consummate an initial business combination, and our sponsor and other initial shareholders are likely to make a substantial profit on their investment in us in the event we consummate an initial business combination, even if the business combination causes the trading price of our ordinary shares to decline materially. Our initial shareholders and members of our management team may from time to time become aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have not (nor has anyone on our behalf) engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to a business combination transaction with us. As described in Proposed Business Sourcing of Potential Business Combination Targets and Management Conflicts of Interest, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us, subject to their fiduciary duties under Cayman Islands law. We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially affect our ability to complete our initial business combination. Our initial shareholders and members of our management team may participate in the formation of, invest in (on behalf of themselves, their affiliates or its and their clients), or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our initial shareholders and members of our management team could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved. 9 Table of Contents Initial Business Combination The rules of the NYSE require our initial business combination to occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account). We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target business or issue a substantial number of new shares to third parties in connection with financing our initial business combination. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Notwithstanding the foregoing, if we are not then listed on the NYSE for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test. 10 Table of Contents
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+PROSPECTUS SUMMARY Investors should read the following summary together with the more detailed information in this Prospectus before investing in Shares of the Fund, including the information under the caption Risk Factors, and all exhibits to this Prospectus as well as information found in documents incorporated by reference in this Prospectus. Investors should also read any updated Prospectus, supplements to this Prospectus, Current Reports on Form 8-K, if any, notices and press releases, and other important information about the Fund which are posted on the Sponsor s website at www.ProShares.com. The definitions of capitalized terms used in this Prospectus can be found in the Glossary of Defined Terms in Appendix A and throughout this Prospectus.
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0002026793_moove_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002026793_moove_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
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@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0002033682_yzsz_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002033682_yzsz_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..22929212f1e6c23be281a6380c779c39a14df858
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CIK0002033682_yzsz_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus that we consider important. This summary does not contain all of the information you should consider before investing in our Common Shares. You should read this summary together with the entire prospectus, including the risks related to our business, our industry, investing in our Common Shares and our location in British that we describe under Risk Factors and our consolidated financial statements and the related notes before making an investment in our securities. Our Mission In our corporate culture, "Quality First, Customer Supreme, Integrity-Based, Co-Creating the Future" is not just a slogan, but the core principle and action guide of our daily work. Our mission is deeply rooted in these four fundamental commitments, guiding us to move forward and pursue excellence. Quality First for us means striving for perfection in every link of production and every service delivery. We are committed to ensuring that our products and services meet the highest industry standards through continuous technological innovation and process improvement. We believe that only by consistently exceeding customer expectations can we truly achieve a leading quality. Customer Supreme is the core of our decision-making. We listen closely to our customers, deeply understand their needs and challenges, and provide customized solutions based on this understanding. Our goal is to establish long-term, mutually beneficial relationships, proving through actions that our customers' success is our success. Integrity-Based occupies a crucial position in all our business activities. We win and maintain the trust of customers, partners, and the society with transparent communication, upright behavior standards, and strict compliance with laws and regulations. Integrity also means being responsible for our commitments, ensuring our words match our actions. Co-Creating the Future emphasizes win-win cooperation with all stakeholders. We are dedicated to working together with customers, employees, suppliers, and the community to meet challenges and share successes. By encouraging innovative thinking and supporting sustainable development projects, we believe we can create greater value for society while driving long-term growth Overview of Our Company The founder of YZSZ Holding Group Inc has been deeply involved in the exhibition industry for 30 years. The company adheres to the principle of "enabling culture by science and technology to create a better future" and devotes itself to the exhibition field with planning and design as the leading factor. With the vision of "making the exhibition of digital intelligence possible", we will focus on providing customers with comprehensive online and offline technology exhibitions, conference exchanges and cultural activities with big data technology as the driving force, and build an efficient and convenient industry ecosystem to help customers maximize their business value. The company advocates the value proposition of "integrity, innovation, integration, professionalism, service and sharing" and builds a national "cloud-based digital exhibition service platform". Yun Zai Shu Zhi Exhibition Service Platform is a comprehensive commercial activity platform using various high-tech means, aiming at helping various industries and enterprises to carry out various commercial activities. The platform aims at creating "never-ending Expo" and takes "new ecology of exhibition industry" as its mission. It comprehensively uses the new generation of information technology means such as cloud computing, artificial intelligence, big model, streaming media and 2/3D image processing mobile Internet, and provides convenient high-tech digital tools for corporate image promotion, product display and promotion, sales channel expansion, customer relationship contact, sales staff training, market investment and information research. It provides enterprises with the functions of intelligent target customer promotion, intelligent exhibition docking and intelligent online exhibition hall across time, space, language and industry. At the same time, it also provides an effective digital docking platform for government economic activities, publicity and investment promotion. I PRELIMINARY PROSPECTUS (Subject to Completion) Dated August 5, 2024. PRELIMINARY PROSPECTUS Ordinary Shares We are offering ordinary shares. This is the initial public offering of ordinary shares of . The offering price of our ordinary shares in this offering is expected to be $6.50 per share. Prior to this offering, there has been no public market for our ordinary shares. We have applied to list our ordinary shares on the Nasdaq Capital Market under the symbol YZSZ . There is no assurance that such application will be approved, and if our application is not approved, this offering may not be completed. Investing in our ordinary shares involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our ordinary shares in Risk Factors . We are an emerging growth company as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See Prospectus Summary Implications of Being an Emerging Growth Company for additional information. Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. We are a holding company incorporated in the Cayman Islands as a holding company. The Ordinary Shares offered in this prospectus are shares of the Cayman Islands holding company. For a description of our corporate structure, see Corporate History and Structure. See also Risk Factors Risks Relating to Our Corporate Structure. PER SHARE TOTAL Initial public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ (1)Does not include accountable and non-accountable expense allowance payable to underwriters. Please see the section of this prospectus entitled Underwriting for additional information regarding underwriter compensation. We expect our total cash expenses for this offering (including cash expenses payable to our underwriters for their out-of-pocket expenses) to be approximately $[ ], exclusive of the above commissions. In addition, we will pay additional items of value in connection with this offering that are viewed by the Financial Industry Regulatory Authority, or FINRA, as underwriting compensation. These payments will further reduce proceeds available to us before expenses. See Underwriting. Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor any of the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock. For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States. Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. II TABLE OF CONTENTS Page ABOUT THIS PROSPECTUS IV INTERNATIONAL FINANCIAL REPORTING STANDARDS V MARKET AND INDUSTRY DATA V TRADEMARKS V SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS VI PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/CIK0002041340_hong_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CIK0002041340_hong_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/CTRI_centuri_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CTRI_centuri_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CTRI_centuri_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/CYTOF_altamira_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/CYTOF_altamira_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/CYTOF_altamira_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2024/DARE_dare_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/DARE_dare_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8e46decdcb2f2cea6fc0d1f8bf5a060187c7ed37
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/DARE_dare_prospectus_summary.txt
@@ -0,0 +1 @@
+II-XI SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on November 15, 2024. Dar Bioscience, Inc. By: /s/ Sabrina Martucci Johnson Sabrina Martucci Johnson Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Dar Bioscience, Inc., hereby severally constitute and appoint Sabrina Martucci Johnson and MarDee Haring-Layton, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for her or him and in her or his name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as she or he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or her or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Sabrina Martucci Johnson President, Chief Executive Officer, Secretary and Director November 15, 2024 Sabrina Martucci Johnson (Principal Executive and Financial Officer) /s/ MarDee Haring-Layton Chief Accounting Officer November 15, 2024 MarDee Haring-Layton (Principal Accounting Officer) /s/ William H. Rastetter Chairman of the Board November 15, 2024 William H. Rastetter, Ph.D. /s/ Jessica D. Grossman Director November 15, 2024 Jessica D. Grossman, M.D. /s/ Susan L. Kelley Director November 15, 2024 Susan L. Kelley, M.D. /s/ Gregory W. Matz Director November 15, 2024 Gregory W. Matz /s/ Robin J. Steele Director November 15, 2024 Robin J. Steele, J.D., L.L.M. II-XII
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diff --git a/parsed_sections/prospectus_summary/2024/DTSTW_data_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/DTSTW_data_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/DTSTW_data_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/ETHA_ishares_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/ETHA_ishares_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ac692f4a77ef957c1e70221a8d9e2ad7eabf70e8
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/ETHA_ishares_prospectus_summary.txt
@@ -0,0 +1 @@
+S-1/A Table of Contents The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS SUBJECT TO COMPLETION, DATED July 17, 2024 iShares Ethereum Trust ETF The iShares Ethereum Trust ETF (the Trust ) is a Delaware statutory trust that issues shares ( Shares ) representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist primarily of ether held by a custodian on behalf of the Trust. The Trust seeks to reflect generally the performance of the price of ether. The Trust seeks to reflect such performance before payment of the Trust s expenses and liabilities. iShares Delaware Trust Sponsor LLC (the Sponsor ) is the sponsor of the Trust; Wilmington Trust, National Association, a national association (the Delaware Trustee ), is the Delaware trustee of the Trust; BlackRock Fund Advisors (the Trustee ) is the trustee of the Trust; Coinbase Custody Trust Company, LLC (the Ether Custodian ) is the custodian for the Trust s ether holdings; and The Bank of New York Mellon is the custodian for the Trust s cash holdings (the Cash Custodian and together with the Ether Custodian, the Custodians ) and the administrator of the Trust (the Trust Administrator ). The Trust is not an investment company registered under the Investment Company Act of 1940, as amended (the Investment Company Act ), and the Sponsor is not registered with the Securities and Exchange Commission ( SEC ) as an investment adviser and is not subject to regulation by the SEC as such in connection with its activities with respect to the Trust. The Trust is not a commodity pool for purposes of the Commodity Exchange Act of 1936, as amended (the Commodity Exchange Act or CEA ), and the Sponsor is not subject to regulation by the Commodity Futures Trading Commission (the CFTC ) as a commodity pool operator or a commodity trading advisor with respect to the Trust. The Trust intends to issue Shares on a continuous basis and is registering an indeterminate number of Shares with the SEC in accordance with Rule 456(d) and 457(u). The Trust issues and redeems Shares only in blocks of 40,000 or integral multiples thereof, based on the quantity of ether attributable to each Share (net of accrued but unpaid remuneration due to the Sponsor (the Sponsor s Fee ) and any accrued but unpaid expenses or liabilities). A block of 40,000 Shares is called a Basket. These transactions will take place in exchange for cash. Subject to The Nasdaq Stock Market LLC ( NASDAQ or the Exchange ) receiving the necessary regulatory approval to permit the Trust to create and redeem Shares in-kind for ether (the In-Kind Regulatory Approval ), these transactions may also take place in exchange for ether. The timing of the In-Kind Regulatory Approval is unknown, and there is no guarantee that NASDAQ will receive the In-Kind Regulatory Approval at any point in the future. If NASDAQ receives the In-Kind Regulatory Approval and if the Sponsor chooses to allow in-kind creations and redemptions, the Trust will notify the owners of the beneficial interests of Shares (the Shareholders ) in a prospectus supplement, in its periodic Exchange Act reports and on the Trust s website. Baskets will be offered continuously at the net asset value per Share ( NAV ) for 40,000 Shares. Only registered broker-dealers that become authorized participants by entering into a contract with the Sponsor and the Trustee ( Authorized Participants ) may purchase or redeem Baskets. Shares will be offered to the public from time to time at varying prices that will reflect the price of ether and the trading price of the Shares on NASDAQ at the time of the offer. The Authorized Participants will deliver only cash to create Shares and will receive only cash when redeeming Shares. Further, Authorized Participants will not directly or indirectly purchase, hold, deliver, or receive ether as part of the creation or redemption process or otherwise direct the Trust or a third party with respect to purchasing, holding, delivering, or receiving ether as part of the creation or redemption process. The Trust will create Shares by receiving ether from a third party that is not the Authorized Participant and the Trust not the Authorized Participant is responsible for selecting the third party to deliver the ether. Further, the third party will not be acting as an agent of the Authorized Participant with respect to the delivery of the ether to the Trust or acting at the direction of the Authorized Participant with respect to the delivery of the ether to the Trust. The Trust will redeem Shares by delivering ether to a third party that is not the Authorized Participant and the Trust not the Authorized Participant is responsible for selecting the third party to receive the ether. Further, the third party will not be acting as an agent of the Authorized Participant with respect to the receipt of the ether from the Trust or acting at the direction of the Authorized Participant with respect to the receipt of the ether from the Trust. The third party will be unaffiliated with the Trust and the Sponsor. Neither the Trust, nor the Sponsor, nor the Ether Custodian, nor any other person associated with the Trust will, directly or indirectly, employ any portion of the Trust s assets in actions where any portion of the Trust s ether becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ether or generate income or other earnings (collectively, Staking Activities ). Accordingly, the Trust will not earn any form of staking rewards, or income of any kind, from Staking Activities. Table of Contents Prior to this offering, there has been no public market for the Shares. The Shares will be listed and traded on NASDAQ under the ticker symbol ETHA. Market prices for the Shares may be different from the NAV. CME CF Ether Dollar Reference Rate New York Variant for the ether U.S. Dollar trading pair (the CF Benchmarks Index ), produced by CF Benchmarks Ltd., on July 16, 2024 was $3,468.20. Except when aggregated in Baskets, Shares are not redeemable securities. Baskets are only redeemable by Authorized Participants. The Trust is an emerging growth company, as that term is used in the Jumpstart Our Business Startups Act (the JOBS Act ), subject to reduced public company reporting requirements under U.S. federal securities laws. Investing in the Shares involves significant risks. See Risk Factors starting on page 18. Neither the SEC nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The Shares are not interests in nor obligations of any of the Sponsor, the Trustee, the Delaware Trustee, BlackRock Financial Management, Inc. (the Seed Capital Investor ), the Administrator, the Cash Custodian, the Ether Custodian or their respective affiliates. The Shares are not insured or guaranteed by the Federal Deposit Insurance Corporation ( FDIC ) or any other governmental agency. iShares is a registered trademark of BlackRock, Inc. or its affiliates. On May 21, 2024, the Seed Capital Investor, an affiliate of the Sponsor, subject to conditions, purchased the Seed Creation Baskets, comprising 400,000 Shares at a per-Share price equal to $25.00. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $10,000,000. On June 24, 2024, the Trust purchased 3,030.72569755 ether with the proceeds of the Seed Creation Baskets using the Prime Execution Agent. The Seed Capital Investor will act as a statutory underwriter in connection with this purchase. See Seed Capital Investor and Plan of Distribution for additional information. The price of the Seed Creation Baskets was determined as described above and such Shares could be sold at different prices if sold by the Seed Capital Investor at different times. The date of this prospectus is [ ], 2024. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Table of Contents TABLE OF CONTENTS Page STATEMENT REGARDING FORWARD-LOOKING STATEMENTS iv PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/EZBC_franklin_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/EZBC_franklin_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..9593d9c5a5c8f8f59be90a0eec886b6dbac2149d
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/EZBC_franklin_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY Although the Sponsor believes that this summary is materially complete, you should read the entire prospectus, including Risk Factors beginning on page 13, before making an investment decision about the Shares. Definitions of terms used in this prospectus can be found in the Glossary on page 97. Trust Structure The Trust was formed as a Delaware statutory trust on September 6, 2023. The Fund is the sole series of the Trust. The purpose of the Fund is to own bitcoin. Each Share represents a fractional undivided beneficial interest in the net assets of the Fund. The assets of the Fund consist primarily of bitcoin held by the Bitcoin Custodian on behalf of the Fund and cash. Key Service Providers The Sponsor, Trustee, Custodians, Administrator, Marketing Agent and Trade Credit Lender The Sponsor of the Trust and the Fund is Franklin Holdings, LLC. The Sponsor is a Delaware limited liability company and was formed on July 21, 2021. Under the Delaware Limited Liability Company Act and the governing documents of the Sponsor, Franklin Advisers, Inc., the sole member of the Sponsor, is not responsible for the debts, obligations and liabilities of the Sponsor solely by reason of being the sole member of the Sponsor. Franklin Resources, Inc. ( Franklin ), a corporation registered under Delaware law, is the ultimate parent company of the Sponsor. The Trust is governed by the provisions of an Agreement and Declaration of Trust (the Declaration of Trust ) executed as of January 5, 2024 by the Sponsor and the Trustee. The Fund issues Shares only in Creation Units of 50,000 or multiples thereof. Creation Units are issued and redeemed in exchange for cash. Individual Shares will not be redeemed by the Fund but will be listed and traded on the Cboe BZX Exchange, Inc. ( Cboe BZX Exchange or the Exchange ) under the ticker symbol EZBC. The Fund seeks to reflect generally the performance of the price of bitcoin before payment of the Fund s expenses. The material terms of the Trust and the Shares are discussed in greater detail under the section Description of the Shares and the Trust. The Trust is not registered as an investment company under the Investment Company Act and is not required to register under such Act. The Sponsor is not registered with the SEC as an investment adviser and is not subject to regulation by the SEC as such in connection with its activities with respect to the Trust or the Fund. The Fund will not hold or trade in commodity futures contracts regulated by the CEA, as administered by the CFTC. The Fund is not a commodity pool for purposes of the CEA, and none of the Sponsor, the Trustee or the Marketing Agent is subject to regulation as a commodity pool operator or a commodity trading adviser in connection with the Shares. The Fund intends to continuously offer Shares but may suspend issuances of Shares at any time. The Sponsor has arranged for the creation of the Trust and the Fund, the registration of the Shares for their public offering in the United States and the listing of the Shares on the Cboe BZX Exchange. In exchange for the Sponsor s fee, the Sponsor has agreed to assume the ordinary fees and expenses incurred by the Fund, including but not limited to the following: fees charged by the Administrator, the Custodians and the Trustee, Cboe BZX Exchange listing fees, typical maintenance and transaction fees of the DTC, SEC registration fees, printing and mailing costs, tax reporting fees, audit fees, license fees and expenses, up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor bears expenses in connection with the Trust s organization and initial offering costs. The Fund will sell bitcoin on an as-needed basis to pay the Sponsor s fee. The Fund bears transaction costs, including any Bitcoin network fees or other similar transaction fees, in connection with any sales of bitcoin necessary to pay the Sponsor s fee, as well as other Fund expenses (if any) that are not assumed by the Sponsor (expenses assumed by the Sponsor are specified above). Any Bitcoin network fees and similar transaction fees incurred in connection with the creation or redemption of Creation Units are borne by the Authorized Participant. The Sponsor is not required to pay any extraordinary or non-routine expenses. Extraordinary expenses are fees and expenses which are unexpected or unusual in nature, such as legal claims and liabilities and litigation costs or indemnification or other unanticipated expenses. Extraordinary fees and expenses also include material expenses which are not currently anticipated obligations of the Fund. The Fund will be responsible for the payment of such expenses to the extent any such expenses are incurred. Routine operational, administrative and other ordinary expenses are not deemed extraordinary expenses. In addition, the Fund may incur certain other non-recurring expenses that are not assumed by the Sponsor (expenses assumed by the Sponsor are described above), including but not limited to: taxes and governmental charges; any applicable brokerage commissions; Bitcoin network fees and similar transaction fees that qualify as extraordinary or non-routine expenses as described above; financing fees; expenses and costs of any 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 post-effective amendment filed pursuant to Rule 462(d) 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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, 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 Securities Act. CALCULATION OF REGISTRATION FEE Title of each class of securities to be registered Amount to be registered Proposed maximum aggregate price per share Proposed maximum aggregate offering price Amount of registration fee Franklin Bitcoin ETF Shares (1) (1) (1) (2) (1) In accordance with Rule 456(d) under the Securities Act of 1933, as amended, an indeterminate number of Franklin Bitcoin ETF Shares are being registered as may from time to time be offered hereunder at indeterminate prices. (2) In accordance with Rules 456(d) and 457(u) under the Securities Act, as amended, the registrant is deferring payment of these registration fees and will pay these registration fees on an annual net basis no later than 90 days after the end of each fiscal year. 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 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine. The Trust is an emerging growth company, as that term is used in the Jumpstart Our Business Startups Act (the JOBS Act ), subject to reduced public company reporting requirements under U.S. federal securities laws. Investing in the Shares involves significant risks. See Risk Factors starting on page 13. Neither the SEC nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The Shares are not interests in nor obligations of any of the Sponsor, the Seed Capital Investor, the Trustee, the Administrator, the Custodians, the Marketing Agent or their respective affiliates. The Shares are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. On December 15, 2023, Franklin Resources Inc. (the Seed Capital Investor ), an affiliate of the Sponsor, subject to conditions, purchased 4,000 Shares at a per-Share price equal to $25.00 (the Initial Seed Shares ). Delivery of the Initial Seed Shares was made on December 15, 2023. Total proceeds to the Fund from the sale of the Initial Seed Shares were $100,000. On January 8 , 2024, the Initial Seed Shares were redeemed for $100,000 and the Seed Capital Investor purchased two creation units in a cash transaction comprised of a total of 100,000 Shares at a per-Share price based on 29.00000000 bitcoins per Creation Unit (or 0.00058 bitcoins per Share), for a total of 58.00000000 bitcoins (the Seed Creation Units ). The cash proceeds to the Fund from the sale of the Seed Creation Units were used by the Fund to purchase 58.00000000 bitcoins at the price of $ 44,973.58 per bitcoin on January 8 , 2024. The transaction and other costs incurred in connection with the Seed Creation Units were paid by the Seed Capital Investor and not borne by the Fund. Thus, the ultimate total proceeds to the Fund from the sale of the Seed Creation Units were $ 2,608,467.81 (an amount representing 58.00000000 bitcoins). The Seed Capital Investor will act as a statutory underwriter with respect to the Seed Creation Units. See Seed Capital Investor and Plan of Distribution for further information. Creation Units will be sold at a per-Share offering price that will vary depending on, among other things, the price of bitcoin and the trading price of the Shares on the Cboe BXZ Exchange Inc. at the time of the offer. Shares offered at different times may have different offering prices. Prior to this offering, there was no public market for the Shares. This offering of an indeterminate amount of the Shares is registered with the Securities and Exchange Commission (the SEC ) in accordance with the Securities Act of 1933, as amended (the 1933 Act ). The offering of Shares pursuant to this prospectus is intended to be a continuous offering and is not expected to terminate until three years from the date of the original offering, unless extended as permitted by applicable rules under the 1933 Act. The date of this prospectus is January [ ], 2024. extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Fund to protect the Fund or the owners of the beneficial interests in the Shares (the Shareholders ) (including, for example, in connection with any fork of the Bitcoin blockchain, any Incidental Rights (as defined below) and any IR Virtual Currency (as defined below)), any indemnification of the Cash Custodian, Bitcoin Custodian, Prime Broker, Administrator or other agents, service providers or counterparties of the Trust or the Fund, and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters or legal expenses in excess of $500,000 per year. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Fund in excess of the $500,000 per annum stipulated in the Sponsor Agreement. To the extent that the Sponsor does not voluntarily assume such fees and expenses, they will be the responsibility of the Fund. The Fund s organizational and initial offering costs are borne by the Sponsor and, as such, are the sole responsibility of the Sponsor. The Sponsor will not seek reimbursement or otherwise require the Fund, the Trust, the Trustee or any Shareholder to assume any liability, duty or obligation in connection with any such organizational and initial offering costs. The Sponsor will maintain a public website on behalf of the Fund, containing information about the Fund and the Shares. The Internet address of the Fund s website will be https://www.franklintempleton.com/investments/options/exchange-traded-funds/products/39639/SINGLCLASS/franklin-bitcoin-etf/EZBC. This Internet address is only provided here as a convenience to you, and the information contained on or connected to the Fund s website is not considered part of this prospectus. The Sponsor is responsible for establishing the Fund and for the registration of the Shares. The Sponsor will generally oversee the performance of the Fund s principal service providers, but will not exercise day-to-day oversight over such service providers. Delaware Trust Company, a subsidiary of the Corporation Service Company, serves as Trustee of the Trust. The Trustee s principal offices are located at 251 Little Falls Drive, Wilmington, DE 19808. The structure of the Trust and the number and/or identity of the Trustee may be amended in the future via amendments to the Trust s Certificate of Trust and the Declaration of Trust. The material terms of the Trust s Declaration of Trust are discussed in greater detail under the section The Declaration of Trust. The Sponsor may remove the Trustee at any time by giving at least 60 days advance written notice to the Trustee, provided that such removal will not become effective until such time as a successor Trustee has accepted appointment as Trustee of the Trust. Upon effective resignation or removal, the Trustee will be discharged of its duties and obligations. The Sponsor also has the right to select any new or additional custodian. The Sponsor, the Marketing Agent or any of their respective affiliates and associates currently engage in, and may in the future engage in, the promotion, management or investment management of other accounts, funds or trusts that invest primarily in bitcoin or another digital asset, or may face other potential conflicts of interest. Although officers and professional staff of the Sponsor s management intend to devote as much time to the Fund as is deemed appropriate to perform their duties, the Sponsor s management may allocate their time and services among the Fund and the other accounts, funds or trusts. In addition, the Sponsor, in its sole discretion, may determine to amend the Declaration of Trust, including to increase the remuneration due to the Sponsor (the Sponsor s Fee ), without Shareholder consent. See Conflicts of Interest. The Bitcoin Custodian is Coinbase Custody Trust Company, LLC ("Coinbase Custody"), and the Cash Custodian and the Administrator is the Bank of New York Mellon. The Bitcoin Custodian is responsible for safekeeping the bitcoin owned by the Fund. The Bitcoin Custodian is appointed by the Sponsor on behalf of the Fund. The general role and responsibilities of the Bitcoin Custodian are further described in Custodians The Bitcoin Custodian. The Administrator is generally responsible for the day-to-day administration of the Fund, including the calculation of the Fund s NAV per Share. The Administrator s fees are paid by the Sponsor. The Administrator and any of its affiliates may from time to time purchase or sell Shares for their own accounts, as agents for their customers and for accounts over which they exercise investment discretion. The Administrator and any successor administrator must be a participant in DTC or such other securities depository as shall then be acting. The general role and responsibilities of the Administrator are discussed in greater detail under the section Description of Key Service Providers The Administrator. The Fund may borrow bitcoin or cash as trade credit ( Trade Credit ) from Coinbase Credit, Inc. (the Trade Credit Lender ) on a short-term basis pursuant to the Coinbase Credit Post-Trade Financing Agreement (the Trade Financing Agreement ). The Fund s Objective The Fund seeks to reflect generally the performance of the price of bitcoin before payment of the Fund s expenses. The Shares are intended to offer a convenient means of making an investment similar to an investment in bitcoin relative to acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset platform. The Shares have been designed to remove obstacles associated with the complexities and operational burdens involved in a direct investment in bitcoin by providing an investment with a value that reflects the price of TABLE OF CONTENTS Page STATEMENT REGARDING FORWARD-LOOKING STATEMENTS iii PROSPECTUS SUMMARY 1
\ No newline at end of file
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@@ -0,0 +1,5812 @@
+Prospectus Summary - Reorganization 
+above.
+
+ 
+
+Our
+Major Operating Subsidiaries
+
+ 
+
+Our
+business and financial results are contributed primarily by our three Operating Subsidiaries, namely FIL, AIL and FPPF.
+
+ 
+
+AIL
+ As the marketing arm for the Group, AIL is responsible for all sales and marketing efforts.
+
+ 
+
+FIL
+ Is responsible for the overall management of the Operating Subsidiaries.
+
+ 
+
+FPPF
+ Is responsible for the production of all of the Company s products, and its engineering and design department conducts
+in-house design and research functions for the development of new products and product lines.
+
+ 
+
+Incorporation
+of Holding Companies
+
+ 
+
+Fenbo
+Holdings Limited
+
+ 
+
+On
+September 30, 2022, FHL was incorporated in the Cayman Islands with limited liability and is authorized to issue a maximum of 303,000,000
+shares, comprised of 300,000,000 ordinary shares and 3,000,000 preference shares each with a par value of US$0.0001. FHL is a holding
+company and owns all of the issued and outstanding shares of our intermediate holding company, RLHL, and our Operating
+Subsidiaries, AIL, FIL and FPPF.
+
+ 
+
+Luxury
+Max Investments Limited
+
+ 
+
+On
+October 21, 2022, LMIL was incorporated in the BVI as a holding company with limited liability and is authorized to issue a maximum of
+50,000 shares with a par value of US$1.00 each of a single class. As of the date of this prospectus, LMIL owns 72.32% of
+the issued and outstanding shares of the Company.
+
+ 
+
+Rich
+Legend Holdings Limited
+
+ 
+
+On
+October 21, 2022, RLHL was incorporated in the BVI as a holding company with limited liability and is authorized to issue a maximum of
+50,000 shares with a par value of US$1.00 each of a single class. As of the date of this prospectus, RLHL owns all of the issued
+and outstanding shares of AIL and FIL.
+
+ 
+
+ 67
+
+ 
+
+ 
+
+ 
+
+INDUSTRY
+OVERVIEW
+
+ 
+
+Introduction
+
+ 
+
+The
+following overview is based on an Independent Market Research Report prepared for the Company by Frost & Sullivan.
+
+ 
+
+Products
+ Personal Care Beauty Appliances / Hair Styling Tools
+
+ 
+
+The
+Group s electrical hair styling products can be divided into five sub-categories, namely,
+
+ 
+
+(i)Curling
+ Wands and Irons;
+
+(ii)Flat
+ Irons and Hair Straighteners;
+
+(iii)Hair
+ irons, which are tools used to alter the structure of hair of which there are three types:
+ (a) crimpers, which are used to create little crimps in the hair; (b) straighteners, also
+ known as flat irons, which are used to straighten the hair; and (c) curling tongs, which
+ are used to make the hair curly; and
+
+ (iv)others,
+ which includes trimmer, nail polish, pet shampoo brush, eyebrow pluckers, etc.
+
+ 
+
+ 
+
+Typically,
+the irons embedded in the hair iron devices are made of heat-conductive metal with ceramic layers protecting the ironing
+surfaces. The handle is made of thermal-resistant plastic. Advanced hair irons consist of components such as timer, temperature control
+system, and automatic shutdown system in order to prevent fire damage.
+
+ 
+
+Manufacturers
+
+ 
+
+The
+two typical categories of beauty appliance manufacturers are:
+
+ 
+
+Original
+equipment manufacturer ( OEM ) refers to a manufacturer that undertakes the manufacture and assembly of hair styling tool
+based on designs and specifications provided by brand owners. OEM typically provides two types of offering (i) a finished end product
+labelled with the brand name of the brand owner that are ready-to-sell to the end customers; (ii) the semi-finished subassemblies produced
+by OEMs are subject to further assembly by the brand owner to be part of the final products sold under the brand names of such brand
+owners.
+
+ 
+
+Original
+design manufacturers ( ODM ) are manufacturers that provide both product design and development and manufacturing services
+for brand owners. Circumstances in which the manufacturer and brand owner collaborate to jointly develop, design, and manufacture a new
+product, are referred as joint development ( JD ). The business model, i.e., OEM, ODM and JD, utilized by a particular product
+manufacturer may vary across its product lines.
+
+ 
+
+Industry
+and Market Overview
+
+ 
+
+As
+reported by Frost & Sullivan, the global market size of personal care beauty appliance / hair styling tools, which is measured by
+retail price, has increased from approximately US$28.9 billion to US$36.1 billion from 2018 to 2023, representing
+a CAGR of 4.0%. The burgeoning demand for hair care appliances was attributable to the adverse effects shown by the chemical-based
+hair styling process. The popularity of compact, portable, and travel size designs of hair styling tools also contributed to the market
+growth.
+
+ 
+
+Looking
+forward, the increasing awareness of adverse chemical treatment reactions, including a recent study from the National Institute of Health
+indicating that women who used chemical hair straightening products were at higher risk for uterine cancer compared to women who did
+not report using these products, continues to boost demand for personal care beauty appliances and the adoption of smart styling tools
+is on the rise. Furthermore, increased consciousness about personal grooming and aesthetic appeal coupled with rising preference for
+easy-to-use and low-cost grooming and beauty devices preference for easy-to-use and low-cost grooming and beauty devices is also likely
+to augment the products demand in the future. With the advancements in technologies, personal care beauty appliances have become extremely
+handy and offer different features such as better battery life, digital displays, multi-tasking, anti-bacterial, and others. Furthermore,
+the overall cost of these products has also decreased due to reduced cost of manufacturing and surged demand from middle-income households.
+
+ 
+
+The
+global hair styling tool market is expected to continuously increase at a CAGR of 3.7% in the next five years to reach US$41.9
+billion in 2026.
+
+ 
+
+ 
+
+ 68
+
+ 
+
+ 
+
+ 
+
+Market
+Drivers
+
+ 
+
+Fashion
+Trends. Evolving fashion trends, growing fashion consciousness, growing emphasis of people on self-maintenance and appearance
+and changes in consumer preferences have influenced the market and driven the demand for household beauty appliances extensively within
+the past few years. Millennials are the prime focus consumers of household beauty appliances. Use of hair styling appliances has been
+higher among females. However, with the rising trend of self-grooming and personal hygiene, the use of these appliances has been increasing
+among men population as well. The growing number of men spending on hair styling appliances, increasing the use of electric hair care
+devices such as hair straighteners, hair dryers, and other appliances continue to influence the growth of the segment globally. The segment
+is expected to continue to dominate the household beauty appliances market throughout the forecast period.
+
+ 
+
+Continued
+Innovation in Hair Styling Products. The rapid technological advancements in electronics, reduction in the size of equipment,
+and ease of manufacturing have helped the industry to a great extent. Increased innovations in the tools used for hair styling with the
+opinions of salon expert and also individuals push the manufactures to develop new products and thus boosts the growth of the market.
+Hair straighteners create beach waves effectively and effortlessly with just a simple bend of the wrist. High quality ceramics plates
+have heat balance micro sensors that regulate the temperature and evenly distributes heat. Such products have multifunction features
+that attract customers, thus increasing the demand for hair styling tools in the market. Further, advancements in battery technologies
+helped in reducing the size of the equipment and increased the portability feature. This resulted in better marketing opportunities for
+the companies as people could carry them without any hassle during traveling.
+
+ 
+
+Economic
+Considerations. Previously, the expenditure on personal grooming was relatively high, as people had to visit professional salons
+and beauticians for hairstyling, facials, massages, and others. This was mainly owing to the high cost of grooming equipment that needed
+expertise for effective operation. However, the prices for beauty appliances have been reduced significantly due to the small size of
+the products and the low cost of manufacturing. Currently major players in the industry have outsourced their production from countries,
+such as China, where the cost of raw material and labor is lower than the developed countries. The resulting lower the cost of the products
+has attracted sales from middle-income consumers who are eager to keep up with the latest beauty standards. This coincides with the increase
+in disposable income of consumers, mainly from the developing nations, which has significantly driven the demand for household beauty
+appliances. Countries such as India, South Korea, Vietnam, Brazil, Mexico, Nigeria, Myanmar, and others have witnessed large-scale economic
+development in the past few years, resulting in a surge in disposable income. As a result, people are spending more on self-care and
+personal grooming products, which in turn propels the growth of the household beauty appliances market.
+
+ 
+
+Rise
+in Social Media. Consumers are increasingly looking for quality and meaningful interact with different brands throughout the
+consumer journey from product trial, word-of-mouth interactions, purchase, after-sales experience. Good experiences and interactions
+with the brands bring consumers back for more and attract new consumers through word of mouth and online reviews. With the prevalence
+of social media in the world of fashion, makeup, hairstyling, and trendsetting, there is the growing number of promotions and advertisements
+for hair styling tools through different media channels. For example, there is rising popularity of social media influencers, DIY hair
+styling tutorials, and training videos, which in turn garner the attention of consumers across the world and further promote the use
+of hair styling tools.
+
+ 
+
+Surge
+in Demand for Personalization. The demand for personalization solutions of beauty and fashion has been on the rise for creating
+the right fit for every consumer. In the past, consumers generally used the styling services in salons, including hair-cutting, coloring
+and styling and other treatments. Along with the development of technology, personalized solutions using electrical hair styling tools
+have satisfied consumers needs and saved consumers time. Once the technology was launched, consumers began to use hair
+styling tools that enable personalization, rather than having treatments in salon.
+
+ 
+
+Growth
+in E-Commerce Sales of Personal Care Beauty Appliances. Online retail or e-commerce sector has witnessed an exceptional growth
+during the past few years, with an exponential rise during 2020, driven by the COVID-19 pandemic. The improvement in ease of buying through
+e-commerce platforms is supported by the availability of various products, low costs, marketing strategies and increased dependence on
+social media. E-commerce sites and applications have advanced their online platforms to offer a better user experience, thereby attracting
+consumers toward buying products online. Consumers can now choose from different brands and products of beauty appliances on online applications
+with categorization between quality, features, price, reviews, popularity, and others. As personal appliances have ergonomic designs
+and smaller sizes, they can be shipped easily locally as well as internationally. In addition, various private labels and brands have
+recently emerged which only offer products online, thereby reducing the expenditure on construction of showrooms or by other distribution
+channels.
+
+ 
+
+ 69
+
+ 
+
+ 
+
+ 
+
+Another
+factor driving the importance of online sales platforms is the growing influence of social media, especially within the millennial and
+Gen-Z consumer population. YouTube, Instagram, Facebook, Twitter, and other social media platforms are filled with influencers, which
+are paid by brands to promote their products to the viewers. This is further backed up by various bloggers and online magazines which
+provide fresh (frequently upgraded) lists of best brands or best personal care products to get more consumer attraction. Such trends
+have helped in the promotion of recently launched products such as at-home laser hair removal appliances, among many others. For instance,
+the online site of the Cosmopolitan Magazine, which is a trusted source for many consumers globally, has a special blog for 19 best at-home
+laser hair removal devices. Such marketing strategies and availability of numerous personal care products on online and e-commerce platforms
+have driven the growth of the household beauty appliances market.
+
+ 
+
+Impact
+of COVID-19 on the Market. The post-COVID-19 era has provided a big opportunity for the household beauty appliances industry.
+As people are spending more time at home, the overall expenditure on comfort goods and personal care products has grown significantly.
+Various countries imposed lockdowns with the outbreak of the first COVID-19 infection wave. The high severity of COVID-19 cases led to
+strict impositions of full-scale lockdowns and regulations on movement. As more people were stuck at home and working remotely, the online
+sales for consumer products, home improvement goods, and others saw rapid growth during 2020 and 2021. Beauty salons, hair salons, spas,
+and other places were closed down as per local government rules and regulations in 2020 due to the risk of infection within the customers.
+
+ 
+
+This
+increased the sale of basic personal grooming products such as hair trimmers, epilators, electric razors, and others. In addition, the
+demand for hand-held facial and body massagers, electric cleansers also surged during the COVID-19 pandemic. In the long run, this sudden
+change in consumer buying habits is likely to stay intact as people are focusing more on personal care and luxury appliances. Thus, the
+COVID-19 pandemic has had a positive impact on the household beauty appliance industry and is likely to display the same trend in the
+near future.
+
+ 
+
+The
+Personal Care Beauty Appliance / Hair Styling Tool OEM Market in the PRC 
+
+ 
+
+The
+size of personal care beauty appliance / hair styling tool OEM industry by revenue in the PRC measures the revenue generated by hair
+styling tool manufacturing plants located in the PRC in the aggregate. The market size has increased from US$2,011.8 million
+in 2018 to US$3,921.4 million in 2023, representing a CAGR of approximately 14.3%. The increase was largely
+attributed to the continuous upgrading of hair styling tool and surge in application in advanced & portable hair styling tools
+along with the ease and convenience.
+
+ 
+
+The
+increase in promotion, including advertisements of hair styling tools in different media channels and rise in awareness for personal
+grooming are expected to further support the growth of hair styling tool in the near future.
+
+ 
+
+ 
+
+ 70
+
+ 
+
+ 
+
+ 
+
+Market
+Drivers and Trends
+
+ 
+
+Advanced
+Product Design and Growing Demand from Downstream End-customers. During 2018 to 2023, the market size in terms
+of sales value of hair styling tool has increased at a CAGR of approximately 4.0%. The robust demand for hair styling tool is principally
+driven by the growing awareness on needs and consciousness on beauty products, growing disposable income that leads to an elevated living
+standard and greater consumption on consumer goods and electrical appliances, as well as the continuously advancing product specifications
+and designs. In particular, the compactness and portability of hair styling tools nowadays contributes to growing momentum of demand
+as they are convenient to carry along to different occasions and eliminate the need to visit a salon. Adverse impact of chemical-based
+hair styling process unveiled in recent years has also contributed to customers in pursing hair styling products as a substitute product.
+Besides, digitalization of hair styling product, such as the embedment of LCD screen and smartphone connectivity function has attracted
+wider target customers. The burgeoning demand also lies on the heightened reliability and durability of hair styling tool, which in turn
+serve as an impetus to the future demand for such product to grow at a CAGR of 3.7% during 2024 to 2028.
+
+ 
+
+Developed
+Supply Chain in the PRC. Outlined by the PRC Ministry of Industry and Information Technology, the total sales value of electronic
+home appliances in the PRC has attained RMB773.6 billion in 2023, representing a year-on-year increase of approximately 1.7%, and the
+export value of electronic home appliances has attained RMB617.4 billion in the same year, representing a year-on-year increase of approximately
+9.9%. As a major production and export country of electronic products, the supply chain of electronic components in the PRC has been
+well developed, where upstream raw material producers and various midstream manufacturers are often located in each other s proximately,
+which allows close collaboration and reduced logistics costs. To attain better allocation of resources and considering cost efficiency,
+brand owners around the globe have increasingly outsourced the manufacturing of hair styling products to OEMs. In turn, OEMs are expected
+to continuously serve as major stakeholders in the supply chain.
+
+ 
+
+Favorable
+Policies in the PRC. In view of the accelerated downstream demand for various electronic product and subsequently the production
+volume, the PRC government has devoted substantial efforts and promulgated development directions underpinning the domestic manufacturing
+industry, particularly on electronic products. In terms of monetary policy, the PRC government has set out mitigation plans to the reduce
+operational costs of electronics manufacturers, through provisions of tax relief and preferential financing assistance. Further, the
+ Information Industry Development Guide published by the PRC government has placed strong emphasis on research and development
+of various types of manufacture red products. As a consequence of the rollout of various technology related proposals prior to the Fourteenth
+Five-Year Plan, the PRC Government has taken initiatives in developing innovative technology that accommodates the dynamic environment.
+In turn, the demand for hair styling tool OEM services is expected to grow continuously with the support of the favorable PRC government
+policies.
+
+ 
+
+Digitalization
+in Production and operational Aspects. Owing to the advancement of technology and the implementation of Made in China
+2025 production initiatives, increasing numbers of electronic products manufacturers including manufacturers of hair styling tool
+are leveraging computerized machineries and advanced machineries to implement automation with an aim to lowering labor costs, alleviating
+operational risk, and enhancing inventory management. Predictive maintenance technology coupled with Enterprise Resources Planning (ERP)
+systems are introduced by manufacturers to monitor the state of equipment, inventory level and utilization rate. Further, the rise of
+business-to-business online marketplace transactions are expected to lower procurement and logistics costs between upstream suppliers
+and downstream brand owners with information transparency. As such, the integration of automation and informalization into the supply
+chain is expected to alleviate the cost burden on manual efforts to achieve a greater allocation of manpower resources.
+
+ 
+
+ 71
+
+ 
+
+ 
+
+ 
+
+Market
+Threats and Risk Analysis
+
+ 
+
+Rising
+labor and Raw Material Costs. Labor and raw material are the two major cost components. According to the to the Ministry of Industry
+and Information Technology of the PRC, the profitability of enterprises in the electronics industry has declined from 4.5% in
+2019 to 4.2% in 2023. The decline was attributable to the rising labor costs, as well as a surge in price of component
+such as printed circuit board, which is expected to put additional cost burden on industry participants.
+
+ 
+
+Shortage
+of Experienced Labor. In view of the advancement in technology and increasing demand for solution customizations, professionals
+that are capable of designing, implementing, and overseeing throughout the product development stage, are able to accommodate the demand
+are an essential resource. However, there is a lack of domestic training for qualified personnel to participate in high-end design and
+development services. As such, the shortage of professionals may hinder the development of the industry.
+
+ 
+
+Impact
+and the Outbreak of COVID-19. Outlined by leading companies in the components chips industry, the global component shortage has
+been prolonging since 2019 during the events of U.S. China trade war, outbreak of the COVID-19 and various severe weather incidents. The COVID-19 pandemic caused temporary disruption to demand and supply of raw material
+of hair styling tool. Temporary suspension of non-essential workplace activities as part of the containment measures for COVID-19 delayed
+raw material supply from the upstream, shipment of semi-finished or finished products to overseas customers and increased operational
+risk in relation to currencies, logistics costs and delayed scheduling. In the medium-to-long run, the impact of COVID-19 is expected
+to be mitigated gradually as supported by systematic normalization of economic and logistics activities and the resumption of normal
+manufacturing schedule throughout the supply chain.
+
+ 
+
+Cost
+Structure Analysis
+
+ 
+
+Labor
+Cost. During 2016 to 2023, the labor cost in the manufacturing industry in the PRC increased steadily. In particular,
+the average monthly wage of professional technician has increased from RMB7,814.9 to RMB11,173.8 during 2018 to
+2023, representing a CAGR of approximately 7.4%. The increasing labor cost is attributable to increasing demand of skillful
+labor equipped with skills such as knowledge on computerized management system, modelling analytical skills and proficiency in foreign
+languages.
+
+ 
+
+Going
+forward, the average monthly wage of employed persons in the manufacturing industry, including production and equipment operator,
+professional technician and managerial staff are expected to grow at a slower trend, at a CAGR of 6.4%, 7.2% and 6.5%,
+respectively, during 2024 to 2028, owing to the increasing amount of labor entrants, resulting in a stable growth of wage.
+
+ 
+
+Raw
+Materials. The prices of key raw materials and component in hair styling tool manufacturing during 2018 to 2028,
+which include integrated circuit, printed circuit board, plastics, lithium battery. In general, majority of materials and components
+used in hair styling tool production in the PRC have been sourced domestically. The fast-growing market demand for raw materials worldwide
+has resulted in a general increase in prices for such materials. With the sustained development of the electronic product and hair styling
+tool manufacturing industry, the raw material prices are expected to grow moderately in the forecasted period.
+
+ 
+
+ 72
+
+ 
+
+ 
+
+ 
+
+Competitive
+Landscape
+
+ 
+
+Overview.
+The industry is relatively fragmented and is highly competitive and there were approximately 1,000 market participants principally engaged
+as hair styling tool OEM service providers in the PRC in 2023. The OEM service providers tend to place their focus on several
+specific product categories to gain industry recognition and competitive advantages. Business relationships and track records establish
+long- term relationships with customers and suppliers are the key factors of competition among the hair styling tool ODM services providers.
+
+ 
+
+Barriers
+to Entry
+
+ 
+
+R&D
+Capabilities. R&D capabilities are the technical abilities to discover, develop, or scale marketable solutions. Strong R&D
+capabilities allow existing market participants to have an improved type of business process, lower marginal costs or increase marginal
+productivity. In view of the evolving market landscape, regular upgrade and innovation of products is another competition focus. Fast changing
+technical requirements further heighten the needs for R&D capabilities. Therefore, a lack of strong R&D capabilities will prevent
+new market entrants from entering this industry.
+
+ 
+
+Reputation
+and Relationship with Different Stakeholders. In general, current market participants have already established an extensive business
+network with their upstream equipment suppliers, distributors, as well as downstream customers. New market entrants without prior supply
+and sales network may find it difficult to build a credible relationship with other stakeholders along the value chain, thus, a stable
+business relationship between stakeholders act as one of the major challenges that new market entrants may face in the PRC hair styling
+tool market.
+
+ 
+
+Capital
+Requirements. Market participants are required to possess sufficient amount of capital and human resources to sustain their businesses,
+particularly product research and development (R&D) process, product pilot tests and daily operation costs. Existing market participants
+may have already built up a profound and reliable customer base and supply network, so as to ensure a stable and smooth business operation
+and income flow as a comparative advantage over new market entrants. Therefore, new market entrants who would like to enter the PRC hair
+styling tool market may have to overcome such high initial capital investment.
+
+ 
+
+Factors
+of Competition
+
+ 
+
+Experience
+and Knowledge. On time deliveries and lead time, response to shifts in demand and strong customized production platform are highly
+valued by customers in hair styling tools OEM market. In addition, market participants who have in-depth understanding of customer s
+requirements are more capable of developing and offering better solution to address customers needs and gain a competitive advantage.
+
+ 
+
+Technological
+Capabilities. Technological capabilities, including casting and molding, machining, joining, and shearing and forming, form key
+factors of competition in the hair styling tool OEM market. Market participants with strong technological capabilities are able to engage
+in whole lifecycle of hair styling tool, from product development and prototype production to production, which comes as the indistinguishable
+asset among the hair styling tool OEM services providers.
+
+ 
+
+Track
+Record and Project Experience. Market participants with proven track record and satisfactory project reference are usually more
+preferred by customers, and thus receive higher recognition and earn reputation in the market. Such market participants are more likely
+to be invited to tender and secure potential projects.
+
+ 
+
+ 73
+
+ 
+
+ 
+
+ 
+
+BUSINESS
+
+ 
+
+Overview
+
+ 
+
+Fenbo
+Holdings Limited (the Company or we or FHL ), incorporated on September 30, 2022, under
+the laws of the Cayman Islands, is the holding company of our Operating Subsidiaries, Able Industries Limited ( AIL ), Fenbo
+Industries Limited ( FIL ) and Fenbo Plastic Products Factory (Shenzhen) Ltd. ( FPPF ). Through our Operating
+Subsidiaries, we represent over 30 years of experience producing premium personal care electric appliances (principally electrical hair
+styling products such as straighteners, curlers, trimmers, etc.) and toys products to overseas markets.
+
+ 
+
+Our
+operating history began in 1993 when FIL was founded in Hong Kong by Mr. Li Kin Shing as a toy manufacturer and distributor. As the toy
+market deteriorated, he founded AIL in 2005 in Hong Kong and shifted our operations to the manufacturing and sales of personal care electric
+appliances. Our manufacturing subsidiary, FPPF, located in Guangdong, PRC, was formed in the PRC in 2010 and is capable of producing
+over three million units per year based on management s calculation and internal analysis. We currently act as both an OEM
+and historically have also served as an ODM.
+
+ 
+
+Corporate
+Structure
+
+ 
+
+Our
+Company was incorporated in the Cayman Islands on September 30, 2022 under the Companies Act as an exempted company with limited liability.
+Effective November 18, 2022, our Group completed a reorganization to consolidate its business operations in Hong Kong and the PRC into
+an offshore corporate holding structure to expand our manufacturing and sales operations and in anticipation of listing on a recognized
+securities market (the Reorganization ). Following the Reorganization, on August 11, 2023, LMIL completed a private placement
+of an aggregate of 2,000,000 Ordinary Shares owned by it at a price of $2.50 per share to: Yuk Tong Lam (500,000 Ordinary Shares), Majestic
+Dragon Investment Co. Limited (500,000 Ordinary Shares), Top Dragon International Limited (300,000 Ordinary Shares), Smart Tech Group
+Limited (300,000 Ordinary Shares), and Power Ocean Ventures Limited (400,000 Ordinary Shares). See Principal Shareholders, 
+for information on the current shareholdings of our major shareholders.
+
+ 
+
+Therefore,
+as a result of the Reorganization, the private placement, and the initial public offering as described below, as of the
+date of this offering: (i) LMIL which is 100% owned by Mr. Li Kin Shing, owns 8,000,000 Ordinary Shares, representing 72.32% of
+our Company, (ii) our Company is a holding company and owns 100% of RLHL, (iii) RLHL owns 100% of FIL and AIL and (iv) FIL owns 100%
+of FPPF. We do not utilize a VIE structure.
+
+ 
+
+Initial
+Public Offering. On December 1, 2023, we closed on our IPO of 1,000,000 Ordinary Shares at a public offering price of $5.00 for total
+gross proceeds of $5,000,000. On November 30, 2023, we commenced the listing of our Ordinary Shares on the Nasdaq Capital Market under
+the ticker symbol FEBO . On January 16, 2024, the representative of the underwriters in the IPO partially
+exercised its over-allotment option and purchased an additional 62,500 Ordinary Shares for gross proceeds of $312,500. The primary reason
+for our IPO and listing on the Nasdaq Capital Market was to allow us to raise funds to strengthen our market position and to further
+expand our market share. We are using the proceeds from the IPO for: (i) expansion of our production capacity and capability; (ii) strengthening
+engineering, research, and development capability; (iii) penetrating and further expanding into new and existing geographical markets;
+(iv) general working capital; and (v) payment of an advisory fee, which $61,146 was paid to ARC Group and $380,000 to GCA Advisors Limited
+at closing of the IPO.
+
+ 
+
+Organization
+Chart
+
+ 
+
+The
+following chart sets forth our corporate structure as of the date of this prospectus.
+
+ 
+
+ 
+
+ 74
+
+ 
+
+ 
+
+ 
+
+Our
+Operating Subsidiaries Services
+
+ 
+
+AIL
+ As the marketing arm for the Group, AIL is responsible for all sales and marketing efforts. As of December 31, 2023, AIL employed
+one employee.
+
+ 
+
+FIL
+ Is responsible for the overall management of the Operating Subsidiaries. As of December 31, 2023, FIL employed a total of 7 employees.
+
+ 
+
+FPPF
+ Is responsible for the production of all of the Company s products, and its engineering and design department conducts
+in-house design and research functions for the development of new products and product lines. As of December 31, 2023, FPPF employed
+a total of 262 employees.
+
+ 
+
+As
+an OEM electrical hair styling product manufacturer for a renowned multinational client, the Group has been focusing on the high-end
+segment of the personal care electrical appliance market. To this end, the Group has launched high-end professional electrical hair styling
+products which were once more commonly used in salons for the mass household markets (particularly in Europe and United States).
+
+ 
+
+The
+Group offers a wide array of fashionable electrical hair styling products with different styles, features, functionalities, colors, textures,
+materials. It is the Group s emphasis on the innovation of the design and styling of electrical hair styling products that appeals
+to the demands of different customers.
+
+ 
+
+The
+basic components of hair styling products are casings, motors, heating elements, thermostats, power cords, and switches.
+
+ 
+
+Since
+2006, the Company has served as an OEM for Spectrum Brands, a global home essential company, and its sole customer, producing electrical
+hair styling products, under the Remington brand which Spectrum Brands has the right of the use of, and which are currently
+sold to mainly Europe, United States and Latin America.
+
+ 
+
+Products
+ Personal Care Beauty Appliances / Hair Styling Tools
+
+ 
+
+The
+Group s electrical hair styling products can be divided into five sub-categories, namely,
+
+ 
+
+ 
+ 
+ (i)
+ Curling
+ Wands and Irons;
+
+ 
+ 
+
+ 
+ 
+ (ii)
+ Flat
+ Irons and Hair Straighteners; 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ (iii)
+ Hair irons, which are tools used to alter the structure
+ of hair of which there are three types: (a) crimpers, which are used to create little crimps in the hair; (b) straighteners, also
+ known as flat irons, which are used to straighten the hair; and (c) curling tongs, which are used to make the hair curly; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ (iv)
+ others, which includes trimmer, nail polish, pet shampoo
+ brush, eyebrow pluckers, etc.
+
+ 
+
+ 
+
+ 75
+
+ 
+
+ 
+
+ 
+
+Typically, the irons embedded
+in the hair iron devices are made of heat-conductive metal with ceramic layers protecting the ironing surfaces. The handle is made of
+thermal-resistant plastic. Advanced hair irons consist of components such as timer, temperature control system, and automatic shutdown
+system in order to prevent fire damage.
+
+ 
+
+ 
+ 
+ 
+ Product
+ type:
+ 
+ Example
+ features:
+
+ 
+ 
+
+ 
+
+ 
+ Curling
+ Irons
+ 
+ -
+ 120 to 240V worldwide voltage
+
+ -
+ 150 C to 230 C variable heat
+
+ -
+ reaching 100 C in 30 seconds
+
+ -
+ ceramic coated on barrel and clip for a smooth surface for hair to glide on
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+ 
+ Curling
+ Wands
+ 
+ -
+ 120 to 240V worldwide voltage
+
+ -
+ 150 C to 230 C variable heat
+
+ -
+ reaching 100 C in 30 seconds
+
+ -
+ ceramic coated on barrel and clip for a smooth surface for hair to glide on
+
+ 
+
+ -
+ LCD display
+
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+
+ 
+ Hair
+ Straighteners
+ 
+ -
+ 120 to 240V worldwide voltage
+
+ -
+ 150 C to 230 C variable heat
+
+ -
+ reaching 100 C in 30 seconds
+
+ -
+ ceramic coated on heating plates for a smooth surface for hair to glide on
+
+ 
+
+ -
+ LCD display
+
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Trimmer
+ 
+ -
+ 17mm and 5mm blade
+
+ 
+
+ -
+ operate with AAA battery
+
+ 
+
+ 
+ 
+
+ 76
+
+ 
+
+ 
+
+ 
+
+Research
+and Development
+
+ 
+
+The
+engineering and design department of the Group has been conducting in-house design and research for the purposes of developing new product
+lines for the Group. From time to time, the engineering and design department of the Group innovates new product design and features
+around the core parameters of creativity, reliability, safety, and commercial viability. Our research and development activities also
+include (i) development and standardizations of production techniques and procedures; (ii) working with customer to resolve specific
+problems on customer s designs and requirements; and (iii) experiment on project bases for calibration and optimization of production
+processes in order to achieve higher yield on production. We believe that successful research process improvement and refinement is critical
+to our ability to stay competitive in the industry in which we operate.
+
+ 
+
+Manufacturing
+
+ 
+
+The
+Group s production facilities ( SZ Factory ) are located in Bao an District, Shenzhen City, Guangdong Province,
+the PRC. The SZ Factory comprises one block of four-story building consisting of approximately 11,000 sq. meters.
+
+ 
+
+Raw
+materials. The principal raw materials sourced by the Group in its production which constitute the basic core components of its
+products include plastics, motors, power cords, switches, heating elements and thermostats.
+
+ 
+
+The
+Group sources plastics, motors, power cords, switches, heating elements and thermostats mainly from Hong Kong and PRC. The Group does
+not have long term purchase contracts with its suppliers but only purchase via orders. Management bargains purchase price by taking into
+account price trends of commodity and quantity volume discount.
+
+ 
+
+During
+the years ended December 31, 2022 and 2023, certain major raw materials experienced a general upward price trend. The prices of raw materials
+were, to a certain extent, volatile over the period. Factors affecting the supply and prices of raw materials include fluctuation of
+oil price and commodity price (including metals and plastics) and the variation in global economy as a whole. The Company has business
+relationships with its major suppliers for over 17 years. Some of them are public companies or subsidiaries of public companies listed
+on Shanghai, Shenzhen or Hong Kong Stock Exchanges and the supplies and availabilities of our raw materials have never been an issue
+in the past. Also, all of our primary raw materials are general commercial commodities. Management believes that the Group has maintained
+good business relationships with its suppliers and has a stable material supply chain. Other than the Group s existing suppliers,
+there are alternative sources of supply available for the raw materials which the Group requires. Therefore, even our existing suppliers
+may be temporarily short in inventory, alternative purchase order to other suppliers can be placed without difficulty or price premium.
+
+ 
+
+In
+order to ensure a stable supply of raw materials which can meet the ongoing requirements of sales and distribution, the quantity of each
+procurement order for raw materials is determined by the Group with reference to (i) the customers indicative orders prevailing
+from time to time; (ii) the inventory levels prevailing from time to time; and (iii) the price trend and fluctuation of raw materials
+as predicted by the Group. The Group also implements stock control procedures including up-to-date recording of all incoming and outgoing
+items into and out of warehouse and production lines. During the Track Record Period, the Group did not have any material obsolete inventory
+written off.
+
+ 
+
+Production
+Facility. Our manufacturing facilities is operated under our WFOE named FPPF, which is equipped with different types of machines
+and is able to produce about three million pieces of electrical hair styling products per annum.
+
+ 
+
+ 77
+
+ 
+
+ 
+
+ 
+
+The
+principal production components of the Group are injection molding machines, EDM machines, milling machines, grinding machines, lathe,
+spraying chambers and ovens, pad printing machines, hot stamping machines, production lines with oven, heater winding machines, bristle
+insertion machines, wire forming machines, wire stripping machines, lead cutting machines, spot welding machines, hot plate welding machines,
+crimping machines, and ultrasonic welding machines. The majority of the plant and machinery now situated in SZ Factory are owned by the
+Group. Safeguarding policies have been set up and maintained by the Group. There are security guards and gates at the entrance, a 24-hour
+surveillance system, security scanners for entrance and exit, periodic count of assets, in and out register and insurance coverage.
+
+ 
+
+ 
+
+Marketing,
+Promotions and Advertising
+
+ 
+
+The
+Group carries out its sales and distribution activities through its sales and marketing team. The Group s sales and marketing strategy
+secures its overseas orders by establishing confidence and reputation in the Group s products, assurance of quality, reasonable
+and competitive pricing and maintaining long-term relationship with overseas customers. In addition, the Group has participated in various
+exhibitions in Hong Kong, PRC and overseas to promote the Group s products to overseas customers. Furthermore, business visit,
+new product presentation and briefing and video conference have been carried out by the Group to potential overseas customers.
+
+ 
+
+In
+order to keep abreast of the market trends of electrical appliances in terms of styles, features, functionalities, colors, textures,
+materials and pricing, the Group s sales and marketing department collects market data through participating in local and overseas
+trade exhibitions and fairs and market data and surveys provided and/or conducted by customers. In particular, Mr. Gary Chiu, the Group s
+marketing consultant, has vast experience in marketing matters and strives to maintain a stable business relationship with its largest
+customer, Spectrum Brands, a leading global branded consumer product for more than 15 years.
+
+ 
+
+Pricing
+
+ 
+
+The
+Group negotiates with its customer to determine the price each year. The prices of the Group s products are primary determined
+with reference to (i) a cost-plus basis approach and (ii) the demand elasticity of a given product (which in turn is affected by (a)
+the product features and functionality, (b) the product life cycle and (c) consumer preferences). Our sales and marketing department
+is responsible to provide the quotation after considering the requirements from our customer. The actual selling prices of our products
+are determined by our senior management by taking into account the estimated costs of each order. In arriving at the final price, the
+Group also takes into account other ancillary factors such as the actual size and time frame of the order, the industry standing of the
+customer and the relationship with the customer. Our pricing policy is reviewed quarterly by our senior management.
+
+ 
+
+ 78
+
+ 
+
+ 
+
+ 
+
+Seasonality
+
+ 
+
+With
+the exception of lower sales in February of each calendar year correlated with the closure of factories in the PRC during the Chinese
+New Year holidays, our Operating Subsidiaries sales are not subject to any material seasonal fluctuations and remained steady
+throughout the year.
+
+ 
+
+Customer
+
+ 
+
+Our
+sole customer is Spectrum Brands ( Spectrum Brands ) for whom we manufacture hair care electric appliance styling
+products under the Remington brand which is owned by Spectrum Brands. The Company has provided OEM services to Spectrum Brands since
+2006. It does not have a formal written contract with Spectrum Brands and relies on its long-term relationship to continue
+to provide such services in the future. For each individual transaction, the Group generally negotiates and confirms the terms of sales
+with its customer based on the quantity and quality of the products being ordered and enters into a purchase order with the customer.
+Although the Group has not entered into any long-term sales contract with Spectrum Brands, the Directors consider that the Group has
+good business relationship with Spectrum Brands. The Group has maintained business relationships with Spectrum Brands since 2006.
+
+ 
+
+With
+respect to products distributed to overseas customers, the Group exports its finished products on a Free Carrier ( FCA )
+basis, which means the Group is responsible for the delivery of products to a destination specified by the customers. The customer is
+responsible for all costs after the goods are delivered to the container terminal warehouse designated by the customer. Management estimates
+that the lead time from placing a purchase order by an overseas customer to the delivery of the first batch of finished product by the
+Group takes approximately 55 to 65 days (subject to the size and the type of the order, the location of the customer and the availability
+of raw materials).
+
+ 
+
+The
+Group generally allows a credit period of 120 days for the trade receivables with terms that are common within the industry. Credit terms
+offered to the customer by the Group vary depending on the Group s assessment of the reputation of the customer, the length of
+business relationship established with the Group and the actual size of order placed by the customer.
+
+ 
+
+Competition
+
+ 
+
+The
+industry is highly fragmented and competitive. In 2023, there were approximately 1,000 market participants principally engaged
+as hair styling tool OEM service providers in the PRC. However, the Group considers that Zheijang Jindelie Electrical Appliance Co. Ltd.
+and Hang Shun Hing Co. Ltd. are two direct competitors to the Group.
+
+ 
+
+Competitive
+Strengths
+
+ 
+
+Renowned
+customer base with stable relationship. The Group has built up a solid and stable business relationship with Spectrum Brands
+since 2006, as its OEM manufacturer for a variety of hair styling products under the popular worldwide personal care brand Remington. 
+The established customer relationship provides a concrete foundation for the Group to further expand its business and to achieve
+economies of scale. See Risk Factors Risks Related to Our Operating Subsidiaries Business Operations .
+
+ 
+
+Designs
+for a diversified product range. Endowed with over a decade of industry experience and market awareness, the engineering and
+design department of the Group has been keeping itself abreast of market changes and has a track record for designing, researching, and
+developing an innovative and trendy array of products on a proactive basis. The Group also offers a diversified range of products with
+different value-added features or functionalities to meet the demands of customers of different demographical origins or consumer preferences.
+
+ 
+
+ 79
+
+ 
+
+ 
+
+ 
+
+Stringent
+quality control. As a consumer product manufacturer, the Group has a strong commitment to quality control. From the very beginning
+of raw material procurement to the packaging of finished products, the Group imposes intensive quality checks and controls along the
+whole production line of the Group s manufacturing processes. The quality checks and controls include incoming checks, online checks,
+random checks, and technical checks, which are strictly carried out by the operation department of the Group, as well as the representatives
+of the Group s customers as the case may be. The Group considers that continual adherence to stringent quality control procedures
+is one of the most vital elements in maintaining long-term business relationships with its multinational customer.
+
+ 
+
+Decade
+of operating history and established presence in the industry. The Group has been engaged in the design, manufacture, and sale
+of small electrical appliances under the management of Mr. Li Kin Shing and Mr. Li Siu Lun, Allan. With over a decade of operating history
+and industry experience under the management of Mr. Li Kin Shing and Mr. Li Siu Lun, Allan, the Group has established its presence in
+the market for providing quality electrical appliances to customers.
+
+ 
+
+The
+Group also retained suitable talents with different specializations in senior management team for the business development of the Group.
+In particular, Mr. Gary Chiu, the Group s marketing consultant, has joined the Group since 2005 and has vast experience in marketing
+matters. In particular, through the continuous marketing efforts by Mr. Gary Chiu, the Group enjoys a stable business relationship with
+its sole customer, Spectrum Brands, for more than 15 years.
+
+ 
+
+Business
+Strategies
+
+ 
+
+Our
+principal business objective is to strengthen our Operating Subsidiaries market position and further expand their market share.
+We intend to achieve such business objectives by:
+
+ 
+
+Expansion
+of production capacity and capability. In line with the Group s business expansion plan, the Group plans to upgrade and
+expand its existing production facilities for further growth and development. In particular, the Group plans to purchase and install
+new equipment in the SZ Factory so as to increase its overall production capacity.
+
+ 
+
+With
+a view to achieving greater economies of scale and thereby enhancing the competitiveness of its products in the marketplace, the Group
+will also devise effective management control over or re-engineer its production processes in order to optimize its production efficiency
+and to improve the quality of its existing products, after commissioning the new production equipment.
+
+ 
+
+Furthermore,
+with a view to leveraging on the product development capability of the Group s engineering, research, and development team, and
+for the purpose of enhancing the long-term growth potential of the Group, it is the Directors intention to actively develop and
+pursue its ODM business, pursuant to which the Group intend to develop, manufacture, and sell the products under its own brand
+name.
+
+ 
+
+Strengthening
+the engineering, research, and development capability. The Group plans to reinforce its product development capability by way
+of recruiting more engineers. With a stronger engineering, research and development team, the Group will be better positioned to expand
+the range of product models and lines available for its potential ODM and OBM customers.
+
+ 
+
+Penetration
+and further expansion into new and existing geographical markets. Leveraging on the existing multinational customer base of the
+Group, the Group plans to establish business relationship with more overseas customers with a view to broadening the Group s customer
+base and the market coverage of the Group s products, such as the market in United States.
+
+ 
+
+For
+the purpose of penetration into the Group s new or developing markets such as the United States, the Group intends to strengthen
+its sales force by way of recruiting new sales and marketing staff to solicit potential customers for the Group. We also intend to set
+up our new subsidiary or representative office in the United States to enhance sales and service support for our sole customer and for
+future expansion in marketing and internet sales of potential self-branded products.
+
+ 
+
+ 80
+
+ 
+
+ 
+
+ 
+
+Licenses,
+Permits and Approvals
+
+ 
+
+Our
+Operating Subsidiaries are required to obtain and maintain certain licenses and permits for our Operating Subsidiaries business
+operations.
+
+ 
+
+The
+following table sets forth the licenses and/or approvals our Operating Subsidiaries obtained in respect of our Operating Subsidiaries 
+operations in the PRC as of the date of this prospectus.
+
+ 
+
+ 
+ Group
+ member
+ 
+ Licenses/records
+ 
+ Expiry
+ date
+
+ 
+ Fenbo
+ Plastic Products Factory (Shenzhen) Ltd.,
+ 
+ Business
+ License 
+ 
+ October
+ 26, 2060 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Fenbo
+ Plastic Products Factory (Shenzhen) Ltd.,
+ 
+ Sewage
+ Discharge Permission 
+ 
+ June
+ 9, 2028
+
+ 
+ 
+
+Our
+PRC Legal Advisers have confirmed that, as of the date of this prospectus, our Operating Subsidiaries have obtained and renewed all substantial
+and necessary licenses and approvals, which are material for their business operations in the PRC from the relevant authorities of the
+PRC governments.
+
+ 
+
+Some
+of our Operating Subsidiaries licenses and permits are subject to renewal. Our Operating Subsidiaries intend to renew all existing
+licenses and permits accordingly before their respective expiry dates. Our Operating Subsidiaries have not experienced any refusal of
+renewal of the licenses and permits necessary for their operation during the fiscal years ended December 31, 2023, 2022, and 2021.
+
+ 
+
+Insurance
+
+ 
+
+Management
+exercises prudent risk management control through the maintenance of various insurance plans for the purposes of covering against different
+aspects of risks, including:
+
+ 
+
+1.
+Property all risk insurance - covers its assets
+such as plant and machinery, raw materials and finished goods against accidental, physical loss, destruction, or damage of property.
+
+ 
+
+2.
+Public liability insurance - third party insurance
+against possible third-party personal injury and property damage claims relating to its factory premises and office located in the PRC
+and Hong Kong.
+
+ 
+
+3.
+The Company maintains director and officer liability
+and Company reimbursement insurance.
+
+ 
+
+4.
+Product liability insurance - product liability insurance for most kinds of its products against possible claims (relating to personal
+injury or damage to property arising from the product manufactured by it).
+
+ 
+
+Health,
+Work Safety, Social and Environmental Matters
+
+ 
+
+Due
+to the nature of our Operating Subsidiaries business, our Operating Subsidiaries operational activities are subject to
+environmental obligations, and they did not directly incur any cost of compliance with applicable environmental protection rules and
+regulations during the fiscal years ended December 31, 2023, 2022, and 2021. Our directors expect that our Operating Subsidiaries will
+not directly incur significant costs for compliance with applicable environmental protection rules and regulations in the future. As
+of the date of this prospectus, our Operating Subsidiaries were not in any material non-compliance issues in respect of any applicable
+laws and regulations on environmental protection, health, and work safety.
+
+ 
+
+Human
+capital is one of the key elements of our Operating Subsidiaries success. Our Operating Subsidiaries have taken out employees 
+compensation insurance for their staff s safety. Our Operating Subsidiaries also have adopted a safety and health policy for its
+employees to follow and provide safety education and trainings to raise employees awareness of safety issues. During the fiscal
+years ended December 31, 2023, 2022, and 2021, our Operating Subsidiaries did not experience any significant incidents or accidents in
+relation to employees safety or any non-compliance with the applicable laws and regulations relevant to the health and work safety
+issues.
+
+ 
+
+ 81
+
+ 
+
+ 
+
+ 
+
+Employees
+
+ 
+
+The
+following table sets forth a breakdown of our employees by functions and geographical locations as of December 31, 2023:
+
+ 
+
+ 
+ Function 
+ Hong
+ Kong 
+ China 
+ Total 
+
+ 
+ 
+ AIL 
+ FIL 
+ FPPF 
+ 
+
+ 
+ Management 
+ - 
+ 3 
+ 1 
+ 4 
+
+ 
+ Sales and Marketing 
+ 1 
+ 1 
+ 5 
+ 7 
+
+ 
+ Operation 
+ - 
+ 2 
+ 236 
+ 238 
+
+ 
+ Warehouse 
+ - 
+ - 
+ 12 
+ 12 
+
+ 
+ Accounting and Administration 
+ - 
+ 2 
+ 8 
+ 10 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Total 
+ 1 
+ 8 
+ 262 
+ 271 
+
+ 
+
+ 
+
+Recruitment
+and remuneration
+
+ 
+
+Our
+Operating Subsidiaries success is highly dependent on their employees. Our Operating Subsidiaries recruit employees taking into
+account their industry experience and interpersonal skills. Our Operating Subsidiaries hire employees through internal recruitment or
+from the open market through online advertisement or by referrals. Our Operating Subsidiaries endeavor to offer competitive wages and
+benefits. Our Operating Subsidiaries conduct annual review of the performance of their employees for determining the level of bonus,
+salary adjustment and promotion of employees.
+
+ 
+
+Training
+
+ 
+
+Our
+Operating Subsidiaries offer their employees training both internally and externally to enhance their skills and knowledge in the in
+the personal care electric appliance industry. The regular training for our factory employees includes (i) new employee orientation;
+(ii) post-promotion training; and (iii) general annual training. We believe training will help our employees improve their work performance,
+which will eventually increase their loyalty to the Company. Therefore, the Company has developed a series of training programs targeting
+the needs and requirements of the work and tailored in line with their roles and responsibilities. Most training is undertaken by our
+internal staff, but if necessary for the effectiveness of the training, outside professionals are also hired to conduct trainings as
+well.
+
+ 
+
+Labor
+unions, labor, and safety incidents
+
+ 
+
+Our
+Operating Subsidiaries have not set up labor union for employees in Hong Kong or in the PRC. Our Operating Subsidiaries strive to maintain
+good relationships with their employees and provide them with a safe working environment. During the fiscal years ended December 31,
+2023, 2022, and 2021 and through the date of this prospectus, our Operating Subsidiaries did not experience any form of industrial action
+of their employees or any work safety related incidents that led to material disruption of operations or claims against our Operating
+Subsidiaries.
+
+ 
+
+Welfare
+or mandatory contribution
+
+ 
+
+In
+Hong Kong, our Operating Subsidiaries operate a defined contribution mandatory provident fund retirement benefits scheme under the Mandatory
+Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) for all of their employees in Hong Kong who are eligible to participate
+in the scheme. Under the relevant PRC laws and regulations, our Operating Subsidiaries are required to participate in the social welfare
+schemes, which provide pension insurance, medical insurance, work injury insurance, maternity insurance, and unemployment insurance as
+well as the coverage of housing provident funds for our Operating Subsidiaries employees in the PRC.
+
+ 
+
+Intellectual
+Property
+
+ 
+
+Our
+Operating Subsidiaries regard their trademarks, trade secrets, domain names, copyrights, know-how, proprietary technologies, and similar
+intellectual property as critical to their business. As of the date of this prospectus, we have 1 trademark, the Company s logo,
+as registered with the Trade Marks Registry Intellectual Property Department of Hong Kong, and one domain name.
+
+ 
+
+ 82
+
+ 
+
+ 
+
+ 
+
+Our
+Properties
+
+ 
+
+Our
+headquarter and sales office in Hong Kong are operating in an approximately 2,858 sq. feet office located in an industrial building.
+The office has been owned by FIL since July 1999. FIL entered into an agreement to sell the Hong Kong office to Mr. Li Kin Shing at a
+consideration of HK$13,880,000 in November 2022. The sale was completed in December 2022. We have leased the office from Mr. Li Kin Shing
+at market rent since January 2023. The term of the lease of the property is for a fixed term of two (2) years commencing from January
+1, 2023, at a monthly rent of HK$50,000 (approximately US$6,400). The rent paid to Mr. Li Kin Shing was determined according to the market
+value of similar property quotes from the Hong Kong property market.
+
+ 
+
+FPPF
+has leased our factory and staff quarters in the PRC for a term of 3 years, commencing July 16, 2024, from an independent third
+party, with initial annual rent of approximately RMB6.1 million and a rental increase of 7% in the third year
+of the lease term.
+
+ 
+
+Legal
+Proceedings
+
+ 
+
+As
+of the date of this prospectus, neither we nor our Operating Subsidiaries are a party to, and we nor our Operating Subsidiaries
+are aware of any threat of, any legal proceeding that, in the opinion of management, is likely to have a material adverse effect on our
+business, financial condition or operations.
+
+ 
+
+From
+time to time, our Operating Subsidiaries may become involved in legal proceedings arising in the ordinary course of business. Neither
+we nor our Operating Subsidiaries are involved in any litigation, arbitration or claim of material importance, nor any material impact
+non-compliance incidents or systemic non-compliance incidents in respect of applicable laws and regulations.
+
+ 
+
+Impact
+of COVID-19 on our Operating Subsidiaries business and operations
+
+ 
+
+The
+continuous emergence of new series of COVID-19 variants during the years, the variation in vaccination rollout globally and a new series
+of travel and transportation restrictions had contributed consequential impact to the differences in the economic recovery and the increase
+in material lead time and transportation time. In addition, there were high demand in various raw materials which caused the breakdown
+of a number of supply chains and led to rising costs of certain raw material (e.g., plastic) and global inflationary pressures. Energy
+crises and international political dynamics had further hampered the pace of the recovery of the world economy. As of the date of this
+prospectus, except for a temporary impact on the supply chain resulting from COVID-19, we have not experienced significant inflationary
+pressures on material or labor costs negatively affecting our ongoing business since the national consumer price index increased by only
+0.9 percent in 2021 over the previous year, according to the National Bureau of Statistics of China. Although we have not been materially
+affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future. If there is any surge
+in the inflation rate, in order to mitigate the inflationary pressures, we plan to (i) monitor our labor costs carefully in our day-to-day
+operations; (ii) outsource or contract certain nonessential employees, to reduce labor-related administrative costs; and (iii) establish
+a supplier management system and selectively cooperated with key suppliers.
+
+ 
+
+After
+more than three years since the outbreak of COVID-19, the pandemic has impacted the global business environment and the livelihood of
+people and caused a widespread global supply chain disruption. The Group s revenue had been adversely affected due to severe supply
+chain shortage as well as constraint on manpower resources and our export sales volume was therefore affected. During our fiscal year
+ended December 31, 2021, a temporary supply chain disruption led to the decrease in our Group s gross profit margin to approximately
+16.5% for FY2021 (FY2020: 18.9%). Nevertheless, recently some countries had been gradually reopening borders with caution due to high
+vaccination rate. The Directors believe that the impact of the COVID-19 pandemic is only temporary and would not result in a material
+or long-term disruption to the Group s business operations. The Group s gross profit margin for the years ended December
+31, 2023 and 2022, remained relatively stable at approximately 18.6% and 15.7%, respectively. The overall market and the business operation
+of the Group is expected to gradually recover and improve when the adverse impacts of the pandemic to wane as economic activities resume
+to normal. For instant, on December 9, 2022, China announced that China s dynamic zero-COVID policy, which had been adhered to
+for nearly 3 years, has officially moved towards reopening. The travel restrictions of China and Hong Kong were lifted gradually. Our
+Group will closely monitor the development of the COVID-19 pandemic and will continuously assess its potential impact on our supply chain.
+If there is any further disruption in our supply chain, we will response swiftly such as, within our capital constraints, increase our
+raw material inventories in order to manage and mitigate such risk. Our Group s gross profit margin increased from 15.7% for the
+year ended December 31, 2022 to 18.6% for the fiscal year ended December 31, 2023. The increase in gross profit margin was primarily
+due to the continuing diminishing effect of the COVID-19.
+
+ 
+
+ 83
+
+ 
+
+ 
+
+ 
+
+Impact
+in the U.S. of the Uyghur Forced Labor Prevention Act (the UFLPA ), the War in Ukraine and shipping disruptions in the Red
+Sea on our Operating Subsidiaries business and operations.
+
+ 
+
+The
+UFLPA prohibits on the importation of goods into the United States manufactured wholly or in part with forced labor in the PRC, especially
+from the Xinjiang Uyghur Autonomous Region ( Xinjiang ). It establishes a rebuttable presumption that the importation of
+any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in Xinjiang are not entitled to entry
+to the U.S. and requires the importer of record to comply with specified conditions and, by clear and convincing evidence, that the goods,
+wares, articles, or merchandise were not produced using forced labor.
+
+ 
+
+While
+our manufacturing facilities are located in the PRC, they are not located in Xinjiang and are staffed by our own employees with no raw
+materials being sourced from Xinjiang. We are confident that our supply chain management system will rebut the presumption that our products
+are tainted with forced or prison labor and therefore we do not anticipate any material or adverse effect our business operations, financial
+position, and results of operations.
+
+ 
+
+The outbreak of war in Ukraine has already affected global economic markets, including a dramatic increase in the price of oil and
+gas, and the uncertain resolution of this conflict could result in protracted and/or severe damage to the global economy. Russia s
+recent military interventions in Ukraine have led to, and may lead to, additional sanctions being levied by the United States, European
+Union, and other countries against Russia and countries supporting Russia. Russia s military incursion and the resulting sanctions
+could adversely affect global energy and financial markets and thus could affect our businesses and the businesses of our customer, even
+though we do not have any direct exposure to Russia or the adjoining geographic regions. The extent and duration of the military action,
+sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions caused by Russian
+military action or resulting sanctions may magnify the impact of other risks described herein. We cannot predict the progress or outcome
+of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing and beyond their control. Prolonged unrest
+intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on the global economy.
+However, we do not anticipate that such activities will have a disproportionate material adverse effect on our operations, results of
+operations, financial condition, liquidity, and business outlook since:
+
+ 
+
+ 
+ 
+ 
+ we
+ have multiple sources for raw materials and parts and are able to stockpile inventories in the event that we anticipate shortages
+
+ 
+ 
+ 
+ we
+ do not anticipate challenges sourcing raw materials as none are sourced from Russia, Belarus, Ukraine, or Western China 
+
+ 
+ 
+ 
+ we
+ have adequate sources of labor and do not anticipate labor shortages
+
+ 
+ 
+ 
+ we
+ are able to adjust our production capacity to meet surges or declines in consumer demand
+
+ 
+
+ 
+ 
+
+Recently
+there have been shipping disruptions in the Red Sea and surrounding waterways due to attacks on marine vessels by the Houthi movement
+which controls part of Yemen. These disruptions may impact our ability to distribute our products to our customer in a cost-effective
+and timely manner and to meet our customer s demands, all of which could have an adverse effect on financial condition and
+results of operations.
+
+ 
+
+ 84
+
+ 
+
+ 
+
+ 
+
+REGULATORY
+ENVIRONMENT
+
+ 
+
+This
+section sets forth a summary of the material laws and regulations that affect our Operating Subsidiaries business and operations
+in Hong Kong and PRC. Information contained in this section should not be construed as a comprehensive summary nor a detailed analysis
+of laws and regulations applicable to the business and operations of our Operating Subsidiaries. This overview is provided as general
+information only and is not intended to be a substitute for professional advice. You should consult your own advisers regarding the implication
+of the laws and regulations of Hong Kong and PRC on our business and operations.
+
+ 
+
+PRC
+Laws and Regulations
+
+ 
+
+A
+summary of the laws and regulations which are material to our Operating Subsidiaries operations in the personal care electric
+appliance industry in the PRC are as follows: Laws and Regulations Relating to Foreign Investment The establishment, operation, and management
+of corporate entities in the PRC are governed by the Company Law of the PRC (the PRC Company Law ). The PRC Company Law
+generally governs two types of companies: limited liability companies and joint stock limited companies. Both types of companies have
+the status of legal persons, and the liability of shareholders of a limited liability company and a joint stock limited company is limited
+to the amount of registered capital they have contributed. The PRC Company Law shall also apply to foreign-invested companies. Where
+laws on foreign investment have other stipulations, such stipulations shall apply.
+
+ 
+
+Laws
+and Regulations Relating to Foreign Investment
+
+ 
+
+The
+establishment procedures, approval procedures, registered capital requirements, foreign exchange matters, accounting practices, taxation,
+and labor matters of FPPF are regulated by the Foreign-invested Enterprise Law of the PRC (the FIE Law ) and the Regulations
+for the Implementation of the Foreign-invested Enterprise Law of the PRC. Investment in the PRC conducted by foreign investors and foreign-owned
+enterprises shall comply with the Special Management Measures (Negative List) for the Access of Foreign Investment (the Negative
+List ). The Negative List contains specific provisions guiding market access of foreign capital, stipulating in detail the areas
+of entry pertaining to the categories of encouraged foreign-invested industries, restricted foreign-invested industries and prohibited
+foreign investment. Any industry not listed in the Negative List is a permitted industry.
+
+ 
+
+Laws
+and Regulations Relating to Labor
+
+ 
+
+Protection
+Labor Contract. Pursuant to the Labor Law of the PRC, employers should enter into labor contracts with their employees. Wages
+are to be paid according to the level of performance, and the policy of equal pay for equal work. Lowest wage protection and special
+labor protection for female workers and juvenile workers shall be implemented. Employers are also required to pay for their employees 
+social insurance premiums and housing provident funds. These payments are made to local administrative authorities, and an employer who
+fails to contribute may be fined and be ordered to make up for the outstanding contributions.
+
+ 
+
+The
+Labor Contract Law of the PRC and the Implementation Rule of the Labor Contract Law of the PRC set out specific provisions in relation
+to the execution, terms and the termination of an employment contract and the rights and obligations of the employees and employers.
+At the time of hiring, an employer shall truthfully inform the employee as to the scope of work, working conditions, working place, occupational
+hazards, work safety, salary, and other matters about which the employee requests to be informed about.
+
+ 
+
+Social
+Insurance
+
+ 
+
+Employers
+in the PRC are required to contribute, on behalf of their employees, to a number of social insurance funds, including funds for basic
+pension insurance, for unemployment insurance, basic medical insurance, work-related injury insurance and maternity insurance. If an
+employer does not pay the full amount of social insurance premiums as scheduled, the social insurance premium collection institution
+shall order it to make the payment or make up the difference within the stipulated time period and impose a daily fine equivalent to
+0.05% of the overdue payment from the date on which the payment is overdue. If the payment is not made within the stipulated period,
+the relevant administration department shall impose a fine ranging from one to three times of the overdue payment.
+
+ 
+
+The
+various laws and regulations that govern employers obligation to contribute to the social security funds include the Social Insurance
+Laws of the PRC, the Interim Regulation on the Collection and Payment of Social Insurance Premiums, the Decision of the State Council
+on Establishing a Unified System of the Basic Pension Insurance for Enterprise Employees, the Circular on Relevant Issues concerning
+the Improvement of the Basic Pension Insurance Policy for Urban Employees, the Regulation on Work-related Injury Insurance, the Regulation
+on Unemployment Insurance, the Decision of the State Council on Establishing the Basic Medical Insurance System for Urban Employees,
+the Circular on the Issuance of Provisions on the Administration of Basic Medical Insurance for Urban Employees, and the Trial Measures
+on Maternity Insurance for Enterprise Employees.
+
+ 
+
+ 85
+
+ 
+
+ 
+
+ 
+
+Laws
+and Regulations Relating to Intellectual Property Rights
+
+ 
+
+Pursuant
+to the Trademark Law of the PRC (the Trademark Law ), the right to exclusive use of a registered trademark shall be limited
+to trademarks which have been registered and to goods for which the use of trademark has been permitted. The period of validity of a
+registered trademark shall be ten years, counted from the day the registration is made. According to the Trademark Law, (i) using a trademark
+that is identical to a registered trademark on the same goods without the authorization of the owner of the registered trademark; (ii)
+using a trademark that is similar to a registered trademark on the same goods or (iii) using a trademark that is identical with or similar
+to a registered trademark on similar goods without the authorization of the owner of the registered trademark, which is likely to cause
+confusion, shall be deemed to constitute an infringement of the exclusive right to use a registered trademark. The infringer shall, in
+accordance with the regulations, undertake to cease the infringement, take remedial action, and pay damages.
+
+ 
+
+Laws
+and Regulations Relating to Foreign Exchange
+
+ 
+
+Foreign
+Currency Exchange. The principal regulation governing foreign currency exchange in the PRC is the Regulation of the PRC
+for the Control of Foreign Exchange (the Foreign Exchange Regulation ). Under the regulation, RMB are freely convertible
+for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but are
+not freely convertible for capital expenditure, such as direct investment, loans, or investments in securities, outside the PRC unless
+the approval of the State Administration of Foreign Exchange (the SAFE ) or its local counterpart is obtained in advance.
+
+ 
+
+According
+to the Notice on Further Improving and Adjusting Management Policies on Foreign Exchange of Direct Investment, in relation to direct
+foreign investments in the PRC, foreign investors are no longer required to obtain approval from the SAFE to re-invest in the PRC by
+using income legally generated from the PRC. No approval from the SAFE is required for opening the foreign exchange accounts, payment
+into certain accounts, settlement of the foreign exchange and for the purchase and external payment of foreign exchange. Also, the transfer
+of foreign exchange in the PRC under a direct investment account is no longer subject to approval by the SAFE. In addition, the foreign-invested
+enterprises are permitted to remit funds to their offshore parent companies.
+
+ 
+
+According
+to the Notice on Further Simplifying and Improving the Policies of Foreign Exchange Administration Applicable to Direct Investment, verification,
+and approval of foreign exchange registration under domestic direct investment is abolished. The banks shall, in accordance with relevant
+guidance, directly examine and handle foreign exchange registration under domestic direct investment. Relevant entities may, at their
+discretion, choose the banks in their respective places of registration to go through foreign exchange registration of direct investment,
+and may handle subsequent formalities for opening relevant accounts, fund exchange and other services (including the outflow or inflow
+of profits and dividends) under direct investment only after foreign exchange registration of direct investment is completed.
+
+ 
+
+Dividend
+Distribution
+
+ 
+
+The
+principal laws and regulations governing dividend distribution of foreign holding companies include the PRC Company Law, the FIE Law
+and their implementation rules. Under these laws and regulations, foreign-invested enterprises in the PRC may pay dividends only out
+of their after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned
+enterprises in the PRC must allocate at least 10% of their accumulated profits after tax each year, if any, to fund certain reserve funds
+unless these accumulated reserves have reached 50% of their registered capital. These reserves are not distributable as cash dividends.
+
+ 
+
+ 86
+
+ 
+
+ 
+
+ 
+
+Laws
+and Regulations Relating to Taxation in the PRC
+
+ 
+
+Enterprise
+Income Tax. Pursuant to the Enterprise Income Tax Law of the PRC (the EIT Law ), the income tax rate for
+both resident enterprises and foreign-invested enterprises is 25% commencing from January 1, 2008 (with certain exceptions for qualified
+foreign-invested enterprises). In order to clarify certain provisions in the EIT Law, the State Council promulgated the Implementation
+Rules of the Enterprise Income Tax Law of the PRC (the EIT Implementation Rules ). Pursuant to the EIT Law and the EIT Implementation
+Rules, non-resident enterprises which have not established agencies or offices in the PRC, or which have established agencies or offices
+in the PRC but whose income has no association with such agencies or offices, shall pay enterprise income tax on their income earned
+from inside the PRC, and such income of nonresident enterprises for which the payer thereof shall be the withholding agent, shall be
+taxed at the reduced rate of 10% and shall be withheld at the source.
+
+ 
+
+Withholding
+income tax and international tax treaties. Pursuant to the EIT Law and the EIT Law Implementation Rules, dividends generated
+after January 1, 2008, and payable by a foreign-invested enterprise in PRC to its foreign investors are subject to a 10% withholding
+tax, unless any such foreign investor s jurisdiction of registration and incorporation has entered into a tax agreement with PRC
+which provides a different withholding tax arrangement.
+
+ 
+
+Pursuant
+to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for Avoidance of Double Taxation and Prevention
+of Tax Evasion, the applicable withholding income tax rate for any dividends declared by a Chinese company is 5% for a shareholder being
+a Hong Kong resident holding at least 25% interest in its registered capital, or 10% for a shareholder being a Hong Kong resident holding
+less than 25% interest in its registered capital.
+
+ 
+
+According
+to the Administrative Measures for Tax Convention Treatment for Non-resident Taxpayers, any non-resident taxpayer meeting conditions
+for enjoying the convention treatment may be entitled to the convention treatment when filing a tax return or making a withholding declaration
+through a withholding agent, subject to the subsequent administration by the tax authorities. The term non-resident taxpayers 
+refers to the taxpayers other than the PRC tax residents under the Provisions of domestic tax laws or conventions on the avoidance of
+double taxation signed by the government of the People s Republic of China with foreign countries (including the tax arrangements
+signed with the Hong Kong Special Administrative Region and the Macau Special Administrative Region (hereinafter collectively referred
+to as the Tax Conventions ) (including non-resident enterprises and non-resident individuals). The convention treatment
+means the deduction of or exemption from the enterprise income tax or individual income tax obligations required by the provisions of
+PRC tax laws, under the tax conventions or tax clauses of conventions on aviation, sea transportation, and automobile transportation,
+as well as the agreements or exchanges of letters on the mutual-exemption from tax on income from international transportation, signed
+by the People s Republic of China with foreign countries, including the Arrangement between Mainland China and the Hong Kong Special
+Administrative Region for Avoidance of Double Taxation and Prevention of Tax Evasion.
+
+ 
+
+According
+to the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, if the relevant PRC tax authorities
+determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily
+tax-driven, such PRC tax authorities may adjust the preferential tax treatment. Pursuant to the Announcement of the State Administration
+of Taxation on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, when the withholding agent enters
+into a business contract with a non-resident enterprise in relation to income derived from or accruing in the PRC, where the non-resident
+enterprise has no office or premises established in the PRC or the income derived or accrued has no de facto relationship with the office
+or premises established, if the contract stipulates that the withholding agent shall bear the tax payable amount, the tax-exclusive income
+amount derived by the non-resident enterprise shall be converted to a tax-inclusive income amount and the tax withheld shall be turned
+over. Where the income subject to withholding at source derived by a non-resident enterprise is equity investment income such as dividends
+and bonuses, the date of occurrence of withholding obligation for the relevant tax payable amount shall be the date of actual payment
+of equity investment income such as dividends and bonuses.
+
+ 
+
+ 87
+
+ 
+
+ 
+
+ 
+
+Hong
+Kong Laws and Regulations
+
+ 
+
+Hong
+Kong Regulations Related to Services Providers
+
+ 
+
+Business
+registration requirement. The Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) requires every
+person carrying on any business to make an application to the Commissioner of Inland Revenue in the prescribed manner for the
+registration of that business. The Commissioner of Inland Revenue must register each business for which a business registration
+application is made and as soon as practicable after the prescribed business registration fee and levy are paid and issue a business
+registration certificate or branch registration certificate for the relevant business or the relevant branch, as the case may
+be.
+
+ 
+
+As
+of the date of this prospectus, AIL and FIL hold valid business registration certificates.
+
+ 
+
+Regulations
+related to employment and labor protection
+
+ 
+
+Employment
+Ordinance (Chapter 57 of the Laws of Hong Kong). The Employment Ordinance (Chapter 57 of the Laws of Hong Kong), or the
+EO, is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation of the general conditions
+of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst other things, notice of termination
+of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee; not less than
+one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays or alternative
+holidays; and paid annual leave of up to 14 days depending on the period of employment.
+
+ 
+
+As
+of the date of this prospectus, AIL and FIL have complied with the provisions under the EO.
+
+ 
+
+Employees 
+Compensation Ordinance (Chapter 282 of the Laws of Hong Kong). The Employees Compensation Ordinance (Chapter 282 of the
+Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of providing for the payment of compensation to employees injured
+in the course of employment. As stipulated by the ECO, no employer shall employ any employee in any employment unless there is in force
+in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified in
+the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured
+amount shall be not less than HKD100,000,000 per event if a company has no more than 200 employees. Any employer who contravenes this
+requirement commits a criminal offence and is liable on conviction to a fine and imprisonment. An employer who has taken out an insurance
+policy under the ECO is required to display a prescribed notice of insurance in a conspicuous place on each of its premises where any
+employee is employed.
+
+ 
+
+As
+of the date of this prospectus, employee compensation insurance has been obtained for all employees of AIL and FIL.
+
+ 
+
+Mandatory
+Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong). The Mandatory Provident Fund Schemes Ordinance
+(Chapter 485 of the Laws of Hong Kong), or the MPFSO, is an ordinance enacted for the purposes of providing for the establishment of
+non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every employer of an employee of 18 years of
+age or above but under 65 years of age to take all practical steps to ensure the employee becomes a member of a registered MPF Scheme.
+Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute 5% of
+the employee s relevant income to the MPF Scheme. Any employer who contravenes this requirement commits a criminal offence and
+is liable on conviction to a fine and imprisonment.
+
+ 
+
+As
+of the date of this prospectus, the Company believes it has made all contributions required under the MPFSO.
+
+ 
+
+ 88
+
+ 
+
+ 
+
+ 
+
+Regulations
+related to Personal Data
+
+ 
+
+Personal
+Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong). The
+Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO, imposes a statutory duty on data users to comply
+with the requirements of the six data protection principles (the Data Protection Principles ) contained in Schedule 1 to
+the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle
+unless the act or practice, as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are:
+
+ 
+
+ 
+ 
+ 
+ Principle
+ 1 purpose and manner of collection of personal data;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Principle
+ 2 accuracy and duration of retention of personal data;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Principle
+ 3 use of personal data;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Principle
+ 4 security of personal data;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Principle
+ 5 information to be generally available; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Principle
+ 6 access to personal data.
+
+ 
+ 
+
+Non-compliance with a Data Protection Principle may lead to a complaint
+to the Privacy Commissioner. The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention
+and/or instigate prosecution actions. A data user who contravenes an enforcement notice commits an offense which may lead to a fine and
+imprisonment.
+
+ 
+
+The
+PDPO also gives data subjects certain rights, inter alia:
+
+ 
+
+ 
+ 
+ 
+ the
+ right to be informed by a data user whether the data user holds personal data of which the individual is the data subject;
+
+ 
+ 
+ 
+
+ 
+ 
+ if
+ the data user holds such data, to be supplied with a copy of such data; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ right to request correction of any data they consider to be inaccurate.
+
+ 
+ 
+
+The
+PDPO criminalizes, including but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance
+with a data access request and the unauthorized disclosure of personal data obtained without the relevant data user s consent.
+An individual who suffers damage, including injured feelings, by reason of a contravention of the PDPO in relation to his or her personal
+data may seek compensation from the data user concerned.
+
+ 
+
+As
+of the date of this prospectus, AIL and FIL are in compliance with the provisions of the PDPO.
+
+ 
+
+ 89
+
+ 
+
+ 
+
+ 
+
+MANAGEMENT
+
+ 
+
+Our
+Board of Directors is the primary decision-making body of our Company, setting fundamental business strategies and policies for the management
+and operation of our Operating Subsidiaries business and monitoring their implementation.
+
+ 
+
+Our
+Board of Directors currently consists of six directors, comprising two Executive Directors and four independent non-executive
+Directors. The following table sets forth the names, ages, and titles of our directors, executive officers, and senior management/key
+personnel:
+
+ 
+
+ 
+ Name
+ 
+ Age
+ 
+ Title
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Executive
+ Officers and Directors:
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Li
+ Siu Lun Allan
+ 
+ 49
+ 
+ Chairman,
+ Executive Director, and Chief Executive Officer 
+
+ 
+ Li
+ Kin Shing
+ 
+ 73
+ 
+ Executive
+ Director
+
+ 
+ Fu
+ Wai Yip (Freddy)
+ 
+ 52
+ 
+ Chief
+ Financial Officer
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Independent
+ Non-executive Directors:
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Lai
+ King Yan (Anthony)
+ 
+ 51
+ 
+ Independent
+ Non-executive Director
+
+ 
+ Tong
+ Ching Ho (Tony)
+ 
+ 53
+ 
+ Independent
+ Non-executive Director
+
+ 
+ Wong
+ Siu Keung (Sony)
+ 
+ 48
+ 
+ Independent
+ Non-executive Director
+
+ 
+ Derong
+ Meng
+ 
+ 49
+ 
+ Independent
+ Non-Executive Director and Co-Chairman
+
+ 
+
+ 
+
+No
+arrangement or understanding exists between any such director or officer and any other persons pursuant to which any director or executive
+officer was elected as a director or executive officer. Our directors are elected annually and serve until their successors take office
+or until their death, resignation, or removal. The executive officers serve at the pleasure of the Board of Directors.
+
+ 
+
+Executive
+Officers and Directors:
+
+ 
+
+Mr.
+Li Siu Lun Allan ( Mr. Allan Li ) has served as FHL s Chairman, Executive Director, and Chief Executive Officer
+since September 30, 2022. Since September 1998, he has served as a Director of FIL and since June 2021 as a Director of AIL. He has over
+20 years of marketing, administration, and operating experience at FIL. Mr. Allan Li attended the Faculty of Applied Sciences at Simon
+Fraser University, B.C. Canada, from September 1994 until December 1996. Mr. Allan Li is the son of Mr. Li Kin Shing, founder of the
+Group.
+
+ 
+
+Mr.
+Li Kin Shing ( Mr. Li ) has served as FHL s Executive Director since September 30, 2022. Mr. Li founded FIL in
+June 1993 and has served as a director since then. Mr. Li has served as the Legal Representative of FPPF since October 1993 and the Director
+of AIL since November 2005. Mr. Li received a Certificate in Mechanical Engineer in June 1996 and a Certificate in Workshop Instructor
+Training from the Morrison Hill Technical Institute, Hong Kong, in 1974.
+
+ 
+
+Mr.
+Fu Wai Yip (Freddy) has served as FHL s Chief Financial Officer since December 6, 2022. Since December 2011, he has served
+as the Financial Controller of The Well Leatherware Manufactory Ltd. He attended the University of Bolton, UK from 2000 to 2002 where
+he received a Bachelor of Arts degree in Accountancy. Mr. Fu is a Fellow Member of the Association of International Accounts, UK., The
+Institute of Public Accountants - Australia, and the Institute of Financial Accountants.
+
+ 
+
+Independent
+Non-executive Directors
+
+ 
+
+Mr.
+Lai King Yan (Anthony) was appointed as an Independent Director effective upon the closing of the IPO. Since October 2021,
+Mr. Lai has served as a Director of Advent Corporate Finance Limited since October 2021. From April 2019 to May 2021, he served as a
+Director of Changjiang Corporate Finance (HK) Limited and from January 2013 until February 2019, he served as the Managing Director of
+CLC International Limited, Mr. Lai attended Bond University in Australia from 1994 until 1996 where he received a Bachelor of Commerce
+degree.
+
+ 
+
+Mr.
+Tong Ching Ho (Tony) was appointed as an Independent Director effective upon the closing of the IPO. Mr. Tong served as a
+Sourcing Specialist for NBC Hong Kong Merchants Ltd. since July 2015. He attended the University of Victoria, B.C. Canada from 1993 until1996
+where he received his Bachelor of Arts in Economics degree.
+
+ 
+
+ 90
+
+ 
+
+ 
+
+ 
+
+Mr.
+Wong Siu Keung (Sony) was appointed as an Independent Director effective upon the closing of the IPO. Mr. Wong served as the
+Responsible Officer and Risk Manager for Ocean Assets Management HK Limited since May 2021. From October 2019 to March 2021, he served
+as the Responsible Officer and Executive Director for Boxin Jiayuan Ltd, and from October 2017 to September 2019 as the Senior VP and
+Responsible Officer for ZQ Capital HK Ltd. Mr. Wong attended the Simon Fraser University, Vancouver, Canada from 1994 until 2000, where
+he received a Bachelor s degree in business administration in 1998 and a Master s degree in business administration in 2000.
+Mr. Wong was admitted as a certified public accountant of the Delaware State Board of Accountancy in October 2004 and became a chartered
+financial analyst of the Association for Investment Management and Research in August 2003.
+
+ 
+
+Mr.
+Derong Meng was appointed as the Co-Chairman and an Independent Director effective January 1, 2024. Since April 2019, Mr. Meng has
+served as the Executive President of Dijiu (Shenzhen) Supply Chain Group Co. Ltd., a firm focused on the development, implementation,
+and management of supply chain logistics from traditional sales channels to e-commerce platforms with an emphasis on agricultural products.
+From June 2017 until March 2019, he served as the CEO, Business Development Department, of Shenzhen Eternal Asia Supply Chain Co. Ltd.
+Mr. Meng received a Bachelor s Degree in Economics and Management from Yancheng Institute of Technology in July 1996.
+
+ 
+
+Key
+Personnel / Consultants
+
+ 
+
+Our
+senior management comprises the following personnel:
+
+ 
+
+Mr.
+Chiu Yat Chung (Gary) ( Mr. Chiu ) has served as the AIL s Marketing Consultant since April 2021 and from November
+2005 until March 2021, he served as a Director of AIL. Mr. Chiu received a Bachelor s degree in Industrial Engineering from the
+University of Hong Kong in 1999 and Master s degree in Manufacturing Engineering from the Polytechnic University, Hong Kong in
+2003.
+
+ 
+
+Mr.
+Tang Yau Sing (Gareth) has served as our Vice President - Finance since May 2024. Mr. Tang has over 25 years of experience in corporate
+finance, mergers and acquisitions, public and private offerings and restructuring activities. Since July 2011 he has served as the Founder
+and President of GCA Advisors Limited, a company that provides corporate finance, merger, and acquisition, and restructuring advisory
+services to listed and private corporations. He was the Chairman and an Executive Director of Winto Group (Holdings) Limited, a company
+listed on the GEM of The Stock Exchange of Hong Kong Limited (Stock Code: 8238) for the period from July 2017 to September 2019. Mr.
+Tang obtained a bachelor s degree in social sciences (Hon.) from the University of Hong Kong in June 1986, is a Fellow Member of
+the Hong Kong Institute of Certified Public Accountants and a Member of the Institute of Chartered Accountants in England and Wales.
+
+ 
+
+Committees
+of the Board of Directors
+
+ 
+
+Our
+Board of Directors has established an audit committee, a compensation committee, and a nomination committee, each of which operate pursuant
+to a charter adopted by our Board of Directors. The Board of Directors may also establish other committees from time to time to assist
+our Company and the Board of Directors. The composition and functioning of all of our committees comply with all applicable requirements
+of the Sarbanes-Oxley Act of 2002, Nasdaq and SEC rules and regulations, if applicable. Each committee s charter is
+available on our website at http://www.fenbo.com. The reference to our website address does not constitute incorporation by reference
+of the information contained at or available through our website, and you should not consider it to be part of this prospectus.
+
+ 
+
+Audit
+committee
+
+ 
+
+Wong
+Siu Keung (Sony) Tong Ching Ho (Tony), and Lai King Yan (Anthony), all of whom are our independent non-executive Directors, will serve
+on the audit committee, which will be chaired by Wong Siu Keung (Sony). Our Board of Directors has determined that each are independent 
+for audit committee purposes as that term is defined by the rules of the SEC and Nasdaq, and that each has sufficient knowledge in financial
+and auditing matters to serve on the audit committee. Our Board of Directors has designated Mr. Wong Siu Keung (Sony) as an audit
+committee financial expert, as defined under the applicable rules of the SEC. The audit committee s responsibilities include:
+
+ 
+
+ 
+ 
+ 
+ appointing,
+ approving the compensation of, and assessing the independence of our independent registered public accounting firm;
+
+ 
+ 
+ 
+ pre-approving
+ auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public
+ accounting firm;
+
+ 
+ 
+
+ 91
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ reviewing
+ the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing
+ our financial statements;
+
+ 
+ 
+ 
+ reviewing
+ and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements
+ and related disclosures as well as critical accounting policies and practices used by us;
+
+ 
+ 
+ 
+ coordinating
+ the oversight and reviewing the adequacy of our internal control over financial reporting;
+
+ 
+ 
+ 
+ establishing
+ policies and procedures for the receipt and retention of accounting-related complaints and concerns; recommending, based upon the
+ audit committee s review and discussions with management and our independent registered public accounting firm, whether our
+ audited financial statements shall be included in our Annual Report on Form 20-F;
+
+ 
+ 
+ 
+ monitoring
+ the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial
+ statements and accounting matters;
+
+ 
+ 
+ 
+ preparing
+ the audit committee report required by SEC rules to be included in our annual proxy statement;
+
+ 
+ 
+ 
+
+ 
+
+ 
+
+ reviewing
+ all related person transactions for potential conflict of interest situations and approving
+ all such transactions;
+
+ 
+
+ 
+ 
+ 
+ continuously engage
+ in the analysis of and review for potential cybersecurity risks as part of the Company s overall risk management program; and
+
+ 
+ 
+ 
+ reviewing
+ earnings releases.
+
+ 
+ 
+
+Audit
+committee charter. On April 16, 2024, our Board of Directors authorized and approved an amendment to the Audit Committee Charter
+(the Audit Committee Charter ), pursuant to which it adopted a cybersecurity policy (the Cybersecurity Policy )
+and further approved that the Audit Committee will have full authority and powers to implement the Cybersecurity Policy. The Audit Committee
+Charter provides the members of the Audit Committee with authorization and authority to conduct continuous analysis of and review for
+any potential cybersecurity risks as part of the Company s overall risk management program and to create a cyber-resilient organization,
+which will contribute to the value preservation of the Company. The Audit Committee Charter further provides authority and responsibility
+to the members of the Audit Committee to: (i) understand the economic drivers and impact of cyber risk, including the financial impact
+to our Company; (ii) align cyber-risk management policies with our business needs by integrating cyber-risk analysis into significant
+business decisions; (iii) ensure our organizational structure supports cybersecurity goals; and (iv) incorporate cybersecurity expertise
+into board governance.
+
+ 
+
+For
+additional information regarding our Cybersecurity Policy, please refer to Exhibit 4.4 to our Annual Report on Form 20-F filed with
+the SEC on April 29, 2024.
+
+ 
+
+Compensation
+committee
+
+ 
+
+Lai
+King Yan (Anthony), Wong Siu Keung (Sony), and Tong Ching Ho (Tony) all of whom are our independent non-executive Directors, will serve
+on the compensation committee, which will be chaired by Lai King Yan (Anthony). Our Board of Directors has determined that each such
+member satisfies the independence requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market. The
+compensation committee s responsibilities include:
+
+ 
+
+ 
+ 
+ 
+ evaluating
+ the performance of our Chief Executive Officer in light of our Company s corporate goals and objectives and based on such evaluation:
+ (i) recommending to the Board of Directors the cash compensation of our Chief Executive Officer, and (ii) reviewing and approving
+ grants and awards to our Chief Executive Officer under equity-based plans;
+
+ 
+ 
+ 
+ reviewing
+ and recommending to the Board of Directors the cash compensation of our other executive officers;
+
+ 
+ 
+ 
+ reviewing
+ and establishing our overall management compensation, philosophy, and policy;
+
+ 
+ 
+ 
+ overseeing
+ and administering our compensation and similar plans;
+
+ 
+ 
+ 
+ reviewing
+ and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation
+ matters and evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified
+ in the applicable Nasdaq rules;
+
+ 
+ 
+ 
+ retaining
+ and approving the compensation of any compensation advisors;
+
+ 
+ 
+
+ 92
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ reviewing
+ and approving our policies and procedures for the grant of equity-based awards;
+
+ 
+ 
+ 
+ reviewing
+ and recommending to the Board of Directors the compensation of our directors;
+
+ 
+ 
+ 
+
+ reviewing
+and determining the necessity for recovery of certain incentive compensation previously paid to the Company s officers and directors
+in the event of a restatement of the Company s financial statements for any fiscal year; and
+
+ 
+ 
+ 
+ preparing
+ the compensation committee report required by SEC rules, if and when required.
+
+ 
+ 
+
+Compensation
+committee charter. On April 16, 2024, our Board of Directors authorized and approved an amendment to the Compensation Committee Charter
+(the Compensation Committee Charter ), pursuant to which it adopted a compensation recovery policy (the Compensation
+Recovery Policy ) and further approved that the Compensation Committee will have full authority and powers to implement the Compensation
+Recovery Policy. The Compensation Committee Charter provides the members of the Compensation Committee with authorization and authority
+to carry out such duties and responsibilities associated with the Compensation Recovery Policy. The Compensation Committee shall, in
+the event of a restatement of the Company s financial statements, have the authority and power to: (i) determine such executive
+officers who served at any time during the performance period for the incentive-based compensation; (ii) determine the relevant recovery
+period; (iii) determine the amount of incentive-based compensation that must be subject to the Company s Compensation Recovery
+Policy and establish procedures for recovery; (iv) maintain documentation of the above-referenced determinations; and (v) prepare and
+have filed all disclosures with respect to the Compensation Recovery Policy in accordance with Federal securities laws, including the
+disclosure required by the applicable Securities and Exchange Commission filings.
+
+ 
+
+For
+additional information regarding our Compensation Recovery Policy, please refer to Exhibit 4.7 to our Annual Report on Form 20-F filed with the SEC on April 29, 2024.
+
+ 
+
+Nomination
+committee
+
+ 
+
+Tong
+Ching Ho (Tony), Wong Siu Keung (Sony) and Lai King Yan (Anthony), all of whom are our independent non-executive Directors, will serve
+on the nomination committee, which will be chaired by Tong Ching Ho (Tony). Our Board of Directors has determined that each member of
+the nomination committee is independent as defined in applicable Nasdaq rules. The nomination committee s responsibilities
+include:
+
+ 
+
+ 
+ 
+ 
+ developing
+ and recommending to the Board of Directors criteria for board and committee membership;
+
+ 
+ 
+ 
+ establishing
+ procedures for identifying and evaluating director candidates, including nominees recommended by stockholders; and
+
+ 
+ 
+ 
+ reviewing
+ the composition of the Board of Directors to ensure that it is composed of members containing the appropriate skills and expertise
+ to advise us.
+
+ 
+ 
+
+While
+we do not have a formal policy regarding board diversity, our nomination committee and Board of Directors will consider a broad range
+of factors relating to the qualifications and background of nominees, which may include diversity (not limited to race, gender, or national
+origin). Our nomination committee s and Board of Directors priority in selecting board members is identification of persons
+who will further the interests of our shareholders through their established record of professional accomplishment, the ability to contribute
+positively to the collaborative culture among board members, knowledge of our business, understanding of the competitive landscape and
+professional and personal experience and expertise relevant to our growth strategy.
+
+ 
+
+Foreign
+Private Issuer Status
+
+ 
+
+The
+Nasdaq listing rules include certain accommodations in the corporate governance requirements that allow foreign private issuers, such
+as us, to follow home country corporate governance practices in lieu of the otherwise applicable corporate governance standards
+of Nasdaq Markets. The application of such exceptions requires that we disclose each Nasdaq Markets corporate governance standard that
+we do not follow and describe the Cayman Islands corporate governance practices we do follow in lieu of the relevant Nasdaq Markets corporate
+governance standard. However, we currently follow the Nasdaq Markets corporate governance standards listed below with the exception of
+the independent directors regularly scheduling meetings with only the independent directors present:
+
+ 
+
+ 
+ 
+ 
+ the
+ majority independent director requirement under Section 5605(b)(1) of the Nasdaq Marketplace Listing rules;
+
+ 
+ 
+
+ 93
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ the
+ requirement under Section 5605(d) of the Nasdaq Marketplace Listing Rules that a compensation committee comprised solely of independent
+ directors governed by a compensation committee charter oversee executive compensation; 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ requirement under Section 5605(e) of the Nasdaq Marketplace Listing Rules that director nominees be selected or recommended for selection
+ by either a majority of the independent directors or a nominations committee comprised solely of independent directors;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ Shareholder Approval Requirements under Section 5635 of the Nasdaq Marketplace Listing Rules; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ the
+ requirement under Section 5605(b)(2) of the Nasdaq Marketplace Listing Rules that the independent directors have regularly scheduled
+ meetings with only the independent directors present.
+
+ 
+ 
+
+Code
+of Conduct and Code of Ethics
+
+ 
+
+We
+have adopted a written code of business conduct
+and ethics that applies to our directors, officers, and employees, including our chief executive officer, chief financial officer, principal
+accounting officer or controller or persons performing similar functions. A current copy of this code is posted on the
+Corporate Governance section of our website, which is located at http://www.fenbo.com. The information on our website is deemed
+not to be incorporated by reference in this prospectus or to be a part of this prospectus. We intend to disclose any amendments
+to the code of ethics, and any waivers of the code of ethics or the code of conduct for our directors, executive officers, and senior
+finance executives, on our website to the extent required by applicable U.S. federal securities laws and the Nasdaq corporate governance
+rules.
+
+ 
+
+Compensation
+of Directors and Senior Management/Executive Personnel
+
+ 
+
+Our
+directors and members of our senior management receive compensation in the form of salaries, allowances, bonuses, and other benefits-in-kind,
+including our contribution to the pension scheme. Our compensation committee determines the salaries of our directors and members of
+our senior management based on their qualifications, positions, and seniority.
+
+ 
+
+Notwithstanding
+the below compensation table: (i) no remuneration was paid to our directors or the five highest paid individuals as an inducement to
+join, or upon joining, our Group; (ii) no compensation was paid to, or receivable by, our directors or past directors or the five highest
+paid individuals during the fiscal years ended December 31, 2023, 2022 and 2021 for the loss of office as director of any member
+of our Group or of any other office in connection with the management of the affairs of any member of our Group; and (iii) none of our
+directors waived any emoluments during the same period. Notwithstanding the below compensation table, no director has been paid in cash
+or shares or otherwise by any person either to induce him to become, or to qualify him as a director, or otherwise for service rendered
+by him in connection with the promotion or formation of us.
+
+ 
+
+ 94
+
+ 
+
+ 
+
+ 
+
+The
+following table summarizes all compensation received by our directors and our executive officers during the fiscal years ended
+December 31, 2021, 2022 and 2023.
+
+ 
+
+Summary
+Compensation Table
+
+ 
+
+ 
+ 
+ Compensation
+ Paid 
+
+ 
+ Name and
+ Principal Position 
+ Year 
+ Salary
+ (HK 000)
+ 
+ Bonus
+ (HK 000)
+ 
+ Other
+ Compensation
+ (6)
+ (HK 000)
+ 
+
+ 
+ Li Siu Lun Allan, CEO, 
+ 2021 
+ 1,040 
+ Nil 
+ 18 
+
+ 
+ Chairman and Executive Director
+ (1) 
+ 2022 
+ 1,040 
+ Nil 
+ 18 
+
+ 
+ 
+ 2023 
+ 1,063 
+ 300 
+ 18 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Li Kin Shing, 
+ 2021 
+ 1,080 
+ Nil 
+ Nil 
+
+ 
+ Executive Director (2) 
+ 2022 
+ 1,080 
+ Nil 
+ Nil 
+
+ 
+ 
+ 2023 
+ 1,658 
+ Nil 
+ Nil 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Fu Wai Yip (Freddy), 
+ 2021 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ CFO (3) 
+ 2022 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ 
+ 2023 
+ 23 
+ Nil 
+ Nil 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Lai King Yan (Anthony), 
+ 2021 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ Independent Non-Executive
+ Director (4) 
+ 2022 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ 
+ 2023 
+ 20 
+ Nil 
+ Nil 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Tong Ching Ho (Tony), 
+ 2021 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ Independent Non-Executive
+ Director (4) 
+ 2022 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ 
+ 2023 
+ 20 
+ Nil 
+ Nil 
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Wong Siu Keung (Sony), 
+ 2021 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ Independent Non-Executive
+ Director (4) 
+ 2022 
+ Nil 
+ Nil 
+ Nil 
+
+ 
+ 
+ 2023 
+ 20 
+ Nil 
+ Nil 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Derong Meng,
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Independent
+ Non-Executive Director (5)
+ 
+ 
+ -
+ 
+ 
+ 
+ -
+ 
+ 
+ 
+ -
+ 
+ 
+ 
+ -
+ 
+
+ 
+
+ 
+
+(1)
+Compensation for Li Siu Lun Allan was paid by FIL, a wholly owned subsidiary of FHL for the years ended December 31, 2021 and 2022
+whereas for the year ended December 31, 2023 was paid by FIL and FHL together.
+
+ 
+
+(2)
+Compensation for Li Kin Shing was paid by FIL and AIL, wholly owned subsidiaries of FHL for the years ended December 31, 2021 and
+2022 whereas for the year ended December 31, 2023 was paid by FIL, AIL and FHL altogether.
+
+ 
+
+(3)
+Fu Wai Yip (Freddy) was appointed as CFO of FHL on December 6, 2022.
+
+ 
+
+(4)
+Lai King Yan (Anthony), Tong Ching Ho (Tony), and Wong Siu Keung (Sony) were appointed as independent non-executive directors
+effective with the closing of the IPO.
+
+ 
+
+(5)
+Mr. Meng was appointed as independent non-executive director effective January 1, 2024.
+
+ 
+
+(6)
+Other compensation includes sales commission, allowances, and any employer s contribution social security.
+
+ 
+
+Compensation
+Recovery Policy
+
+ 
+
+As
+required pursuant to the listing standards of the Nasdaq Listing Rules, Rule 10D under the Exchange Act, and Rule 10D-1 under the Exchange
+Act, the Compensation Committee of the Board of Directors has adopted the Compensation Recovery Policy, also known as a clawback
+policy, effective December 1, 2023. The Compensation Recover Policy requires the Company to recover the incremental portion of the incentive-based
+compensation received by such officer that was in excess of the amount they would have received had their incentive compensation been
+determined based on the restated financial statements. Such events requiring a restatement of financial statements would be due to the
+material noncompliance of the Company with any financial reporting requirements under the securities laws, including any required accounting
+restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements,
+or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current
+period.
+
+ 
+
+For
+additional information regarding our Compensation Recovery Policy, please refer to Exhibit 4.7 to our Annual Report on Form 20-F filed with the SEC on April 29, 2024.
+
+ 
+
+ 95
+
+ 
+
+ 
+
+ 
+
+Mandatory
+Provident Fund
+
+ 
+
+The
+Mandatory Provident Fund (the MPF ) is a compulsory saving scheme (pension fund) for the retirement of residents in Hong
+Kong. Most employees and their employers are required to contribute monthly to mandatory provident fund schemes provided by approved
+private organizations, according to their salaries and the period of employment. The Mandatory Provident Fund was implemented in December
+2000 following the enactment of the Mandatory Provident Fund Schemes Ordinance on July 27, 1995. The MPF Schemes Authority (MPFA) is
+charged with supervising the provision of MPF schemes it registers schemes and ensures that approved trustees administer schemes
+prudently, ensuring compliance including inspections, audits, and investigations.
+
+ 
+
+The
+MPF system is mandatory for all employees in Hong Kong who have an employment contract of 60 days or more and also applies also to self-employed
+persons. Under the MPF, the choice of the scheme is the responsibility of the employer (for which the legislation defines three types):
+(i) master trust scheme; (ii) employer sponsored scheme; or (iii) industry scheme. The scheme operates on the principle of fully funded
+defined contributions into a privately managed plan fund contributed by employers and employees managed as a trust, which compartmentalizes
+fund assets from those of the manager. Investment decisions are delegated to a trustee in the private sector.
+
+ 
+
+FIL,
+our Operating Subsidiary in Hong Kong, implemented a MPF with a major international assurance company to provide retirement benefits
+for its employees. All permanent full-time are eligible to join the MPF. Eligible employees of the MPF and the employer s contributions
+to the MPF are both at 5% of the eligible employee s monthly salary and are subject to a maximum mandatory contribution of HKD1,500
+(US$192) monthly.
+
+ 
+
+Pursuant
+to the relevant PRC regulations, the Group is required to make contributions for each employee, at rates based upon the employee s
+standard salary base as determined by the local social security bureau, to a defined contribution retirement scheme organized by the
+local social security bureau in respect of the retirement benefits for FPPF s employees in the PRC.
+
+ 
+
+The
+contributions to the MPF are recognized as employee benefit expense when they are due and are charged to the consolidated statement of
+income (loss). The total contributions to the MPF of our Operating Subsidiaries in Hong Kong for the fiscal years ended December
+31, 2023, 2022, and 2021 amounted to approximately HKD61,000, HKD79,000 and HKD94,000, respectively. FIL has no other obligation
+to make payments in respect of retirement benefits of the employees.
+
+ 
+
+Directors 
+Agreements
+
+ 
+
+Each
+of our directors has entered into a Director s Agreement with the Company dated as of the effective date of its registration statement
+as filed with the SEC, which was November 27, 2023 (the Effective Date ). Our newly appointed director, Mr. Derong Meng,
+entered into a Director s Agreement dated April 16, 2024. The terms and conditions of each such Director s Agreement are
+similar in all material aspects. Each Director s Agreement is for an initial term of one year and will continue until the director s
+successor is duly elected and qualified. Each director will be up for re-election each year at the annual shareholders meeting
+and, upon re-election, the terms, and provisions of his or her Director s Agreement will remain in full force and effect. Any Director s
+Agreement may be terminated for any or no reason by the director or at a meeting called expressly for that purpose by a vote of the shareholders
+holding more than 50% of the Company s issued and outstanding Ordinary Shares entitled to vote.
+
+ 
+
+Under
+the Directors Agreements, the initial annual salary that is payable to each of our directors is as follows:
+
+ 
+
+ 
+ Lai King Yan (Anthony) 
+ US$30,000 
+
+ 
+ Tong Ching Ho (Tony) 
+ US$30,000 
+
+ 
+ Wong Siu Keung (Sony) 
+ US$30,000 
+
+ 
+ Derong Meng 
+ US$12,000 
+
+ 
+
+ 
+
+Other
+than as disclosed above, none of our directors has entered into a service agreement with our Company or any of our subsidiaries that
+provides for benefits upon termination of employment.
+
+ 
+
+Employment
+Letters
+
+ 
+
+On
+December 6, 2022, FGH entered into a letter agreement with Mr. Li Siu Lun Allan, pursuant to which Mr. Li will serve as the Chairman,
+Executive Director and Chief Executive Officer of the Company in accordance with the following terms and provisions: (i) payment of a
+monthly salary of US$3,000 payable at the end of each month, which commenced upon the closing of the IPO; (ii) a discretionary
+performance bonus determined by the compensation committee and/or the board at the end of the fiscal year; and (ii) either party shall
+have the right to terminate the agreement by giving to the other party not less than six months notice in writing.
+
+ 
+
+On
+December 6, 2022, FGH entered into a letter agreement with Mr. Li Kin Shing, pursuant to which Mr. Li Kin Shing will serve as an Executive
+Director of the Company in accordance with the following terms and provisions: (i) payment of a monthly salary of US$3,000 payable at
+the end of each month, which commenced upon the closing of the IPO; and (ii) a discretionary performance bonus determined by the
+compensation committee and/or the board at the end of the fiscal year; and (ii) either party shall have the right to terminate the agreement
+by giving to the other party not less than six months notice in writing.
+
+ 
+
+On
+December 6, 2022, FGH entered into an employment agreement with Mr. Fu Wai Yip (Freddy), pursuant to which Mr. Fu is designated as the
+Chief Financial Officer of the Company in accordance with the following terms and provisions: (i) a fixed initial salary of US$3,000
+for the period from December 6, 2022 to the date of the closing of the IPO (the Initial Period ) (ii) after
+the Initial Period, payment of a monthly salary of US$3,000, subject to the adjustment determined by the compensation committee and/or
+the board, payable at the end of each month; (iii) a discretionary performance bonus determined by the compensation committee and/or
+the board at the end of the fiscal year and (iv) either party shall have the right to terminate the agreement by giving to the other
+party not less than six months notice in writing.
+
+ 
+
+Indemnification
+Agreements
+
+ 
+
+We
+have entered into indemnification agreements with each of our directors and executive officers including our newly appointed director,
+Mr. Derong Meng. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses
+incurred by such persons in connection with claims made by reason of their being a director or officer of our Company.
+
+ 
+
+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.
+
+ 
+
+ 96
+
+ 
+
+ 
+
+ 
+
+PRINCIPAL
+SHAREHOLDERS
+
+ 
+
+The
+following table sets forth information regarding beneficial ownership of our share capital by:
+
+ 
+
+ 
+ 
+ 
+ each
+ person, or group of affiliated persons, known by us to beneficially own more than 5% of our shares;
+
+ 
+ 
+ 
+ each
+ of our named executive officers;
+
+ 
+ 
+ 
+ each
+ of our directors; and
+
+ 
+ 
+ 
+ all
+ of our current executive officers, directors as a group.
+
+ 
+ 
+
+Applicable
+percentage ownership is based on 11,062,500 Ordinary Shares of our Company issued and outstanding as of the date of this prospectus,
+including the 62,500 Ordinary Shares issued to the underwriters of our IPO on January 16, 2024 pursuant to their exercise of the over-allotment
+option.
+
+ 
+
+The
+information presented below regarding beneficial ownership of our Ordinary Shares has been presented in accordance with the rules
+of the SEC and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a beneficial
+owner of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose
+or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right
+to acquire sole or shared voting or investment power within sixty (60) days through the conversion or exercise of any convertible security,
+warrant, option, or other right. More than one (1) person may be deemed to be a beneficial owner of the same securities. The percentage
+of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such
+person, which includes the number of shares as to which such person has the right to acquire voting or investment power within sixty
+(60) days, by the sum of the number of shares outstanding as of such date, plus the number of shares as to which such person has the
+right to acquire voting or investment power within sixty (60) days. Consequently, the denominator used for calculating such percentage
+may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe
+that the beneficial owners of our shares listed below have sole voting and investment power with respect to the shares shown.
+
+ 
+
+Unless
+otherwise noted below, the address of each person listed on the table is Flat J, 19/F., World Tech Centre, 95 How Ming Street, Kwun Tong,
+Kowloon, Hong Kong.
+
+ 
+
+ 
+ Name of
+ Beneficial Owner 
+ Ordinary
+ Shares
+ Beneficially
+ Owned
+ 
+ Percent
+
+ of Class 
+
+ 
+ Named Executive
+ Officers and Directors: 
+ 
+ 
+
+ 
+ Li Siu Lun Allan 
+ 0 
+ 0.00%
+
+ 
+ Li
+ Kin Shing (1) 
+ 8,000,000 
+ 72.32%
+
+ 
+ Fu Wai Yip (Freddy) 
+ 0 
+ 0.00%
+
+ 
+ Lai King Yan (Anthony) 
+ 0 
+ 0.00%
+
+ 
+ Tong Ching Hi (Tony) 
+ 0 
+ 0.00%
+
+ 
+ Wong Siu Keung (Sony) 
+ 0 
+ 0.00%
+
+ 
+ Meng Derong 
+ 0 
+ 0.00%
+
+ 
+ All executive officers and Directors as a group
+ (7 persons) 
+ 8,000,000 
+ 72.32%
+
+ 
+ 
+ 
+ 
+
+ 
+ 5% Shareholders: 
+ 
+ 
+
+ 
+ Luxury Max Investments Limited
+ (1) 
+ 8,000,000 
+ 72.32%
+
+ 
+
+ 
+
+ 
+ (1)
+ Luxury
+ Max Investments Limited is owned 100% of record by Li Kin Shing, our director, who is also its sole director.
+
+ 
+ 
+
+ 97
+
+ 
+
+ 
+
+ 
+
+RELATED
+PARTY TRANSACTIONS
+
+ 
+
+Related
+Parties
+
+ 
+
+We
+have adopted an audit committee charter, which was amended on April 16, 2024, which requires the committee to review all related-party
+transactions on an ongoing basis and all such transactions be approved by the committee.
+
+ 
+
+During
+the fiscal years ended December 31, 2023, 2022, and 2021, we, including the Operating Subsidiaries, entered into the following
+transactions with our related parties:
+
+ 
+
+Sale
+/ Lease of Office
+
+ 
+
+In
+December 2022, FIL sold its headquarter and sales office in Hong Kong to Mr. Li Kin Shing, the Company s Executive Director,
+and sole shareholder, at a consideration of HK$13,880,000. The carrying net book value of the office as of the transaction date was
+HK$1,349,000, and thus, one-off gain on disposal of the property of HK$12,531,000 was recognized in the income statements of the Group
+for the year ended December 31, 2022. This gain on disposal of the property was regarded as capital gain and classified as a non-taxable
+income under the tax rule of Hong Kong. The sale consideration of HK$13,880,000 receivable from Mr. Li Kin Shing was offset against the
+amount due to Mr. Li Kin Shing, and the dividend declared of HK$10,000,000 for the year ended December 31, 2022.
+
+ 
+
+After
+the disposal of the office, FIL has continued to occupy the office and entered into a lease agreement with Mr. Li Kin Shing
+to lease this office for an initial term of two (2) years, which commenced January 1, 2023, for a monthly rental of HK$50,000.
+
+ 
+
+Guarantees
+
+ 
+
+Certain
+related parties provided guarantees to the Company in connection with its bank borrowings of the Group. The bank loans of the Group consisted
+of the following:
+
+ 
+
+ 
+ Bank
+ Name 
+ Nature
+ of 
+ Loan 
+ As
+ at
+ December 31, 
+2021 
+ As
+ at
+ December 30, 
+2022 
+ As
+ at
+ December 31, 
+2023 
+
+ 
+ 
+ 
+ HK$ 000 
+ HK$ 000 
+ HK$ 000 
+
+ 
+ Bank
+ of China (Hong Kong) 
+ Revolving
+ loan (1) 
+ 11,000 
+ 11,000 
+ 11,000 
+
+ 
+
+ 
+
+ 
+ (1)
+ This loan is a revolving
+ loan up to HK$11,000,000, carries an interest of 2.25% below Hong Kong prime rate and is secured by the Company s office premise
+ located in Hong Kong; a Hong Kong residential property jointly owned by Li Kin Shing and his spouse and a personal guarantee from
+ Li Kin Shing. This loan was first drawn down on October 22, 2018 and has been rolled over for every six-month period. The Company
+ recognized this loan as short-term bank borrowing in its consolidated financial statements. The security charged over the Company s
+ office premise located in Hong Kong was released since September 29, 2022. 
+
+ 
+ 
+
+Transactions
+with related parties were conducted in the normal course of business and at prices and terms no less than those charged to and contracted
+with other independent third parties.
+
+ 
+
+Leases
+
+ 
+
+During
+the fiscal years ended December 31, 2023, 2022, and 2021, our Operating Subsidiaries entered into a lease agreement with a related
+party for a director quarter located in Hong Kong as follows:
+
+ 
+
+ 
+ Premise 
+ Relationship
+ with 
+the lessor 
+ Rental
+ 
+payment for
+ the year 
+ended
+ December 31, 
+2021
+ (HK$ 000) 
+ Rental
+ 
+payment for
+ the year 
+ended
+ December 31, 2022
+ (HK$ 000) 
+ Rental
+ 
+payment for
+ the year 
+ended
+ December 31, 
+2023
+ (HK$ 000) 
+
+ 
+ Director quarter 
+ Lessor is a company owned by Mr.
+ Li Kin Shing and his spouse 
+ 600 
+ 600 
+ 600 
+
+ 
+ Hong Kong office 
+ Lesser is Mr. Li Kin Shing 
+ - 
+ - 
+ 600 
+
+ 
+
+ 
+
+The
+related party transaction is determined on an arm-length basis by reference to the market price of the comparable premises.
+
+ 
+
+Related
+party balances
+
+ 
+
+The
+related party balances consisted of the following:
+
+ 
+
+ 
+ Name 
+ Relationship 
+ Nature 
+ Classification 
+ December
+ 31, 
+ 2021 
+ December
+ 31,
+ 2022 
+ December
+ 31,
+ 2023 
+
+ 
+ 
+ 
+ 
+ 
+ (HK$ 000) 
+ (HK$ 000) 
+ (HK$ 000) 
+
+ 
+ Mr. Li Siu Lun Allan 
+ Executive director 
+ Advance to a director 
+ Amount due from a related party 
+ 20 
+ - 
+ - 
+
+ 
+ Mr. Li Kin Shing 
+ Sole shareholder and executive director 
+ Advance from a shareholder 
+ Amounts due to related parties 
+ 4,213 
+ 2,855 
+ 151 
+
+ 
+ Mr. Chiu Yat Chung Gary 
+ Senior management 
+ Advance from senior management 
+ Amounts due to related parties 
+ 2,262 
+ 2,262 
+ 2,262 
+
+ 
+ Total amount due 
+ 
+ 
+ 
+ 6,495
+ 
+ 5,117
+ 
+ 2,413
+ 
+
+ 
+
+ 
+
+The
+above amounts are unsecured, non-interest bearing and repayable on demand.
+
+ 
+
+ 98
+
+ 
+
+ 
+
+ 
+
+DESCRIPTION
+OF SECURITIES
+
+ 
+
+We
+are offering up to 591,016 Ordinary Shares, or Pre-Funded Warrants in lieu thereof, and accompanying Warrants to purchase up to
+591,016 Ordinary Shares. The following description summarizes the material terms and provisions of our Securities. For each Pre-Funded
+Warrant we sell, the number of Ordinary Shares we are offering will be decreased on a one-for-one basis. The following description of
+our Securities does not purport to be complete and is subject to, and qualified in its entirety by, our memorandum and articles of association
+and by applicable law.
+
+ 
+
+A
+copy of our memorandum and articles of association is filed as an exhibit to the registration statement of which this prospectus is a
+part (and which is referred to in this section as, respectively, the Memorandum and the Articles of Association ).
+
+ 
+
+We
+are an exempted company incorporated with limited liability in the Cayman Islands and our affairs are governed by our Memorandum
+and Articles of Association, the Companies Act and the common law of the Cayman Islands.
+
+ 
+
+As
+of the date of this prospectus, our authorized share capital is US$30,300 divided into 300,000,000 ordinary shares of par value of US$0.0001
+each, and 3,000,000 preference shares of a par value of US$0.0001 each.
+
+ 
+
+The
+following are summaries of certain material provisions of our Memorandum and Articles of Association and the Companies Act insofar as
+they relate to the material terms of our Ordinary Shares.
+
+ 
+
+Ordinary
+Shares
+
+ 
+
+General
+
+ 
+
+All
+of our outstanding Ordinary Shares are fully paid and non-assessable. Certificates representing the Ordinary Shares are issued in registered
+form. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their Ordinary Shares. We may not issue shares
+to bearer.
+
+ 
+
+Dividends
+
+ 
+
+Subject
+to the Companies Act and our Articles of Association, our Company in general meeting may declare dividends in any currency to be paid
+to the members but no dividend shall be declared in excess of the amount recommended by our Board of Directors.
+
+ 
+
+ 99
+
+ 
+
+ 
+
+ 
+
+Except
+in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide:
+
+ 
+
+ 
+ (i)
+ all
+ dividends shall be declared and paid according to the amounts paid-up on the shares in respect of which the dividend is paid, although
+ no amount paid-up on a share in advance of calls shall for this purpose be treated as paid-up on the share;
+
+ 
+ 
+ 
+
+ 
+ (ii)
+ all
+ dividends shall be apportioned and paid pro rata in accordance with the amount paid-up on the shares during any portion(s) of the
+ period in respect of which the dividend is paid; and
+
+ 
+ 
+ 
+
+ 
+ (iii)
+ our
+ Board of Directors may deduct from any dividend or other monies payable to any member all sums of money (if any) presently payable
+ by him to our Company on account of calls, installments or otherwise.
+
+ 
+ 
+
+Where
+our Board of Directors or our Company in general meeting has resolved that a dividend should be paid or declared, our Board of Directors
+may resolve:
+
+ 
+
+ 
+ 
+ (aa)
+ that
+ such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid-up, provided that the members
+ entitled to such dividend will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment;
+ or
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ (bb)
+ that
+ the members entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid-up in lieu
+ of the whole or such part of the dividend as our Board of Directors may think fit.
+
+ 
+ 
+
+Upon
+the recommendation of our Board of Directors, our Company may by ordinary resolution in respect of any one particular dividend of our
+Company determine that it may be satisfied wholly in the form of an allotment of shares credited as fully paid-up without offering any
+right to members to elect to receive such dividend in cash in lieu of such allotment.
+
+ 
+
+Any
+dividend, bonus, or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post. Every such
+cheque or warrant shall be made payable to the order of the person to whom it is sent and shall be sent at the holder s or joint
+holders risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to our Company.
+Any one of two or more joint holders may give effectual receipts for any dividends or other monies payable or property distributable
+in respect of the shares held by such joint holders.
+
+ 
+
+Whenever
+our Board of Directors or our Company in general meeting has resolved that a dividend be paid or declared, our Board of Directors may
+further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.
+
+ 
+
+Our
+Board of Directors may, if it thinks fit, receive from any member willing to advance the same, and either in money or money s worth,
+all or any part of the money uncalled and unpaid or installments payable upon any shares held by him/her/it, and in respect of all or
+any of the monies so advanced may pay interest at such rate (if any) not exceeding 20% per annum, as our Board of Directors may decide,
+but a payment in advance of a call shall not entitle the member to receive any dividend or to exercise any other rights or privileges
+as a member in respect of the share or the due portion of the shares upon which payment has been advanced by such member before it is
+called up.
+
+ 
+
+All
+dividends, bonuses, or other distributions unclaimed for one year after having been declared may be invested or otherwise used by our
+Board of Directors for the benefit of our Company until claimed and our Company shall not be constituted a trustee in respect thereof.
+All dividends, bonuses, or other distributions unclaimed for six years after having been declared may be forfeited by our board of directors
+and, upon such forfeiture, shall revert to our Company.
+
+ 
+
+No
+dividend or other monies payable by our Company on or in respect of any share shall bear interest against our Company.
+
+ 
+
+ 100
+
+ 
+
+ 
+
+ 
+
+Our
+Company may exercise the power to cease sending checks for dividend entitlements or dividend warrants by post if such checks or warrants
+remain uncashed on two consecutive occasions or after the first occasion on which such a check or warrant is returned undelivered.
+
+ 
+
+Voting
+Rights
+
+ 
+
+Subject
+to any special rights, restrictions or privileges as to voting for the time being attached to any class or classes of shares at any general
+meeting: (a) on a poll every member present in person or by proxy or, in the case of a member being a corporation, by our duly authorized
+representative shall have one vote for every share which is fully paid or credited as fully paid registered in his name in the register
+of members of our Company but so that no amount paid-up or credited as paid-up on a share in advance of calls or instalments is treated
+for this purpose as paid-up on the share; and (b) on a show of hands every member who is present in person (or, in the case of a member
+being a corporation, by our duly authorized representative) or by proxy shall have one vote. Where more than one proxy is appointed by
+a member which is a clearing house (as defined in the Articles) (or its nominee(s)) or a central depository house (or its nominee(s)),
+each such proxy shall have one vote on a show of hands. On a poll, a member entitled to more than one vote need not use all his votes
+or cast all the votes he does use in the same way.
+
+ 
+
+Transfer
+of Ordinary Shares
+
+ 
+
+Subject
+to the Companies Act and our Articles of Association, all transfers of shares shall be effected by an instrument of transfer in the usual
+or common form or in such other form as our Board of Directors may approve and may be under hand or, if the transferor or transferee
+is a clearing house (as defined in the Articles) (or its nominee(s)) or a central depository house (or its nominee(s)), under
+hand or by machine imprinted signature, or by such other manner of execution as our Board of Directors may approve from time to time.
+
+ 
+
+Execution
+of the instrument of transfer shall be by or on behalf of the transferor and the transferee, provided that our Board of Directors may
+dispense with the execution of the instrument of transfer by the transferor or transferee or accept mechanically executed transfers.
+The transferor shall be deemed to remain the holder of a share until the name of the transferee is entered in the register of members
+of our Company in respect of that share.
+
+ 
+
+Our
+Board of Directors may, in our absolute discretion, at any time and from time to time remove any share on the principal register to any
+branch register or any share on any branch register to the principal register or any other branch register. Unless our Board of Directors
+otherwise agrees, no shares on the principal register shall be removed to any branch register nor shall shares on any branch register
+be removed to the principal register or any other branch register. All removals and other documents of title shall be lodged for registration
+and registered, in the case of shares on any branch register, at the registered office and, in the case of shares on the principal register,
+at the place at which the principal register is located.
+
+ 
+
+Our
+Board of Directors may, in our absolute discretion, decline to register a transfer of any share (not being a fully paid-up share) to
+a person of whom it does not approve or on which our Company has a lien. It may also decline to register a transfer of any share issued
+under any share option scheme upon which a restriction on transfer subsists or a transfer of any share to more than four joint holders.
+Our Board of Directors may decline to recognize any instrument of transfer unless a certain fee, up to such maximum sum as Nasdaq may
+determine to be payable, is paid to our Company, the instrument of transfer is properly stamped (if applicable), is in respect of only
+one class of share and is lodged at our registered office or the place at which the principal register is located accompanied by the
+relevant share certificate(s) and such other evidence as our Board of Directors may reasonably require is provided to show the right
+of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority
+of that person so to do).
+
+ 
+
+The
+registration of transfers of shares or of any class of shares may, after compliance with any notice requirement of Nasdaq, be suspended
+at such times and for such periods (not exceeding in the whole thirty days in any year) as our Board of Directors may determine.
+
+ 
+
+Fully
+paid shares shall be free from any restriction on transfer (except when permitted by Nasdaq) and shall also be free from all liens.
+
+ 
+
+ 101
+
+ 
+
+ 
+
+ 
+
+Procedures
+on liquidation
+
+ 
+
+A
+resolution that our Company be wound up by the court or be wound up voluntarily shall be a special resolution of our shareholders.
+
+ 
+
+Subject
+to any special rights, privileges, or restrictions as to the distribution of available surplus assets on liquidation for the time being
+attached to any class or classes of shares:
+
+ 
+
+ 
+ (i)
+ if
+ our Company is wound up, the surplus assets remaining after payment to all creditors shall be divided among the members in proportion
+ to the capital paid-up on the shares held by them respectively; and
+
+ 
+ 
+ 
+
+ 
+ (ii)
+ if
+ our Company is wound up and the surplus assets available for distribution among the members are insufficient to repay the whole of
+ the paid-up capital, such assets shall be distributed, subject to the rights of any shares which may be issued on special terms and
+ conditions, so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid-up on the shares
+ held by them, respectively.
+
+ 
+ 
+
+If
+our Company is wound up (whether the liquidation is voluntary or compelled by the court), the liquidator may, with the sanction of a
+special resolution and any other sanction required by the Companies Act, divide among the members in specie or kind the whole or any
+part of the assets of our Company, whether the assets consist of property of one kind or different kinds, and the liquidator may, for
+such purpose, set such value as he deems fair upon any one or more class or classes of property to be so divided and may determine how
+such division shall be carried out as between the members or different classes of members and the members within each class. The liquidator
+may, with the like sanction, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator thinks
+fit, but so that no member shall be compelled to accept any shares or other property upon which there is a liability.
+
+ 
+
+Calls
+on Ordinary Shares and Forfeiture of Ordinary Shares
+
+ 
+
+Subject
+to the Articles and to the terms of allotment, our Board of Directors may, from time to time, make such calls as it thinks fit upon the
+members in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares
+or by way of premium) and not by the conditions of allotment of such shares made payable at fixed times. A call may be made payable either
+in one sum or by instalments. If the sum payable in respect of any call or instalment is not paid on or before the day appointed for
+payment thereof, the person or persons from whom the sum is due shall pay interest on the same at such rate not exceeding 20% per annum
+as our Board of Directors shall fix from the day appointed for payment to the time of actual payment, but our Board of Directors may
+waive payment of such interest wholly or in part. Our Board of Directors may, if it thinks fit, receive from any member willing to advance
+the same, either in money or money s worth, all, or any part of the money uncalled and unpaid or instalments payable upon
+any shares held by him, and in respect of all or any of the monies so advanced our Company may pay interest at such rate (if any) not
+exceeding 20% per annum as our Board of Directors may decide.
+
+ 
+
+If
+a member fails to pay any call or installment of a call on the day appointed for payment, our Board of Directors may, for so long as
+any part of the call or instalment remains unpaid, serve not less than 14 days notice on the member requiring payment of so much
+of the call or instalment as is unpaid, together with any interest which may have accrued and which may still accrue up to the date of
+actual payment. The notice shall name a further day (not earlier than the expiration of 14 days from the date of the notice) on or before
+which the payment required by the notice is to be made and shall also name the place where payment is to be made. The notice shall also
+state that, in the event of non-payment at or before the appointed time, the shares in respect of which the call was made will be liable
+to be forfeited.
+
+ 
+
+If
+the requirements of any such notice are not complied with, any share in respect of which the notice has been given may at any time thereafter,
+before the payment required by the notice has been made, be forfeited by a resolution of our Board of Directors to that effect. Such
+forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.
+
+ 
+
+ 102
+
+ 
+
+ 
+
+ 
+
+A
+person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares but shall, nevertheless, remain
+liable to pay to our Company all monies which, at the date of forfeiture, were payable by him to our Company in respect of the shares
+together with (if our Board of Directors shall in our discretion so require) interest thereon from the date of forfeiture until payment
+at such rate not exceeding 20% per annum as our Board of Directors may prescribe.
+
+ 
+
+Redemption
+of Ordinary Shares
+
+ 
+
+Subject
+to the Companies Act, our Articles of Association, and, where applicable, the Nasdaq listing rules or any other law or so far as not
+prohibited by any law and subject to any rights conferred on the holders of any class of shares, any power of our Company to purchase
+or otherwise acquire all or any of its own shares (which expression as used in this Article includes redeemable shares) be exercisable
+by our Board of Directors in such manner, upon such terms and subject to such conditions as it thinks fit.
+
+ 
+
+Subject
+to the Companies Act, our Articles of Association, and to any special rights conferred on the holders of any shares or attaching to any
+class of shares, Shares may be issued on the terms that they may, at the option of our Company or the holders thereof, be liable to be
+redeemed on such terms and in such manner, including out of capital, as our Board of Directors may deem fit.
+
+ 
+
+Variations
+of Rights of Shares
+
+ 
+
+Subject
+to the Companies Act and without prejudice to our Articles of Association, if at any time the share capital of our Company is divided
+into different classes of shares, all or any of the special rights attached to any class of shares may (unless otherwise provided for
+by the terms of issue of the shares of that class) be varied, modified, or abrogated with the sanction of a special resolution passed
+at a separate general meeting of the holders of the shares of that class. The provisions of the Articles relating to general meetings
+shall mutatis mutandis apply to every such separate general meeting, but so that the necessary quorum (whether at a separate general
+meeting or at its adjourned meeting) shall be not less than a person or persons together holding (or, in the case of a member being a
+corporation, by our duly authorized representative) or representing by proxy not less than one-third in nominal value of the issued shares
+of that class. Every holder of shares of the class shall be entitled on a poll to one vote for every such share held by him, and any
+holder of shares of the class present in person or by proxy may demand a poll.
+
+ 
+
+Any
+special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights
+attaching to the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu
+therewith.
+
+ 
+
+General
+Meetings of Shareholders
+
+ 
+
+Our Company must hold an annual general meeting each year other than the
+year of our Company s adoption of our Articles of Association.
+
+ 
+
+Every
+general meeting of our Company shall be called by at least 10 clear days notice in writing. The notice shall be exclusive of the
+day on which it is served or deemed to be served and of the day for which it is given, and must specify the time, place and agenda of
+the meeting and particulars of the resolution(s) to be considered at that meeting and the general nature of that business.
+
+ 
+
+ 103
+
+ 
+
+ 
+
+ 
+
+Although
+a meeting of our Company may be called by shorter notice than as specified above, such meeting may be deemed to have been duly called
+if it is so agreed:
+
+ 
+
+ 
+ (i)
+ in
+ the case of an annual general meeting, by all members of our Company entitled to attend and vote thereat; and
+
+ 
+ 
+ 
+
+ 
+ (ii)
+ in
+ the case of any other meeting, by a majority in number of the members having a right to attend and vote at the meeting holding not
+ less than 95% of the total voting rights at the meetings of all our shareholders.
+
+ 
+ 
+
+All
+business transacted at an extraordinary general meeting shall be deemed special business. All business shall also be deemed special business
+where it is transacted at an annual general meeting, with the exception of the election of directors, which shall be deemed ordinary
+business.
+
+ 
+
+No
+business other than the appointment of a chairman of a meeting shall be transacted at any general meeting unless a quorum is present
+when the meeting proceeds to business and continues to be present until the conclusion of the meeting.
+
+ 
+
+The
+quorum for a general meeting shall be two members entitled to vote and present in person (or, in the case of a member being a corporation,
+by our duly authorized representative) or by proxy representing not less than one-third (1/3) in nominal value of the total issued voting
+shares in our Company throughout the meeting.
+
+ 
+
+Inspection
+of Books and Records
+
+ 
+
+Our
+shareholders have no general right to inspect or obtain copies of the register of members or corporate records of our company. They will,
+however, have such rights as may be set out in our Articles of Association.
+
+ 
+
+Changes
+in Capital
+
+ 
+
+Subject
+to the Companies Act, our shareholders may, by ordinary resolution:
+
+ 
+
+ 
+ (a)
+ increase
+ our share capital by new shares of the amount fixed by that ordinary resolution and with the attached rights, priorities and privileges
+ set out in that ordinary resolution;
+
+ 
+ 
+
+ 
+ (b)
+ consolidate
+ and divide all or any of our share capital into shares of a larger amount than our existing shares;
+
+ 
+ 
+
+ 
+ (c)
+ sub-divide
+ our shares or any of them into our shares of a smaller amount than is fixed by our Company s Memorandum of Association, so,
+ however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced our shares
+ shall be the same as it was in case of the share from which the reduced our shares is derived;
+
+ 
+ 
+
+ 
+ (d)
+ cancel
+ any shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person
+ and diminish the amount of our share capital by the amount of the shares so cancelled; and
+
+ 
+ 
+
+ 
+ (e)
+ convert
+ all or any of our paid-up shares into stock and reconvert that stock into paid-up shares of any denomination.
+
+ 
+ 
+
+Subject
+to the Companies Act and to any rights for the time being conferred on the shareholders holding a particular class of shares, our shareholders
+may, by special resolution, reduce our share capital or any capital redemption reserve in any way.
+
+ 
+
+ 104
+
+ 
+
+ 
+
+ 
+
+Warrants
+being Offered
+
+ 
+
+Overview
+
+ 
+
+The
+following summary of certain terms and provisions of the Warrants offered hereby is not complete and is subject to, and qualified in
+its entirety by the form of Warrant, which is filed as an exhibit to the registration statement of which this prospectus is a part. Prospective
+investors should carefully review the terms and provisions set forth in the form of Warrant for a complete description of the terms
+and conditions of the Warrant.
+
+ 
+
+The
+Warrants entitle the registered holder to purchase Ordinary Shares at an assumed exercise price equal to $8.46 per Ordinary Share
+(100% of the assumed combined public offering price per Ordinary Share and accompanying Warrant, which was the closing price
+of our Ordinary Shares on Nasdaq on August 9, 2024), subject to adjustment as discussed below, immediately following the issuance
+of such warrant and terminating at 5:00 p.m., New York City time, five years after the initial issuance date of the Warrants.
+
+ 
+
+The
+exercise price and number of Ordinary Shares issuable upon exercise of
+the Warrants may be adjusted in certain circumstances, including in the event of a share dividend or recapitalization, reorganization,
+merger, or consolidation.
+
+ 
+
+Duration,
+Exercisability and Form. The Warrants are exercisable at any time after their initial issuance date and at any time up to
+the date that is five years after the initial issuance date. The Warrants may be exercised upon surrender of the warrant
+certificate on or prior to the expiration date to the Company, with the exercise form on the reverse side of the warrant certificate
+completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to
+us, for the number of warrants being exercised. Under the terms of the Warrants, we must use our best efforts to maintain the effectiveness
+of the registration statement and current prospectus relating to Ordinary Shares issuable upon exercise of the Warrants until the expiration
+of the Warrants. If we fail to maintain the effectiveness of the registration statement and a current prospectus relating to the Ordinary
+Shares issuable upon exercise of the Warrants, the holders of the Warrants will have the right to exercise the Warrants solely via a
+cashless exercise feature provided for in the Warrants, until such time as there is an effective registration statement and a current
+prospectus. The Warrants will be issued separately from the Ordinary Shares or the Pre-Funded Warrants, as the case may be, and may be
+transferred separately immediately thereafter but must be purchased together in this offering. The Warrants will be issued in
+certificated form only.
+
+ 
+
+Exercise
+Limitation. A holder may not exercise any portion of a Warrant to the extent that the holder, together with its affiliates and any
+other person or entity acting as a group, would own more than 4.99% of the outstanding Ordinary Shares after exercise, as such percentage
+ownership is determined in accordance with the terms of the Warrant, except that upon notice from the holder to us, the holder may waive
+such limitation up to a percentage not in excess of 9.99%. However, the holder may increase or decrease such percentage upon notice to
+us, provided that any increase will not be effective until the 61st day after such notice is provided to us by the holder, and
+provided that in no event shall the beneficial ownership limitation exceed 9.99%.
+
+ 
+
+Exercise
+Price. The assumed exercise price of the Warrants is $8.46 per Ordinary Share (100% of the assumed combined public
+offering price per Ordinary Share and accompanying Warrant, which was the closing price of our Ordinary Shares on Nasdaq on August
+9, 2024). The exercise price is subject to appropriate adjustment in the event of certain share dividends and distributions, share
+splits, share combinations, reclassifications or similar events affecting our Ordinary Shares and also upon any distributions of assets,
+including cash, shares, or other property to our shareholders.
+
+ 
+
+Fractional
+Shares. No fractional Ordinary Shares will be issued upon exercise of the Warrants. As to any fraction of a share which the holder
+would otherwise be entitled to purchase upon such exercise, the Company will, either pay a cash adjustment in respect of such final fraction
+in an amount equal to such fraction multiplied by the exercise price or round up to the nearest whole share.
+
+ 
+
+Transferability.
+Subject to applicable laws, the Warrants may be offered for sale, sold, transferred, or assigned without our consent. However, the Warrants
+will not trade on the Nasdaq Capital Market and no trading market is expected to develop for the Warrants.
+
+ 
+
+Cashless
+Exercise. If at the time of exercise there is no effective registration statement registering, or the prospectus contained therein
+is not available for the issuance of the underlying shares to the holder, in lieu of making the cash payment otherwise contemplated to
+be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise
+(either in whole or in part) the net number of Ordinary Shares determined according to a formula set forth in the Warrant.
+
+ 
+
+Fundamental
+Transactions. In the event of a fundamental transaction, as described in the Warrants and generally including any reorganization,
+recapitalization or reclassification of our Ordinary Shares, the sale, transfer or other disposition of all or substantially all of our
+properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Ordinary
+Shares, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Ordinary Shares,
+the holders of the Warrants will be entitled to receive the kind and amount of securities, cash or other property that the holders would
+have received had they exercised the Warrants immediately prior to such fundamental transaction. In addition, in certain circumstances,
+upon a fundamental transaction, the holder of a Warrant will have the right to require us to repurchase its Warrants at the Black-Scholes
+value; provided, however, that, if the fundamental transaction is not within our control, including not approved by our Board, then the
+holder will only be entitled to receive the same type or form of consideration (and in the same proportion), at the Black-Scholes value
+of the unexercised portion of the Warrant that is being offered and paid to the holders of our Ordinary Shares in connection with the
+fundamental transaction.
+
+ 
+
+Rights
+as a Shareholder. The Warrant holders do not have the rights or privileges of holders of Ordinary Shares or any voting rights until
+they exercise their warrants and receive Ordinary Shares. After the issuance of Ordinary Shares upon exercise of the Warrants, each holder
+will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
+
+ 
+
+Governing
+Law. The Warrants are governed by New York law.
+
+ 
+
+ 105 
+
+ 
+
+ 
+
+ 
+
+Pre-Funded
+Warrants being Offered
+
+ 
+
+Overview
+
+ 
+
+The
+following summary of certain terms and provisions of the Pre-Funded Warrants that are being offered hereby is not complete and is subject
+to, and qualified in its entirety by the provisions of, the Pre-Funded Warrants, the form of which is filed as an exhibit to the
+registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions
+of the form of Pre-Funded Warrant for a complete description of the terms and conditions of the Pre-Funded Warrants. For each Pre-Funded
+Warrant we sell, the number of Ordinary Shares we are offering will be decreased on a one-for-one basis.
+
+ 
+
+Purpose.
+The term pre-funded refers to the fact that the purchase price of our Ordinary Shares in this offering includes almost
+the entire exercise price that will be paid under the Pre-Funded Warrants, except for a nominal remaining exercise price of $0.001 per
+Ordinary Share. The purpose of the Pre-Funded Warrants is to enable investors that may have restrictions on their ability to beneficially
+own more than 4.99% (or, upon election of the holder, 9.99%) of our outstanding Ordinary Shares following the consummation of this offering
+the opportunity to invest capital into the Company without triggering their ownership restrictions, by receiving Pre-Funded Warrants
+in lieu of our Ordinary Shares which would result in such ownership of more than 4.99% (or, upon election of the holder, 9.99%), and
+receive the ability to exercise their option to purchase the shares underlying the Pre-Funded Warrants at such nominal price at a later
+date. The Pre-Funded Warrants will be issued in certificated form only.
+
+ 
+
+Exercisability
+and Duration. The Pre-Funded Warrants offered hereby are immediately exercisable (subject to the beneficial ownership limitations
+described below) and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.
+
+ 
+
+Exercise
+Limitation. A holder will not have the right to exercise any portion of the Pre-Funded
+Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, upon election of the holder, 9.99%)
+of the number of our Ordinary Shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined
+in accordance with the terms of the Pre-Funded Warrants. The holder may increase or decrease such percentage, provided that any increase
+will not be effective until the 61st day after such notice is provided to us by the holder, and provided that in no event shall
+the beneficial ownership limitation exceed 9.99%.
+
+ 
+
+Exercise
+Price. The Pre-Funded Warrants will have an exercise price of $0.001 per Ordinary Share. The exercise price is subject to
+appropriate adjustment in the event of certain share dividends and distributions, share splits, share combinations, reclassifications
+or similar events affecting our Ordinary Shares and also upon any distributions of assets, including cash, shares, or other property
+to our shareholders.
+
+ 
+
+Transferability.
+Subject to applicable laws, the Pre-Funded Warrants may be offered for sale, sold, transferred, or assigned without our consent.
+
+ 
+
+Exchange
+Listing. There is no established trading market for the Pre-Funded Warrants, and we do not expect a market to develop. In addition,
+we do not intend to apply for the listing of the Pre-Funded Warrants on any national securities exchange or other trading market. Without
+an active trading market, the liquidity of the Pre-Funded Warrants will be limited.
+
+ 
+
+ 106
+
+ 
+
+ 
+
+ 
+
+Cashless
+Exercise. At the time a holder exercises its Pre-Funded Warrants, in lieu of making the cash payment otherwise contemplated to
+be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such
+exercise (either in whole or in part) the net number of Ordinary Shares determined according to a formula set forth in the
+Pre-Funded Warrants.
+
+ 
+
+Fundamental
+Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may
+exercise every right and power that we may exercise and will assume all of our obligations under the Pre-Funded Warrants with the same
+effect as if such successor entity had been named in the Pre-Funded Warrant itself. If holders of our Ordinary Shares are given a choice
+as to the securities, cash, or property to be received in a fundamental transaction, then the holder shall be given the same choice as
+to the consideration it receives upon any exercise of the Pre-Funded Warrant following such fundamental transaction.
+
+ 
+
+Rights
+as a Shareholder. Except as otherwise provided in the Pre-Funded Warrants or by virtue of such holder s ownership of our Ordinary
+Shares, the holder of a Pre-Funded Warrant does not have the rights or privileges of a holder of our Ordinary Shares, including any
+voting rights, until the holder exercises the Pre-Funded Warrant.
+
+ 
+
+Governing
+Law. The Pre-Funded Warrants are governed by New York law.
+
+ 
+
+Listing
+
+ 
+
+Our
+Ordinary Shares are listed on the Nasdaq Capital Market under the symbol FEBO .
+
+ 
+
+There
+is no established trading market for the Warrants or Pre-Funded Warrants, and we do not expect an active trading market to develop.
+We do not intend to list the Warrants or Pre-Funded Warrants on any securities exchange or other trading market. Without an active
+trading market, the liquidity of the Warrants and Pre-Funded Warrants will be limited.
+
+ 
+
+Transfer
+Agent
+
+ 
+
+The transfer agent and registrar for our Ordinary Shares is Vstock Transfer,
+LLC, 18 Lafayette Place, Woodmere, New York 11598; telephone: 212-828-8436, toll-free: 855-9VSTOCK; facsimile: 646-536-3179.
+
+ 
+
+Placement
+Agent Warrants
+
+ 
+
+We
+have also agreed to issue to the Placement Agent or its designees as compensation in connection with this offering, the Placement Agent
+Warrants to purchase up to 29,550 Ordinary Shares as compensation in connection with this offering. The Placement Agent Warrants
+will be exercisable beginning on the initial date of issuance and will have substantially the same terms as the Warrants described above,
+except that the Placement Agent Warrants will have an exercise price of $[ ] per share (representing 125% of the combined
+public offering price per Ordinary and accompanying Warrant) and a termination date that will be five years from the commencement of
+the sales pursuant to this offering. See Plan of Distribution below.
+
+ 
+
+ 107
+
+ 
+
+ 
+
+ 
+
+CERTAIN
+CAYMAN ISLANDS COMPANY CONSIDERATIONS
+
+ 
+
+Exempted
+Company 
+
+ 
+
+We
+are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies
+and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands
+may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary
+company except for the exemptions and privileges listed below:
+
+ 
+
+ 
+ 
+ an
+ exempted company does not have to file an annual return of its shareholders with the Registrar of Companies in the Cayman Islands;
+
+ 
+ 
+
+ 
+ 
+ an
+ exempted company s register of members is not open to inspection;
+
+ 
+ 
+
+ 
+ 
+ an
+ exempted company does not have to hold an annual general meeting;
+
+ 
+ 
+
+ 
+ 
+ an
+ exempted company may issue no par value, negotiable or bearer shares;
+
+ 
+ 
+
+ 
+ 
+ an
+ exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given
+ for 20 years in the first instance);
+
+ 
+ 
+
+ 
+ 
+ an
+ exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
+
+ 
+ 
+
+ 
+ 
+ an
+ exempted company may register as a limited duration company; and
+
+ 
+ 
+
+ 
+ 
+ an
+ exempted company may register as a segregated portfolio company.
+
+ 
+ 
+
+ Limited
+liability means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the
+company. At the closing of the Initial Public Offering, we became subject to reporting and other informational requirements of the
+Exchange Act, as applicable to foreign private issuers. As of the date of this prospectus, we intend to comply with the Nasdaq Rules
+in lieu of following home country practice. The Nasdaq Rules require that every company listed on the Nasdaq hold an annual general meeting
+of shareholders. In addition, our Articles of Association allow directors to call special meetings of shareholders pursuant to the procedures
+set forth in our Articles of Association.
+
+ 
+
+Comparison
+of Cayman Islands Corporate Law and U.S. Corporate Law
+
+ 
+
+The
+Companies Act is modeled after that of England and Wales but does not follow recent statutory enactments in England. In addition, the
+Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the
+significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated
+in the State of Delaware.
+
+ 
+
+This
+discussion does not purport to be a complete statement of the rights of holders of our Ordinary Shares under applicable law in the Cayman
+Islands or the rights of holders of the common stock of a typical corporation under applicable Delaware law.
+
+ 
+
+Mergers
+and Similar Arrangements
+
+ 
+
+The
+Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman
+Islands companies. For these purposes, (a) merger means the merging of two or more constituent companies and the vesting
+of their undertaking, property, and liabilities in one of such companies as the surviving company, and (b) a consolidation 
+means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property,
+and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each
+constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution
+of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company s
+articles of association. The plan must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as
+to the solvency of the consolidated or surviving company, a statement setting out the assets and liabilities of each constituent company
+and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent
+company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required
+for a merger or consolidation which is effected in compliance with these statutory procedures.
+
+ 
+
+ 108
+
+ 
+
+ 
+
+ 
+
+A
+merger between a Cayman Islands parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution
+of shareholders. For this purpose, a subsidiary is a company of which at least ninety percent (90%) of the issued shares entitled to
+vote are owned by the parent company.
+
+ 
+
+The
+consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived
+by a court in the Cayman Islands.
+
+ 
+
+Save
+in certain circumstances, a dissentient shareholder of a Cayman constituent company is entitled to payment of the fair value of his shares
+upon dissenting to a merger or consolidation. The exercise of appraisal rights will preclude the exercise of any other rights save for
+the right to seek relief on the grounds that the merger or consolidation is void or unlawful.
+
+ 
+
+Separate
+from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate
+the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (i) 75%
+in value of the members or class of members or (ii) a majority in number representing 75% in value of the creditors or class of creditors,
+as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The
+convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting
+shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to
+approve the arrangement if it determines that:
+
+ 
+
+ 
+ 
+ the
+ statutory provisions as to the required majority vote have been met;
+
+ 
+ 
+
+ 
+ 
+ the
+ shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion
+ of the minority to promote interests adverse to those of the class;
+
+ 
+ 
+
+ 
+ 
+ the
+ arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest;
+ and
+
+ 
+ 
+
+ 
+ 
+ the
+ arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.
+
+ 
+ 
+
+The
+Companies Act also contains a statutory power of compulsory acquisition which may facilitate the squeeze out of dissentient
+minority shareholders upon a tender offer. When a tender offer is made and accepted by holders of ninety percent (90%) of the shares
+affected within four months, the offeror may, within a two-month period commencing on the expiration of such four-month period, require
+the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the
+Grand Court of the Cayman Islands.
+
+ 
+
+If
+an arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which
+would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash
+for the judicially determined value of the shares.
+
+ 
+
+Shareholders 
+Suits
+
+ 
+
+In
+principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minority shareholder.
+However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands
+court can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto)
+so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company
+to challenge actions where:
+
+ 
+
+ 
+ 
+ a
+ company acts or proposes to act illegally or ultra vires;
+
+ 
+ 
+
+ 
+ 
+ the
+ act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has
+ not been obtained; and
+
+ 
+ 
+
+ 
+ 
+ those
+ who control the company are perpetrating a fraud on the minority. 
+
+ 
+ 
+
+ 109
+
+ 
+
+ 
+
+ 
+
+Indemnification
+of Directors and Executive Officers and Limitation of Liability
+
+ 
+
+Cayman
+Islands law does not limit the extent to which a company s memorandum and articles of association may provide for indemnification
+of officers and directors, except to the extent that 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 Memorandum and Articles
+of Association provide that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses,
+losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person s dishonesty,
+willful default or fraud, in or about the conduct of our company s business or affairs (including as a result of any mistake of
+judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality
+of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully
+or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere.
+
+ 
+
+This
+standard of conduct is generally the same as permitted under the Delaware General Corporation Act for a Delaware corporation. In addition,
+we intend to enter into indemnification agreements with our directors and senior executive officers that will provide such persons with
+additional indemnification beyond that provided in our Memorandum and Articles of Association. 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.
+
+ 
+
+Directors 
+Fiduciary Duties
+
+ 
+
+Under
+Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty
+has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care
+that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and
+disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires
+that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use
+his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best
+interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder
+and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis,
+in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption
+may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by
+a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
+
+ 
+
+As
+a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company,
+and therefore it is considered that he owes the following duties to the company a duty to act bona fide in the best interests
+of the company, a duty not to make a profit based on his or her position as director (unless the company permits him to do so) and a
+duty not to put himself in a position where the interests of the company conflict with his or her personal interest or his or her duty
+to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered
+that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from
+a person of his or her knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with
+regard to the required skill and care, and these authorities are likely to be followed in the Cayman Islands.
+
+ 
+
+Shareholder
+Action by Written Consent
+
+ 
+
+Under
+the Delaware General Corporation Act, a corporation may eliminate the right of shareholders to act by written consent by amendment to
+its certificate of incorporation. Our Articles of Association provide that any action required or permitted to be taken at general meetings
+of our Company may only be taken upon the vote of shareholders at general meeting, and shareholders may approve corporate matters by
+way of a unanimous written resolution without a meeting being held.
+
+ 
+
+ 110
+
+ 
+
+ 
+
+ 
+
+Shareholder
+Proposals
+
+ 
+
+Under
+the Delaware General Corporation Act, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided
+it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors, or any
+other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
+
+ 
+
+The
+Companies Act does not provide shareholders with rights to requisition a general meeting nor any right to put any proposal before a general
+meeting. However, these rights may be provided in a company s articles of association. Our Articles of Association do not
+provide our shareholders with any right to put proposals before annual general meetings or extraordinary general meetings. As an exempted
+Cayman Islands company, we are not obliged by law to call shareholders annual general meetings.
+
+ 
+
+Cumulative
+Voting
+
+ 
+
+Under
+the Delaware General Corporation Act, cumulative voting for elections of directors is not permitted unless the corporation s certificate
+of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders
+on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single
+director, which increases the shareholder s voting power with respect to electing such director. Although permitted under
+Cayman Islands law, our Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded
+any less protections or rights on this issue than shareholders of a Delaware corporation.
+
+ 
+
+Removal
+of Directors
+
+ 
+
+Under
+the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval
+of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our Articles
+of Association, directors may be removed by an ordinary resolution of our shareholders.
+
+ 
+
+Transactions
+with Interested Shareholders
+
+ 
+
+The
+Delaware General Corporation Act contains a business combination statute applicable to Delaware corporations whereby, unless the corporation
+has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging
+in certain business combinations with an interested shareholder for three years following the date that such person becomes
+an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target s
+outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered
+bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to
+the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination
+or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware
+corporation to negotiate the terms of any acquisition transaction with the target s board of directors.
+
+ 
+
+Cayman
+Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business
+combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders,
+it does provide that such transactions must be entered into bona fide in the best interests of the company and for a proper corporate
+purpose and not with the effect of constituting a fraud on the minority shareholders.
+
+ 
+
+ 111
+
+ 
+
+ 
+
+ 
+
+Dissolution;
+Winding Up
+
+ 
+
+Under
+the Delaware General Corporation Act, unless the board of directors approves the proposal to dissolve, dissolution must be approved by
+shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors
+may it be approved by a simple majority of the corporation s outstanding shares. Delaware law allows a Delaware corporation to
+include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
+
+ 
+
+Under
+Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its
+members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority
+to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to
+do so. Under the Companies Act and our Articles of Association, our company may be dissolved, liquidated, or wound up by a special resolution
+of our shareholders.
+
+ 
+
+Variation
+of Rights of Shares
+
+ 
+
+Under
+the Delaware General Corporation Act, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding
+shares of such class, unless the certificate of incorporation provides otherwise. Under our Articles of Association, if our share capital
+is divided into more than one class of shares, we may vary the rights attached to any class with the sanction of a special resolution
+passed at a separate meeting of the holders of the shares of that class.
+
+ 
+
+Amendment
+of Governing Documents
+
+ 
+
+Under
+the Delaware General Corporation Act, a corporation s governing documents may be amended with the approval of a majority of the
+outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law,
+our Memorandum and Articles of Association may only be amended by a special resolution of our shareholders.
+
+ 
+
+Rights
+of Non-Resident or Foreign Shareholders
+
+ 
+
+There
+are no limitations imposed by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold
+or exercise voting rights on our shares. In addition, there are no provisions in our Memorandum and Articles of Association governing
+the ownership threshold above which shareholder ownership must be disclosed.
+
+ 
+
+Data
+Protection Cayman Islands
+
+ 
+
+We
+have certain duties under the Data Protection Act (2021 Revision) of the Cayman Islands (the Data Protection Act ) based
+on internationally accepted principles of data privacy.
+
+ 
+
+In
+this subsection, we, us, our and the Company refers to Fenbo Holdings Limited
+and our affiliates and/or delegates, except where the context requires otherwise.
+
+ 
+
+Privacy
+Notice
+
+ 
+
+Introduction
+
+ 
+
+This
+privacy notice puts our shareholders on notice that through your investment in the Company, you will provide us with certain personal
+information which constitutes personal data within the meaning of the Data Protection Act ( personal data ). In the following
+discussion, the company refers to us and our affiliates and/or delegates, except where the context requires otherwise.
+
+ 
+
+ 112
+
+ 
+
+ 
+
+ 
+
+Investor
+Data
+
+ 
+
+We
+will collect, use, disclose, retain, and secure personal data to the extent reasonably required only and within the parameters that could
+be reasonably expected during the normal course of business. We will only process, disclose, transfer, or retain personal data to the
+extent legitimately required to conduct our activities on an ongoing basis or to comply with legal and regulatory obligations to which
+we are subject. We will only transfer personal data in accordance with the requirements of the Data Protection Act and will apply appropriate
+technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal
+data and against the accidental loss, destruction, or damage to the personal data.
+
+ 
+
+In
+our use of this personal data, we will be characterized as a data controller for the purposes of the Data Protection Act,
+while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act
+as our data processors for the purposes of the Data Protection Act or may process personal information for their own lawful
+purposes in connection with services provided to us.
+
+ 
+
+We
+may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating
+to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact
+details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence
+records, passport number, bank account details, source of funds details and details relating to the shareholder s investment activity.
+
+ 
+
+Who
+this Affects
+
+ 
+
+If
+you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements
+such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in
+relation your investment in the company, this will be relevant for those individuals, and you should transmit the content of this Privacy
+Notice to such individuals or otherwise advise them of its content.
+
+ 
+
+How
+the Company May Use a Shareholder s Personal Data
+
+ 
+
+The
+company, as the data controller, may collect, store, and use personal data for lawful purposes, including, in particular:
+
+ 
+
+ 
+ 
+ (a)
+ where
+ this is necessary for the performance of our rights and obligations under any purchase agreements;
+
+ 
+ 
+ (b)
+ where
+ this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money
+ laundering requirements); and/or
+
+ 
+ 
+ (c)
+ where
+this is necessary for the purpose of our legitimate interests, and such interests are not overridden by your interests, fundamental rights,
+or freedoms.
+
+ 
+ 
+
+Should
+we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will
+contact you.
+
+ 
+
+Why
+We May Transfer Your Personal Data
+
+ 
+
+In
+certain circumstances, we may be legally obliged to share personal data and other information with respect to your shareholding with
+the relevant regulatory authorities, such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may
+exchange this information with foreign authorities, including tax authorities.
+
+ 
+
+We
+anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain
+entities located outside the United States, the Cayman Islands, or the European Economic Area), who will process your personal data on
+our behalf.
+
+ 
+
+The
+Data Protection Measures We Take
+
+ 
+
+Any
+transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance
+with the requirements of the Data Protection Act.
+
+ 
+
+We
+and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures
+designed to protect against unauthorized or unlawful processing of personal data and against accidental loss or destruction of, or damage
+to, personal data.
+
+ 
+
+We
+shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms
+or those data subjects to whom the relevant personal data relates.
+
+ 
+
+ 113
+
+ 
+
+ 
+
+ 
+
+EXPENSES
+RELATED TO THIS OFFERING
+
+ 
+
+Set
+forth below is an itemization of the total expenses in US dollars, excluding Placement Agent fees and estimated offering expenses, which are expected to be incurred by us in connection with the offer and sale of the Securities by
+us. With the exception of the SEC registration fee and the Financial Industry Regulatory Authority ( FINRA ) filing
+fee, all amounts are estimates.
+
+ 
+
+ 
+ 
+ US$ 
+
+ 
+ SEC registration fee 
+ 1,522.13
+ 
+
+ 
+ FINRA filing fee 
+ 2,046.87 
+
+ 
+ Legal fees and expenses, including placement agent s counsel 
+ 281,647.00 
+
+ 
+ Miscellaneous 
+ 25,381.00 
+
+ 
+ Total 
+ 310,597.00 
+
+ 
+
+ 
+
+ 114
+
+ 
+
+ 
+
+ 
+
+MATERIAL
+TAX CONSIDERATIONS
+
+ 
+
+The
+following summary of certain Cayman Islands and U.S. federal income tax consequences of an investment in our Ordinary Shares is based
+upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This
+summary does not deal with all possible tax consequences relating to an investment in the Ordinary Shares, such as the tax consequences
+under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands and the United States. You are
+encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under U.S.
+federal, state, local or foreign law of the ownership of our Ordinary Shares. To the extent that this discussion relates to matters of
+Cayman Islands tax law, it is the opinion of Harney Westwood & Riegels, our counsel as to Cayman Islands law.
+
+ 
+
+Cayman
+Islands Tax Considerations
+
+ 
+
+The
+Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there
+is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our Company levied
+by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.
+
+ 
+
+No
+stamp duty is payable in the Cayman Islands on transfer of shares of Cayman Islands companies except for those which hold interests in
+land in the Cayman Islands.
+
+ 
+
+United
+States Federal Income Tax Considerations
+
+ 
+
+The
+following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of
+our Ordinary Shares, Warrants or Pre-Funded Warrants by U.S. Holders (as defined below) that acquire our Ordinary Shares, Warrants
+or Pre-Funded Warrants in this offering and hold our Ordinary Shares, Warrants or Pre-Funded Warrants as capital assets 
+(generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the Code ).
+This discussion is based upon existing United States federal income tax law, which is subject to differing interpretations or change,
+possibly with retroactive effect. There can be no assurance that the Internal Revenue Service, or the IRS, or a court will not take a
+contrary position. This discussion does not address all aspects of United States federal income taxation that may be relevant to particular
+investors in light of their specific circumstances, including investors subject to special tax rules (for example, certain financial
+institutions (including banks), cooperatives, pension plans, insurance companies, broker-dealers, traders in securities that have elected
+the mark-to-market method of accounting for their securities, partnerships and their partners, regulated investment companies, real estate
+investment trusts and tax-exempt organizations (including private foundations)), investors who are not U.S. Holders, investors who own
+(directly, indirectly, or constructively) 10% or more of our stock (by vote or value), investors that will hold their Ordinary Shares,
+Warrants or Pre-Funded Warrants as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for
+United States federal income tax purposes or U.S. Holders that have a functional currency other than the U.S. dollar, all of whom may
+be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not discuss any non-United
+States tax, state or local tax, or non-income tax (such as the U.S. federal gift or estate tax) considerations, or any consequences under
+the alternative minimum tax or Medicare tax on net investment income. Each U.S. Holder is urged to consult its tax advisor regarding
+the United States federal, state, local, and non-United States income and other tax considerations of an investment in our Ordinary Shares,
+Warrants or Pre-Funded Warrants.
+
+ 
+
+General
+
+ 
+
+For
+purposes of this discussion, a U.S. Holder is a beneficial owner of our Ordinary Shares, Warrants or Pre-Funded Warrants
+that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii)
+a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under
+the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in
+gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which
+is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority
+to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a United States person under
+the Code.
+
+ 
+
+If
+a partnership (or other entity or arrangement treated as a partnership for United States federal income tax purposes) is a beneficial
+owner of our Ordinary Shares, Warrants or Pre-Funded Warrants the tax treatment of a partner in the partnership will generally
+depend upon the status of the partner as a U.S. Holder, as described above, and the activities of the partnership. Partnerships holding
+our Ordinary Shares, Warrants or Pre-Funded Warrants and partners in such partnerships are urged to consult their tax advisors
+as to the particular United States federal income tax consequences of an investment in our Ordinary Shares, Warrants or Pre-Funded
+Warrants.
+
+ 
+
+Allocation of Purchase Price 
+
+ 
+
+Each Ordinary Share or Pre-Funded
+Warrant, as applicable, and accompanying Warrant will be treated for U.S. federal income tax purposes as an investment unit consisting
+of one Ordinary Share or Pre-Funded Warrant, as applicable, and accompanying Warrant to purchase our Ordinary Shares. In determining
+their tax basis for the Ordinary Shares or Pre-Funded Warrant and the Warrant constituting an investment unit, holders of securities
+should allocate their purchase price for the investment unit between the Ordinary Shares or Pre-Funded Warrant, as applicable, and the
+Warrant on the basis of their relative fair market values at the time of issuance. The Company does not intend to advise holders of the
+securities with respect to this determination, and holders of the securities are advised to consult their tax and financial advisors
+with respect to the relative fair market values of the Ordinary Shares or Pre-Funded Warrant, as applicable, and the Warrants for U.S.
+federal income tax purposes.
+
+ 
+
+Treatment of Pre-Funded Warrants 
+
+ 
+
+Although not free from doubt,
+a Pre-Funded Warrant should be treated as a share of our common stock for U.S. federal income tax purposes, and a holder of Pre-Funded
+Warrants should generally be taxed in the same manner as a holder of Ordinary Shares, as described below. Accordingly, no gain or loss
+should be recognized (other than with respect to cash paid in lieu of a fractional share) upon the exercise of a Pre-Funded Warrant (except
+in the case of a cashless exercise, the treatment of which for U.S. federal income tax purposes is not clear) and, upon exercise, the
+holding period of a Pre-Funded Warrant should carry over to the Ordinary Shares received. Similarly, the tax basis of the Pre-Funded
+Warrant should carry over to the Ordinary Shares received upon exercise, increased by the exercise price of $0.001. The discussion below
+assumes the characterization described above is respected for U.S. federal income tax purposes. Holders should consult their tax advisors
+regarding the risks associated with the acquisition of Pre-Funded Warrants pursuant to this offering (including alternative characterizations).
+
+ 
+
+Dividends
+
+ 
+
+The
+entire amount of any cash distribution paid with respect to our Ordinary Shares (including the amount of any non-U.S. taxes withheld
+therefrom, if any) generally will constitute dividends to the extent such distributions are paid out of our current or accumulated earnings
+and profits, as determined under United States federal income tax principles, and generally will be taxed as ordinary income in the year
+received by such U.S. Holder. To the extent amounts paid as distributions on the Ordinary Shares exceed our current or accumulated earnings
+and profits, such distributions will not be dividends but instead will be treated first as a tax-free return of capital to the extent
+of the U.S. Holder s adjusted tax basis, determined for federal income tax purposes, in the Ordinary Shares with respect to which
+the distribution is made, and thereafter as capital gain. However, we do not intend to compute (or to provide U.S. Holders with the information
+necessary to compute) our earnings and profits under United States federal income tax principles. Accordingly, a U.S. Holder will be
+unable to establish that a distribution is not out of earnings and profits and should expect to treat the full amount of each distribution
+as a dividend for United States federal income tax purposes.
+
+ 
+
+ 115
+
+ 
+
+ 
+
+ 
+
+Any
+dividends that we pay will generally be treated as income from foreign sources for United States foreign tax credit purposes and will
+generally constitute passive category income. Depending on the U.S. Holder s particular facts and circumstances, a U.S. Holder
+may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes
+imposed (at a rate not exceeding any applicable treaty rate) on dividends received on our Ordinary Shares. A U.S. Holder who does not
+elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction, for United States federal income tax purposes,
+in respect of such withholdings, but only for a year in which such U.S. Holder elects to do so for all creditable foreign income taxes.
+The rules governing the foreign tax credit are complex. U.S. Holders are advised to consult their tax advisors regarding the availability
+of the foreign tax credit under their particular circumstances.
+
+ 
+
+Dividends
+paid in non-U.S. currency will be included in the gross income of a U.S. Holder in a U.S. dollar amount calculated by reference to a
+spot market exchange rate in effect on the date that the dividends are received by the U.S. Holder, regardless of whether such foreign
+currency is in fact converted into U.S. dollars on such date. Such U.S. Holder will have a tax basis for United States federal income
+tax purposes in the foreign currency received equal to that U.S. dollar value. If such dividends are converted into U.S. dollars on the
+date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect thereof. If the
+foreign currency so received is not converted into U.S. dollars on the date of receipt, such U.S. Holder will have a basis in the foreign
+currency equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the
+foreign currency generally will be treated as ordinary income or loss to such U.S. Holder and generally will be income or loss from sources
+within the United States for foreign tax credit limitation purposes. U.S. Holders should consult their own tax advisors regarding the
+treatment of foreign currency gain or loss, if any, on any foreign currency received by a U.S. Holder that is converted into U.S. dollars
+on a date subsequent to receipt.
+
+ 
+
+Sale
+or Other Disposition of Ordinary Shares
+
+ 
+
+A
+U.S. Holder will generally recognize capital gain or loss upon a sale or other disposition of Ordinary Shares, in an amount equal to
+the difference between the amount realized and the U.S. Holder s adjusted tax basis, determined for federal income tax purposes,
+in such Ordinary Shares, each amount determined in U.S. dollars. Any capital gain or loss will be long-term capital gain or loss if the
+Ordinary Shares have been held for more than one year and will generally be United States source gain or loss for United States foreign
+tax credit purposes. The deductibility of a capital loss may be subject to limitations, particularly with regard to shareholders who
+are individuals. Each U.S. Holder is advised to consult its tax advisor regarding the tax consequences if a foreign tax is imposed on
+a disposition of our Ordinary Shares, including the availability of the foreign tax credit under its particular circumstances.
+
+ 
+
+A
+U.S. Holder that receives a currency other than U.S. dollars on the disposition of our Ordinary Shares will realize an amount equal to
+the U.S. dollar value of the non-U.S. currency received at the spot rate on the date of sale (or, if the Ordinary Shares are traded on
+a recognized exchange and in the case of cash basis and electing accrual basis U.S. Holders, the settlement date). An accrual basis U.S.
+Holder that does not elect to determine the amount realized using the spot rate on the settlement date will recognize foreign currency
+gain or loss equal to the difference between the U.S. dollar value of the amount received based on the spot market exchange rates in
+effect on the date of sale or other disposition and the settlement date. A U.S. Holder will have a tax basis in the currency received
+equal to the U.S. dollar value of the currency received on the settlement date. Any gain or loss on a subsequent disposition or conversion
+of the currency will be United States source ordinary income or loss.
+
+ 
+
+Sale
+or Other Disposition, Exercise or Expiration of Warrants
+
+ 
+
+For
+U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of a Warrant (other than by exercise) will be
+capital gain or loss and will be long-term capital gain or loss if the U.S. Holder held the Warrant for more than one year at the time
+of the sale or other disposition. The amount of the gain or loss will equal the difference between the U.S. Holder s tax basis
+in the Warrants disposed of and the amount realized on the disposition. 
+
+ 
+
+In
+general, a U.S. Holder will not be required to recognize income, gain or loss upon the exercise of a Warrant by payment of the exercise
+price, except to the extent of cash paid in lieu of a fractional share. A U.S. Holder s tax basis in a share of Common Stock received
+upon exercise will be equal to the sum of (1) the U.S. Holder s tax basis in the Warrant and (2) the exercise price of the Warrant.
+A U.S. Holder s holding period in the stock received upon exercise will commence on the day or the day after such U.S. Holder exercises
+the Warrant. No discussion is provided herein regarding the U.S. federal income tax treatment on the exercise of a Warrant on a cashless
+basis, and U.S. Holders are urged to consult their tax advisors as to the exercise of a Warrant on a cashless basis.
+
+ 
+
+If
+a Warrant expires without being exercised, a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder s
+tax basis in the Warrant. This loss will be long-term capital loss if, at the time of the expiration, the U.S. Holder s holding
+period in the Warrant is more than one year. The deductibility of capital losses is subject to limitations.
+
+ 
+
+Dividends
+and Other Distributions on the Pre-Funded Warrants 
+
+ 
+
+The
+Pre-Funded Warrants do not pay dividends to the holders of the Pre-Funded Warrants. However, in the event that the exercise price or
+conversion ratio of Pre-Funded Warrants is adjusted as a result of an action affecting the Ordinary Shares, such as a stock dividend
+being paid on the Ordinary Shares, a U.S. Holder may be treated as receiving a distribution from us. Subject to the PFIC rules such deemed
+distributions may be treated as a dividend and may be eligible for preferential tax rates, as described above under Sale and Other
+Distributions on the Ordinary Shares .
+
+ 
+
+Sale
+and Exercise of the Pre-Funded Warrants
+
+ 
+
+Sale
+of Pre-Funded Warrants
+
+ 
+
+A
+U.S. Holder has a tax basis in its Pre-Funded Warrants equal to the amount paid for the Pre-Funded Warrants. A U.S. Holder s holding
+period in the Pre-Funded Warrants begins on the day that the U.S. Holder acquires the Pre-Funded Warrants. Upon a sale of the Pre-Funded
+Warrants, the U.S. Holder will have a capital gain or loss equal to the difference between its tax basis in the Pre-Funded Warrants and
+the amount realized on the sale. The gain or loss will be long-term gain or loss if the U.S. Holder has held the Pre-Funded Warrants
+for more than one year. If the Company is a PFIC at the time of the sale, the PFIC rules may apply to a sale of the Pre-Funded Warrants
+if, as discussed below, the pre-funded warrants are treated as Ordinary Shares.
+
+ 
+
+Exercise
+of Pre-Funded Warrants and sale of Ordinary Shares
+
+ 
+
+No
+gain or loss will be recognized upon the exercise of a Pre-Funded Warrant. The tax basis of the Pre-Funded Warrants will carry over
+to Ordinary Shares received upon exercise, increased by the exercise price of $0.001 per share. Moreover, while the question is not
+entirely free from doubt, upon exercise the holding period of a Pre-Funded Warrants should carry over to the Ordinary Shares
+received. While the Code provides that upon the exercise of rights to acquire stock or securities the holding
+period of the acquired stock begins on the date of acquisition, Pre-Funded Warrants should be treated as stock for this purpose, not
+as rights to acquire stock, because the U.S. Holder has already fully paid for the Ordinary Shares when he exercises the Pre-Funded Warrants. Our position that upon exercise Pre-Funded Warrants should be treated like Ordinary Shares is not binding on the IRS and
+the IRS may treat the Pre-Funded Warrants as warrants to acquire our Ordinary Shares (we are not aware of any on-point authority on
+this issue).
+
+ 
+
+Subject
+to the PFIC rules, upon a sale of the Ordinary Shares acquired through the exercise of the Pre-Funded Warrants, the U.S. Holder will
+have a capital gain or loss equal to the difference between its tax basis in the Ordinary Shares (which includes its tax basis in the
+Pre-Funded Warrants), and the amount realized on the sale. The gain or loss will be long-term gain or loss if the U.S. Holder
+has held the Ordinary Shares for more than one year (including, we believe, the period of time during which the U.S. Holder held the
+Pre-Funded Warrants).
+
+ 
+
+Each
+holder should consult his, her or its own tax advisor regarding the tax consequences of the acquisition and exercise of Pre-Funded Warrants
+pursuant to this offering (including potential alternative characterizations).
+
+ 
+
+Passive
+Foreign Investment Company Considerations
+
+ 
+
+For
+United States federal income tax purposes, a non-United States corporation, such as our Company, will be treated as a passive
+foreign investment company, or PFIC if, in the case of any particular taxable year, either (a) 75% or more of our
+gross income for such year consists of certain types of passive income or (b) 50% or more of the value of our assets (generally
+determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Based upon
+our current and expected income and assets (including goodwill and taking into account the expected proceeds from this offering) and
+the expected market price of our Ordinary Shares following this offering, we do not expect to be a PFIC for the current taxable year
+or the foreseeable future.
+
+ 
+
+ 116
+
+ 
+
+ 
+
+ 
+
+However,
+while we do not expect to be or become a PFIC, no assurance can be given in this regard because the determination of whether we are or
+will become a PFIC for any taxable year is a fact-intensive inquiry made annually that depends, in part, upon the composition and classification
+of our income and assets. Fluctuations in the market price of our Ordinary Shares may cause us to be or become a PFIC for the current
+or subsequent taxable years because the value of our assets for the purpose of the asset test, including the value of our goodwill and
+other unbooked intangibles, may be determined by reference to the market price of our Ordinary Shares (which may be volatile). The composition
+of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering.
+It is also possible that the Internal Revenue Service may challenge our classification of certain income or assets for purposes of the
+analysis set forth in subparagraphs (a) and (b), above or the valuation of our goodwill and other unbooked intangibles, which may result
+in our company being or becoming a PFIC for the current or future taxable years.
+
+ 
+
+If
+we are classified as a PFIC for any taxable year during which a U.S. Holder holds our Ordinary Shares, and unless the U.S. Holder makes
+a mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules on (i) any excess distribution
+that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than
+125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder s holding period
+for the Ordinary Shares); and (ii) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge,
+of Ordinary Shares. Under the PFIC rules:
+
+ 
+
+ 
+ 
+ 
+ such
+ excess distribution and/or gain will be allocated ratably over the U.S. Holder s holding period for the Ordinary Shares;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ such
+ amount allocated to the current taxable year and any taxable years in the U.S. Holder s holding period prior to the first taxable
+ year in which we are a PFIC, each a pre-PFIC year, will be taxable as ordinary income;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ such
+ amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect
+ applicable to the U.S. Holder for that year; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ an
+ interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year,
+ other than a pre-PFIC year.
+
+ 
+ 
+
+If
+we are a PFIC for any taxable year during which a U.S. Holder holds our Ordinary Shares, and we own any equity in a non-United States
+entity that is also a PFIC, or a lower-tier PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the
+shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are advised to consult their tax advisors
+regarding the application of the PFIC rules to any of the entities in which we may own equity.
+
+ 
+
+As
+an alternative to the foregoing rules, a U.S. Holder of marketable stock in a PFIC may make a mark-to-market election with
+respect to such stock, provided that certain requirements are met. The mark-to-market election is available only for stock that is regularly
+traded on a national securities exchange that is registered with the SEC, or on a foreign exchange or market that the IRS determines
+is a qualified exchange that has rules sufficient to ensure that the market price represents a legitimate and sound fair market value.
+Although we intend to apply for the listing of our Ordinary Shares on Nasdaq, we cannot guarantee that our listing will be approved.
+Furthermore, we cannot guarantee that, once listed, our Ordinary Shares will continue to be listed and regularly traded on such exchange.
+U.S. Holders are advised to consult their tax advisors as to whether the Ordinary Shares are considered marketable for these purposes.
+
+ 
+
+If
+an effective mark-to-market election is made with respect to our Ordinary Shares, the U.S. Holder will generally (i) include as ordinary
+income for each taxable year that we are a PFIC the excess, if any, of the fair market value of Ordinary Shares held at the end of the
+taxable year over its adjusted tax basis of such Ordinary Shares; and (ii) deduct as an ordinary loss the excess, if any, of its adjusted
+tax basis of the Ordinary Shares held at the end of the taxable year over the fair market value of such Ordinary Shares held at the end
+of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election.
+The U.S. Holder s adjusted tax basis in the Ordinary Shares would be adjusted to reflect any income or loss resulting from the
+mark-to-market election. If a U.S. Holder makes an effective mark-to-market election, in each year that we are a PFIC, any gain recognized
+upon the sale or other disposition of the Ordinary Shares will be treated as ordinary income and loss will be treated as ordinary loss,
+but only to the extent of the net amount previously included in income as a result of the mark-to-market election.
+
+ 
+
+ 117
+
+ 
+
+ 
+
+ 
+
+If
+a U.S. Holder makes a mark-to-market election in respect of a PFIC, and such corporation ceases to be a PFIC, the U.S. Holder will not
+be required to take into account the mark-to-market gain or loss described above during any period that such corporation is not a PFIC.
+
+ 
+
+Because
+a mark-to-market election generally cannot be made for any lower-tier PFICs that a PFIC may own, a U.S. Holder who makes a mark-to-market
+election with respect to our Ordinary Shares may continue to be subject to the general PFIC rules with respect to such U.S. Holder s
+indirect interest in any of our non-United States subsidiaries if any of them is a PFIC.
+
+ 
+
+If
+a U.S. Holder owns our Ordinary Shares during any taxable year that we are a PFIC, such holder would generally be required to file an
+annual IRS Form 8621. Each U.S. Holder is advised to consult its tax advisor regarding the potential tax consequences to such holder
+if we are or become a PFIC, including the possibility of making a mark-to-market election.
+
+ 
+
+Hong
+Kong Profits Tax Considerations
+
+ 
+
+Our
+subsidiaries incorporated in Hong Kong were subject to Hong Kong profits tax at a rate of 8.25% for assessable profits on the first HK$2,000,000
+and 16.5% on their remaining assessable profits generated from operations arising in or derived from Hong Kong for the year of assessment
+of 2020/2021 and 2019/2020. As from year of assessment of 2018/2019 onwards, Hong Kong profits tax rates are 8.25% on assessable profits
+up to HK$2,000,000 and 16.5% on any part of assessable profits over HK$2,000,000. Under Hong Kong tax laws, our Hong Kong subsidiaries
+are exempted from Hong Kong income profits tax on its foreign-derived income profits. In addition, payments of dividends from our Hong
+Kong subsidiaries to us are not subject to any tax withholding in Hong Kong.
+
+ 
+
+Taxation
+of Dividends
+
+ 
+
+Under
+the current practices of the Hong Kong Inland Revenue Department, no tax is payable in Hong Kong in connection with dividends paid by
+us, either by withholding or otherwise, unless such dividends are attributable to a trade, profession or business carried on in Hong
+Kong.
+
+ 
+
+Profits
+
+ 
+
+No
+tax is imposed in Hong Kong in respect of capital gains from the sale of the Ordinary Shares. Trading gains from the sale of Ordinary
+Shares by persons carrying on a trade, profession, or business in Hong Kong, where such gains are derived from or arise in Hong Kong
+from such trade, profession or business will be chargeable to Hong Kong profits tax which is imposed at the rates of 8.25% on assessable
+profits up to HK$2,000,000 and 16.5% on any part of assessable profits over HK$2,000,000 on corporations and at the rates of 7.5% on
+assessable profits up to HK$2,000,000 and 15.0% on any part of assessable profits over HK$2,000,000 on unincorporated businesses from
+the year of assessment commencing on or after April 1, 2018. Liability for Hong Kong profits tax would thus arise in respect of trading
+gains from sales of Ordinary Shares realized by persons carrying on a business of trading or dealing in securities in Hong Kong.
+
+ 
+
+THE
+DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE
+INVESTOR IN OUR ORDINARY SHARES IS URGED TO CONSULT ITS OWN TAX ADVISER ABOUT THE TAX CONSEQUENCES TO IT OF OWNING AND DISPOSING OF OUR
+ORDINARY SHARES IN LIGHT OF SUCH PROSPECTIVE INVESTOR S OWN CIRCUMSTANCES.
+
+ 
+
+ 118
+
+ 
+
+ 
+
+ 
+
+PLAN
+OF DISTRIBUTION
+
+ 
+
+Pursuant
+to an engagement agreement, dated June 11, 2024, as amended on July 30, 2024 (the Engagement Agreement ),
+we have engaged Rodman & Renshaw LLC to act as our exclusive placement agent to solicit offers to purchase the Securities
+offered by this prospectus. The aggregate initial offering price of all Securities sold by us under this prospectus will not exceed $5,000,000.
+The Placement Agent is not purchasing or selling any such Securities, nor is it required to arrange for the purchase and sale of any
+specific number or dollar amount of such Securities, other than to use its reasonable best efforts to arrange for the sale
+of such Securities by us. Therefore, we may not sell all of the Securities being offered. The terms of this offering were subject to
+market conditions and negotiations between us, the Placement Agent, and prospective investors. The Placement Agent will have no authority
+to bind us by virtue of the Engagement Agreement. This is a reasonable best efforts offering and there is no minimum offering amount
+required as a condition to the closing of this offering. The Placement Agent may retain sub-agents and selected dealers in connection
+with this offering.
+
+ 
+
+Investors
+purchasing the Securities offered hereby will have the option to execute a securities purchase agreement with us. In addition to rights
+and remedies available to all purchasers in this offering under federal securities and state law, the purchasers which enter into a securities
+purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue a claim for breach of contract
+is material to larger purchasers in this offering as a means to enforce the following covenants uniquely available to them under the
+securities purchase agreement: (i) a covenant to not enter into variable rate financings for a period of six (6) months following
+the closing of
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/FLX_bingex-ltd_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/FLX_bingex-ltd_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/FLX_bingex-ltd_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/FXA_invesco_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/FXA_invesco_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d09a26cf242c9dfc700017daa0f646ebbbe91fe3
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/FXA_invesco_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary This is a summary of the prospectus. You should read the entire prospectus, including Risk Factors beginning on page 6 and the information incorporated by reference in this prospectus, before making an investment decision about the Shares. See Glossary of Terms beginning on page 12 for a description of certain terms used in this prospectus. TRUST STRUCTURE The Trust is a grantor trust formed under the laws of the State of New York pursuant to the Depositary Trust Agreement. The Trust holds Australian Dollars and from time to time issues Baskets in exchange for deposits of Australian Dollars and distributes Australian Dollars in connection with redemptions of Baskets. The investment objective of the Trust is for the Shares to reflect the price in USD of the Australian Dollar. Earning income for Shareholders is not the objective of the Trust. Whether investors earn income primarily depends on the relative value of the Australian Dollar and the USD. If the Australian Dollar appreciates relative to the USD and a Shareholder sells Shares, the Shareholder will earn income. If the Australian Dollar depreciates relative to the USD and a Shareholder sells Shares, the Shareholder will incur a loss. The Sponsor believes that, for many investors, the Shares represent a cost-effective investment in Australian Dollars. The Shares represent units of fractional undivided beneficial interest in, and ownership of, the Trust. The Shares are listed and trade on NYSE Arca under the symbol FXA. The Shares may also trade in other markets, but the Sponsor has not sought to have the Shares listed by any other market. The Sponsor, Invesco Specialized Products, LLC, a Delaware limited liability company, established the Trust and is responsible for registering the Shares. The Sponsor generally oversees the performance of the Trustee and the Trust s principal service providers, but does not exercise day-to-day oversight over the Trustee or the Trust s service providers. The Sponsor may remove the Trustee if any of various events occur. See Description of the Depositary Trust Agreement The Trustee Resignation, discharge or removal of trustee; successor trustees for more information. The Sponsor maintains a public website on behalf of the Trust containing information about the Trust and the Shares. The internet address of the Trust s website is www.invesco.com/etfs. This internet address is provided here only as a convenience to you; the information contained on or connected to the Trust s website is not considered part of this prospectus. The general role and responsibilities of the Sponsor are discussed further under The Sponsor. The Trustee is The Bank of New York Mellon, a banking corporation formed under the laws of the State of New York with trust powers. The Trustee is generally responsible for the day-to-day administration of the Trust. This includes calculating the NAV of the Trust and the NAV per Share each business day, paying the Trust s expenses (which are accrued daily but paid monthly), including withdrawing the Trust s Australian Dollars, if needed, receiving and processing orders from Authorized Participants to create and redeem Baskets and coordinating the processing of such orders with the Depository and DTC. The general role, responsibilities and regulation of the Trustee are further described under The Trustee. The Depository is JPMorgan Chase Bank, N.A., London Branch. The Depository and the Trustee have elected the laws of England to govern the Deposit Account Agreement between them. The Depository accepts Australian Dollars deposited with it by Authorized Participants in connection with the creation of Baskets. The Depository facilitates the transfer of Australian Dollars into and out of the Trust through the two deposit accounts maintained with it by the Trust. The Depository may pay interest on the primary deposit account but does not pay interest on the secondary deposit account. Interest on the primary deposit account, if any, accrues daily and is paid monthly. The material terms of the Depositary Trust Agreement are discussed in greater detail in Description of the Depositary Trust Agreement. The general role, responsibilities and regulation of the Depository and the two deposit accounts are further described under The Depository and Description of the Deposit Account Agreement. Detailed descriptions of certain specific rights and duties of the Trustee and the Depository are set forth under Description of the Shares, Description of the Depositary Trust Agreement and Description of the Deposit Account Agreement. EXPLANATORY NOTE This Pre-Effective Amendment No. 2 on Form S-1 to the Registration Statement on Form S-3 (File No. 333-280633) is being filed for the purpose of changing the EDGAR tag of the registration statement from S-3/A to S-1/A The Distributor, Invesco Distributors, Inc., is a corporation formed under the laws of the State of Delaware. The Distributor assists the Sponsor in marketing the Shares. Specifically, the Distributor prepares marketing materials regarding the Shares, including the content of the Trust s website, executes the marketing plan for the Trust and provides strategic and tactical research on the foreign exchange markets, in each case in compliance with applicable laws and regulations. The Distributor and the Sponsor are affiliates of one another. There is no written agreement between them, and no compensation is paid by the Sponsor to the Distributor in connection with services performed by the Distributor for the Trust. See The Distributor for more information. INVESTMENT ATTRIBUTES OF THE TRUST The investment objective of the Trust is for the Shares to reflect the price in USD of the Australian Dollar. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding Australian Dollars. The costs of purchasing Shares should not exceed the costs associated with purchasing any other publicly-traded equity securities. The Shares are an investment that is: Easily Accessible. Investors are able to access the market for Australian Dollars through a traditional brokerage account. The Shares are bought and sold on NYSE Arca like any other exchange-listed security. Exchange-Traded. Because they are traded on NYSE Arca, the Shares will provide investors with an efficient means of implementing investment tactics and strategies that involve Australian Dollars. NYSE Arca-listed securities are eligible for margin accounts. Accordingly, investors are able to purchase and hold Shares with borrowed money to the extent permitted by law. Transparent. The Shares are backed by the assets of the Trust, which does not hold or use derivative products. The value of the holdings of the Trust is reported on the Trust s website, www.invesco.com/etfs, every business day. Investing in the Shares will not insulate the investor from price volatility or other risks. Further, the ratio of Australian Dollars to Shares may decrease due to withdrawals made to pay Trust expenses in the event that the interest income of the Trust is not sufficient to cover the entirety of the Trust expenses. See Risk Factors and The Depository. PRINCIPAL OFFICES The principal offices of the Sponsor and the Trust are the offices of Invesco Specialized Products, LLC at 3500 Lacey Road, Suite 700, Downers Grove, Illinois 60515, and the principal offices of the Distributor are the offices of Invesco Distributors, Inc. at 11 Greenway Plaza, Suite 1000, Houston, Texas 77046. The telephone number of Invesco Specialized Products, LLC at its address is (800) 983-0903. None of the Sponsor, the Trust or the Distributor owns or leases any other real estate. The Trustee has an office at 2 Hanson Place, Brooklyn, New York 11217. The Depository is located at 125 London Wall, London, EC2Y 5AJ, United Kingdom.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/GNS_genius_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/GNS_genius_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a0526a4271c8b68aa617820eacc7e4d301f91a73
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/GNS_genius_prospectus_summary.txt
@@ -0,0 +1,1162 @@
+Prospectus
+Summary — Overview — A Brief Glossary" beginning on page S-3.
+
+ 
+
+You
+should rely only on the information contained in this prospectus. We have not, and the placement agent has not, authorized anyone to
+provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
+We are not, and the placement agent is not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted.
+You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of
+this prospectus.
+
+ 
+
+For
+investors outside of the United States of America (the "United States" or the "U.S."): Neither we nor the placement
+agent has done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than
+the United States, where action for that purpose is required. Persons outside of the United States who come into possession of this prospectus
+must inform themselves about, and observe any restrictions relating to, the offering of our ordinary shares and the distribution of this
+prospectus outside of the United States.
+
+ 
+
+The
+Company s reporting currency is the U.S. dollar. The functional currencies of the Genius Group and its subsidiaries are their local
+currencies (Singapore dollar, British pound, Indonesian rupiah and South African Rand, New Zealand Dollar) and the functional currency
+of ERL, UAV and RF is the U.S. dollar. The Company engages in foreign currency denominated transactions with customers and suppliers,
+as well as between subsidiaries with different functional currencies. Gains and losses resulting from transactions denominated in non-functional
+currencies are recognized in earnings.
+
+ 
+
+Unless
+otherwise noted, (i) all industry and market data in this prospectus is presented in U.S. dollars, (ii) all financial and other data
+related to Genius Group in this prospectus is presented in U.S. dollars, (iii) all references to "$" or "USD"
+in this prospectus (other than in our financial statements) refer to U.S. dollars, and (iv) all references to "S$" or "SGD"
+in this prospectus refer to Singapore dollars.
+
+ 
+
+Our
+fiscal year end is December 31. References to a particular "fiscal year" are to our fiscal year ended December 31 of that
+calendar year. Our audited consolidated financial statements have been prepared in accordance with International Financial Reporting
+Standards ("IFRS"), as issued by the International Accounting Standards Board.
+
+ 
+
+We
+obtained the industry, market and competitive position data in this prospectus from our own internal estimates, surveys, and research
+as well as from publicly available information, industry and general publications and research, surveys and studies conducted by third
+parties. None of the independent industry publications used in this prospectus were prepared on our behalf. Industry publications, research,
+surveys, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable,
+but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained
+from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus,
+and to risks due to a variety of factors, including those described under "Risk Factors." These and other factors could cause
+results to differ materially from those expressed in these forecasts and other forward-looking information.
+
+ 
+
+Unless
+we indicate otherwise or the context otherwise requires, all information in this prospectus gives effect to the 1-for-10 reverse
+share split with respect to our ordinary shares, which took effect on August 16, 2024. 
+
+ 
+
+We
+have proprietary rights to trademarks used in this prospectus that are important to our business, many of which are registered under
+applicable intellectual property laws. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus
+are without the , and other similar symbols, but the absence of such references is not intended to indicate, in any way,
+that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks,
+service marks and trade names.
+
+ 
+
+ S-1
+
+ 
+
+ 
+
+ 
+
+This
+prospectus contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing
+in this prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies 
+trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other person.
+
+ 
+
+This
+prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, our ordinary shares were not
+offered or sold or caused to be made the subject of an invitation for subscription or purchase and will not be offered or sold or caused
+to be made the subject of an invitation for subscription or purchase, and this prospectus or any other document or material in connection
+with the offer or sale, or invitation for subscription or purchase, of our ordinary shares, has not been circulated or distributed, nor
+will it be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor
+(as defined in Section 4A of the Securities and Futures Act 2001 of Singapore, as modified or amended from time to time ("SFA"))
+pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of
+the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the
+SFA and (where applicable) Regulation 3 of the Securities and Futures (Classes of Investors) Regulations 2018, or (iii) otherwise pursuant
+to, and in accordance with the conditions of, any other applicable provision of the SFA.
+
+ 
+
+Where
+our ordinary shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
+
+ 
+
+(a)
+a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments
+and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
+
+ 
+
+(b)
+a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust
+is an individual who is an accredited investor, securities or securities-based derivatives contracts (each term as defined in Section
+2(1) of the SFA) of that corporation or the beneficiaries rights and interest (howsoever described) in that trust shall not be
+transferred within six months after that corporation or that trust has acquired the ordinary shares pursuant to an offer made under Section
+275 of the SFA, except:
+
+ 
+
+ 
+ 
+ 
+ to
+ an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) of the SFA
+ or Section 276(4)I(ii) of the SFA;
+
+ 
+ 
+ 
+ where
+ no consideration is or will be given for the transfer;
+
+ 
+ 
+ 
+ where
+ the transfer is by operation of law;
+
+ 
+ 
+ 
+ as
+ specified in Section 276(7) of the SFA; or
+
+ 
+ 
+ 
+ as
+ specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts)
+ Regulations 2018.
+
+ 
+ 
+
+Any
+reference to the SFA is a reference to the Securities and Futures Act 2001 of Singapore and a reference to any term as defined in the
+SFA or any provision in the SFA is a reference to that term as modified or amended from time to time including by such of its subsidiary
+legislation as may be applicable at the relevant time.
+
+ 
+
+Notification
+under Section 309B(1)(c) of the SFA: The Company has determined, and hereby notifies all persons (including relevant persons (as defined
+in Section 309A(1) of the SFA)) that the ordinary shares are prescribed capital markets products (as defined in the Securities and Futures
+(Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale
+of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
+
+ 
+
+By
+accepting this prospectus, the recipient hereof and thereof represents and warrants that such recipient is entitled to receive it in
+accordance with the restrictions set forth above and agrees to be bound by the limitations contained herein. Any failure to comply with
+these limitations may constitute a violation of law.
+
+ 
+
+We
+have not, and the selling stockholders have not, authorized anyone to provide you with any information or to make any representations
+other than those contained in this prospectus or in any free writing prospectus we have prepared and filed with the SEC. We and the selling
+stockholders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may
+give you. This prospectus is an offer to sell only the shares offered hereby, but only under the circumstances and in jurisdictions where
+it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery
+of this prospectus or of any sale of our common stock. For investors outside of the United States: Neither we nor the selling stockholders
+have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action
+for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this
+prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and
+the distribution of this prospectus outside of the United States.
+
+ 
+
+ S-2
+
+ 
+
+ 
+
+ 
+
+PROSPECTUS
+SUMMARY
+
+ 
+
+This
+summary highlights certain information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including
+our financial statements and related notes and the risks described under "Risk Factors." Our actual results and future events
+may differ significantly based upon a number of factors. The reader should not put undue reliance on the forward-looking statements in
+this document, which speak only as of the date on the cover of this prospectus.
+
+ 
+
+Overview
+
+ 
+
+A
+BRIEF GLOSSARY
+
+ 
+
+To
+aid in the understanding the entities, acquisitions, products, services and certain other concepts referred to in this Annual Report,
+the following non-exhaustive glossary of terms is provided:
+
+ 
+
+AI
+means Artificial Intelligence, which is a technology that enables machine learning, specifically in the case of Genius Group where
+our Genie AI Virtual Assistant and AI Avatars are able to recommend personalized steps for each student based on their personal strengths,
+passions, purpose, preferences and level of each student through their inputs on our Edtech platform.
+
+ 
+
+Acquisitions
+refers to companies which have been bought and are controlled by the Genius Group
+
+ 
+
+Bridge
+Loan refers to short term funding secured with proceeds of $2 million from an institutional investor for the face amount of $2.2
+million in July 2023, which has subsequently been fully repaid.
+
+ 
+
+Certification
+refers to the digital courses on our GeniusU platform that faculty members take in order to be certified to mentor students on GeniusU,
+and to be able to add their own courses and products to GeniusU.
+
+ 
+
+City
+Leader refers to our mentors who host monthly events in their city to support the Students and mentors in their local area.
+
+ 
+
+Convertible
+Note refers to the secured convertible note raised with proceeds of $17.0 million from an institutional investor for the face amount
+of $18.1 million in September, 2022, which has been fully repaid in 2023.
+
+ 
+
+Debt
+Note refers to the secured debt note with proceeds of $5.0 million for the face amount of $5.72 million from an institutional investor
+in April, 2024, with a repayment schedule of 18 months.
+
+ 
+
+E-Square
+refers to E-Squared Education Enterprises (Pty) Ltd, a South African private limited company and one of the Group Companies as defined
+below.
+
+ 
+
+Edtech
+is an abbreviation of Educational Technology and refers to technology designed to improve the effectiveness, efficiency and experience
+of the education process. Genius Group is focused on growing as an Edtech group with the ability to scale rapidly and operate globally.
+
+ 
+
+Education
+Angels refers to Education Angels in Home Childcare Limited, a New Zealand private limited company and one of the Group Companies
+as defined below.
+
+ 
+
+Entrepreneurs
+Institute refers to Wealth Dynamics Pte Ltd, a Singapore private limited company and one of the Group Companies.
+
+ 
+
+Entrepreneur
+Resorts refers to Entrepreneur Resorts Limited, a Seychelles public listed company on the Seychelles Merj Stock Exchange (Ticker:
+ERL). Entrepreneur Resorts was acquired by Genius Group in 2020, and subsequently spun off. The spin-off was completed on October 2,
+2023.
+
+ 
+
+FatBrain
+AI refers to FB PrimeSource Acquisition LLC, a Delaware based company, acquired in March 2024. FatBrain AI was acquired from LZG International by Genius Group Ltd and has five subsidiaries located in Kazakhstan consolidated under Prime Source
+Group.
+
+ 
+
+Genius
+City refers to Genius Group s city-based model that delivers an AI-driven exponential ecosystems providing AI education and
+acceleration while localizing values and culture.
+
+ 
+
+Genius
+Group (or the Group) refers to the entire group of companies within Genius Group including Genius Group Ltd and the Group
+Companies as defined below.
+
+ 
+
+ S-3
+
+ 
+
+ 
+
+ 
+
+Genius
+Group Ltd refers specifically to the holding company, Genius Group Limited, the Singapore public limited company which owns the Group
+Companies. Prior to a corporate name change in July 2019, it was known as GeniusU Pte Ltd. For the avoidance of doubt, references in
+this Annual Report to Genius Group Ltd with respect to periods prior to its July 2019 name change should be understood as references
+to the company as operated under its previous name.
+
+ 
+
+Genius
+Group Proforma refers to the entire group of companies within Genius Group including the FatBrain acquisition closed in March 2024.
+
+ 
+
+GeniusU,
+when used without any corporate suffix or otherwise not as part of a corporate name, refers to the Edtech platform including website,
+mobile app, AI system, data and software system under the GeniusU brand.
+
+ 
+
+GeniusU
+Ltd refers to the company formed in August 2019 under the corporate name GeniusU Pte Ltd, and subsequently converted to a public
+company, GeniusU Ltd in May 2021 (as distinct from its parent Genius Group Ltd, the current Group holding company, which until July 2019
+used the name GeniusU Pte Ltd).
+
+ 
+
+Group
+Companies refers to all subsidiary companies within Genius Group that are partially or fully owned by Genius Group Ltd.
+
+ 
+
+IASB
+refers to International Accounting Standards Board.
+
+ 
+
+IFRS
+refers to International Financial Reporting Standards as issued by IASB.
+
+ 
+
+IPO
+refers to the initial public offering of our ordinary shares that was consummated on April 14, 2022.
+
+ 
+
+Mentor
+refers to our faculty members who have taken and passed Certifications on GeniusU.
+
+ 
+
+Microcamp
+refers to courses that are a combination of digital content on our GeniusU Edtech platform and live in-person courses conducted with
+our mentors.
+
+ 
+
+Microdegree
+refers to the digital courses on our GeniusU Edtech platform. These are a combination of video, audio and text-based learning with
+assessments and exercises that students can take in their own time, on their own or with the guidance of our faculty.
+
+ 
+
+Microschool
+refers to the scheduled, live digital courses on our GeniusU Edtech platform. These are similar in format to microdegrees but differ
+in that they are conducted live together with other students and the guidance of our faculty, with live interaction, feedback and challenge-based
+presentations, competitions and awards.
+
+ 
+
+OpenExO
+refers to OpenExO Inc, a Delaware based company, which entered into a binding acquisition agreement with us March 2024 with closing
+pending final closing conditions. The financials of OpenExO are not included in this prospectus.
+
+ 
+
+Partners
+refer to all individuals who are creating, marketing, delivering or hosting courses on GeniusU and PIN, and all faculty members delivering
+courses in all other Group companies.
+
+ 
+
+Pre-IPO
+Group refers to the four companies which were already operating as a group in 2020 prior to our IPO on 14 April 2022, namely Genius
+Group Ltd, GeniusU Ltd, Entrepreneurs Institute and Entrepreneur Resorts.
+
+ 
+
+Prime
+Source Group refers to Five companies registered under the laws of the Republic of Kazakhstan namely Prime Source LLP, Prime Source
+Innovation LLP, Prime Source Analytic Systems LLP, InFin IT Solution LLP and Digitalism LLP.
+
+ 
+
+Property
+Investors Network (or PIN) refers to Property Investors Network Ltd combined with its sister company Mastermind Principles
+Limited, a United Kingdom ("U.K.") private limited company and one of the Group Companies.
+
+ 
+
+Revealed
+Films (or RF) refers to Revealed Films Inc, US Corporation and one of the Group Companies.
+
+ 
+
+Students
+refer to all individuals who have registered for courses in our Group Companies. This is further divided into Free Students, who
+have registered for free courses, and Paying Students, who have registered and paid for courses.
+
+ 
+
+University
+of Antelope Valley (or UAV) refers to University of Antelope Valley, Inc., a California corporation and a Group Company which
+we are in the process of closing down.
+
+ 
+
+ S-4
+
+ 
+
+ 
+
+ 
+
+RESALE
+PROSPECTUS
+
+ 
+
+The
+shares of common stock being offered by the selling stockholders are those issuable upon exercise of the warrants, see below. We are
+registering the shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time.
+The Company shall receive no proceeds from this offering.
+
+ 
+
+Our
+Company
+
+ 
+
+We
+believe that we are a world leading entrepreneur Edtech and education group based on student numbers with a student base of 3.5
+million on GeniusU at the end of December 2023. Our mission is to disrupt the current education model with a student-centered,
+lifelong learning curriculum that prepares students with the leadership, entrepreneurial and life skills to succeed in today s
+market.
+
+ 
+
+To
+help achieve our mission, we have completed an IPO on NYSE American, on April 14, 2022 and then dual listed the company on Upstream on
+April 6, 2023 (although we subsequently found that there was little demand for Upstream and on September 19, 2023, Genius Group. Ltd.
+publicly announced that it had commenced the process to delist its securities from Upstream, which process was completed on September
+29, 2023. The Genius Group will have no further contact with Upstream as a result of this delisting. It will not be involved with or
+take part in any distribution of or listing of the shares of its spun off subsidiary, Entrepreneur Resorts Ltd ("ERL") on
+Upstream or any other exchange, which will be the sole responsibility of ERL. The decision to delist the Company from Upstream is due
+to complex securities regulations arising from the dual listing on Upstream and NYSE and de minimis use of Upstream by GNS shareholders).
+We have also raised additional capital through a follow-on private placement of a Convertible Note in September 2022. We grew from a
+Pre-IPO Group of four companies to a post IPO Group of nine companies, once the five Acquisitions closed.
+
+ 
+
+Starting
+from October 30, 2023, U.S. individuals have no longer had the authorization to engage in securities trading activities
+(including buying, selling, or depositing) on the Upstream/MERJ Exchange. All U.S. shareholders were promptly removed from Upstream
+and their holdings were transferred back to the ERL book entry system. Investors will still need to follow the process to claim
+their ERL shares, but these shares will be exclusively held with ERL through the registrar. Shareholders have not been able to
+view their positions on Upstream, as they can no longer be maintained in Upstream accounts. Trading these securities won t
+be possible after a 6-month period, and shareholders will remain as such until ERL lists on another market or until the SEC accepts the
+Upstream/MERJ position of 15A-6.
+
+ 
+
+Our
+Pre-IPO Group includes our holding company, Genius Group Ltd, our Edtech platform, GeniusU Ltd, and two companies that we acquired: Entrepreneurs
+Institute in 2019 and Entrepreneur Resorts in 2020 (spin-off completed on October 2, 2023).
+
+ 
+
+The
+entrepreneur education system of our Pre-IPO Group has been delivered virtually and in-person, in multiple languages, locally and globally
+mainly via our GeniusU Edtech platform to adults seeking to grow their entrepreneur and leadership skills. Our partners and community
+are global with an average of 8,900 new students joining our GeniusU platform each week in 2023. Our City Leaders have been conducting
+our events (physically or virtually) in over 100 cities and over 2,500+ faculty members have been operating their microschools using
+our online tools.
+
+ 
+
+We
+are now expanding our education system to age groups beyond our adult audience, to children and young adults. The five Acquisitions are
+our first step towards this. They include: Education Angels, which provides early learning in New Zealand for children from 0-5 years
+old; E-Square, which provides primary and secondary school education in South Africa; University of Antelope Valley, which provides vocational
+certifications and university degrees in California, USA; Property Investors Network, which provides property investment courses and
+events in England, UK; and Revealed Films, a media production company that specializes in multi-part documentaries.
+
+ 
+
+Our
+plan is to combine their education programs with our current education programs and Edtech platform as part of one lifelong learning
+system, and we have selected these acquisitions because they already share aspects of our Genius Curriculum and our focus on entrepreneur
+education.
+
+ 
+
+The
+FatBrain AI acquisition has added $51.8 million in revenue to the Group in the year ended Dec 31, 2023, which represents 74% of the $70.4
+million pro forma Group revenue during this period, while the rest of the Group generated $18.7 million in pro forma revenue. For the
+year ended December 31, 2023, the audited group revenue was $23.1 million compared to $18.2 million in 2022.
+
+ 
+
+In
+coming years, we plan to continue the growth of our Group through a combination of organic growth of our Edtech platform together with
+the acquisition of various education companies that we believe provide complementary programs that can be added to our Genius Curriculum.
+This Prospectus provides details of both our acquisition strategy together with our plans to integrate these Acquisitions together with
+future acquisitions into our Edtech platform, "entrepreneur education" vision, Genius Curriculum and "freemium"
+student and partner conversion models.
+
+ 
+
+We
+define "entrepreneur education" as personalized discovery-based learning that leads to higher levels of self-awareness, self-mastery
+and self-expression. We believe this in turn develops leadership and entrepreneurial skills through which students can independently
+create value and "create a job" rather than being dependent on a system in which they need to "get a job". We
+believe these skills can be nurtured from an early age.
+
+ 
+
+We
+also believe these skills can be learned at any age, enabling adults to reskill and upskill themselves. We describe our Genius Curriculum,
+together with the philosophy, principles, learning methodology, course content and delivery of our curriculum in the Business section
+set forth below in this prospectus.
+
+ 
+
+On
+December 15, 2023, we publicly disclosed that we have revised our guidance from a net loss of $17 million to a net profit of $3 million
+as a result to the omission of certain non-cash items.
+
+ 
+
+Roger
+Hamilton has agreed to convert $1 million of his loan to the Company into Series 1 Units upon the same terms and conditions as offered
+by this prospectus (the "Founder Securities"). The remaining balance of the loan of approximately $900 thousand shall be
+repaid in cash at a date no sooner than July 1, 2024.
+
+ 
+
+Change
+in Registrant s Certifying Accountant.
+
+ 
+
+On
+March 13, 2024, Marcum LLP sent a letter to the Company terminating the auditor client relationship. The termination of auditor relationship
+was disclosed in a Form 6-K dated March 19, 2024. The termination is not as a result of a disagreement between the two entities.
+
+ 
+
+On
+March 28, 2024, the Group, following approval by the audit committee, appointed Enrome LLP as an independent public accounting firm for
+the Group s IFRS consolidated financial statements for Financial Year 2023 and re-audit Financial Year 2022 and 2021. The engagement
+was finalized after inquires completed by the incoming Enrome LLP with Marcum LLP. The appointment of auditor was disclosed in a Form
+6-K dated March 28, 2024.
+
+ 
+
+Marcum s
+audit report on our consolidated financial statement as of December 31, 2022 and December 31, 2021 and for each of the years ended December
+31, 2022 and December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to
+uncertainty, audit scope or accounting principles. As previously disclosed in the Company s Annual Reports on Form 20-F for the
+fiscal years ended December 31, 2022, material weaknesses existed in the Company s internal control over financial reporting at
+December 31, 2022 because of
+
+ 
+
+ 
+ 
+ 
+ lack
+ of sufficient documentation of our existing financial processes, risk assessment and internal controls activities and evaluation
+ of effectiveness of internal controls;
+
+ 
+ 
+ 
+ Inadequate
+ internal controls, including inadequate segregation of duties, over account reconciliations, the preparation and review of the consolidated
+ financial statements and untimely annual closings of the books;
+
+ 
+ 
+ 
+ Inadequate
+ internal control over accounting for and financial reporting related to business combination accounting and subsequent assessment
+ for impairments as they related to goodwill and other long lived assets;
+
+ 
+ 
+ 
+ Inadequate
+ information technology general controls as it relates to user access rights and segregation of duties over systems that are critical
+ to the Company s system of financial reporting
+
+ 
+ 
+
+ S-5
+
+ 
+
+ 
+
+ 
+
+During
+each of the years ended December 31, 2023 and 2022 and the subsequent interim period through March 28, 2024, neither the Group nor anyone
+on behalf of the Group consulted Enrome LLP regarding (i) the application of accounting principles to a specific transaction, either
+completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written
+report nor oral advice was provided to us that Enrome LLP concluded was an important factor considered by us in reaching a decision as
+to any accounting, auditing, or financial reporting issue, (ii) any matter that was the subject of a disagreement pursuant to Item 16F(a)(1)(iv)
+of Form 20-F, or (iii) any reportable event pursuant to Item 16F(a)(1)(v) of Form 20-F.
+
+ 
+
+We
+provided Marcum LLP with a copy of the disclosures under this Item 16F and requested from Marcum a letter addressed to the Securities
+and Exchange Commission indicating whether it agrees with such disclosures. A copy of Marcum s letter dated June 24, 2024 is attached as
+Exhibit 99.4.
+
+ 
+
+Resignation
+of director and appointment of a director
+
+ 
+
+On June 20,
+2024, Eric Pulier resigned as a director of the Company. He will serve as a Board advisor and will also be a consultant to the Company.
+On June 20, 2024, Michael Moe was appointed as a director to fill the vacancy arising from Mr. Pulier s resignation. Mr. Moe was
+also appointed to fill the vacancies arising from Mr. Pulier s resignation from each of the Company s Audit Committee, Compensation
+Committee and Governance Committee. Mr. Moe has been deemed by the Board of Directors of the Company to be an independent director. On July 24, 2024, Riaz Shah was appointed as a director and has been deemed by the Board of Directors of the Company
+to be an independent director. 
+
+ 
+
+Summary
+of Risks Affecting Our Company
+
+ 
+
+The
+following is a summary of certain, but not all, of the risks that could adversely affect our business, operations and financial results.
+If any of the risks actually occur, our business could be materially impaired, the trading price of our ordinary shares could decline,
+and you could lose all or part of your investment, all of which are incorporated by reference from our Form 20-F filed with the SEC on
+May 15, 2024 for the year ended December 31, 2023.
+
+ 
+
+Risks
+Related to Our Business and Industry (All Group companies)
+
+ 
+
+ 
+ 
+ 
+ We
+ are a global business subject to complex economic, legal, political, tax, foreign currency and other risks associated with international
+ operations, which risks may be difficult to adequately address.
+
+ 
+ 
+ 
+ Our
+ growth strategy anticipates that we will create new products, services, and distribution channels and expand existing distribution
+ channels. If we are unable to effectively manage these initiatives, our business, financial condition, results of operations and
+ cash flows would be adversely affected.
+
+ 
+ 
+ 
+ Our
+ growth may have a negative effect on the successful expansion of our business, on our people management, and on the increase in complexity
+ of our software and platforms.
+
+ 
+ 
+ 
+ If
+ our growth rate decelerates significantly, our prospects and financial results would be adversely affected, preventing us from achieving
+ profitability.
+
+ 
+ 
+ 
+ We
+ may be unable to recruit, train and/or retain qualified teachers, mentors, and other skilled professionals.
+
+ 
+ 
+ 
+ Our
+ business may be materially adversely affected if we are not able to maintain or improve the content of our existing courses or to
+ develop new courses on a timely basis and in a cost-effective manner.
+
+ 
+ 
+ 
+ Failure
+ to attract and retain students to enroll in our courses and programs, and to maintain tuition levels, may have a material adverse
+ impact on our business and prospects.
+
+ 
+ 
+ 
+ If
+ student performance falls or parent and student satisfaction declines, a significant number of students may not remain enrolled in
+ our programs, and our business, financial condition and results of operations will be adversely affected.
+
+ 
+ 
+ 
+ Our
+ curriculum and approach to instruction may not achieve widespread acceptance, which would limit our growth and profitability.
+
+ 
+ 
+ 
+ The
+ continued development of our brand identity is important to our business. If we are not able to maintain and enhance our brand, our
+ business and operating results may suffer.
+
+ 
+ 
+ 
+ If
+ our partnerships are unable to maintain educational quality, we may be adversely affected.
+
+ 
+ 
+ 
+ There
+ is significant competition in the market segments that we serve, and we expect such competition to increase; we may not be able to
+ compete effectively.
+
+ 
+ 
+ 
+ We
+ cannot assure you that we will not be subject to liability claims for any inaccurate or inappropriate content in our training programs,
+ which could cause us to incur legal costs and damage our reputation.
+
+ 
+ 
+ 
+ We
+ may be subject to legal liability resulting from the actions of third parties, including independent contractors and teachers, which
+ could cause us to incur substantial costs and damage our reputation.
+
+ 
+ 
+ 
+ We
+ may not have sufficient insurance to protect ourselves against substantial losses.
+
+ 
+ 
+ 
+ A
+ cybersecurity attack or other security breach or incident could delay or interrupt service to our users and customers, harm our reputation
+ or subject us to significant liability.
+
+ 
+ 
+
+ S-6
+
+ 
+
+ 
+
+ 
+
+Risks
+Related to Our Business and Industry
+
+ 
+
+ 
+ 
+ 
+ We
+ are a growing company with a limited operating history. If we fail to achieve further marketplace acceptance for our products and
+ services, our business, financial condition and results of operations will be adversely affected.
+
+ 
+ 
+ 
+ Our
+ Edtech platform is technologically complex, and potential defects in our platforms or in updates to our platforms could be difficult
+ or even impossible to fix.
+
+ 
+ 
+ 
+ System
+ disruptions, capacity constraints and vulnerability from security risks to our online computer networks could impact our ability
+ to generate revenues and damage our reputation, limiting our ability to attract and retain students.
+
+ 
+ 
+ 
+ Our
+ current success and future growth depend on the continued acceptance of the Internet and the corresponding growth in users seeking
+ educational services on the Internet.
+
+ 
+ 
+ 
+ We
+ are susceptible to the illegal or improper use of our content, Edtech and platform (whether from students, teachers, mentors, management
+ personnel and other employees, or third parties), or other forms of misconduct, which could expose us to liability and damage our
+ business and brand.
+
+ 
+ 
+
+Risks
+Related to Our Business and Industry (Specific to Acquisitions)
+
+ 
+
+ 
+ 
+ 
+ We
+ have acquired the acquisitions and may pursue other strategic acquisitions or investments. The failure of an acquisition or investment
+ (including but not limited to the Acquisitions) to be completed or to produce the anticipated results, or the inability to fully
+ integrate an acquired company, could harm our business.
+
+ 
+ 
+ 
+ Public
+ perception and regulatory changes in the primary school and secondary school systems in countries that E-Square may expand to may
+ have a materially adverse impact on the company.
+
+ 
+ 
+ 
+ Our
+ growth plans for E-Square and our plans to expand into the primary school and high school markets will be a complex and lengthy process
+ where future success is not assured.
+
+ 
+ 
+ 
+ If
+ we cannot maintain student enrollments and maintain tuition levels in our Acquisition, UAV, the university s results of operations
+ may be materially adversely affected.
+
+ 
+ 
+
+Risks
+Related to Investing in a Foreign Private Issuer or a Singapore Company
+
+ 
+
+ 
+ 
+ 
+ As
+ a foreign private issuer, we are permitted to follow certain home country corporate governance practices in lieu of certain requirements
+ under the NYSE American listing standards. This may afford less protection to holders of our ordinary shares than U.S. regulations.
+
+ 
+ 
+ 
+ We
+ are a foreign private issuer and, as a result, we are not subject to U.S. proxy rules and are instead subject to the Securities Exchange
+ Act of 1934, as amended (the "Exchange Act") reporting obligations that, to some extent, are more lenient and less detailed
+ than those for a U.S. issuer.
+
+ 
+ 
+ 
+ We
+ may lose our foreign private issuer status, which would then require us to comply with the Exchange Act s domestic reporting
+ regime and cause us to incur additional legal, accounting and other expenses.
+
+ 
+ 
+
+ 1-for-10
+Reverse Share Split 
+
+ 
+
+ On August 16, 2024, we effected
+a 1-for-10 reverse share split with respect to our ordinary shares. Unless we indicate otherwise or the context otherwise requires, all
+information in this prospectus gives effect to this share split. 
+
+ 
+
+Implications
+of Being an Emerging Growth Company
+
+ 
+
+We
+qualify as an "emerging growth company" ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012
+(the "JOBS Act"). We had less than $1.07 billion in revenue during our last fiscal year, and have not tripped any of the
+measures that would cause us to no longer qualify as an EGC. As such, we may take advantage of reduced public reporting requirements.
+These provisions include, but are not limited to:
+
+ 
+
+ 
+ 
+ 
+ Being
+ permitted to present only two years of audited financial statements and only two years of related Management s Discussion and
+ Analysis of Financial Condition and Results of Operations in our filings with the SEC;
+
+ 
+ 
+ 
+ Not
+ being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
+
+ 
+ 
+ 
+ Reduced
+ disclosure obligations regarding executive compensation in periodic reports, proxy statements and registration statements; and
+
+ 
+ 
+ 
+ Exemptions
+ from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute
+ payments not previously approved.
+
+ 
+ 
+
+We
+may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first
+sale of ordinary shares pursuant to the IPO. However, if certain events occur before the end of such five-year period, including if we
+become a "large accelerated filer," if our annual gross revenues exceed $1.07 billion or if we issue more than $1.0 billion
+of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end of such five-year period.
+
+ 
+
+Section
+107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section
+7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting
+standards. We have elected to take advantage of this extended transition period and acknowledge such election is irrevocable pursuant
+to Section 107 of the JOBS Act.
+
+ 
+
+ S-7
+
+ 
+
+ 
+
+ 
+
+Implications
+of Being a Foreign Private Issuer
+
+ 
+
+We
+report under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as a non-U.S. company with "foreign
+private issuer" status. Even after we no longer qualify as an emerging growth company, so long as we qualify as a foreign private
+issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act and the rules thereunder that are applicable
+to U.S. domestic public companies, including:
+
+ 
+
+ 
+ 
+ 
+ the
+ rules under the Exchange Act that require U.S. domestic public companies to issue financial statements prepared under U.S. Generally
+ Accepted Accounting Principles ("U.S. GAAP");
+
+ 
+ 
+ 
+ the
+ sections of the Exchange Act that regulate the solicitation of proxies, consents or authorizations in respect of any securities registered
+ under the Exchange Act;
+
+ 
+ 
+ 
+ the
+ sections of the Exchange Act that require insiders to file public reports of their stock ownership and trading activities and that
+ impose liability on insiders who profit from trades made in a short period of time; and
+
+ 
+ 
+ 
+ the
+ rules under the Exchange Act that require the filing with the SEC of quarterly reports on Form 10-Q, containing unaudited financial
+ and other specified information, and current reports on Form 8-K, upon the occurrence of specified significant events.
+
+ 
+ 
+
+We
+file with the SEC, within four months after the end of each fiscal year (or as otherwise required by the SEC), a prospectus on Form 20-F
+containing financial statements audited by an independent registered public accounting firm.
+
+ 
+
+We
+may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private
+issuer at such time as more than 50% of our outstanding voting securities are held of record by U.S. residents and any of the following
+three circumstances applies: (i) the majority of our executive officers or directors are U.S. citizens or residents, (ii) more than 50%
+of our assets are located in the United States or (iii) our business is administered principally in the United States. Both foreign private
+issuers and emerging growth companies are also exempt from certain of the more extensive SEC executive compensation disclosure rules.
+Therefore, if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from
+such rules and will continue to be permitted to follow our home country practice as to the disclosure of such matters.
+
+ 
+
+Corporate
+Information
+
+ 
+
+Our
+principal executive offices are located at 8 Amoy Street, #01-01, Singapore 049950, which is also our registered address, and our telephone
+number is +65 8940 1200. The address of our website is www.geniusgroup.net. Information contained on, or available through,
+our website does not constitute part of, and is not deemed incorporated by reference into, this prospectus. Our agent for service of
+process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711.
+
+ 
+
+The
+Offering
+
+ 
+
+ 
+ Common
+ Shares outstanding after this offering 
+ 
+ 
+
+ 
+ 
+ 
+ 28,433,870
+ ordinary shares (effected for 1-for-10 reverse
+ split) (assuming exercise of all warrants).
+
+ 
+ 
+ 
+ 
+
+ 
+ Use
+ of proceeds
+ 
+ We
+ are not selling any shares of our common stock in this offering and we will not receive any of the proceeds from the sale of shares
+ of our common stock by the selling stockholders. The selling stockholders will receive all of the proceeds from any sales of the
+ shares of our common stock offered hereby.
+
+ 
+ 
+ 
+ 
+
+ 
+ Risk
+ factors
+ 
+ Investing
+ in our securities involves a high degree of risk. See the section entitled "Risk Factors" of this prospectus and the
+ section entitled "Risk Factors" in the documents incorporated by reference herein for a discussion of factors you should
+ carefully consider before investing in our securities.
+
+ 
+ 
+ 
+ 
+
+ 
+ NYSE
+ American symbol
+ 
+ "GNS."
+ 
+
+ 
+ 
+
+ S-8
+
+ 
+
+ 
+
+ 
+
+Unless
+otherwise noted, the number of ordinary shares to be outstanding effecting for 1-for-10 reverse split immediately after this offering
+as set forth above is based on shares outstanding as of August 26, 2024, excluding 6,725,072 warrants issued and outstanding
+and excludes:
+
+ 
+
+ 
+ 
+ 
+ 152,494
+ management and employee share options issued
+ and reserved.
+
+ 
+ 
+ 
+ Any
+ further conversion from the convertible debt issuance or any outstanding warrants.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/GSIW_garden_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/GSIW_garden_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/GSIW_garden_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/GUER_guerrilla_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/GUER_guerrilla_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/GUER_guerrilla_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/GYRO_gyrodyne_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/GYRO_gyrodyne_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/GYRO_gyrodyne_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/HGASW_global_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/HGASW_global_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..24780df7384858be5e687e552d4cb5f7ddf9f011
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/HGASW_global_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights selected information appearing elsewhere in this prospectus or the documents incorporated by reference herein. Because it is a summary, it may not contain all of the information that may be important to you. To understand this offering fully, you should read this entire prospectus, the registration statement of which this prospectus is a part and the documents incorporated by reference herein carefully, including the information set forth under the heading Risk Factors and our financial statements. Our Business Global Gas is a nascent pure-play hydrogen and carbon recovery project developer and industrial gas supplier. Global Gas intends to offer customers reliable, low-carbon and clean hydrogen, pure carbon dioxide, and other gases generated from a variety of feedstocks. Global Gas planned activities involve (i) the sourcing, identification, evaluation and vetting of offtake customers seeking to purchase industrial gases, (ii) the securing of local feedstocks, equipment, and utilities, (iii) the planning and management of projects and (iv) the structuring and financing of projects. Global Gas was founded in 2023 by a team with over a decade of hydrogen experience and several decades of business development, mergers & acquisitions, and capital markets experience. Global Gas targets both privately- and publicly-funded hydrogen development and selected carbon recovery projects, including projects supported by local-, county-, state-, and national-level governments in North America, Western Europe, and Great Britain. Global Gas intends to serve traditional industrial gas customers, and is particularly focused on plans to serve the rapidly growing hydrogen-as-energy-carrier market for use in hydrogen fuel-cell powered vehicles. Global Gas growth strategy is based on its developing ability to place modular generation, recovery, storage, and dispense solutions in closer geographic proximity to end customers onsite in many cases and its developing ability to produce and sell multiple outputs from a single feedstock input. Additionally, governments at all levels in North America and Western Europe have and are deploying substantial incentives to mitigate the impact of climate change and to decarbonize their economies. Global Gas believes it is well-placed to benefit as a developer of projects eligible for several of these incentives, such as the hydrogen tax production credits and the investment tax credits made available in the United States through the recently enacted Inflation Reduction Act of 2022 (the IR Act ). For a discussion of Global Gas, see Management s Discussion and Analysis of Financial Condition and Results of Operations Business Overview. In selecting feedstock to generate industrial gases, we will primarily target renewable waste and will need to seek arrangements with owners of renewable waste feedstock, such as wastewater treatment plants, landfills, food waste processing facilities, and agricultural farms, to access their renewable waste feedstock. In addition to generating industrial gases from renewable waste feedstock, we plan to generate gases from non-renewable sources including pipeline natural gas. We will need to seek arrangement with owners of such non-renewable feedstock. On projects where a non-renewable, or high greenhouse gas output, energy source is used, as well as on selected other projects where such technology is required to produce clean hydrogen, we may deploy carbon recovery technology more commonly known as carbon capture technology. On the hydrogen side, we intend to serve traditional industrial gas customers, and are particularly focused on plans to serve the rapidly growing hydrogen-as-energy-carrier market, comprising heavy duty hauling transportation operators such as transit bus agencies, long haul truck fleet operators, truck leasing operators, and refuse collection truck operators, many of whom are considering deploying hydrogen fuel cell powertrain vehicles to decarbonize their fleets which currently runs almost exclusively on diesel. On the carbon dioxide side, we target both traditional industrial users of the gas, including food & beverage grade users such as brewers and beverage bottlers requiring carbonation, as well as emerging users such as the producers of green building materials. Our growth strategy is based on developing our ability to place modular generation, recovery, storage, and dispensing solutions in closer geographic proximity to our end customers onsite in many cases and our ability to produce and sell multiple outputs from a single feedstock input. We hope that these plans, if successfully carried out, will allow us to produce clean hydrogen and carbon dioxide at a net cost normally seen only in larger scale plants and which supports competitive market prices for our end products. Additionally, governments at all levels in North America and Western Europe have and are deploying substantial incentives to mitigate the impact of climate change and to decarbonize their economies. We believe we are well-placed to 1 Table of Contents benefit as a developer of projects eligible for several of these incentives, such as the hydrogen tax production credits and the investment tax credits made available in the United States through the recently enacted Inflation Reduction Act of 2022. The mailing address of Global Gas is 99 Wall Street, Suite 436, New York, New York 10005, and its telephone number is (917) 203-4436. Background On December 21, 2023 (the Closing Date ), Global Gas Corporation, a Delaware corporation (formerly known as Dune Acquisition Corporation) (prior to the Effective Time (as defined below), Dune and after the Effective Time, the Company ), consummated the previously-announced business combination pursuant to that certain Unit Purchase Agreement, dated May 14, 2023 (as amended on August 22, 2023 and as further amended on November 24, 2023, the Purchase Agreement ), by and among Dune, Global Gas Holdings LLC, a Delaware limited liability company and direct, wholly-owned subsidiary of Dune ( Holdings ), Global Hydrogen Energy LLC, a Delaware limited liability company ( Global Hydrogen ), and William Bennett Nance, Jr., Sergio Martinez and Barbara Guay Martinez (collectively, the Sellers ), the equity holders of Global Hydrogen. William Bennett Nance, Jr., the Founder and Chief Executive Officer of Global Hydrogen, was also a director of Dune and, as of the Effective Time, is now the Chief Executive Officer and a director of the Company. In connection with the closing of such business combination, the registrant changed its name from Dune Acquisition Corporation to Global Gas Corporation, and on December 22, 2023, the Company s Class A Common Stock (as defined below) and warrants began trading on The Nasdaq Capital Market ( Nasdaq ) under the new trading symbols of HGAS and HGASW, respectively. In accordance with the terms and subject to the conditions of the Purchase Agreement and the other transactions contemplated thereby (the Business Combination ), at the closing of the Business Combination (the Closing ) on December 21, 2023, (a) Dune contributed to Holdings all of its assets (excluding its interests in Holdings and the aggregate amount of cash proceeds required to satisfy redemptions by Dune s public stockholders ( Stockholder Redemptions )), and in exchange therefor, Holdings issued to Dune a number of common equity units of Holdings ( Holdings Common Units ) which equal the number of total shares of Class A common stock, par value $0.0001 per share ( Class A Common Stock ), of Dune issued and outstanding immediately after the Closing (giving effect to all Stockholder Redemptions) (such transactions, the SPAC Contribution ) and (b) immediately after the SPAC Contribution, the Sellers transferred, conveyed, assigned and delivered all of the limited liability company equity interests of Global Hydrogen ( Global Hydrogen Units ) to Holdings in exchange for shares of Class B voting non-economic common stock, par value $0.0001 per share ( Class B Common Stock ), of Dune and Holdings Common Units (together with the SPAC Contribution, the Combination Transactions ), as a result of which, (i) each issued and outstanding Global Hydrogen Unit immediately prior to the Combination Transactions is now held by Holdings, (ii) each Seller received an aggregate number of Holdings Common Units and shares of Class B Common Stock, in each case, equal to the number of Global Hydrogen Units held by such Seller, multiplied by the applicable exchange ratio, and (iii) Dune changed its name to Global Gas Corporation and the Company became the publicly traded reporting company. The effective time of the Business Combination on the Closing Date is referred to as the Effective Time. The Business Combination was accomplished through what is commonly referred to as an Up-C structure, which is often used by partnerships and limited liability companies undertaking an initial public offering. The Up-C structure allowed the Sellers, who became equity holders of Holdings upon the consummation of the Combination Transactions, to retain their equity ownership in Holdings, an entity that is classified as a partnership for United States federal income tax purposes, in the form of Holdings Common Units after the Closing, and provides potential future tax benefits for both the Company and Holdings equity holders (other than the Company) when they ultimately exchange their Holdings Common Units. In accordance with the terms and subject to the conditions of the Purchase Agreement, at the Closing, the issued and outstanding Global Hydrogen Units of each Seller were transferred, conveyed, assigned and delivered in exchange for (i) a number of shares of Class B Common Stock equal to the product of (x) the number of Global Hydrogen Units held by such Seller and (y) the exchange ratio determined by dividing (A) the quotient of 2 Table of Contents $43,000,000 divided by the number of Global Hydrogen Units issued and outstanding immediately prior to the Closing by (B) $10.00 per share and (ii) a number of Holdings Common Units equal to the number of shares of Class B Common Stock received by such Seller pursuant to clause (i) hereof. In connection with the Business Combination, on December 1, 2023, Dune and Global Hydrogen entered into a forward purchase agreement (the Forward Purchase Agreement ) with each of Meteora Strategic Capital, LLC ( MSC ), Meteora Capital Partners, LP ( MCP ) and Meteora Select Trading Opportunities Master, LP ( MSTO and, collectively with MSC and MCP, the Meteora Entities ) for an OTC Equity Prepaid Forward Transaction. In connection with the Forward Purchase Agreement, Dune entered into a subscription agreement (the Subscription Agreement ) with the Meteora Entities. Pursuant to the Subscription Agreement, the Meteora Entities agreed to subscribe for and purchase, and Dune agreed to issue and sell to the Meteora Entities, on the Closing Date, 681,220 shares of Class A Common Stock in the aggregate (the PIPE Shares ). Pursuant to the Subscription Agreement, the Company gave certain registration rights to the Meteora Entities with respect to the PIPE Shares. The sale of the PIPE Shares was consummated concurrently with the Closing. On February 5, 2024, Global Gas and the Meteora Entities entered into an amendment to the Forward Purchase Agreement (the Forward Purchase Agreement Amendment ) which provides that Global Gas has the option, at its sole discretion, at any time up to 45 days prior to the valuation date, to request up to $5 million in Prepayment Shortfall (as defined in the Forward Purchase Agreement Amendment) via twenty separate written requests to the Meteora Entities in the amount of $250,000 each (each, an Additional Shortfall Request ), provided that at the time of any Additional Shortfall Request (i) the Meteora Entities has recovered 110% of the prior Additional Shortfall Request, if any, via Shortfall Sales and (ii) the VWAP Price over the five trading days prior to such Additional Shortfall Request multiplied by the then current Number of Shares less Shortfall Sale Shares held by Seller is at least 2.625 times greater than such Additional Shortfall Request (in each case, as defined in the Forward Purchase Agreement Amendment). In addition, the Forward Purchase Agreement Amendment amends the section of the Forward Purchase Agreement regarding Prepayment Shortfall Consideration by eliminating the 180-day period following a Trade Date before Seller may commence selling Recycled Shares and by permitting such sales without payment by Seller of any Early Termination Obligation until such time as the proceeds from such sales equal 110% (instead of 100% as originally provided in the Forward Purchase Agreement) of the Prepayment Shortfall. Finally, the Forward Purchase Agreement Amendment amends the section of the Forward Purchase Agreement regarding Share Consideration by amending the holding period to equal the earlier of (i) Seller recovering 110% of the first Additional Shortfall Request and (ii) the three-month anniversary of the Business Combination (each term as defined in the Forward Purchase Agreement) (instead of just a three-month holding period). On March 4, 2024, Global Gas and the Sellers entered into forfeiture agreements (the Forfeiture Agreements ) with each of Sergio Martinez, Barbara Guay Martinez and William Bennett Nance, Jr., pursuant to which Sergio Martinez and Barbara Guay Martinez each forfeited 80,000 shares of Class B Common Stock and William Bennett Nance, Jr. forfeited 1,400,000 shares of Class B Common Stock (collectively, the Forfeitures ). After the Forfeitures, the Sellers continue to hold an aggregate of 2,700,000 shares of Class B Common Stock. The rights of holders of our Class A Common Stock and Warrants are governed by our second amended and restated certificate of incorporation (the Amended and Restated Charter ), our amended and restated bylaws (the Amended and Restated Bylaws ) and the Delaware General Corporation Law (the DGCL ), and in the case of the Public Warrants and Private Placement Warrants, the Warrant Agreement dated as of December 17, 2020, between the Company and Continental Stock Transfer & Trust Company ( Continental ), as warrant agent. See the section entitled Description of Securities. 3 Table of Contents
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/HPAIW_helport_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/HPAIW_helport_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8d864e052daf244b9e0e4d9132a2ef6c38e4031d
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/HPAIW_helport_prospectus_summary.txt
@@ -0,0 +1 @@
+SUMMARY OF THE PROSPECTUS 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/IKT_inhibikase_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/IKT_inhibikase_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8ee1fc9cc61780849a282f747346ad76e19a4b18
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/IKT_inhibikase_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights certain information about us, this offering and information appearing elsewhere in this prospectus and in the documents we incorporate by reference in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our securities. After you carefully read this summary, to fully understand our Company and this offering and its consequences to you, you should read this entire prospectus and any related free writing prospectus authorized by us, including the information referred to under the heading Risk Factors in this prospectus beginning on page 8, and any related free writing prospectus, as well as the other documents that we incorporate by reference into this prospectus, including our financial statements and the notes to those financial statements, which are incorporated herein by reference from our Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 27, 2024, and our Quarterly Report on Form 10-Q for the three month period ended March 31, 2024, filed on May 15, 2024. Please read Where You Can Find More Information on page 31 of this prospectus. In this prospectus, unless context requires otherwise, references to we, us, our, or the Company refer to Inhibikase Therapeutics, Inc., a Delaware corporation and its consolidated subsidiaries. We own or have rights to trademarks and trade names that we use in connection with the operation of our business. In addition, our name, logos and website name and address are our trademarks. Solely for convenience, in some cases, the trademarks and trade names referred to in this prospectus are listed without the applicable and symbols, but we will assert, to the fullest extent under applicable law, our rights to these trademarks and trade names. Other trademarks and trade names appearing in this prospectus are the property of their respective owners. Overview Inhibikase Therapeutics, Inc. Company Overview We are a clinical-stage pharmaceutical company developing protein kinase inhibitor therapeutics to modify the course of Parkinson s disease ( PD ), Parkinson s-related disorders and other diseases of the Abelson Tyrosine Kinases. The Company s multi-therapeutic pipeline has a primary focus on neurodegeneration and its lead program utilizing Risvodetinib (also known as IkT-148009), a selective inhibitor of the non-receptor Abelson Tyrosine Kinases, targets the treatment of Parkinson s disease inside and outside the brain as well as other diseases that arise from Abelson Tyrosine Kinases. In 2021, we commenced clinical development of Risvodetinib (IkT-148009), which we believe can modify the course of Parkinson s disease including its manifestation in the gastrointestinal, or GI, tract. In January, 2023, the Company initiated its Phase 2 program, termed the 201 trial (www.the201trial.com), for Risvodetinib (IkT-148009) as a treatment for Parkinson s disease and began the process of opening up to 34 sites in the U.S. As of June 17, 2024, 32 sites are open and the trial is fully enrolled. As of June 17, 2024, 32 mild and 4 moderate possibly treatment-related adverse events have been reported across all enrolled patients taking Risvodetinib (IkT-148009). Results from this trial will be reported in the fourth quarter of 2024. The emerging path to complete enrollment has prompted us to take further advantage of this multi-dose study by planning to extend the 201 trial by up to 12 months, subject to additional resources. In addition, emerging biomarker data from the 201 trial evaluating pathological alpha-synuclein in multiple tissues and fluids supported our recent grant submissions to the National Institute of Neurological Disease and Stroke. One of these grants, if approved, will introduce our novel monoclonal antibody to track phospho-Tyr39-alpha-synuclein in the clinical trial setting, which we believe in turn will enhance the meaning of biomarker measurements. We believe the utilization of this antibody in tissue biopsy and fluid analysis will enable us to confirm target engagement and evaluate the effect of Risvodetinib (IkT-148009) on the underlying pathology responsible for disease. The twelve-week 201 trial is evaluating three doses in participants who have untreated Parkinson s disease on a staggered schedule and is placebo controlled with 1:1:1:1 randomization. The primary endpoints of this trial are safety and tolerability and a hierarchy of 15 secondary endpoints will evaluate treatment benefit in the brain and Table of Contents GI tract. The recent analysis of 11 patients who participated in the 201 trial prior to the temporary clinical hold issued by the FDA in November, 2022, which was lifted in January, 2023, suggested that Risvodetinib (IkT-148009) may have some effect on disease. These participants were withdrawn from the trial following the FDA s temporary clinical hold. As detailed at the Movement Disorder Society Congress held August 2023, the primary secondary endpoint is a functional assessment comprised of the sum of Parts 2 and 3 of the Movement Disorder Society Universal Parkinson s Disease Rating Scale (MDS-UPDRS Parts II+III). This sum showed an average -8.7 point improvement in the three participants on the 200 mg dose relative to baseline, while three placebo participants increased by +1.7 points; this represents an average spread of -10.4 points. A lower (or negative) change relative to placebo of greater than -3 to -6 points might be considered a measure of improvement. Given the small sample size on this dose, we believe it is premature to conclude a clinical benefit, but this observation reinforces our desire to extend the trial for an additional 12 months to potentially obtain a clear picture of clinical benefit over a total measurement of 15 months. Blinded functional assessment and biomarker data supports the trial extension and may reinforce the observations made from the 11 unblinded patients. In March 2023, we opened our Investigational New Drug Application, or IND, for Risvodetinib (IkT-148009) as a treatment for the Parkinson s-related orphan disease Multiple System Atrophy, or MSA. Our evaluation of Risvodetinib (IkT-148009) in MSA was benefited by a grant received from the National Institute of Neurological Diseases and Stroke, an Institute of the National Institutes of Health, for $0.39 million to fund animal model studies of Risvodetinib (IkT-148009) as a therapy for MSA. Two different animal studies were undertaken to evaluate whether Risvodetinib (IkT-148009) could have an impact on disease in the animal. One model evaluated the ability of Risvodetinib (IkT-148009) to modify disease early in its progression, while the second model is evaluating whether Risvodetinib (IkT-148009) can correct functional loss much later in the disease course. The early progression model study has now been shown to preserve nearly normal functional activity following 20 weeks of once daily dosing relative to untreated controls. Preservation of function in this model occurred with substantial reduction of the underlying alpha-synuclein protein pathology. The second model evaluating Risvodetinib (IkT-148009) late in the disease course is ongoing. In addition, Risvodetinib (IkT-148009) was recently given Orphan Drug Designation by the FDA for the treatment of MSA. We are working with the National Institute of Neurological Diseases and Stroke to possibly initiate a Phase 2/3 program to evaluate Risvodetinib (IkT-148009) as a treatment for MSA through a clinical trial network supported by the Institute. The proposed Phase 2/3 study will have a primary efficacy endpoint following once daily dosing at one of two dose levels for twelve months. We plan to submit complementary regulatory documents for Risvodetinib (IkT-148009) to European Union authorities in 2024. We are also developing platform technologies to improve delivery of protein kinase inhibitors in patients. One example of our potential ability to improve drug delivery is IkT-001Pro, a prodrug of the anticancer agent imatinib mesylate, which is intended to treat Stable Phase Chronic Myelogenous Leukemia, or SP-CML. A three-part dose finding/dose equivalence study in 66 healthy volunteers (known as the 501 trial ) has completed with IkT-001Pro. The study was designed to evaluate the 96-hour pharmacokinetics of imatinib delivered as IkT-001Pro and determine the dose of IkT-001Pro that can deliver the equivalent of either 400 mg or 600 mg imatinib mesylate. As of the date of this Report, bioequivalence to 400 mg imatinib mesylate has been established to our satisfaction for a 600 mg dose of IkT-001Pro. We further evaluated 600 mg imatinib mesylate and believe that a 900 mg dose of IkT-001Pro is the preferred dose of IkT-001Pro to deliver a dose of imatinib equivalent to 600 mg imatinib mesylate. We studied 800 mg IkT-001Pro and found it to be nearly equivalent to 600 mg imatinib mesylate. We may study higher doses of IkT-001Pro to cover the full range of doses approved for imatinib mesylate to treat up to 11 adult and pediatric blood cancers. On January 19, 2024, members of the Company along with its medical oncology consultants met with the FDA Review Team (the Review Team ) from the Division of Hematologic Malignancies in a Pre-New Drug Application, or NDA, meeting to discuss our bioequivalence studies of IkT-001Pro and its path to approval. All questions were addressed and summarized in official meeting minutes issued by the FDA on February 12, 2024. During the meeting we inquired whether additional clinical studies may be needed to seek approval and Table of Contents discussed manufacturing and quality control requirements for approval. The Review Team acknowledged that the 505(b)(2) pathway appears to be the appropriate pathway for approval of IkT-001Pro and indicated that, pending formal review of our clinical data, clinical studies completed to date indicate that 600 mg and 800 mg IkT-001Pro provides similar exposures to 400 mg and 600 mg imatinib mesylate, respectively, subject to review of the NDA upon filing. In addition, given that imatinib mesylate is approved for use between 300 mg and 800 mg once daily for a variety of blood and gastrointestinal cancers, the Review Team stated that if we intend to seek approval across all currently approved indications, we should evaluate additional dose(s) as needed to measure the safety, tolerability and bioequivalent dose of IkT-001Pro that would deliver up to 800 mg, the highest approved dose of imatinib mesylate. The Review Team also discussed the possible difference between IkT-001Pro and imatinib mesylate absorption in the gut and recommended that we evaluate whether IkT-001Pro and imatinib mesylate behave differently with respect to certain gut transporters that regulate absorption. We are in alignment with the FDA and are initiating the necessary pre-clinical test to evaluate this further to ensure that delivery of imatinib by IkT-001Pro mimics imatinib mesylate in all respects. Finally, a number of recommendations were discussed to prevent the potential mix-up between 001Pro and imatinib mesylate either at the pharmacy or by patients for two drugs delivering the same active ingredient. We discussed alternate dosage forms for IkT-001Pro relative to imatinib mesylate as the primary mitigation strategy and will provide a justification of the dosage forms chosen and why they are unlikely to cause medication errors. To ensure that we meet the manufacturing requirements for approval, we will request milestone-based meetings with the Review Team as we complete the required manufacturing and quality control processes. We are also evaluating the application of IkT-001Pro to pulmonary arterial hypertension (PAH). PAH is a rare disease of the pulmonary microvasculature with about 30,000 cases in the U.S., mostly in women between the ages of 30 and 60. The global PAH market size was valued at $7.66 billion in 2023 and is estimated to grow at a compound annual growth rate of 5.4% between 2024 to 2030. Most treatments for PAH attempt to address symptoms of this progressive disorder, but in the early 2010s, imatinib delivered by imatinib mesylate was shown to be a disease-modifying therapy for PAH. Co-administration of medications with harmful drug-drug interactions precluded the approval of imatinib as add-on therapy in PAH. Today, on the other hand, changes to standard-of-care for these patients has reduced the safety risk from imatinib treatment in PAH in our view. As such, on April 5, 2024, members of the Company met with the FDA Division of Cardiology and Nephrology in a pre-IND meeting to discuss the Company s plan to utilize IkT-001Pro at 300 mg or 450 mg in a Phase 2/3 efficacy, safety and tolerability trial in World Health Organization Functional Class I patients. At the meeting, the FDA confirmed that IkT-001Pro would be viewed as a New Molecular Entity (NME) for PAH and that the appropriate path for approval is the 505(b)(2) statute. This opens up the possibility of IkT-001Pro being granted NME and patent exclusivity on approval. The period of exclusivity would be evaluated once the NDA is filed. The FDA requested that we conduct a comparative cell-culture based study of the hERG ion channel, a standard cardiovascular safety test performed for any NME for which a new IND is to be opened. The Company plans to complete this study later in the second quarter or in early third quarter of 2024 and file the IND. The Company is in active discussion with potential strategic partners on this program. The Company has also applied for Orphan Drug Designation for delivery of imatinib by IkT-001Pro for PAH. We have also improved drug delivery of Risvodetinib (IkT-148009) through development of a tablet formulation, which we measured to nearly double the concentration of Risvodetinib (IkT-148009) delivered relative to the same dose previously administered as a gelatin capsule. This provides the opportunity to lower the effective oral dose, which could lead to further safety and tolerability improvements for Risvodetinib (IkT-148009). The Company plans to introduce the tablet formulation into the 12-month extension study, once implemented, as well as in all future clinical trials. Finally, we are evaluating a number of research phase molecules (IkT-148x and BIP 4-7) for a variety of neurodegenerative disease indications across our pre-clinical development pipeline. In our opinion, the multi-decade failures in the treatment of neurodegenerative diseases such as PD result from a lack of understanding of the biochemistry of the disease processes involved. Neurodegeneration is marked by a Table of Contents progressive degeneration and loss of function of neurons which send and receive signals to and from the brain. Historically, the cause of a neurodegenerative disease was thought to be a plaque made up of a misfolded and/or aggregated protein(s). Therapeutic approaches, therefore, sought to remove plaque from the brain. A plaque -focused treatment strategy has failed to alter the course of Parkinson s disease in two Phase 2 trials that reported results in 2020 and 2021. We believe we are different. We identified the proteins that become dysfunctional in a disease pathway and sought to understand how a dysfunctional protein causes disease and published those results in several high-profile peer reviewed publications. We believe our approach to PD and other neurological diseases has identified the underlying cause of disease and led to an understanding of how individual proteins are linked together to define the disease process. We believe our approach to neurodegenerative disease is validated by our 2022 and 2023 publications and oral presentations at the major academic and industry conferences in Parkinson s and Alzheimer s diseases. To increase the probability of success, we are making parallel investments in several product candidates and back-up candidates, and plan to advance only those candidates to the later stages of clinical development that show strong preclinical and early clinical data. By developing a portfolio of product candidates across therapeutic indications, we can continuously apply learnings and tools across programs and leverage economies of scale in our research and development organization. Our target indications include diseases with large patient populations, such as PD, as well as orphan indications, such as, Multiple System Atrophy and Chronic Myelogenous Leukemia. Pivot Arbitration On April 26, 2024, we received a notice of a demand for arbitration with the American Arbitration Association from Pivot Holding LLC ( Pivot ), that alleges to be a successor in interest to Sphaera Pharma Pte. Ltd. ( Sphaera ), in connection with the Collaborative Research and Development Agreement dated February 29, 2012, as amended, between us and Sphaera. Pivot alleges breach of contract by us for failure to pay milestone payments and seeks damages of $1.625 million in milestone payments plus interest. We believe that Pivot s claims are without merit and that we have not owed and do not owe any milestone payments to Pivot. We filed our Answering Statement on June 17, 2024, in which we asserted various defenses and a counterclaim seeking damages or offset of no less than $900,000. The parties have agreed to mediate before arbitrating. Reduction of At The Market Offering On February 1, 2024, we entered into an At The Market Offering Agreement (the Sales Agreement ) with H.C. Wainwright & Co., LLC, as sales agent (the Agent ), pursuant to which we may, from time to time, issue and sell shares of our common stock in an aggregate offering price of up to $5,659,255 through the Agent. The offer and sales of such shares of common stock made pursuant to the Sales Agreement are made under the Company s effective shelf registration statement on Form S-3 (File No. 333-262551) dated February 11, 2022, the base prospectus contained therein, and a prospectus supplement ( ATM Prospectus Supplement ) related to the offering of such shares of common stock dated February 1, 2024. Under the terms of the Sales Agreement, the Agent may sell such shares of common stock at market prices by any method that is deemed to be an at the market offering as defined in Rule 415 under the Securities Act. As of May 20, 2024, we have sold 315,338 shares of common stock covered by the ATM Prospectus Supplement for an aggregate gross sales price of $849,187.85 prior to the filing of Prospectus Supplement No. 1 to the ATM Prospectus Supplement. On May 20, 2024, we filed Prospectus Supplement No. 1 to the ATM Prospectus Supplement to reduce the additional maximum aggregate gross sales price of our common stock that may be offered, issued and sold under the Sales Agreement to $50,000. Company Information We were incorporated in Delaware in 2010 as a successor to a Georgia limited liability company and commenced operations in September 2008. Our principal executive offices are located at 3350 Riverwood Parkway SE, Suite Table of Contents 1900, Atlanta, Georgia, 30339. We also maintain offices at 1 Cranberry Hill, Ste 200, Lexington, Massachusetts, 02421. Our telephone numbers are (678) 392-3419 and (617) 936-0184. Our website address is www.inhibikase.com. Information contained on our website is not incorporated by reference into this prospectus, and it should not be considered to be part of this prospectus. Implications of Being an Emerging Growth Company As a company with less than $1.235 billion in revenues during our last completed fiscal year, we qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise applicable generally to public companies. These reduced reporting requirements include: an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal control over financial reporting; an exemption from compliance with any requirement that the Public Company Accounting Oversight Board may adopt regarding a supplement to the auditor s report providing additional information about the audit and the financial statements; reduced disclosure about our executive compensation arrangements; and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or a stockholder approval of any golden parachute arrangements. We have elected to take advantage of some, but not all, of the available benefits under the JOBS Act. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock. Further, pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. We will remain an emerging growth company until the earliest to occur of: (i) the end of the first fiscal year in which our annual gross revenues are $1.235 billion or more; (ii) the end of the first fiscal year in which we are deemed to be a large accelerated filer, as defined in the Securities Exchange Act of 1934, as amended (the Exchange Act ); (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) December 31, 2025. Table of Contents
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+PROSPECTUS SUMMARY This summary highlights selected information that is presented in greater detail contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our unaudited condensed consolidated financial statements, audited consolidated financial statements, unaudited condensed combined financial statements, audited combined financial statements, and unaudited pro forma financial statements, and the related notes thereto and the information set forth under the sections of this prospectus titled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations of Inhibrx, Inc. and Management s Discussion and Analysis of Financial Condition and Results of Operations of Inhibrx Biosciences. Unless expressly indicated or the context requires otherwise, the terms Company, we, us, and our in this prospectus refer to Inhibrx Biosciences, Inc., a corporation incorporated under the laws of the State of Delaware, and its subsidiaries, including as a former business of Inhibrx, Inc. to the extent the context requires. Spin-Off from Inhibrx, Inc. Inhibrx Biosciences, Inc. was incorporated on January 8, 2024 under the laws of the State of Delaware as a direct, wholly-owned subsidiary of the Former Parent. On May 29, 2024, the Former Parent completed the Distribution pursuant to the Distribution Agreement. Following the Distribution, the Company became a separate company from the Former Parent, or the Spin-Off, and the Former Parent retained 8% of the issued and outstanding shares of the Company s Common Stock as of the time of the Distribution. Immediately following the Spin-Off, the Former Parent and the Acquirer consummated the Merger pursuant to the Merger Agreement. Each holder of a share of the Former Parent s common stock received one share of the Company s Common Stock for every four shares of the Former Parent s common stock held of record as of the close of business, New York City time, on May 17, 2024. In the Distribution, an aggregate of 14,475,904 shares of the Company s Common Stock were issued, including 1,458,072 shares of Common Stock issued to certain of the selling stockholders. Following the Distribution and prior to the closing of the Merger, the holders of prefunded warrants to purchase shares of common stock of the Former Parent received warrants, or the Warrants, to purchase up to 991,849 shares of the Company s Common Stock. Prior to the Distribution, and pursuant to the Separation, the Former Parent underwent an internal restructuring that resulted in (a) the Former Parent directly or indirectly owning, assuming or retaining those assets and liabilities primarily related to the Former Parent s product candidate, INBRX-101, or the Former Parent Business, and (b) the Company directly or indirectly owning, assuming or retaining those assets and liabilities primarily related to the Former Parent s platform for the research, development, manufacture and commercialization of INBRX-105, INBRX-106 and ozekibart (INBRX-109), its discovery pipeline, and certain corporate infrastructure. Overview We are a clinical-stage biopharmaceutical company with a pipeline of novel biologic therapeutic candidates, developed using our proprietary modular protein engineering platforms. We leverage our innovative protein engineering technologies and deep understanding of target biology to create therapeutic candidates with attributes and mechanisms superior to current approaches and applicable to a range of challenging, validated targets with high potential. Current Clinical Pipeline Our current clinical pipeline of therapeutic candidates includes ozekibart (INBRX-109) and INBRX-106, both of which utilize our multivalent formats where the precise valency can be optimized in a target-centric way to mediate what we believe to be the most appropriate agonist function. ozekibart (INBRX-109)INBRX-106 Tetravalent DR5 agonistHexavalent OX40 agonist ProgramTherapeutic AreaTarget(s)/FormatSTAGE OF DEVELOPMENT PreclinicalPhase 1Phase 2Phase 3 ozekibart (INBRX-109)*OncologyDR5 Tetravalent Agonist INBRX-106** OncologyOX40 Hexavalent Agonist __________________ * Currently being investigated in chondrosarcoma, Ewing sarcoma, colorectal cancer, and certain other solid tumor types. ** Currently being investigated in patients with NSCLC and HNSCC. See the section entitled Business included in this prospectus for an in-depth discussion of our development programs and therapeutic candidates. Our Leadership Team We have assembled a team with deep scientific, manufacturing, and clinical experience in discovering and developing protein therapeutics, as well as an accomplished commercial team with the expertise to successfully bring our therapeutic candidates, if approved, to market. Our in-house capabilities span the disciplines of discovery, protein engineering, cell biology, translational research, chemistry, manufacturing and controls, or CMC, clinical development, and commercialization. Members of our team bring experience from multiple organizations including Genentech, Inc., Gilead Sciences, Inc., Merck & Co., Novartis AG, Pfizer Inc. and Roche. Our board of directors is comprised of individuals with proven business and scientific accomplishments and significant operating knowledge of our company. Our Strategy Our mission is to discover and develop effective biologic treatments for people with life-threatening conditions and to evolve the Company into a commercial-stage biopharmaceutical company with a differentiated and sustainable product portfolio by focusing on the following: Rapidly advance and optimize the clinical development of our lead programs. Each of our clinical programs has key data or milestone events expected in 2024/2025. Since entering the clinic, we have made great strides in each trial. Apply our protein engineering platforms to create differentiated, next-generation therapeutics in focused disease areas with particular emphasis on oncology. We continue to focus our internal clinical development where we believe we can create effective and flexible solutions to address the challenges of validated targets in areas with a high unmet medical need. Our modular protein engineering platforms enable us to efficiently identify optional therapeutic formats customized to the target biology. Maintain our culture of innovation, execution and efficiency. We have successfully built an innovative culture that encourages scientific risk-taking within the bounds of our data-driven philosophy. This enables our research and development team to discover numerous promising preclinical candidates cost effectively, from which we select what we believe are highly differentiated programs for clinical development. Maximize the potential of our therapeutic pipeline. We have a disciplined strategy to maximize the potential of our therapeutic pipeline in order to bring the greatest value to our stockholders and the most significant impact to patients. We are continuously looking to streamline operations to increase efficiency and to ensure maximum value is achieved with the capital we raise. Additionally, we will enter into strategic partnerships and transactions in instances where we believe partnering will accelerate our development timelines and/or maximize the commercial potential of any approved therapeutic candidate. Implication of Being an Emerging Growth Company We qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, enacted in 2012. As an emerging growth company, we expect to take advantage of reduced reporting requirements otherwise applicable to public companies. These provisions include, but are not limited to: not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may rely on the relief provided by these provisions until the last day of our fiscal year following the fifth anniversary of the completion of the Distribution. However, if certain events occur prior to the end of such five-year period, including if we become a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period. We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Implication of Being a Smaller Reporting Company Additionally, we are a smaller reporting company, meaning that the market value of our shares of Common Stock held by non-affiliates is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year. As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation. We may continue to be a smaller reporting company as long as either (i) the market value of our shares of Common Stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our shares of Common Stock held by non-affiliates is less than $700 million. Corporate Information Inhibrx Biosciences, Inc. was incorporated on January 8, 2024 under the laws of the State of Delaware as a direct, wholly-owned subsidiary of the Former Parent. We changed our name from Ibex SpinCo, Inc. to Inhibrx Biosciences, Inc. on January 25, 2024. Our corporate headquarters are located at 11025 N. Torrey Pines Road, Suite 140, La Jolla, CA 92037, and our telephone number is (858) 795-4220. Our website address is www.inhibrx.com. Information contained on, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus. We have proprietary rights to a number of trademarks used in this prospectus which are important to our business, including the Inhibrx logo. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the and symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. All other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. Summary of Risk Factors An investment in our Common Stock is subject to a number of risks, including risks related to our therapeutic candidates, risks related to our business, and risks related to our Common Stock. The following list of risk factors is not exhaustive. Please read the information in the section captioned Risk Factors for a more thorough description of these and other risks. Risks Related to Our Financial Condition and Need for Additional Capital We have a limited operating history, have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We may never generate product revenue or become profitable, or if we achieve profitability, we may not be able to sustain it. Biotechnology product development is a highly speculative undertaking and involves a substantial degree of uncertainty. We have never generated any revenue from product sales and may never be profitable. We expect we will need to raise substantial additional funds to advance development of our therapeutic candidates, and we cannot guarantee this additional funding will be available on acceptable terms or at all. Failure to obtain this funding when needed may force us to delay, limit or terminate our development efforts and, if any of our therapeutic candidates are approved, our commercialization efforts. We may be adversely affected by the effects of inflation. Risks Related to the Development, Clinical Testing and Commercialization of Our Therapeutic Candidates Our therapeutic candidates are in various stages of development and may fail or suffer delays (such as our partial clinical hold experienced in 2023 for ozekibart (INBRX-109)) that may materially and adversely affect their commercial viability. If we are unable to advance our therapeutic candidates through clinical development, obtain marketing approval and ultimately commercialize our therapeutic candidates, or experience significant delays in doing so, our business will be materially harmed. There can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development, including development in trials, of any of our therapeutic candidates. The results of preclinical studies and early-stage clinical trials of our therapeutic candidates may not be predictive of the results of later stage clinical trials. Initial results or observations in our ongoing clinical trials may not be indicative of results obtained when these trials are completed or in later stage trials. Our therapeutic candidates may cause undesirable side effects that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any. We have observed serious adverse events in our trials completed to date for ozekibart (INBRX-109) and INBRX-106. Please see the section entitled Business Our Pipeline ozekibart (INBRX-109) and Business Our Pipeline INBRX-106 for more information. The market opportunities for any current or future therapeutic candidate we develop, if and when approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed such that our therapeutic candidates may be approved only as second-line or third-line therapies. We expect to initially seek approval of certain of our therapeutic candidates as a therapy for patients who have received one or more prior treatments. Subsequently, for those products that prove to be sufficiently beneficial, if any, we would expect to seek approval potentially as a first-line therapy, but there is no guarantee that therapeutic candidates we develop, even if approved, would be approved for first-line therapy, and, prior to any such approvals, we may have to conduct additional clinical trials. The market opportunity for a second-line or third-line therapy may be small or smaller than we expect. Our approach to the discovery and development of product candidates is based on our proprietary modular protein engineering platforms and is novel and unproven, and the cost and time to develop them and the likelihood of success may be more uncertain than if we had employed more established drug development approaches. We rely on third parties to conduct a portion of our clinical trials and certain of our nonclinical studies. If these third parties do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines, our development programs could be delayed with material and adverse effects on our business, financial condition, results of operations and prospects. Risks Related to Our Organization and Operations We face significant competition and if our competitors develop and market products that are more effective, safer or less expensive than the therapeutic candidates we develop, our commercial opportunities will be negatively impacted. Our business, the conduct of our clinical trials, results of operations, financial condition, and prospects may be adversely affected by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus disease. Risks Related to Intellectual Property If we are not able to obtain and enforce patent protection for our technologies or therapeutic candidates, development and commercialization of our therapeutic candidates may be adversely affected. Risks Related to Government Regulation We may be unable to obtain marketing approval for any product that we may develop and the marketing approval processes of the FDA and other comparable regulatory authorities outside the United States are lengthy, time consuming and inherently unpredictable. Risks Related to Ownership of Our Common Stock We do not know whether an active, liquid and orderly trading market will continue to develop or be sustained for our Common Stock and as a result it may be difficult for you to sell your shares of our Common Stock. We expect that our stock price may fluctuate significantly. Our executive officers, directors and holders of more than 5% of our capital stock own a significant percentage of our stock and are able to exercise significant control over matters subject to stockholder approval. Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus and in the documents we incorporate by reference herein. This summary does not contain all of the information you should consider before making an investment decision. You should read this entire prospectus carefully, especially the risks of investing in our securities discussed under Risk Factors in this prospectus and under Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, along with our consolidated financial statements and notes to those consolidated financial statements and the other information incorporated by reference in this prospectus, before making an investment decision. In this prospectus, unless otherwise stated or the context otherwise requires, references to Iterum, we, us, our, the Company and similar references refer to Iterum Therapeutics plc and its consolidated subsidiaries; the term Iterum refers to Iterum Therapeutics plc. Overview of Iterum Therapeutics plc We are a clinical-stage pharmaceutical company dedicated to developing and commercializing sulopenem to be potentially the first oral penem available in the United States and the first and only oral and intravenous (IV) branded penem available globally. Penems, including thiopenems and carbapenems, belong to a class of antibiotics more broadly defined as -lactam antibiotics, the original example of which was penicillin, but which now also includes cephalosporins. Sulopenem is a potent, thiopenem antibiotic delivered intravenously which is active against bacteria that belong to the group of organisms known as gram-negatives and cause urinary tract and intra-abdominal infections. We have also successfully developed sulopenem in an oral tablet formulation, sulopenem etzadroxil-probenecid, which we refer to as oral sulopenem. We believe that sulopenem and oral sulopenem have the potential to be important new treatment alternatives to address growing concerns related to antibacterial resistance without the known toxicities of some of the most widely used antibiotics, specifically fluoroquinolones. After receiving positive data from our Phase 3 clinical trial known as REASSURE (REnewed ASsessment of Sulopenem in uUTI caused by Resistant Enterobacterales) in January 2024, our board of directors determined that we should focus on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing stakeholder value. We are now focused on a strategic process to sell, license, or otherwise dispose of our rights to sulopenem with the goal of maximizing stakeholder value and have engaged a financial advisor to assist management and the board of directors in evaluating strategic alternatives. We cannot provide any commitment regarding when or if this strategic process will result in any type of transaction however, and no assurance can be given that we will determine to pursue a potential sale, licensing arrangement or other disposition of its rights to sulopenem. We resubmitted our NDA for oral sulopenem for the treatment of uUTIs in adult women to the U.S. Food and Drug Administration ( FDA ) in April 2024. In May 2024, we received a notice from the FDA acknowledging receipt of the resubmission of the NDA and indicating that the FDA deemed our NDA resubmission to be a Class II complete response under the Prescription Drug User Fee Act ( PDUFA ), which has a six-month review period from the date of resubmission. As a result, the FDA has assigned a PDUFA action date to our resubmitted NDA of October 25, 2024. In June 2024, we announced that the FDA had determined that our NDA for oral sulopenem for the treatment of uUTIs in adult women will be taken to Advisory Committee, with September 9, 2024 being the proposed date for the Advisory Committee meeting. In its communication, the FDA highlighted that the purpose of the Advisory Committee meeting was to discuss (a) antimicrobial stewardship issues raised by potential approval and subsequent use of what would be the first oral penem in the U.S. and (b) the most appropriate target patient population(s) for treatment of uUTI with oral sulopenem. Table of Contents Our Corporate Information We were incorporated under the laws of Ireland in June 2015 as a private limited company and re-registered as a public limited company in March 2018. Our corporate headquarters are located at Fitzwilliam Court 1st Floor, Leeson Close, Dublin 2, Ireland and our telephone number is +353 1 669 4820. Our U.S. headquarters are located at 200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606, and our telephone number is (312) 778-6070. Our website address is www.iterumtx.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. Implications of Being a Smaller Reporting Company We are a smaller reporting company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, (the Exchange Act ). We may remain a smaller reporting company until we have a non-affiliate public float in excess of $250 million and annual revenues in excess of $100 million, or a non-affiliate public float in excess of $700 million, each as determined on an annual basis. For so long as we remain a smaller reporting company, we are permitted and intend to take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. Table of Contents
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/IZM_iczoom_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/IZM_iczoom_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/IZM_iczoom_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/KITL_kisses_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/KITL_kisses_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/KITL_kisses_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/LFCR_lifecore_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/LFCR_lifecore_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d40848df1b6dee7f07e59544fb581250557de5bd
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/LFCR_lifecore_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights selected information contained in more detail elsewhere in this prospectus and in documents incorporated by reference in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our common stock. For a more complete understanding of the Company, we encourage you to read and consider the more detailed information included or incorporated by reference in this prospectus, including the sections titled Risk Factors, Special Note Regarding Forward-Looking Statements, and our consolidated financial statements and the accompanying notes thereto incorporated by reference in this prospectus. Our Business We are a fully integrated contract development and manufacturing organization that offers highly differentiated capabilities in the development, fill and finish of complex sterile, injectable pharmaceutical products in syringes, vials and cartridges. As a leading manufacturer of premium, injectable grade Hyaluronic Acid, we bring more than 40 years of expertise as a partner for global and emerging biopharmaceutical and biotechnology companies across multiple therapeutic categories to bring their innovations to market. Private Placements 2024 Common Stock Private Placement On October 3, 2024, we entered into a securities purchase agreement (the 2024 Purchase Agreement ) with certain of the Selling Stockholders, pursuant to which we issued and sold an aggregate of 5,928,775 shares (the Common Shares ) of our common stock at a purchase price of $4.10 per share, generating gross proceeds of approximately $24.3 million (the 2024 Private Placement ). Pursuant to the 2024 Purchase Agreement, we also granted such Selling Stockholders certain registration rights, pursuant to which we agreed to file a registration statement covering the resale of the Common Shares by such holders and to use our reasonable best efforts to cause each such registration statement to become effective and to remain continuously effective until all Common Shares (a) have been disposed of in accordance with such registration statement, (b) have been transferred pursuant to Rule 144 under the Securities Act ( Rule 144 ), (c) can be immediately sold under Rule 144 without any restrictions on transfer, or (d) have ceased to be outstanding. 2023 Preferred Stock Private Placement On January 9, 2023 (the Preferred Issuance Date ), we entered into a securities purchase agreement (the Preferred Stock Purchase Agreement ) with investors, certain of the Selling Stockholders (collectively, the Preferred Holders ), pursuant to which we issued and sold an aggregate of 38,750 shares of Series A Convertible Preferred Stock, par value $0.001 per share (the Convertible Preferred Stock ), to the Preferred Holders for an aggregate purchase price of $38.75 million (the Preferred Stock Private Placement ). The Convertible Preferred Stock has the powers, designations, preferences and other rights as are set forth in the Certificate of Designations of the Series A Preferred Stock filed with the Delaware Secretary of State on the Preferred Issuance Date (the Certificate of Designations ), including the payment of dividends at a rate of 7.5% per annum, payable in-kind ( PIK ), and was originally convertible into shares of common stock at an initial conversion price equal to $7.00 per share. The conversion price is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, recapitalization or similar events, and is also subject to adjustment in the event of subsequent offerings of common stock or convertible securities by the Company for less than the conversion price then in effect. As a result of the 2024 Private Placement, the conversion price was adjusted to $6.53 per share, thereby increasing the aggregate number of shares of common issuable upon conversion of the Convertible Preferred Stock (the Conversion Shares ). The Conversion Shares covered by this prospectus include the 866,569 additional shares of common stock issuable as a result of such adjustment (the Additional Shares ). The information in this prospectus is not complete and may be changed. The Selling Stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED OCTOBER 10, 2024 Preliminary Prospectus Lifecore Biomedical, Inc. Up to 6,795,344 Shares of Common Stock This prospectus relates to the resale by the selling stockholders named herein or their permitted transferees (the Selling Stockholders ) of up to 6,795,344 shares of our common stock, par value $0.001 per share (the common stock ), including (i) 5,928,775 issued and outstanding shares of common stock and (ii) 866,569 shares of common stock that became issuable upon the conversion of shares of Series A Convertible Preferred Stock (the Convertible Preferred Stock ) as a result of an adjustment to the conversion price thereof. We are registering the shares for resale pursuant to such stockholders registration rights under a securities purchase agreement and a registration rights agreement between us and such stockholders. For additional information, see Prospectus Summary Private Placements beginning on page 1 of this prospectus. Subject to any applicable contractual restrictions, the Selling Stockholders may offer, sell or distribute all or a portion of their shares of our common stock publicly or through private transactions at prevailing market prices or at negotiated prices. For additional information, see Plan of Distribution beginning on page 16 of this prospectus. The Selling Stockholders may sell some, all or none of the shares being offered for resale in this offering. We are not selling any shares of our common stock under this prospectus and will not receive any of the proceeds from the sale of the shares of our common stock owned by the Selling Stockholders. For additional information, see Use of Proceeds beginning on page 6 of this prospectus and Selling Stockholders beginning on page 7 of this prospectus. We will bear all costs, expenses and fees in connection with the registration of these shares of our common stock, including with regard to compliance with state securities or blue sky laws. The Selling Stockholders will bear all commissions and discounts, if any, attributable to their sale of shares of our common stock. We have agreed to reimburse the Selling Stockholders for up to $70,000 of their expenses in the aggregate in connection with the registration of these shares. We are a smaller reporting company for purposes of federal securities laws and are subject to reduced public company reporting requirements. Accordingly, the information in this prospectus may not be comparable to information provided by companies that are not smaller reporting companies. Our common stock is listed on the Nasdaq Global Select Market tier of The Nasdaq Stock Market LLC under the symbol LFCR. On October 9, 2024, the last reported sale price of our common stock was $4.54. INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE RISK FACTORS BEGINNING ON PAGE 4 OF THIS PROSPECTUS AND IN ANY PROSPECTUS SUPPLEMENT OR SIMILAR SECTION CONTAINED IN THE DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Prospectus dated , 2024 In connection with the Preferred Stock Private Placement and pursuant to our obligations under a registration rights agreement with the Preferred Holders (the 2023 Registration Rights Agreement ), we previously filed a registration statement on Form S-1 (File No. 333-271176) with the SEC to register the resale of the shares of common stock then-issuable upon conversion of the shares of Convertible Preferred Stock. The incremental Additional Shares that became issuable upon conversion of the Convertible Preferred Stock as a result of the adjustment to the conversion price thereof are being registered pursuant to this registration statement. Accordingly, this prospectus does not cover the maximum aggregate number of shares of common stock issuable upon conversion of the Convertible Preferred Stock. Resale Shares This prospectus covers up to 6,795,344 shares of our common stock, including (i) 5,928,775 Common Shares issued and sold in the 2024 Private Placement and (ii) 866,569 Additional Shares that became issuable upon conversion of the Convertible Preferred Stock as a result of an adjustment to the conversion price thereof following the 2024 Private Placement. The Additional Shares, collectively with the number of Conversion Shares covered by a separate registration statement, exceed the Exchange Cap. Until our stockholders approve the Nasdaq Proposal, if ever, holders of Convertible Preferred Stock will not be entitled to convert their shares of Convertible Preferred Stock into a number of shares of common stock in excess of the Exchange Cap, and therefore until such time certain shares of common stock covered by this prospectus will not be issued or available for resale. Corporate Information We were incorporated in California on October 31, 1986 and reincorporated as a Delaware corporation on November 6, 2008. Our common stock is listed on The Nasdaq Global Select Market under the symbol LFCR. Our principal executive offices are located at 3515 Lyman Boulevard, Chaska, Minnesota 55318 and our telephone number is (952) 368-4300.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/LIMX_limitless_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/LIMX_limitless_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/LIMX_limitless_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/LQMT_liquidmeta_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/LQMT_liquidmeta_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..f74eca8c3490827ebaf29f0434ec3b7c7016bc6e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/LQMT_liquidmeta_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information that we present more fully in the rest of this prospectus and does not contain all of the information you should consider before investing in our securities. This summary contains forward-looking statements that involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. You should read the entire prospectus carefully, including the matters set forth under Risk Factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, our financial statements and related notes included elsewhere in this prospectus and the information incorporated into this prospectus by reference. In this prospectus, unless context requires otherwise, references to we, us, our, Liquidmetal Technologies, Liquidmetal or the Company refer to Liquidmetal Technologies, Inc., and its subsidiaries. Overview We are a materials technology company that works with manufacturing and commercial partners to develop and commercialize products made from our proprietary amorphous alloys. Our Liquidmetal family of alloys consists of a variety of proprietary bulk alloys and composites that utilize the advantages offered by amorphous alloy technology. We design, develop, and sell custom products and parts from bulk amorphous alloys to customers in various industries. We also partner with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products. Amorphous alloys are, in general, unique materials that are distinguished by their ability to retain a random atomic structure when they solidify, in contrast to the crystalline atomic structure that forms in other metals and alloys when they solidify. Liquidmetal alloys are proprietary amorphous alloys that possess a combination of performance, processing, and potential cost advantages that we believe will make them preferable to other materials in a variety of applications. The amorphous atomic structure of bulk alloys enables them to overcome certain performance limitations caused by inherent weaknesses in crystalline atomic structures, thus facilitating performance and processing characteristics superior in many ways to those of their crystalline counterparts. We believe the alloys and the molding technologies we employ can result in components for many applications that exhibit exceptional dimensional control and repeatability that rivals precision machining, excellent corrosion resistance, brilliant surface finish, high strength, high hardness, high elastic limit, alloys that are non-magnetic, and the ability to form complex shapes common to the injection molding of plastics. All of these characteristics are achievable from the molding process, so design engineers often do not have to select specific alloys to achieve one or more of the characteristics as is the case with crystalline materials. We believe these advantages could result in Liquidmetal alloys supplanting high-performance alloys, such as titanium and stainless steel, and other incumbent materials in a wide variety of applications. Moreover, we believe these advantages could enable the introduction of entirely new products and applications that are not possible or commercially viable with other materials. Our revenues are derived from (i) selling our bulk amorphous alloy custom products and parts for applications which include, but are not limited to, non-consumer electronic devices, medical products, automotive components, and sports and leisure goods (ii) selling tooling and prototype parts such as demonstration parts and test samples for customers with products in development and (iii) product licensing and royalty revenue. Our cost of sales consists primarily of the costs of manufacturing, which include raw alloy and direct labor costs. Selling, general, and administrative expenses currently consist primarily of salaries and related benefits, travel, consulting and professional fees, depreciation and amortization, insurance, office and administrative expenses, and other expenses related to our operations. Research and development expenses represent salaries, related benefits expenses, consulting and contract services, expenses incurred for the design and testing of new processing methods, expenses for the development of sample and prototype products, and other expenses related to the research and development of Liquidmetal bulk alloys. Costs associated with research and development activities are expensed as incurred. We plan to enhance our competitive position by improving our existing technologies and developing advances in amorphous alloy technologies. We believe that our research and development efforts will focus on the discovery of new alloy compositions, the development of improved processing technology, and the identification of new applications for our alloys. Our Strategy The key elements of our strategy include: Focusing our marketing activities on select products with optimized gross margins; Pursuing strategic partnerships in order to more rapidly develop and commercialize products; and Advancing the Liquidmetal Brand. LIQUIDMETAL TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Table of Contents Applications for Liquidmetal Alloys There is a very broad number of markets where Liquidmetal alloys have application opportunities. Some of the more prominent markets include: medical/ dental, automotive, non-consumer electronics, and sporting equipment. We believe that these areas are consistent with our strategy in terms of market size, building brand recognition, and providing an opportunity to develop and refine our processing capabilities. Although we believe that strategic partnership transactions could also create valuable opportunities beyond the parameters of these target markets, we anticipate continuing to pursue these markets both internally and in conjunction with partners. Medical Devices. We are engaged in product development efforts relating to various medical devices that could be made from bulk Liquidmetal alloys. We believe that the unique properties of bulk Liquidmetal alloys provide a combination of performance and cost benefits that could make them a desirable replacement for incumbent materials, such as machined stainless steel and titanium, or components made from other more traditional metalworking technologies currently used in various medical device applications. Our ongoing emphasis has been on minimally invasive surgical instrument applications for Liquidmetal alloys. These include, but are not limited to, specialized blades, clamps, tissue suturing components, tissue manipulation devices and orthopedic instruments utilized for implant surgery procedures, dental devices, and general surgery devices. The potential value offered by our alloys is higher performance in some cases and cost reduction in others, the latter stemming from the ability of Liquidmetal alloys to be net shape molded into components, thus reducing costs of secondary processing common with other metalworking processes. The status of most components in the prototyping phase is subject to non-disclosure agreements with our customers. Automotive Components. We are engaged in product development efforts relating to various automotive components that could be made from bulk Liquidmetal alloys. We believe that the unique properties of bulk Liquidmetal alloys provide the combination of long-lasting surface finish, corrosion resistance, strength, and precision required by most automotive applications, especially for the EV space. The potential value offered by our alloys is higher performance in some cases and cost reduction in others, the latter stemming from the ability of Liquidmetal alloys to be net shape molded into components, thus reducing costs of secondary processing common with existing processes. Components for Non-Consumer Electronic Products. We work with partners to design, develop and supply components for non-consumer electronic devices utilizing our bulk Liquidmetal alloys and believe that our alloys offer enhanced performance and design benefits for these components in certain applications. Our strategic focus is primarily on parts that command a price commensurate with the performance advantages of our alloys. These product categories in the non-consumer electronics field include, but are not limited to, aerospace components, leisure products, and industrial machines. We believe that there are multiple applications and opportunities in the non-consumer electronics product category for us to produce parts that command the higher margin and premium prices consistent with our core business strategy. Sporting Goods and Leisure Products. We are developing a variety of applications for Liquidmetal alloys in the sporting goods and leisure products area. Corporate Information We were originally incorporated in California in 1987, and we reincorporated in Delaware in May 2003. Our principal executive office is located at 20321 Valencia Circle, Lake Forest, California 92630. Our telephone number at that address is (949) 635-2100. Our Internet website address is www.liquidmetal.com and all of our filings with the SEC are available free of charge on our website. Information contained on our website is not incorporated by reference into this prospectus, and such information should not be considered to be part of this prospectus. We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act, and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies in this prospectus as well as our filings under the Exchange Act. Delaware 2800 33-0264467 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) Table of Contents THE OFFERING Issuer: Liquidmetal Technologies, Inc. Common stock to be offered by the selling stockholders: 417,326,959 shares of our common stock. Offering price: Market price or privately negotiated prices. Common stock outstanding after the offering: 917,285,149 shares of common stock. Use of proceeds: We will not receive any proceeds from the sale of the Resale Shares by the selling stockholders.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/LXEO_lexeo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/LXEO_lexeo_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/LXEO_lexeo_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/MGNO_magnolia_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/MGNO_magnolia_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2c7eeba9d2bcb339515569f03803b79b0a270387
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/MGNO_magnolia_prospectus_summary.txt
@@ -0,0 +1,2683 @@
+summary of selected pricing ratios for Magnolia Bancorp (on a pro forma basis) at and for
+the 12-months ended September 30, 2024, and for the peer group companies based on earnings and other information at
+and for the 12-months ended June 30, 2024, with stock prices at October 16, 2024, as reflected in the updated
+appraisal report. Compared to the average pricing of the peer group, our pro forma pricing ratios at the midpoint of the offering
+range indicated a discount of 53.43% on a price-to-book value basis and a discount of 54.39% on
+a price-to-tangible book value basis. 
+
+ 
+
+ 
+ 
+ 
+ Price-to-
+
+ earnings
+ multiple (1) 
+ 
+ 
+ Price-to-
+
+ book
+ value ratio 
+ 
+ 
+ Price-to-
+
+ tangible book
+ value ratio 
+ 
+
+ 
+ Magnolia Bancorp (pro forma assuming completion
+ of offering) (2) 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Adjusted Maximum 
+ 
+ 
+ NM 
+ 
+ 
+ 
+ 45.60 
+ % 
+ 
+ 
+ 45.60 
+ % 
+
+ 
+ Maximum 
+ 
+ 
+ NM 
+ 
+ 
+ 
+ 41.84 
+ % 
+ 
+ 
+ 41.84 
+ % 
+
+ 
+ Midpoint 
+ 
+ 
+ NM 
+ 
+ 
+ 
+ 38.21 
+ % 
+ 
+ 
+ 38.21 
+ % 
+
+ 
+ Minimum 
+ 
+ 
+ NM 
+ 
+ 
+ 
+ 34.21 
+ % 
+ 
+ 
+ 34.21 
+ % 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Valuation of peer group companies (historical) 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Averages 
+ 
+ 
+ 17.60 
+ x 
+ 
+ 
+ 82.04 
+ % 
+ 
+ 
+ 83.78 
+ % 
+
+ 
+ Medians 
+ 
+ 
+ 12.80 
+ x 
+ 
+ 
+ 84.60 
+ % 
+ 
+ 
+ 86.61 
+ % 
+
+ 
+ 
+
+ 
+
+ 
+
+ 
+ 
+ (1)
+ Price-to-earnings multiples calculated by RP Financial are based on an estimate of "core" or recurring earnings.
+ These ratios are different than those presented in "Pro Forma Data."
+
+ 
+ 
+
+The pro forma calculations
+for Magnolia Bancorp are based on the following assumptions:
+
+ 
+
+ 
+ 
+ 
+ A number of shares equal to 8% of the shares sold in the offering are purchased by the employee stock ownership plan, with the
+ expense to be amortized over 30 years;
+
+ 
+ 
+
+ 
+ 
+ 
+ A number of shares equal to 4% of the shares sold in the offering are purchased by a stock-based benefit plan, with the expense
+ to be amortized over five years; and
+
+ 
+ 
+
+ 
+ 
+ 
+ A number of options equal to 10% of the shares sold in the offering are granted under a stock-based benefit plan, with option
+ expense of $5.22 per option amortized over five years.
+
+ 
+ 
+
+The independent appraisal
+does not indicate trading market value. Do not assume or expect that our valuation as indicated in the appraisal means that after the
+offering the shares of our common stock will trade at or above the $10.00 per share price. Furthermore, RP Financial used the pricing
+ratios presented in
+
+ 
+
+ 6 
+
+ 
+
+ 
+
+ 
+
+the appraisal to estimate
+our pro forma appraised value for regulatory purposes and not to compare the relative value of shares of our common stock
+with the value of the capital stock of the peer group. The value of the capital stock of a particular company may be affected by a number
+of factors such as financial performance, asset size and market location.
+
+ 
+
+For a more complete discussion
+of the amount of common stock we are offering for sale and the independent appraisal, see "The Conversion and Offering—Stock
+Pricing and Number of Shares to be Issued."
+
+ 
+
+How We Intend to Use the Proceeds from
+the Offering
+
+ 
+
+We intend to invest at
+least 50% of the net proceeds from the offering in Mutual Savings and Loan Association, fund the loan to our employee stock ownership
+plan to finance its purchase of shares of common stock in the offering, and retain the remainder of the net proceeds at Magnolia Bancorp.
+
+ 
+
+Assuming we sell 725,000
+shares of common stock in the offering at the midpoint of the offering range, resulting in estimated net proceeds of $5.9 million, we
+intend to invest $2.9 million in Mutual Savings and Loan Association, lend $580,000 to our employee stock ownership plan to fund its
+purchase of shares of common stock (which may include, subject to market conditions, open market purchases after the completion of the
+conversion and offering if the employee stock ownership plan is unable to purchase its shares in the subscription offering due to an
+oversubscription by our eligible account holders), and retain the remaining $2.4 million of the net proceeds at Magnolia Bancorp. Assuming
+we sell 958,813 shares of common stock in the offering at the adjusted maximum of the offering range, resulting in estimated net proceeds
+of $8.2 million, we intend to invest $4.1 million in Mutual Savings and Loan Association, lend $767,000 to our employee stock ownership
+plan to fund its purchase of shares of common stock, and retain the remaining $3.3 million of the net proceeds at Magnolia Bancorp.
+
+ 
+
+Magnolia Bancorp may
+use the funds it retains for investment, for capital management strategies, including the repurchase of shares of common stock in the
+future, to pay cash dividends in the future and for other general corporate purposes. Mutual Savings and Loan Association may use the
+proceeds it receives to support increased lending to hire additional loan officers and accounting personnel, to possibly establish or
+purchase additional branches, and for other general corporate purposes. We do not currently have
+any agreements or understandings regarding any new branches.
+
+ 
+
+See "How We Intend
+to Use the Proceeds from the Offering" for more information on the proposed use of the proceeds from the offering.
+
+ 
+
+Persons Who May Order Shares of Common
+Stock in the Offering
+
+ 
+
+We are offering the shares
+of common stock in a subscription offering in the following descending order of priority:
+
+ 
+
+ 
+ 
+ PRIORITY 1:
+ ELIGIBLE ACCOUNT HOLDERS (Mutual Savings and Loan Association depositors with a balance of at least
+ $50 at the close of business on December 31, 2022);
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ PRIORITY 2:
+ OUR EMPLOYEE STOCK OWNERSHIP PLAN;
+
+ 
+ 
+
+ 
+ 
+ PRIORITY 3:
+ SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (Mutual Savings and Loan Association depositors with a balance
+ of at least $50 at the close of business on September 30, 2024); and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ PRIORITY 4:
+ OTHER MEMBERS (Mutual Savings and Loan Association depositors at the close of business on October
+ 31, 2024).
+
+ 
+ 
+
+Shares of common stock
+not purchased in the subscription offering may be offered for sale to the general public in a community offering, with a preference given
+first to natural persons (including trusts of natural persons) residing in Jefferson and St. Tammany Parishes and the adjacent parishes
+of Lafourche, Orleans, Plaquemines, St. Charles, St. John the Baptist, Tangipahoa and Washington. The community offering may begin concurrently
+with, during or promptly after the subscription offering. We also may offer for sale shares of common stock not purchased in the subscription
+offering and the community offering through a syndicated community offering. Keefe, Bruyette & Woods, Inc. will act as
+sole manager for the syndicated community offering. We have the right to accept or reject, in our sole discretion and reasonably consistent
+with achieving a reasonably wide distribution of the common stock, orders received in the community offering or syndicated community
+offering, and our interpretation of the terms and conditions of the plan of conversion will be final. Any determination to accept or
+reject stock orders in the
+
+ 
+
+ 7 
+
+ 
+
+ 
+
+ 
+
+community offering or syndicated
+community offering will be based on the facts and circumstances then available to us.
+
+ 
+
+If we receive orders
+for more shares than we are offering, we may not be able to fully or partially fill your order. See "The Conversion and Offering"
+for a detailed description of the subscription offering, the community offering and a possible syndicated community offering, as well
+as a discussion regarding allocation procedures.
+
+ 
+
+Limits on How Much Common Stock You May Purchase
+
+ 
+
+The minimum number of
+shares of common stock that may be purchased is 25 shares.
+
+ 
+
+Generally, no individual
+may purchase more than 5% of the common stock to be sold in the stock offering, which equates to 41,687 shares at the maximum of the
+offering range and 30,812 shares at the minimum of the offering range. If any of the following persons purchase shares of common stock,
+their purchases, in all categories of the offering, when combined with your purchases, cannot exceed 5% of the shares of common stock
+actually sold:
+
+ 
+
+ 
+ 
+ 
+ most companies, trusts or other entities in which you are a senior officer, partner, trustee or have a substantial beneficial
+ interest; or
+
+ 
+ 
+
+ 
+ 
+ 
+ your spouse or any relative of you or your spouse living in your house or who is a director or senior officer of Mutual Savings
+ and Loan Association or Magnolia Bancorp; or
+
+ 
+ 
+
+ 
+ 
+ 
+ other persons who may be your associates or persons acting in concert with you.
+
+ 
+ 
+
+If any person or entity desires to submit a maximum
+order for 5% of the shares to be issued in the offering, then such person or entity should submit an order for 41,687 shares, which represents
+5% of the current maximum of the offering range. If any associates or persons acting in concert with such person or entity will also
+be submitting an order, then the combined orders of such person or entity, together with the associates or persons acting in concert
+with such person or entity, cannot exceed 41,687 shares. The stock order form should identify each of your associates or persons acting
+in concert with you who are also submitting a stock order form.
+
+ 
+
+If there is a decrease
+in the offering range to less than the current maximum of $8,337,500, then any person or entity who, together with any associates or
+persons acting in concert with such person or entity, placed a stock order form for 41,687 shares (representing 5% of the current maximum)
+will have their order automatically reduced to 5% of the reduced number of shares to be issued, with a refund equal to the dollar reduction
+in their order plus interest at 0.01% if applicable.
+
+ 
+
+If
+there is an increase in the offering range to up to 958,813 shares of common stock, then each person or entity who, together with
+any associates or persons acting in concert with such person or entity, placed a stock order form for 41,687 shares (representing 5%
+of the current maximum of the offering range) will first be given the opportunity to increase their order to 5% of the new maximum of
+the offering range.
+
+ 
+
+Unless we determine otherwise,
+persons having the same address and persons exercising subscription rights through qualifying deposit accounts registered to the same
+address will be subject to the overall purchase limitation of 5% of the shares sold in the offering.
+
+ 
+
+Subject to regulatory
+approval, we may increase or decrease the purchase limitations at any time. See "The Conversion and Offering—Additional Limitations
+on Common Stock Purchases."
+
+ 
+
+In
+addition to the above conversion restrictions, federal banking regulations prohibit any person acting directly or indirectly, or through
+or in concert with one or more persons, from acquiring ownership of 10% or more of the common stock of Magnolia Bancorp, unless the Federal
+Reserve Board has been given at least 60 days prior written notice and has not issued a notice disapproving the proposed acquisition.
+The federal banking regulations presume that you are acting in concert with any member of your immediate family, regardless of whether
+the family member lives with you. The regulations define immediate family to include a person's father, mother, stepfather, stepmother,
+brother, sister, stepbrother, stepsister, son, daughter, stepson, stepdaughter, grandparent, grandson, granddaughter, father-in-law,
+mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, the spouse of any of the foregoing, and the person's
+spouse. See "Regulation and Supervision—Change in Control Regulations." Article 10 of the articles of incorporation
+of Magnolia Bancorp also prohibits any person from offering to acquire or acquiring, either individually or together with associates,
+immediate family members or other persons acting in concert with such person, the beneficial ownership of more than 10% of the common
+stock of
+
+ 
+
+ 8 
+
+ 
+
+ 
+
+ 
+
+Magnolia
+Bancorp, subject to certain exceptions. The articles of incorporation presume that you are acting in concert with any members of your
+immediate family, regardless of whether the family member lives with you. See "Restrictions on Acquisition of Magnolia Bancorp—Restrictions
+in Our Articles of Incorporation and Bylaws." We will reject any orders in the stock offering which we believe would violate the
+above prohibitions contained in the federal banking regulations or our articles of incorporation. See "The Conversion and Offering—Additional
+Limitations on Common Stock Purchases."
+
+ 
+
+How You May Purchase Shares of Common
+Stock in the Subscription Offering and the Community Offering
+
+ 
+
+In the subscription offering
+and community offering, you may pay for your shares by:
+
+ 
+
+ 
+ 
+ (i)
+ personal check, bank check or money order from the purchaser, made payable to Magnolia Bancorp, Inc.; or
+
+ 
+ 
+
+ 
+ 
+ (ii)
+ authorizing
+ us to withdraw available funds from the types of deposit account(s) at Mutual Savings and Loan Association listed on the stock
+ order form. Funds authorized for withdrawal will continue to earn interest within the account
+ at the contractual rate until the offering is completed, at which time the designated withdrawal will be made.
+
+ 
+ 
+
+Mutual Savings and Loan Association is prohibited
+from lending funds to anyone to purchase shares of common stock in the offering. Additionally, you may not use any type of third party
+check (such as a check payable to you and endorsed over to Magnolia Bancorp) to pay for shares of common stock. No wire transfer will
+be accepted without our prior approval. You may not designate withdrawal from a Mutual Savings
+and Loan Association account with check-writing privileges; rather, submit a check. If you request a direct withdrawal from an account
+with check-writing privileges, we reserve the right to interpret that as your authorization to treat those funds as if we had received
+a check for the designated amount and will immediately withdraw the amount from your checking account(s).You may not authorize
+direct withdrawal from an individual retirement account ("IRA") at Mutual Savings and Loan Association. See "—Using
+IRA Funds to Purchase Shares of Common Stock."
+
+ 
+
+You may subscribe for
+shares of common stock in the subscription and community offerings by delivering a signed and completed original stock order form, together
+with full payment payable to Magnolia Bancorp, Inc. or authorization to withdraw funds from one or more of your deposit accounts at Mutual
+Savings and Loan Association, provided that we receive your stock order form before 1:00 p.m., Central Time, on December 17,
+2024, which is the end of the subscription offering period. You may submit your stock order form and payment by mail using the stock
+order reply envelope provided or by paying for overnight delivery to the address listed on the stock order form. You may also hand deliver
+stock order forms to our main office at 2900 Clearview Parkway, Metairie, Louisiana during branch hours. We will accept hand-delivered
+stock order forms only at this location. We will not accept stock order forms at our other branch office. The
+employees in our main office and branch office may not assist with questions related to the stock offering or the stock order forms.
+Any such questions should be directed to our Stock Information Center at the toll-free number on the front cover page of this prospectus.
+ Do not mail stock order forms to any of Mutual Savings and Loan Association s banking offices.
+
+ 
+
+See "The Conversion
+and Offering—Procedure for Purchasing Shares in the Subscription and Community Offerings—Payment for Shares" for a
+complete description of how to purchase shares in the subscription and community offerings.
+
+ 
+
+Using IRA Funds to Purchase Shares of
+Common Stock
+
+ 
+
+You may be able to subscribe
+for shares of common stock using funds in your IRA. If you wish to use some or all of the funds in an IRA at Mutual Savings and Loan
+Association, the applicable funds must be transferred to a self-directed account maintained by an independent trustee, such as a brokerage
+firm, and the purchase must be made through that account. If you do not have such an account, you will need to establish one before placing
+your stock order. A one-time and/or annual administrative fee may be payable to the independent trustee. Because individual
+circumstances differ and the processing of retirement fund orders takes additional time, we recommend that you contact our Stock Information
+Center promptly, preferably at least two weeks before the December 17, 2024 offering deadline, for assistance with purchases using your
+IRA or other retirement account you may have at Mutual Savings and Loan Association or elsewhere. Whether you may use such funds to purchase
+shares in the offering may depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.
+
+ 
+
+See "The Conversion
+and Offering—Procedure for Purchasing Shares in the Subscription and Community Offerings—Payment for Shares" and "—Using
+Individual Retirement Account Funds."
+
+ 
+
+ 9 
+
+ 
+
+ 
+
+ 
+
+Market for Common Stock
+
+ 
+
+We expect that our common
+stock will be quoted on the OTCQB Market operated by the OTC Markets Group upon completion of the conversion and offering. Keefe, Bruyette &
+Woods, Inc. has advised us that it intends to make a market in our common stock following the offering, but is not obligated to
+do so.
+
+ 
+
+Our Dividend Policy
+
+ 
+
+We
+do not currently intend to pay cash dividends to our shareholders upon completion of the conversion and offering, and no assurances can
+be given that any such dividends will be paid in the future. After the conversion, we will consider a policy of paying regular
+cash dividends. Our ability to pay dividends will depend on a number of factors, including capital requirements, regulatory limitations
+and our operating results and financial condition. Initially, our ability to pay dividends will be limited to the net proceeds retained
+by Magnolia Bancorp and earnings from the investment of such proceeds, as well as dividends from Mutual Savings and Loan Association,
+if any. At the maximum of the offering range, Magnolia Bancorp will retain approximately $2.8 million of the net proceeds. Additionally,
+funds could be provided by Mutual Savings and Loan Association through dividends; however, the ability of Mutual Savings and Loan Association
+to dividend funds to Magnolia Bancorp is subject to regulatory limitations. For information regarding our proposed dividend policy, see
+ "Our Dividend Policy."
+
+ 
+
+Stock Purchases by Directors and Executive
+Officers
+
+ 
+
+We expect our directors
+and executive officers, together with their associates, to subscribe for 6.9% of the shares to be sold in the offering at the minimum
+of the offering range and 6.4% of the shares to be sold in the offering at the maximum of the offering range. They will pay the same
+$10.00 per share price that will be paid by all other persons who purchase shares of common stock in the offering. See "Proposed
+Management Purchases."
+
+ 
+
+Deadline for Orders of Shares of Common
+Stock in the Subscription and Community Offerings
+
+ 
+
+The deadline for ordering
+shares of common stock in the subscription and community offerings is 1:00 p.m., Central Time, on December 17, 2024, unless we extend
+this deadline. If you wish to order shares of common stock, a properly completed and signed original stock order form, together with
+full payment, must be received (not postmarked) by this time.
+
+ 
+
+Although we will make
+reasonable attempts to provide this prospectus and offering materials to holders of subscription rights, the subscription offering and
+all subscription rights will expire at 1:00 p.m., Central Time, on December 17, 2024, whether or not we have been able to locate each
+person entitled to subscription rights.
+
+ 
+
+See "The Conversion
+and Offering—Procedure for Purchasing Shares in the Subscription and Community Offerings—Expiration Date" for a complete
+description of the deadline for ordering shares in the offering.
+
+ 
+
+You May Not Sell or Transfer Your
+Subscription Rights
+
+ 
+
+Applicable regulations
+prohibit you from transferring your subscription rights. If you order shares of common stock in the subscription offering, you will be
+required to certify that you are purchasing the common stock for yourself and that you have no agreement or understanding to sell or
+transfer your subscription rights or the shares that you are purchasing. We intend to take legal action, including reporting persons
+to federal or state agencies, against anyone who we believe has sold or transferred his or her subscription rights. We will not accept
+your order if we have reason to believe that you have sold or transferred your subscription rights. On the stock order form, you cannot
+add the names of other individuals for joint stock registration unless they are also named on the qualifying deposit account or qualify
+separately in the same subscription priority as you do. Doing so may jeopardize your subscription rights. In addition, the stock order
+form requires that you list all deposit accounts, giving all names on each account and the account number at the applicable eligibility
+date. Failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your
+share allocation if there is an oversubscription.
+
+ 
+
+Delivery of Shares of Common Stock
+
+ 
+
+All shares of common
+stock sold will be issued in book entry form. Stock certificates will not be issued. A statement reflecting ownership of shares of common
+stock issued in the subscription and community offerings will be mailed by our transfer agent to the persons entitled thereto at the
+registration address noted by them on their stock order forms as soon as practicable following consummation of the offering. Shares of
+common stock sold in any syndicated community offering may be delivered electronically through the Depository Trust Company. We expect
+
+ 
+
+ 10 
+
+ 
+
+ 
+
+ 
+
+trading in the stock to begin on the day
+of completion of the conversion or the next business day. The conversion is expected to be completed as soon as practicable following
+satisfaction of the conditions described below in "—Conditions to Completion of the Conversion." Until a statement
+reflecting ownership of shares of common stock is available and delivered to purchasers, purchasers might not be able to sell the
+shares of common stock that they purchased, even though the common stock will have begun trading. Your ability to sell your
+shares of common stock before receiving your statement will depend on the arrangements you may make with a brokerage firm.
+
+ 
+
+Conditions to Completion of the Conversion
+
+ 
+
+We cannot complete the conversion and offering
+unless:
+
+ 
+
+ 
+ 
+ 
+ The plan of conversion is approved by the required votes of the depositors of Mutual Savings and Loan Association at a special
+ meeting of depositors to be held on December 23, 2024;
+
+ 
+ 
+
+ 
+ 
+ 
+ We receive orders for at least the minimum number of shares of common stock offered in the offering; and
+
+ 
+ 
+
+ 
+ 
+ 
+ We receive final regulatory approval from the Office of the
+ Comptroller of the Currency to complete the conversion and offering and the final approval
+ required from the Federal Reserve Board with respect to Magnolia Bancorp s holding company application. Any approval
+ by the Office of the Comptroller of the Currency or the Federal Reserve Board does
+ not constitute a recommendation or endorsement of the plan of conversion.
+
+ 
+ 
+
+Steps We May Take if We Do Not Receive
+Orders for the Minimum Number of Shares
+
+ 
+
+If we do not receive
+orders for at least 616,250 shares of common stock, we may take several steps in order to sell the minimum number of shares of common
+stock in the offering range. Specifically, we may:
+
+ 
+
+ 
+ 
+ (i)
+ increase the 5% purchase limitation, subject to certain conditions; and/or
+
+ 
+ 
+
+ 
+ 
+ (ii)
+ seek regulatory approval to extend the offering beyond January 31, 2025, so long as we resolicit subscribers who previously submitted
+ subscriptions in the offering.
+
+ 
+ 
+
+If
+we extend the offering past January 31, 2025, all subscribers will be notified and given an opportunity to confirm, change or cancel
+their orders. If you do not respond to this notice, we will cancel your stock order and promptly return your funds with interest at 0.01%
+per annum for funds received in the subscription and community offering or cancel your deposit account withdrawal authorization. If the
+5% purchase limitation is increased, subscribers in the subscription offering who ordered the maximum amount will be given the opportunity
+to increase their subscriptions up to the then-applicable limit. The 5% maximum purchase limitation may be increased to 9.99%
+of the shares sold in the offering, subject to regulatory approval, provided that orders for shares of common stock exceeding 5% of the
+shares sold in the offering may not exceed in the aggregate 10% of the total shares sold in the offering.
+
+ 
+
+Possible Change in the Offering Range
+
+ 
+
+RP Financial will update
+its appraisal before we complete the offering. If, as a result of demand for the shares or changes in market conditions, RP Financial
+determines that our pro forma market value has increased, we may sell up to 958,813 shares in the offering without further notice to
+you. If, however, the updated appraisal indicates our pro forma market value is either below $6,162,500 or above $9,588,130, then, after
+consulting with the Office of the Comptroller of the Currency, we may:
+
+ 
+
+ 
+ 
+ 
+ terminate the offering and promptly return all funds (with interest paid on funds received in the subscription and community
+ offerings);
+
+ 
+ 
+
+ 
+ 
+ 
+ set a new offering range; or
+
+ 
+ 
+
+ 
+ 
+ 
+ take such other actions as may be permitted by the Office of the Comptroller of the Currency and the Securities and Exchange
+ Commission.
+
+ 
+ 
+
+If we set a new offering
+range, we will promptly return funds, with interest at 0.01% per annum for funds received for purchases in the subscription and community
+offerings, and cancel any authorization to withdraw funds
+
+ 
+
+ 11 
+
+ 
+
+ 
+
+ 
+
+from deposit accounts
+for the purchase of shares of common stock. We will then resolicit subscribers, allowing them to place a new stock order for a period
+of time.
+
+ 
+
+Possible Termination of the Offering
+
+ 
+
+We may terminate the
+offering at any time with regulatory approval. If we terminate the offering, we will promptly return your funds with interest at 0.01%
+per annum, and we will cancel any deposit account withdrawal authorizations.
+
+ 
+
+Benefits to Management and Potential Dilution
+to Shareholders Resulting from the Offering
+
+ 
+
+We expect our employee
+stock ownership plan, which is a tax-qualified retirement plan for the benefit of all employees of Mutual Savings and Loan
+Association, to purchase up to 8% of the shares of common stock we sell in the offering. If market conditions warrant, in the judgment
+of the plan s trustees, the employee stock ownership plan s subscription order may not be filled in the subscription offering
+and the employee stock ownership plan may elect to purchase shares in the open market following the completion of the offering, subject
+to the approval of the Office of the Comptroller of the Currency.
+
+ 
+
+We intend to implement
+one or more new stock-based benefit plans no earlier than six months after completion of the offering. Shareholder approval of these
+plans would be required. We have not determined whether we will adopt the plans within 12 months following the completion of the offering
+or more than 12 months following the completion of the offering. If we implement stock-based benefit plans within 12 months following
+the completion of the offering, the stock-based benefit plans would reserve a number of shares (i) up to 4% of the shares of common
+stock sold in the offering for awards of restricted stock to key employees and directors, at no cost to the recipients, and (ii) up
+to 10% of the shares of common stock sold in the offering for issuance pursuant to the exercise of stock options by key employees and
+directors. These percentage limitations are required by the Office of the Comptroller of the Currency regulations. If the stock-based
+benefit plans are adopted more than 12 months after the completion of the offering, they would not be subject to the percentage limitations
+set forth above.
+
+ 
+
+The following table summarizes
+the number of shares of common stock and the aggregate dollar value of grants that are available under one or more stock-based benefit
+plans if such plans reserve for restricted stock awards and stock options, respectively, a number of shares of common stock equal to
+4% and 10% of the shares sold in the offering. The table shows the dilution to shareholders if all such shares are issued from authorized
+but unissued shares, instead of shares purchased in the open market. The table also sets forth the number of shares of common stock to
+be acquired by the employee stock ownership plan for allocation to all qualifying employees.
+
+ 
+
+ 
+ 
+ 
+ Number of Shares
+ to be Granted or Purchased
+ 
+ 
+ 
+ 
+ 
+ Value of Grants
+ (1)
+ 
+
+ 
+ 
+ 
+ At
+
+ Minimum
+ of Offering
+ Range
+ 
+ 
+ At
+
+ Adjusted
+ Maximum
+ of
+ Offering
+ Range
+ 
+ 
+ As a
+ Percentage
+
+ of Common
+ Stock to be
+ Sold in the
+ Offering
+ 
+ 
+ As a
+ Percentage
+
+ of Common
+ Stock to be
+ Outstanding
+ 
+ 
+ Dilution
+
+ Resulting
+ From
+ Issuance of
+ Shares for
+ Stock-Based
+ Benefit Plans
+ 
+ 
+ At
+
+ Minimum
+ of
+ Offering
+ Range
+ 
+ 
+ At
+
+ Adjusted
+ Maximum
+ of Offering
+ Range
+ 
+
+ 
+ Employee
+ stock ownership plan(2) 
+ 
+ 
+ 49,300
+ 
+ 
+ 
+ 76,705
+ 
+ 
+ 
+ 8.00
+ %
+ 
+ 
+ 8.00
+ %
+ 
+ 
+ 0.00
+ %
+ 
+ $
+ 493,000
+ 
+ 
+ $
+ 767,050
+ 
+
+ 
+ Restricted stock awards 
+ 
+ 
+ 24,650
+ 
+ 
+ 
+ 38.353
+ 
+ 
+ 
+ 4.00
+ 
+ 
+ 
+ 4.00
+ 
+ 
+ 
+ 3.85
+ 
+ 
+ 
+ 246,500
+ 
+ 
+ 
+ 383,530
+ 
+
+ 
+ Stock options 
+ 
+ 
+ 61,625
+ 
+ 
+ 
+ 95,881
+ 
+ 
+ 
+ 10.00
+ 
+ 
+ 
+ 10.00
+ 
+ 
+ 
+ 9.09
+ 
+ 
+ 
+ 321,683
+ 
+ 
+ 
+ 500.499
+ 
+
+ 
+ Total 
+ 
+ 
+ 135,575
+ 
+ 
+ 
+ 210.939
+ 
+ 
+ 
+ 22.00
+ %
+ 
+ 
+ 22.00
+ %
+ 
+ 
+ 12.28
+ %
+ 
+ $
+ 1,061,183
+ 
+ 
+ $
+ 1,651.079
+ 
+
+ 
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+ (1)
+ The actual value of restricted stock awards will be determined based on their fair value at the date of grant. For purposes of
+ this table, the fair value for awards is assumed to be the same as the offering price of $10.00 per share. The fair value of stock
+ options has been estimated at $5.22 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date
+ share price and option exercise price of $10.00; an expected option term of 10 years; no dividend yield; a risk-free rate of return
+ of 4.36%; and expected volatility of 32.07%. The actual value of option grants will be determined by the grant-date fair value of
+ the options, which will depend on a number of factors, including the valuation assumptions used and the option pricing model ultimately
+ adopted.
+
+ 
+ 
+
+ 
+ (2)
+ No dilution is reflected for the employee stock ownership shares because such shares are assumed to be purchased in the offering.
+
+ 
+ 
+
+ 12 
+
+ 
+
+ 
+
+ 
+
+Tax Consequences
+
+ 
+
+Magnolia Bancorp and
+Mutual Savings and Loan Association have received opinions of counsel, Silver, Freedman, Taff & Tiernan LLP, regarding the material
+federal income tax consequences and the material Louisiana income tax consequences of the conversion and offering. As a general matter,
+the conversion and offering will not be a taxable transaction for purposes of federal or state income taxes to Magnolia Bancorp, Mutual
+Savings and Loan Association or persons eligible to subscribe for shares of stock in the subscription offering.
+
+ 
+
+Emerging Growth Company Status
+
+ 
+
+We
+qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012. For as long as we so qualify,
+we exempt ourselves from various reporting requirements applicable to other public companies but not to emerging growth companies. See
+ "Risk Factors—Risks Related to Laws and Regulations—We are an emerging growth company, and any decision on our part
+to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common
+stock less attractive to investors" and "Regulation and Supervision—Emerging Growth Company Status."
+
+ 
+
+We intend to use the extended transition period
+to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable
+to private companies. Accordingly, our financial statements may not be comparable to the financial statements of public companies that
+comply with such new or revised accounting standards.
+
+ 
+
+Risk Factors
+
+ 
+
+An investment in Magnolia Bancorp s common
+stock is subject to risk, including risks related to our profitability, our business and this offering.
+
+ 
+
+Specific risks related to our business include,
+but are not limited to, those related to our net loss for the year ended December 31, 2022 and the first half of 2024 and our prospects
+for profitability in the near term; our business strategy to grow our business and operations; our emphasis on residential mortgage lending;
+our planned increase in commercial and multi-family real estate lending; our allowance for credit losses; the current level of interest
+rates and changes in interest rates; the geographic concentration of our loan portfolio and economic conditions in our local market area;
+national economic conditions; the susceptibility of the markets we operate in to natural disasters; acts of terrorism or other external
+events; competition within our market area; our funding sources for deposits; our dependence on information technology and telecommunications
+systems and third-party service providers; operational risks resulting from the high volume of transactions we process; cybersecurity
+risks; our ability to keep pace with technological changes; our dependence on our management team; our small asset size and small number
+of employees; reputation risk; changes in and compliance with laws and regulations and accounting rules and best practices; and
+material weaknesses in our internal controls.
+
+ 
+
+Specific risks related to this offering include,
+but are not limited to, those related to our expected low return on equity until we leverage our capital and return to profitability;
+the future trading price of the common stock of Magnolia Bancorp; the expected limited trading market for the common stock of Magnolia
+Bancorp; the broad discretion we have over the use of the net offering proceeds; the intended new stock-based benefit plans; the potential
+lack of dividends on our common stock; the potential for delay in an investor s ability to sell shares of common stock immediately
+following the offering; anti-takeover factors; the irrevocability of your investment decision; and our status as an emerging growth company.
+
+ 
+
+Before making an investment decision, we urge
+you to read this entire document carefully, including the section entitled "Risk Factors" that follows and that
+discusses the above risks in further detail.
+
+ 
+
+How You Can Obtain Additional Information—Stock
+Information Center
+
+ 
+
+Our banking personnel
+may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the conversion and
+offering, call our Stock Information Center, toll-free, at (877) 643-8217. The Stock Information Center is open Monday through Friday
+between 9:00 a.m. and 3:00 p.m., Central Time. The Stock Information Center will be closed on weekends and bank holidays.
+
+ 
+
+ 13 
+
+ 
+
+ 
+
+ 
+
+RISK FACTORS
+
+ 
+
+You should carefully consider the following risk factors, in addition
+to all other information in this prospectus, in evaluating an investment in the shares of common stock.
+
+ 
+
+Risks Related to Our Profitability
+
+ 
+
+ We had a net loss in 2022, in the first half of 2024 and in
+the quarter ended September 30, 2024. 
+
+ 
+
+ We had a net loss of $6,000 for the year ended
+December 31, 2022, a net loss of $24,000 for the first half of 2024 and a net loss of $36,000 for the quarter ended September 30,
+2024. Our net loss in the first half of 2024 represented an $89,000 decline when compared to our net income of $64,000 for the first
+half of 2023, primarily due to a substantial decline of $174,000 or 24.4% in net interest income in the first half of 2024 compared to
+the first half of 2023. Our total interest expense increased by $149,000 or 425.7% in the first half of 2024 due to higher rates paid
+on our deposits and borrowings, while our total interest income decreased by $25,000 or 3.3% in the first half of 2024 from the first
+half of 2023. Our net loss in the quarter ended September 30, 2024 represented a $52,000 decline when compared to our net income of $16,000
+in the quarter ended September 30, 2023 primarily due to a decrease of $59,000 or 18.4% in net interest income. See "Management s
+Discussion and Analysis of Financial Condition and Results of Operations – Comparison of Operating Results for the Six Months Ended
+June 30, 2024 and 2023" and "Recent Developments." 
+
+ 
+
+We might not return to sustained profitability in the near future.
+
+ 
+
+Because of declines in our net interest income
+and reduced demand for our fixed-rate loans, we currently expect to incur a net loss for the year ending December 31 2024. We cannot
+provide any assurance as to how soon we will be able to return to sustained profitability. See
+ "Management s Discussion and Analysis of Financial Condition and Results of Operations—Overview."
+
+ 
+
+We believe we will need to hire additional loan officers and grow
+our loan portfolio before we can return to sustained profitability, which will take time and increase our non-interest expense in the
+short term.
+
+ 
+
+As of June 30, 2024, we had one loan officer.
+Our total loan originations decreased by $238,000 or 13.9% in the first half of 2024 from the first half of 2023, as the demand for our
+fixed-rate loans declined as market interest rates increased. In addition, our chief loan officer resigned in May 2023. There can
+be no assurance that we will be able to hire additional qualified loan officers in the near future. In addition, the hiring of additional
+loan officers will increase our non-interest expense, and the increased expense may not be fully offset by increased interest income
+on new loans until the new loan officers produce sufficient loan originations.
+
+ 
+
+Our loan portfolio has declined in recent years, and there can
+be no assurance that we will achieve our plans to grow in size, which would adversely affect our ability to return to profitability.
+
+ 
+
+Our net loans receivable have decreased in recent
+periods to $31.5 million at June 30, 2024 compared to $32.0 million at December 31, 2023 and $33.5 million at December 31, 2022. Our
+total assets have also declined to $35.5 million at June 30, 2024 from $35.8 million at December 31, 2023, $39.2 million at December
+31, 2022 and $45.3 million at December 31, 2021. This decrease of $9.8 million or 21.6% in total assets from December 31, 2021 to June
+30, 2024 has led to decreases in net interest income over this period. We believe we need to reverse this trend of negative growth in
+order to return to sustained profitability, but there can be no assurance that we will be able to achieve our plans to grow in size.
+Continued decreases in our loan portfolio will reduce the interest income on our loan portfolio,
+which will make it more difficult to have net interest income which exceeds our total non-interest expense. During the first half of
+2024, our net interest income of $541,000 was less than our total non-interest expense of $588,000, which resulted in a pre-tax loss
+and a net loss for the period.
+
+ 
+
+The cost of additional finance and accounting systems, procedures,
+compliance and controls needed to satisfy our new public company reporting requirements will increase our expenses.
+
+ 
+
+Upon completion of the conversion, we will become
+a public reporting company. We expect that the obligations of being a public company, including the substantial public reporting obligations,
+will require significant expenditures and place additional demands on our management team, which could divert our management s
+attention from our operations. We have made, and will continue to make, changes to our internal controls and procedures for financial
+reporting and accounting systems to meet our reporting obligations as a stand-alone public company. However, the measures we take may
+not be sufficient to satisfy our obligations as a public company. The
+
+ 
+
+ 14 
+
+ 
+
+ 
+
+ 
+
+Sarbanes-Oxley Act of 2002 requires annual management
+assessments of the effectiveness of our internal control over financial reporting, starting with the second annual report that we would
+expect to file with the Securities and Exchange Commission. Any failure to achieve and maintain an effective internal control environment
+could have a material adverse effect on our business and stock price.
+
+ 
+
+We expect we will need to hire additional accounting personnel
+following completion of the conversion, which will increase our expenses.
+
+ 
+
+We believe we will need to hire additional compliance,
+accounting and financial staff with appropriate public company experience and technical knowledge, and we may not be able to do so in
+a timely fashion. As a result, we may need to continue to rely on outside consultants to provide these services until qualified personnel
+are hired. In connection with the preparation of this prospectus, we engaged an outside accountant to assist in the preparation of our
+financial statements and the tables included in this prospectus. The fees paid to such outside consultant through June 30, 2024
+totaled $97,200, with the fees treated as a deferred conversion expense. The accounting costs incurred following completion of the conversion
+will be accounted for as a current expense, which will increase our operating expenses.
+
+ 
+
+Because our Chief Financial
+Officer has announced her planned departure, our ability to provide financial reports in a timely manner will depend upon how well her
+replacement performs.
+
+ 
+
+In September
+2024, Ms. Anita Cambre, our Vice President, Chief Financial Officer and Secretary, announced that she had accepted another full-time
+but less time-intensive job that will enable her to spend more time with her family. Ms. Cambre has agreed to stay in her current positions
+on a part-time basis at least through completion of the conversion. Following Ms. Cambre s announcement, we hired a new person
+with an accounting background, and Ms. Cambre is assisting in the training and transition of such person prior to her departure. Following
+Ms. Cambre s departure subsequent to completion of the conversion, our ability to provide financial reports in a timely manner
+will depend upon how well Ms. Cambre s replacement performs and whether we are able to hire additional accounting personnel.
+
+ 
+
+Our stock-based benefit plans will increase our expenses and reduce
+our income.
+
+ 
+
+We intend to adopt one or more new stock-based
+benefit plans after the conversion, subject to shareholder approval, which will increase our annual compensation and benefit expenses
+related to the stock options and stock awards granted to participants under the new stock-based benefit plans. The actual amount of these
+new stock-related compensation and benefit expenses will depend on the number of options and stock awards granted under the plans, the
+fair market value of our stock or options on the date of grant, the vesting period, and other factors which we cannot predict at this
+time. If we adopt stock-based benefit plans within 12 months following the conversion, the shares of common stock reserved for issuance
+pursuant to awards of restricted stock and grants of options under such plans would be limited to 4% and 10%, respectively, of the number
+of shares of common stock sold in the stock offering. If we adopt stock-based benefit plans more than 12 months after the completion
+of the conversion, we may adopt plans that allow for greater amounts of awards and options and, therefore, we could award restricted
+shares of common stock or grant options in excess of these amounts, which would further increase costs.
+
+ 
+
+In addition, we will recognize expense for our
+employee stock ownership plan when shares are committed to be released to participants accounts, and we will recognize expense
+for restricted stock awards and stock options over the vesting period of awards made to recipients. The expense in the first year following
+the conversion for our employee stock ownership plan and for our new stock-based benefit plans, assuming such plans had been implemented
+at the beginning of the year, is estimated to be approximately $133,000 ($105,000 after-tax based on an effective tax rate of 21% and
+assuming that 20% of stock options are non-qualified stock options which are tax deductible) at the adjusted maximum of the offering
+range as set forth in the pro forma financial information under "Pro Forma Data," assuming the $10.00 per share purchase
+price as fair market value. Actual expenses, however, may be higher or lower, depending on the price of our common stock. For further
+information, see "Management – New Stock Benefit Plans."
+
+ 
+
+Risks
+Related to Our Lending Activities
+
+ 
+
+Our concentration of residential mortgage loans exposes us to increased
+lending risks.
+
+ 
+
+As of June 30, 2024, one- to four-family
+residential mortgage loans totaled $29.5 million or 93.3% of our total loan portfolio. We intend to continue to make one- to four-family
+residential mortgage loans. One- to four-family residential mortgage lending is generally sensitive to regional and local economic conditions
+that
+
+ 
+
+ 15 
+
+ 
+
+ 
+
+ 
+
+significantly impact the ability of borrowers to
+meet their loan payment obligations, making loss levels difficult to predict. Declines in real estate values could cause some of our
+residential mortgages to be inadequately collateralized, which would expose us to a greater risk of loss if we seek to recover on defaulted
+loans by selling the real estate collateral.
+
+ 
+
+Our residential construction loans involve credit risks that could
+adversely affect our financial condition and results of operations.
+
+ 
+
+We originate residential construction loans, which
+accounted for 47.1% of total loan originations in the first half of 2024 compared to 62.2% of total loan originations in 2023 and 38.9%
+of total loan originations in 2022. When we originate residential construction loans, we typically provide scheduled disbursements as
+different construction phases are completed, with the construction loan to convert to a single-family residential loan upon completion
+of the construction. At June 30, 2024, no residential construction loans were outstanding, as construction was completed and the
+loans had converted to a single-family residential loan. We expect the origination of residential construction loans will continue to
+account for a significant portion of our total loan originations.
+
+ 
+
+Construction
+lending involves additional risks when compared with permanent finance lending because funds are advanced upon the security of the project,
+which is of uncertain value before its completion. Because of the uncertainties inherent in estimating construction costs, as well as
+the market value of the completed project, it is relatively difficult to accurately evaluate the total funds required to complete a project
+and the related loan-to-value ratio. Residential construction loans can experience delays in construction and cost overruns that
+can exceed the borrower s financial ability to complete the construction project, which could result in unmarketable collateral.
+If the appraised value of a completed project proves to be overstated, the loan may be inadequately secured and we may incur a loss.
+As our residential construction loan portfolio increases, the corresponding risks and potential for losses from these loans may also
+increase.
+
+ 
+
+Our home equity lines of credit involve credit risks that could
+adversely affect our financial condition and results of operations.
+
+ 
+
+At June 30, 2024, home equity lines of credit
+totaled $732,000 or 2.3% of our total loan portfolio. In addition, we had $1.3 million of unused lines of credit at June 30, 2024
+that borrowers could elect to utilize. Home equity loans and home equity lines of credit are secured by first or junior liens on residential
+real estate, making such loans susceptible to deterioration in residential real estate values. Home equity loans and lines of credit
+that are secured by junior mortgages have greater risk than one- to four-family residential real estate loans secured by first mortgages.
+Additional risks include lien perfection deficiencies and the inherent risk that the borrower may draw on the lines in excess of their
+collateral value, particularly in a deteriorating real estate market.
+
+ 
+
+Our intent to increase our commercial real estate loan portfolio
+involves credit risks that could adversely affect our financial condition and results of operations.
+
+ 
+
+At June 30, 2024, commercial real estate loans
+totaled $657,000 or 2.1% of our total loan portfolio. All of our commercial real estate loans as of June 30, 2024 were originated prior
+to 2019. Following completion of the conversion, we intend to modestly increase our commercial
+real estate loan portfolio, which may necessitate the hiring of additional loan officers who are experienced in this area. Because we
+have not originated these types of loans in recent years, there are risks associated with hiring additional loan officers for this type
+of lending.
+
+ 
+
+Unlike residential real estate loans, which generally
+are made on the basis of the borrower s ability to make repayment from his or her employment or other income, and which are secured
+by real property whose value tends to be more easily ascertainable, commercial real estate loans are of higher risk and typically are
+made based on the borrower s ability to make repayment from the cash flows of the borrower s business, and any collateral
+securing these loans may be difficult to appraise, may fluctuate in value, and may depreciate over time. As a result, the availability
+of funds for the repayment of commercial real estate loans may depend substantially on the success of the business itself.
+
+ 
+
+We will experience significant competition with
+respect to new commercial real estate loans, as larger institutions have greater financial capability to make these loans, more experienced
+lenders, existing relationships with borrowers and higher visibility in this area. We expect our commercial real estate loans will primarily
+be to small businesses located in our market area. In addition, we expect our commercial real estate loan portfolio to increase only
+modestly and to account for less than 5% of our total loan portfolio for the foreseeable future.
+
+ 
+
+ 16 
+
+ 
+
+ 
+
+ 
+
+Our intent to increase our multi-family residential loans involves
+credit risks that could adversely affect our financial condition and results of operations.
+
+ 
+
+At June 30, 2024, multi-family residential
+loans totaled $295,000 or 0.90% of our total loan portfolio. All of our multi-family residential loans as of June 30, 2024 were
+originated prior to 2019. Following completion of the conversion, we intend to modestly increase our multi-family residential loan portfolio,
+which may necessitate the hiring of additional loan officers who are experienced in this area. Because we have not originated these types
+of loans in recent years, there are risks associated with hiring additional loan officers for this type of lending.
+
+ 
+
+Unlike one- to four family residential loans,
+which generally are made on the basis of the borrower s ability to make repayment from his or her employment or other income, and
+which are secured by real property whose value tends to be more easily ascertainable, multi-family residential loans are of higher risk
+and typically are made based on the borrower s ability to make repayment from the cash flows of the borrower s business,
+and any collateral securing these loans may be difficult to appraise, may fluctuate in value, and may depreciate over time. As a result,
+the availability of funds for the repayment of multi-family residential loans may depend substantially on the success of the business
+itself.
+
+ 
+
+If our allowance for credit losses is not sufficient to cover actual
+credit losses, our earnings could decrease.
+
+ 
+
+We
+maintain an allowance for credit losses, which is established through a provision for credit losses that represents management s
+best estimate of the current expected losses within the loan portfolio. We make various assumptions and judgments about the collectability
+of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral
+for the repayment of many of our loans. In determining the amount of the allowance for credit losses, we review our loans and estimate
+lifetime credit losses in loans as of the balance sheet date using relevant available information, from both internal and external sources,
+relating to past events, current conditions, and reasonable and supportable forecasts. If our assumptions or the results of our analyses
+are incorrect, our allowance for credit losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions
+to our allowance. In addition, our emphasis on loan growth and on modestly increasing our portfolio of commercial real estate and multi-family
+residential loans, as well as any future credit deterioration, could require us to increase our allowance for credit losses in the future.
+Material additions to our allowance for credit losses would materially decrease our net income.
+
+ 
+
+Effective January 1, 2023, the Current Expected
+Credit Loss, referred to as "CECL" throughout this prospectus, accounting standard became effective for Mutual Savings and
+other financial institutions. CECL requires financial institutions to determine periodic estimates of lifetime expected credit losses
+on loans and recognize the expected credit losses as allowances for credit losses. CECL required us to change the prior method of providing
+allowances for credit losses that are incurred or probable, which required us to increase the types of data we need to collect and review
+to determine the appropriate level of the allowance for credit losses. Using loan data as of December 31, 2022, no transition adjustment
+was recorded related to loans or unfunded commitments upon adoption due to immateriality.
+
+ 
+
+In addition, bank regulators periodically review
+our allowance for credit losses and, as a result of such reviews, we may decide to increase our provision for credit losses or recognize
+additional loan charge-offs. Any increase in our allowance for credit losses or loan charge-offs as a result of such review or otherwise
+may have a material adverse effect on our financial condition and results of operations.
+
+ 
+
+The high cost of property and flood insurance in our market area
+has had an adverse effect on mortgage loan demand in our market area.
+
+ 
+
+A monthly mortgage loan payment typically includes
+principal repayment, interest payment, insurance payments and tax payments. In addition to general inflationary pressure on insurance
+premiums, recent hurricanes and other adverse weather conditions have significantly increased premiums on property and flood insurance
+and have also caused some insurers to exit the market and cease insuring properties in our market area. In addition, some insurers now
+require higher deductibles for damage caused by wind, hurricanes or floods, including deductibles of 5% of the value of the property.
+Some insurers have also perceived our market area to be a highly litigious environment between insurers and policyholders, which has
+also contributed to higher insurance premiums or exit from the market. The increased insurance premiums add to the debt burden of mortgage
+loan borrowers which has had an adverse effect on mortgage loan demand.
+
+ 
+
+ 17 
+
+ 
+
+ 
+
+ 
+
+We are subject to environmental liability risk associated with
+lending activities or properties we own.
+
+ 
+
+A significant portion of our loan portfolio is
+secured by real estate, and we could become subject to environmental liabilities with respect to one or more of these properties, or
+with respect to properties that we own in operating our business. During the ordinary course of business, we may foreclose on and take
+title to properties securing defaulted loans and, in doing so, there is a risk that hazardous or toxic substances could be found on these
+properties. If hazardous conditions or toxic substances are found on these properties, we may be liable for remediation costs, as well
+as for personal injury and property damage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances
+first affected any particular property. Environmental laws may require us to incur substantial expenses to address unknown liabilities
+and may materially reduce the affected property s value or limit our ability to use or sell the affected property. In addition,
+future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental
+liability. Our policies, which require us to perform an environmental review before initiating any foreclosure action on non-residential
+real property, may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities
+associated with an environmental hazard could have a material adverse effect on us.
+
+ 
+
+Risks Related to Market Interest Rates
+
+ 
+
+Prevailing high market interest rates have reduced our profits
+and asset values.
+
+ 
+
+Net income is the amount by which net interest
+income and non-interest income exceed the sum of non-interest expense, income tax expense and the provision for credit losses. Net interest
+income makes up a substantial majority of our income and is based on the difference between:
+
+ 
+
+ 
+ 
+ 
+ the interest income we earn on interest-earning assets, such as loans, cash equivalents and interest-bearing deposits in other
+ banks; and
+
+ 
+ 
+
+ 
+ 
+ 
+ the interest expense we pay on interest-bearing liabilities, such as deposits and borrowings.
+
+ 
+ 
+
+Like many savings institutions, our interest-bearing
+liabilities generally have shorter contractual maturities than our interest-earning assets, a substantial portion of which are fixed-rate
+loans. In addition, the rates we pay on our certificates of deposit and FHLB advances are generally fixed for only a relatively short
+contractual period of time. This imbalance can create significant earnings volatility because market interest rates change over time.
+Generally, in a period of rising interest rates, the interest income we earn on our interest-earning assets may not increase as rapidly
+as the interest we pay on deposits and other interest-bearing liabilities. Conversely, in a period of declining interest rates, the interest
+income we earn on our interest-earning assets may decrease more rapidly than the interest we pay on our interest-bearing liabilities,
+as borrowers prepay or refinance mortgage loans, requiring us to reinvest those cash flows at lower, prevailing interest rates.
+
+ 
+
+The prevailing high interest rate environment,
+coupled with the prevailing inverted interest rate yield curve, has had an adverse effect on our net interest margin and net interest
+spread and, therefore, earnings. An inverted interest rate
+yield curve is where short-term interest rates (which are typically the interest rates at which we and other financial institutions borrow
+funds and incur interest expense) are higher than long-term interest rates (which are typically the rates at which we and other financial
+institutions lend funds and earn interest income). As a result of the prevailing high interest rate environment, we have experienced
+a decline in lower-cost savings accounts and NOW accounts. While our average outstanding certificates of deposit have also generally
+declined in recent periods, the average rate paid on our certificates of deposit has increased, resulting in decreases in our net interest
+income. In the first half of 2024, our total interest expense increased by $149,000 or 425.7% from the first half of 2023 due to higher
+rates paid on our deposits and borrowings, while our total interest income decreased by $25,000 or 3.3% in the first half of 2024 from
+the first half of 2023. In the year ended December 31, 2023, our total interest expense increased by 196.3% from 2022, while our
+total interest income increased by only 4.6% in 2023 from 2022. Our average interest rate spread declined to 2.50% for the first
+half of 2024 compared to 3.79% for the first half of 2023 and 3.41% for the year ended December 31, 2023.
+
+ 
+
+Changes in the level of interest rates may also
+negatively affect the value of our assets. While we do not have any available-for-sale investment securities that need to be marked to
+market and generally do not sell loans that we originate, the value of our fixed-rate loan portfolio declines when interest rates increase.
+
+ 
+
+ 18 
+
+ 
+
+ 
+
+ 
+
+We monitor interest rate risk through the use
+of simulation models, including estimates of the amounts by which the fair value of our assets and liabilities (our economic value of
+equity, or "EVE") and our net interest income would change in the event of a range of assumed changes in market interest
+rates. At June 30, 2024, in the event of an instantaneous 200 basis point increase in interest rates, we estimate that we would experience
+a $2.4 million decrease in EVE. For further discussion of how changes in interest rates could impact us, see "Management s
+Discussion and Analysis of Financial Condition and Results of Operations – Management of Market Risk."
+
+ 
+
+The Federal
+Reserve Board began increasing its federal funds rate in March 2022 to combat inflation, with 11 increases aggregating 5.25% occurring
+between March 2022 and July 2023. These increases resulted in substantial increases in market interest rates, including the rates we
+pay on our certificates of deposit. As interest rates rose during this period, our cost of funds increased and the demand for our fixed-rate
+loans decreased, resulting in declines in our net interest income. See "Management s Discussion and Analysis of Financial
+Condition and Results of Operations—Overview."
+
+ 
+
+Risks Related to Economic Conditions
+
+ 
+
+We may be adversely affected by weakness in the U.S. housing market.
+
+ 
+
+During 2023 and continuing into 2024, the U.S.
+housing market continued to be impacted by higher mortgage interest rates, including 30-year fixed-rate mortgage rates that more than
+doubled from 2021. This has negatively impacted the demand for many of our products. The rising interest rate environment has negatively
+impacted and, until the interest rate environment improves, is expected to continue to negatively impact multiple aspects of our business,
+as increases in mortgage rates (as well as prolonged periods of high mortgage rates) generally have an adverse impact on home sale transaction
+volume, housing affordability, and refinancing volumes. We believe the high mortgage rate environment is a key contributor to declines
+in residential real estate home sale transaction volume, as potential home sellers choose to stay with their lower rate mortgage loan
+rather than sell their home and obtain a higher rate mortgage loan to fund the purchase of another home and potential home buyers choose
+to rent rather than purchase a home. If existing home sale transactions continue to be at depressed levels or decline further (due to
+the high mortgage rate environment or otherwise), we would also expect to continue to experience decreased refinancing activity.
+
+ 
+
+Inflation can have an adverse impact on our business and on our
+customers.
+
+ 
+
+Inflation
+risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value
+of money. Inflation rose sharply at the end of 2021 and remained at an elevated level throughout 2022 and 2023 and was still above
+the Federal Reserve Board s target rate of 2% in the first half of 2024. In recent periods, the Federal Reserve Board has raised
+certain benchmark interest rates to combat inflation. As interest rates increase, the value of our fixed-rate mortgage loans, particularly
+those with longer maturities, decreases, as does the demand for new fixed-rate mortgage loans. Inflation also increases the cost of goods
+and services we use in our business operations, such as electricity and other utilities, which increases our noninterest expenses. In
+addition, our loan customers are affected by inflation through the rising costs of goods and services used in their households and businesses,
+which could have an adverse effect on their ability to make timely payments on their loans.
+
+ 
+
+Furthermore, inflation and higher interest rates
+have had a negative effect on the demand for mortgage loans, including construction loans, in our market area. Inflation has led to a
+rising market interest rate environment and higher loan interest rates, making mortgage loan debt more expensive and thereby depressing
+loan demand. The current market interest rate environment has also depressed the market for existing home sales because homeowners are
+reluctant to forego their lower interest rate mortgage loans upon a sale and having to obtain a higher rate mortgage loan to finance
+a new home purchase. Inflation has also increased building construction costs, which has had a negative effect on demand for construction
+loans.
+
+ 
+
+We have a high concentration of loans secured by real estate in
+our market area. Adverse economic conditions, both generally and in our market area, could adversely affect our financial condition and
+results of operations.
+
+ 
+
+As of June 30, 2024, one- to four-family
+residential mortgage loans totaled $29.5 million, or 93.3% of our total loan portfolio. We have relatively few one- to four-family residential
+mortgage loans secured by real estate outside of our market area.
+
+ 
+
+ 19 
+
+ 
+
+ 
+
+ 
+
+Consequently, we have a greater risk of loan defaults
+and losses in the event of a further economic downturn in our market area, as adverse economic conditions may have an adverse effect
+on the ability of our borrowers to make timely payments of their loans. A return of recessionary conditions and/or negative developments
+in the economy may significantly affect the markets in which we do business, the value of our loans, the collateral securing our loans,
+and our ongoing operations, costs and profitability. Any of these negative events may result in higher than expected loan delinquencies,
+increase our levels of nonperforming and classified assets, and reduce demand for our products and services, all of which may cause us
+to continue to incur losses and adversely affect our capital, liquidity and financial condition.
+
+ 
+
+Hurricanes and other adverse weather events could have a material
+adverse effect on our business and results of operations and have significantly increased property insurance premiums in recent periods.
+
+ 
+
+New Orleans and the surrounding area are highly
+susceptible to hurricanes and tropical storms, among other adverse weather events. Hurricanes and tropical storms often result in severe
+wind and flood damage, which may disrupt our operations, damage our office locations and the properties securing our loans, and adversely
+affect the local economy. The occurrence of adverse weather events could result in fewer loan originations and higher loan delinquencies,
+foreclosures and/or credit losses, among other adverse effects on our business operations.
+
+ 
+
+In August 2021, Hurricane Ida blew the roof
+off our main office building, which disrupted our operations. While most of the damage was covered by insurance, the most recent renewal
+of our property insurance policy no longer covers wind damage due to the high cost of such coverage. As a result, damage caused by future
+hurricanes could materially adversely affect our results of operations. In September 2024, Hurricane Francine hit the New Orleans area
+but did not cause major damage in our market area.
+
+ 
+
+St. Tammany Parish is subject to repeated flooding that could adversely
+affect the homes that secure our loans in St. Tammany Parish.
+
+ 
+
+Our branch office is located in Mandeville, Louisiana,
+which is on the north shore of Lake Pontchartrain in St. Tammany Parish. Lake Pontchartrain is directly connected to the Gulf of Mexico,
+and the lake has reportedly experienced six inches of sea level rise since 2010. The U.S. Army Corps of Engineers report stated that
+St. Tammany Parish has experienced repeated flood events that have caused major disruptions, damages and adverse economic impacts. The
+report was signed on May 28, 2024 for transmission to the U.S. Congress. The plan includes spending $5.9 billion to build an 18.5-mile-long
+levee system and to raise and floodproof more than 6,400 structures in St. Tammany Parish. Even if the U.S. Congress approves and funds
+the plan, of which there can be no guarantee, the plan would take years to implement. Future hurricanes or flooding in St. Tammany Parish
+could adversely affect the homes that secure our mortgage loans on properties in the parish, as well as the ability of borrowers to repay
+their loans on such properties, and our Mandeville branch office.
+
+ 
+
+A worsening of economic conditions could reduce demand for our
+products and services and/or increase our level of non-performing loans, which could adversely affect our financial condition and results
+of operations.
+
+ 
+
+Unlike larger financial institutions that are
+more geographically diversified, our profitability depends primarily on the general economic conditions in our primary market area. We
+believe the current general economic conditions in our primary market area are healthy and stable. Over the last year our primary market
+area has not experienced any material decline in real estate values or a material increase in the number of foreclosures. In addition
+to local economic conditions, which could have a significant impact on the ability of our borrowers to repay their loans and on the value
+of the collateral securing their loans, deterioration in general economic conditions could result in the following consequences, any
+of which could have a material adverse effect on our business, financial condition, liquidity and results of operations:
+
+ 
+
+ 
+ 
+ 
+ demand for our products and services may decline;
+
+ 
+ 
+
+ 
+ 
+ 
+ loan delinquencies, problem assets and foreclosures may increase;
+
+ 
+ 
+
+ 
+ 
+ 
+ collateral for loans, especially real estate, may decline in value, reducing customers future borrowing power and the
+ value of assets and collateral associated with existing loans; and
+
+ 
+ 
+
+ 
+ 
+ 
+ the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
+
+ 
+ 
+
+ 20 
+
+ 
+
+ 
+
+ 
+
+Moreover, a significant decline in general economic
+conditions, caused by inflation, recession, tariffs and international trade disputes, acts of terrorism, an outbreak of hostilities or
+other international or domestic calamities, unemployment or other factors beyond our control could further impact these local economic
+conditions and could further negatively affect the financial results of our banking operations. In addition, deflationary pressures,
+while possibly lowering our operating costs, could have a significant negative effect on our borrowers, and the values of underlying
+collateral securing loans, which could negatively affect our financial performance.
+
+ 
+
+Risks Related to Competitive Matters
+
+ 
+
+Strong competition within our market area may limit our growth
+and profitability.
+
+ 
+
+Competition in the banking and financial services
+industry is intense. We compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies,
+mutual funds, insurance companies, brokerage and investment banking firms, and unregulated or less regulated non-banking entities. As
+of June 30, 2023 (the latest date for which information is available), our market share was only 0.10% of total bank and thrift
+deposits in Jefferson and St. Tammany Parishes in Louisiana, Many of our competitors are substantially larger than us and have substantially
+greater resources and higher lending limits than we have and offer certain services that we do not or cannot provide, such as trust services,
+private banking, insurance services and asset management. In addition, some of our competitors offer loans with lower interest rates
+and/or more attractive terms than loans we offer. Competition also makes it increasingly difficult and costly to attract and retain qualified
+employees. We expect competition to increase in the future as a result of legislative, regulatory and technological changes and the continuing
+trend of consolidation in the financial services industry. Our profitability depends upon our continued ability to successfully compete
+for business and qualified employees in our market area. The greater resources and deposit and loan products offered by some of our competitors
+may limit our ability to increase our interest-earning assets. See "Business of Mutual Savings and Loan Association – Competition."
+
+ 
+
+Our small size makes it more difficult for us to compete.
+
+ 
+
+Our small asset size relative to other financial
+institutions operating in our market area makes it more difficult to compete with those financial institutions that are larger and can
+more easily afford to invest in the marketing and technologies needed to attract and retain customers. Because our principal source of
+income is the net interest income we earn on our loans and investments after deducting interest paid on deposits and borrowings, our
+ability to generate the revenues needed to cover our expenses and finance such investments is limited by the size of our loan and investment
+portfolios. Accordingly, we are not always able to offer new products and services as quickly as our competitors. Our lower earnings
+may also make it more difficult to offer competitive salaries and benefits. In addition, our smaller customer base makes it difficult
+to generate meaningful non-interest income. Finally, as a smaller institution, we are disproportionately affected by the continually
+increasing costs of compliance with new banking and other regulations.
+
+ 
+
+We currently do not offer mobile banking, online banking or telephone
+banking.
+
+ 
+
+Our ability to compete with larger institutions
+and to attract new customers may be adversely affected since we do not currently offer mobile banking, online banking or telephone banking.
+Following completion of the conversion, we will weigh the advantages of offering such banking with the expected costs and risks of doing
+so. While we may elect to use a portion of the net proceeds to cover the costs of implementing mobile banking, online banking and/or
+telephone banking, we have not yet quantified the costs of doing so, and there is no assurance that we will implement such banking options.
+
+ 
+
+Risks Related to Operational Matters
+
+ 
+
+Our funding sources may prove insufficient to replace deposits
+at maturity and support our future growth.
+
+ 
+
+We must maintain sufficient funds to respond to
+the needs of depositors and borrowers. As a part of our liquidity management, we primarily use certificates of deposit as a funding source
+in addition to core deposit growth, repayments and maturities of loans, and interest-bearing deposits in other banks. We use a passive
+deposit listing service to obtain certificates of deposit, and these certificates of deposit were $4.7 million or 23.6% of total
+deposits at June 30, 2024, compared to $3.7 million or 17.9% of total deposits at December 31, 2023 and $7.6 million or 30.5% of total
+deposit at December 31, 2022. The certificates of deposit obtained through this listing service
+are not brokered deposits under FDIC rules, but these deposits are more interest rate sensitive than our other deposits as competitive
+rates from other financial
+
+ 
+
+ 21 
+
+ 
+
+ 
+
+ 
+
+institutions
+are also posted on this listing service. If we manage to grow in the future, we are likely to depend more on advances from the
+Federal Home Loan Bank of Dallas. In addition to our ability to obtain advances from the Federal Home Loan Bank of Dallas, an additional
+funding source includes borrowing capacity through the Federal Reserve Bank of Atlanta, as well as federal funds. Adverse operating results
+or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources. Our financial
+flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available
+to accommodate future growth at acceptable interest rates. If we are required to rely more heavily on more expensive funding sources
+to support future growth, our revenues may not increase proportionately to cover our costs. In that case, our operating margins and profitability
+would be adversely affected.
+
+ 
+
+Our largest depositor held 24% of our total deposits at June 30,
+2024, and a loss or material reduction in this deposit relationship could adversely affect our liquidity and results of operations.
+
+ 
+
+At June 30, 2024, our largest depositor held 24%
+of our total deposits in multiple accounts, compared to 23% of total deposits at December 31, 2023 and 18% of total deposits at December
+31, 2022. The increase in the percentage of total deposits held by this depositor is primarily due to an overall decline in our total
+deposits in the first half of 2024 and in the year ended December 31, 2023. This depositor is a long-term customer of Mutual Savings
+who has close ties to Mutual Savings and Loan Association and
+who is a related party as defined in applicable regulations. These deposits were made in the ordinary course of business and reflect
+substantially the same terms as those prevailing at the time for comparable deposits with persons unrelated to us. We do not expect
+this depositor to materially reduce the amount of deposits held at Mutual Savings and Loan Association, although we believe a portion
+of such deposits may be used to purchase shares of common stock in the stock offering. However, any loss or material reduction in this
+deposit relationship for any reason could adversely affect our liquidity and results of operations, especially since a significant portion
+of such deposits are held in low-cost checking accounts.
+
+ 
+
+We face significant operational risks because of our reliance on
+technology. Our information technology systems may be subject to failure, interruption or security breaches.
+
+ 
+
+Information technology systems are critical to
+our business. Our business requires us to collect, process, transmit and store significant amounts of confidential information regarding
+our customers, employees and our own business, operations, plans and business strategies. We use various technology systems to manage
+our customer relationships, general ledger, deposits and loans. Our computer systems, data management and internal processes, as well
+as those of third parties, are integral to our performance. Our operational risks include the risk of malfeasance by employees or persons
+outside our company, errors relating to transaction processing and technology, systems failures or interruptions, breaches of our internal
+control systems and compliance requirements, and business continuation and disaster recovery. There have been increasing efforts by third
+parties to breach data security at financial institutions. Such attacks include computer viruses, malicious or destructive code, phishing
+attacks, denial of service or information or other security breaches that could result in the unauthorized release, gathering, monitoring,
+misuse, loss or destruction of confidential, proprietary and other information, damages to systems, or other material disruptions to
+network access or business operations. Although we take protective measures and believe that we have not experienced any of the data
+breaches described above, the security of our computer systems, software and networks may be vulnerable to breaches, unauthorized access,
+misuse, computer viruses, or other malicious code and cyber-attacks that could have an impact on information security. Because the techniques
+used to cause security breaches change frequently, we may be unable to proactively address these techniques or to implement adequate
+preventative measures.
+
+ 
+
+If there is a breakdown in our internal control
+systems, improper operation of systems or improper employee actions, or a breach of our security systems, including if confidential or
+proprietary information were to be mishandled, misused or lost, we could suffer financial loss, loss of customers and damage to our reputation,
+and face regulatory action or civil litigation. Any of these events could have a material adverse effect on our financial condition and
+results of operations. Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance
+limits.
+
+ 
+
+In addition, we outsource a majority of our data
+processing requirements to third-party providers. Accordingly, our operations are exposed to risk that these vendors will not perform
+according to our contractual agreements with them, or we could also be adversely affected if such an agreement is not renewed by the
+third-party vendor or is renewed on terms less favorable to us. If our third-party providers encounter difficulties, or if we have difficulty
+communicating with those service providers, our ability to adequately process and account for transactions could be affected, and our
+business operations could be adversely affected, which could have a material adverse effect on our financial condition and results of
+operations. Threats to information security also exist in the processing of customer information through various other vendors and their
+personnel. To our knowledge, the third
+
+ 
+
+ 22 
+
+ 
+
+ 
+
+ 
+
+party services and programs provided to us have
+not experienced any material security breaches. However, the occurrence of cyber-attacks or security breaches at third parties with access
+to our data, such as vendors, may not be disclosed to us in a timely manner.
+
+ 
+
+Our Board of Directors relies to a large degree on management and
+outside consultants in overseeing cybersecurity risk management.
+
+ 
+
+Management provides information to the board of
+directors at least annually on the overall status of Mutual Savings and Loan Association s information security program. Mutual
+Savings and Loan Association also engages outside consultants to support its cybersecurity efforts. Aside from the President and Chief
+Executive Officer and our Chief Financial Officer, both of whom are directors of Mutual Savings and Loan Association, the other directors
+of Mutual Savings and Loan Association do not have significant experience in cybersecurity risk management in other business entities
+comparable to Mutual Savings and Loan Association.
+
+ 
+
+We depend on our management team to implement our business strategy
+and execute successful operations, and we could be harmed by the loss of their services.
+
+ 
+
+We currently
+depend on the services of our two executive officers in connection with our day-to-day operations. Michael
+L. Hurley, our Chairman of the Board, President and Chief Executive Officer, has
+been with Mutual Savings and Loan Association for 40 years and possesses substantial expertise, extensive knowledge of our markets and
+key business relationships. In addition, Anita C. Cambre, our Vice President and Chief Financial
+Officer, possesses knowledge of our financial statements and audit functions. In
+September 2024, Ms. Cambre announced that she had accepted another full-time but less time-intensive job that will enable her to spend
+more time with her family. Ms. Cambre has agreed to stay in her current positions on a part-time basis at least through completion of
+the conversion and to train a new accounting person we hired in September 2024. The loss of Mr. Hurley, or our inability to successfully
+train Ms. Cambre s replacement prior to her departure or our inability to hire additional qualified personnel, could impact
+our ability to implement our business strategy and could have a material adverse effect on our results of operations and our ability
+to compete in our markets. We do not maintain "key-person" life insurance on any member of our senior management team. See
+ "Management."
+
+ 
+
+Because of our small number of employees, management succession
+planning is critical to our future success.
+
+ 
+
+At June 30, 2024, we had a total of eight
+employees, consisting of our two executive officers, an administrative assistant. a compliance officer, a loan officer, an escrow administrator
+and two tellers. Our Chairman of the Board, President and Chief Executive Officer, who as noted above has been with us for 40 years,
+is 76 years old as of June 30, 2024. The board of directors has adopted a succession policy which provides that if the President
+and Chief Executive Officer is unable to perform his duties for any reason, then our Vice President and Chief Financial Officer will
+assume those responsibilities on an interim basis while a search for a permanent replacement is conducted from both within and outside
+the organization. While our President and Chief Executive Officer has not announced any decision to retire in the near future, the board
+of directors has requested that it be given at least 90 to 180 days advance notice of any planned retirement, and the President
+and Chief Executive Officer has agreed to do so.
+
+ 
+
+We are a community bank and our ability to maintain our reputation
+is critical to the success of our business. The failure to do so may materially adversely affect our performance.
+
+ 
+
+We are a community bank, and our reputation is
+one of the most valuable components of our business. A key factor in implementing our business strategy is our reputation for customer
+service and knowledge of local markets to expand our presence by capturing new business opportunities from existing and prospective customers
+in our market area and contiguous areas. Threats to our reputation can come from many sources, including adverse sentiment about financial
+institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance
+deficiencies, cybersecurity incidents and questionable or fraudulent activities of our customers. Negative publicity regarding our business,
+employees or customers, with or without merit, may result in the loss of customers and employees, costly litigation and increased governmental
+regulation, all of which could adversely affect our business and operating results.
+
+ 
+
+ 23 
+
+ 
+
+ 
+
+ 
+
+We are subject to litigation risk, and any future litigation may
+have an adverse effect on our business, financial condition and results of operations.
+
+ 
+
+Although we are not a party to any material pending
+or potential legal proceedings, future legal proceedings can pose significant financial and other risks to our organization. Prosecuting
+or defending against a lawsuit or other legal proceeding is often costly. Legal issues, such as lawsuits, unenforceable contracts and
+adverse judgments, can potentially disrupt our operations, potentially materially reduce our earnings, capital and liquidity, and otherwise
+materially and adversely affect our business, financial condition and results of operations. See "Business of Mutual Savings and
+Loan Association – Legal Proceedings."
+
+ 
+
+Risks Related to Laws and Regulations
+
+ 
+
+Changes in laws and regulations and the cost of regulatory compliance
+with new laws and regulations may adversely affect our operations and/or increase our costs of operations.
+
+ 
+
+Mutual Savings and Loan Association is subject
+to extensive regulation, supervision and examination by the OCC. Magnolia Bancorp will be subject to extensive regulation, supervision
+and examination by the Federal Reserve Board. Such regulation and supervision govern the activities in which an institution and its holding
+company may engage and is intended primarily for the protection of the federal deposit insurance fund and Mutual Savings and Loan Association s
+depositors rather than the protection of Magnolia Bancorp s shareholders. Regulatory authorities have extensive discretion in their
+supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets
+and determination of the adequacy of the level of our allowance for credit losses. These regulations, along with existing tax, accounting,
+securities, insurance and monetary laws, rules, standards, policies and interpretations, control the methods by which financial institutions
+conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. Any change in such
+regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material
+impact on our operations. In addition, changes in accounting standards can be both difficult to predict and involve judgment and discretion
+in their interpretation by us and our independent accounting firm. These changes could materially impact, potentially even retroactively,
+how we report our financial condition and results of operations.
+
+ 
+
+Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other
+laws and regulations could result in fines or sanctions.
+
+ 
+
+The USA PATRIOT and Bank Secrecy Acts require
+financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities.
+If such activities are suspected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury s
+Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying
+and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result
+in fines or sanctions, including restrictions on pursuing any acquisitions or establishing or acquiring new branches. The policies and
+procedures we have adopted that are designed to assist in compliance with these laws and regulations may not be effective in preventing
+violations of these laws and regulations. Furthermore, these rules and regulations continue to evolve and expand. We have not been
+subject to fines or other penalties, or have suffered business or reputational harm, as a result of money laundering activities in the
+past.
+
+ 
+
+Monetary policies and regulations of the Federal Reserve Board
+could adversely affect our business, financial condition and results of operations.
+
+ 
+
+In addition to being affected by general economic
+conditions, our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve
+Board is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve Board to implement these
+objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks 
+reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and
+the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.
+The monetary policies and regulations of the Federal Reserve Board have had a significant effect on the operating results of financial
+institutions in the past and are expected to continue to do so in the future. The effects of such policies upon our business, financial
+condition and results of operations cannot be predicted.
+
+ 
+
+ 24 
+
+ 
+
+ 
+
+ 
+
+We are an emerging growth company, and any decision on our part
+to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common
+stock less attractive to investors.
+
+ 
+
+Magnolia Bancorp qualifies as an "emerging
+growth company" under the Jumpstart Our Business Startups Act of 2012, referred to herein as the JOBS Act. For as long as it continues
+to be an emerging growth company, it may choose to take advantage of exemptions from various public company reporting requirements that
+are not available to public companies that do not qualify as emerging growth companies, including, but not limited to, reduced disclosure
+obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding
+a non-binding advisory vote on executive compensation. As an emerging growth company, Magnolia Bancorp also will not be subject to Section 404(b) of
+the Sarbanes-Oxley Act of 2002, which would require that our independent auditors audit our internal control over financial reporting.
+In addition, as an emerging growth company, we have elected to take advantage of the extended transition periods for adopting new or
+revised financial accounting standards until the date they are required to be adopted by private companies (however, if any new or revised
+financial accounting standards would not apply to private companies, we would not be able to delay their adoption). Accordingly, our
+financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of
+an earlier date. Investors may find our common stock less attractive since we have chosen to rely on these exemptions. If some investors
+find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market
+for our common stock and the price of our common stock may be more volatile.
+
+ 
+
+We are also a smaller reporting company, and even if we no longer
+qualify as an emerging growth company, any decision on our part to comply only with certain reduced reporting and disclosure requirements
+applicable to smaller reporting companies could make our common stock less attractive to investors.
+
+ 
+
+In addition to qualifying as an emerging growth
+company, Magnolia Bancorp qualifies as a "smaller reporting company" under the federal securities laws. For as long as it
+continues to be a smaller reporting company, it may choose to take advantage of exemptions from various reporting requirements applicable
+to public companies that are not available to companies that are not smaller reporting companies, including, but not limited to, reduced
+financial disclosure obligations and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
+statements. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may
+be a less active trading market for our common stock and the price of our common stock may be more volatile.
+
+ 
+
+Risks
+Related to Accounting Matters
+
+ 
+
+We
+have identified material weaknesses in our internal control over financial reporting with
+respect to various matters, including our allowance for credit losses. If we are unable to remediate them, or if we identify additional
+material weaknesses in the future or otherwise fail to maintain effective internal control over financial
+reporting, we may be unable to accurately or timely report our financial condition or results of operations, which may adversely affect
+our business.
+
+ 
+
+We have identified material weaknesses in our
+internal control over financial reporting that existed as of December 31, 2023 and 2022. A material weakness is a deficiency, or combination
+of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
+of our annual or interim financial statements may not be prevented or detected on a timely basis. If
+we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail
+to maintain effective internal control over financial reporting, we may be unable to accurately or timely report our financial condition
+or results of operations, which may adversely affect our business. We concluded that our procedures were not effective as of December
+31, 2023 and 2022, and that we had, as of such dates, identified the following material weaknesses in our internal control over financial
+reporting:
+
+ 
+
+ 
+ 
+ 
+ Mutual Savings and Loan Association did not maintain an effective control environment as there was
+ an insufficient complement of personnel to provide for adequate segregation of duties within the finance and accounting function
+ to maintain effective controls over the financial close and reporting process.
+
+ 
+ 
+
+ 
+ 
+ 
+ The insufficient complement of personnel adversely impacted our ability to design and maintain policies, procedures and controls
+ that operate at a sufficient level of precision over our significant accounts, classes of transactions and disclosures, including
+ the allowance for credit losses on loans held 
+
+ 
+
+ 25 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ for investment, to ensure that policies and procedures designed to mitigate the risks to the achievement of our financial
+ reporting objectives are carried out.
+
+ 
+ 
+
+ 
+ 
+ 
+ We did not have an effective and formally documented risk assessment process that defined clear
+ financial reporting objectives and elevated risks, including fraud risks, and risks resulting from changes in the external environment
+ and business operations at a sufficient level of detail to identify all relevant risks of material misstatement.
+
+ 
+ 
+
+ 
+ 
+ 
+ We did not design and maintain an effective monitoring program for evaluating and monitoring compliance
+ with established accounting policies, procedures and controls. This weakness included the failure to design and operate effective
+ procedures and controls whose purpose is to evaluate and monitor the effectiveness of individual control activities including the
+ loan review function.
+
+ 
+ 
+
+ 
+ 
+ 
+ We did not have an effective information and communication process to ensure that the processes
+ and controls were effectively documented and disseminated to enable financial personnel to effectively carry out their roles and
+ responsibilities.
+
+ 
+ 
+
+The above material weaknesses
+in our control environment, risk assessment, information and communication, and monitoring controls contributed to the following additional
+material weaknesses.
+
+ 
+
+ 
+ 
+ 
+ We did not design and maintain effective controls regarding significant accounts,
+ transaction cycles and disclosures to ensure policies and procedures designed to mitigate the
+ risks to the achievement of objectives are carried out; and
+
+ 
+ 
+
+ 
+ 
+ 
+ We did not design and maintain effective information technology general controls which could result
+ in misstatements potentially impacting all financial statement accounts and disclosures. Specifically,
+ user access controls were not appropriately designed and maintained to adequately restrict user
+ and privileged access to financial applications and data to the appropriate personnel, segregation of duties over preparation and
+ review of journal entries, and access to critical spreadsheets and similar end-user data files is not restricted and is accessible
+ by all personnel of Mutual Savings and Loan Association.
+
+ 
+ 
+
+These
+material weaknesses could result in a misstatement in the financial
+statements that would result in a material misstatement in the annual or interim financial statements that would not be prevented or
+detected.
+
+ 
+
+For additional information, including
+the remedial actions we have taken to address these material weaknesses, see "Management s Discussion and Analysis of Financial
+Condition and Results of Operations – Internal Control Over Financial Reporting."
+
+ 
+
+Our small number of employees makes it difficult to fully segregate
+duties within the finance and accounting functions to maintain effective internal controls.
+
+ 
+
+Several of our employees have multiple duties
+and responsibilities that extend beyond their designated titles. As discussed above, this resulted in material weaknesses in our internal
+control over financial reporting. When our prior chief financial officer resigned in May 2023, we promoted Ms.
+Cambre as our current Chief Financial Officer and we also hired a new Director of Compliance and Internal Audit in May 2023. As previously
+noted, Ms. Cambre announced in September 2024 that she had accepted another full-time job but will
+continue to stay in her current positions on a part-time basis at least through completion of the conversion. We hired an accounting
+person in September 2024, and Ms. Cambre is assisting in the training and transition of such person prior to her departure. We
+believe we will need to hire additional compliance, accounting and financial staff with appropriate public company experience and technical
+knowledge following completion of the conversion, which will increase our operating expenses.
+
+ 
+
+Changes in management s estimates and assumptions may have
+a material impact on our consolidated financial statements and our financial condition or operating results.
+
+ 
+
+In preparing this prospectus, including Mutual
+Savings and Loan Association s financial statements, and in preparing the periodic reports Magnolia Bancorp will be required to
+file under the Securities Exchange Act of 1934,
+
+ 
+
+ 26 
+
+ 
+
+ 
+
+ 
+
+as amended, upon the completion of the conversion,
+our management is and will be required under applicable rules and regulations to make estimates and assumptions as of a specified
+date. These estimates and assumptions are based on management s best estimates and experience as of that date and are subject to
+substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known.
+The evaluation of our allowance for credit losses requires significant estimates and assumptions by management.
+
+ 
+
+Changes in accounting standards could affect reported earnings.
+
+ 
+
+The regulatory bodies responsible for establishing
+accounting standards, including the Financial Accounting Standards Board, the Securities and Exchange Commission and others, periodically
+change the financial accounting and reporting guidance that governs the preparation of our financial statements. These changes can be
+hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases,
+we could be required to apply new or revised guidance retroactively.
+
+ 
+
+Risks Related to the Stock Offering
+
+ 
+
+Because we will have a high capital level after the completion
+of the conversion, we expect our return on equity to be low following the conversion, which could negatively affect the trading price
+of our shares of common stock.
+
+ 
+
+Net income divided by average shareholders 
+equity, known as "return on equity," is a ratio many investors use to compare the relative performance of financial institutions.
+Our return on average equity was (0.34)% for the first half of 2024, 0.62% for the year ended December 31, 2023 and (0.04)% for
+the year ended December 31, 2022. Our average equity to average assets was 39.00% for the first half of 2024, 37.19% for the year
+ended December 31, 2023 and 31.58% for the year ended December 31, 2022. Our total equity capital was $14.0 million at June 30,
+2024. Assuming the completion of the conversion, our pro forma consolidated shareholders equity at June 30, 2024 is estimated
+to be between $18.1 million at the minimum of the offering range and $21.1 million at the adjusted maximum of the offering range. We
+expect our return on equity to be lower than our peers unless and until we are able to leverage our capital, including the additional
+capital from the stock offering, and return to profitability. Our return on equity also will be negatively affected by added expenses
+associated with our employee stock ownership plan and the stock-based benefit plans we intend to adopt after the completion of the conversion.
+Our lower return on equity may reduce the trading price of our shares of common stock.
+
+ 
+
+The future price of our shares of common stock may be less than
+the $10.00 purchase price per share in the stock offering.
+
+ 
+
+If you purchase shares of common stock in the
+stock offering, you may not be able to sell them later at or above the $10.00 per share purchase price. In many cases, shares of common
+stock issued by newly converted savings institutions have traded below the initial offering price. The aggregate purchase price of the
+shares of common stock sold in the stock offering will be based on an independent appraisal. The independent appraisal is not intended,
+and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. The independent
+appraisal is based on certain estimates, assumptions and projections, all of which are subject to change from time to time. After the
+shares begin trading, the trading price of our common stock will be determined by the marketplace, and may be influenced by many factors,
+including prevailing market interest rates, the overall performance of the economy, changes in federal tax laws, new regulations, investor
+perceptions of Magnolia Bancorp and the outlook for the financial services industry in general. Price fluctuations in our common stock
+may be unrelated to our operating performance.
+
+ 
+
+A significant percentage of our common stock will be held by our
+directors and executive officers and benefit plans.
+
+ 
+
+We expect that our directors and executive officers,
+together with their associates, will subscribe for 6.9% of the shares in the stock offering at the minimum of the offering range and
+6.4% of the shares at the maximum of the offering range. In addition, we intend to establish an ESOP that will purchase an amount of
+shares equal to 8.0% of the total number of shares sold in the stock offering. As a result, upon consummation of the conversion, an aggregate
+up to 14.9% of our outstanding common stock would be held by our directors and executive officers and their associates and by our ESOP
+at the minimum of the offering range (14.4% at the maximum of the offering range). Further, additional shares would be held by management
+following the implementation of an equity incentive plan, which we intend to implement no earlier than six months following the completion
+of the conversion and stock offering assuming we receive shareholder approval.
+
+ 
+
+ 27 
+
+ 
+
+ 
+
+ 
+
+There will be a limited trading market in our common stock, which
+could hinder your ability to sell our common stock and may lower the market price of the stock.
+
+ 
+
+We have never issued capital stock and there is
+no established market for our common stock. We expect that our common stock will be quoted on the OTCQB Market operated by the OTC Markets
+Group upon conclusion of the stock offering, subject to completion of the stock offering. The development of an active trading market
+depends on the existence of willing buyers and sellers, the presence of which is not within our control, or that of any market maker.
+The number of active buyers and sellers of the shares of common stock at any particular time may be limited, particularly in light pf
+the small size of the offering and the amount of stock to be held by our directors and executive officers and employee benefit plans.
+Under such circumstances, you could have difficulty selling your shares of common stock on short notice, and, therefore, you should not
+view the shares of common stock as a short-term investment. As a result, it is unlikely that an active trading market for the common
+stock will develop or that, if it develops, it will continue. If you purchase shares of common stock, you may not be able to sell them
+at or above $10.00 per share. Purchasers of common stock in this stock offering should have long- term investment intent and should recognize
+that there will be a limited trading market in the common stock. This may make it difficult to sell the common stock after the stock
+offering and may have an adverse impact on the price at which the common stock can be sold.
+
+ 
+
+You may not be able to sell your shares of common stock until you
+have received a statement reflecting ownership of shares, which will affect your ability to take advantage of any changes in the stock
+price immediately following the stock offering.
+
+ 
+
+An ownership statement reflecting the shares of
+common stock you purchased in the stock offering may not be delivered to you for several days after the completion of the conversion
+and the start of trading in the common stock. Your ability to sell the shares of common stock before receiving your ownership statement
+will depend on arrangements you may make with a brokerage firm, and you may be unable sell your shares of common stock until you have
+received your ownership statement. As a result, you may not be able to take advantage of any changes in the price of the common stock
+price once trading commences following the completion of the conversion.
+
+ 
+
+Our failure to effectively deploy the net proceeds may have an
+adverse effect on our financial performance and the value of our common stock.
+
+ 
+
+We intend to contribute between $2.4 million and
+$3.5 million of the net proceeds of the stock offering (or $4.1 million at the adjusted maximum of the offering range) to Mutual Savings
+and Loan Association. We may use the remaining net proceeds to invest in short-term investments and for general corporate purposes, including
+repurchasing shares of our common stock to the extent permitted by applicable regulations. We also expect to use a portion of the net
+proceeds we retain to fund a loan to our employee stock ownership plan to purchase shares of common stock in the stock offering. Mutual
+Savings and Loan Association may use the net proceeds it receives to fund new loans, hire additional loan officers and other personnel,
+implement online banking, expand its retail banking franchise by establishing or acquiring new branches, or for other general corporate
+purposes. However, except for funding the loan to the employee stock ownership plan, we have not allocated specific amounts of the net
+proceeds for any of these purposes, and we will have broad discretion in determining the amount of the net proceeds we apply to different
+uses and when we apply or reinvest such proceeds. Also, certain of these uses, such as establishing or acquiring new branches, may require
+the approval of our bank regulators. We have not established a timetable for investing the net proceeds, and we cannot predict how long
+we will require to invest the net proceeds. Our failure to reinvest these funds effectively would reduce our profitability and may adversely
+affect the value of our common stock.
+
+ 
+
+If we are unable to meet our public reporting obligations in a
+timely and satisfactory manner, our business and stock price could be adversely affected.
+
+ 
+
+Upon completion of the conversion, we will become
+a public reporting company. We expect that the obligations of being a public company, including the substantial public reporting obligations,
+will require significant expenditures and place additional demands on our management team. We have made, and will continue to make, changes
+to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a stand-alone
+public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. The Sarbanes-Oxley
+Act of 2002 requires annual management assessments of the effectiveness of our internal control over financial reporting, starting with
+the second annual report that we would expect to file with the Securities and Exchange commission. Any failure to achieve and maintain
+an effective internal control environment could have a material adverse effect on our business and stock price
+
+ 
+
+ 28 
+
+ 
+
+ 
+
+ 
+
+The implementation of stock-based benefit plans may dilute your
+ownership interest. Historically, shareholders have approved these stock-based benefit plans.
+
+ 
+
+We intend to adopt one or more new stock-based
+benefit plans following the conversion. These plans may be funded either through open market purchases of our common stock or from the
+issuance of authorized but unissued shares of common stock. Our ability to repurchase shares of our common stock to fund these plans
+will be subject to many factors, including applicable regulatory restrictions on stock repurchases, the availability of stock in the
+market, the trading price of our stock, our capital levels, alternative uses for our capital and our financial performance. While our
+intention is to fund the new stock-based benefit plans through open market purchases, shareholders would experience a 9.09% dilution
+in ownership interest if newly issued shares of our common stock are used to fund stock options in an amount equal to 10% of the number
+of shares sold in the stock offering, and all such stock options are exercised, and a 3.85% dilution in ownership interest if newly issued
+shares of our common stock are used to fund shares of restricted common stock in an amount equal to 4% of the sum of the number of shares
+sold in the stock offering. Such dilution would also reduce earnings per share. If we adopt the plans more than 12 months following the
+conversion, new stock-based benefit plans would not be subject to these size limitations and shareholders could experience even greater
+dilution.
+
+ 
+
+The implementation of new stock-based benefit
+plans will be subject to shareholder approval. Historically, the overwhelming majority of stock-based benefit plans adopted by savings
+institutions and their holding companies following a mutual-to-stock conversion have been approved by shareholders.
+
+ 
+
+We have not determined when we will adopt one or more new stock-based
+benefit plans. Stock-based benefit plans adopted more than 12 months following the completion of the conversion may exceed regulatory
+restrictions on the size of stock-based benefit plans adopted within 12 months, which would further increase our costs.
+
+ 
+
+If we adopt stock-based benefit plans more than
+12 months following the completion of the conversion, then grants of shares of common stock or stock options under our proposed stock-based
+benefit plans may exceed 4% and 10%, respectively, of the number of shares of common stock sold in the stock offering. Stock-based benefit
+plans that provide for awards in excess of these amounts would increase our costs beyond the amounts estimated in "—Our stock-based
+benefit plans will increase our expenses and reduce our income." Stock-based benefit plans that provide for awards in excess of
+these amounts could also result in dilution to shareholders in excess of that described in "—The implementation of stock-based
+benefit plans may dilute your ownership interest. Historically, shareholders have approved these stock- based benefit plans." Although
+the implementation of stock-based benefit plans would be subject to shareholder approval, the timing of the implementation of such plans
+will be at the discretion of our board of directors.
+
+ 
+
+Our stock value may be negatively affected by applicable regulations
+that restrict stock repurchases.
+
+ 
+
+Applicable regulations generally restrict us from
+repurchasing our shares of common stock during the first year following the completion of the conversion, except for repurchases to fund
+our stock benefit plans. Stock repurchases are a capital management tool that can enhance the value of a company s stock, and our
+inability to repurchase our shares of common stock during the first year following the stock offering may negatively affect our stock
+price.
+
+ 
+
+Various factors may make takeover attempts more difficult to achieve.
+
+ 
+
+Certain provisions of our articles of incorporation
+and bylaws and federal banking laws, including regulatory approval requirements, could make it more difficult for a third party to acquire
+control of Magnolia Bancorp without our board of directors approval. Under regulations applicable to the conversion, for a period
+of three years following completion of the conversion, no person may offer to acquire or acquire beneficial ownership of more than 10%
+of our outstanding shares of common stock without prior approval of the Federal Reserve Board. Under federal law, subject to certain
+exemptions, a person, entity or group must notify the Federal Reserve Board and receive the Federal Reserve Board s non-objection
+before acquiring control of a bank holding company or a savings and loan holding company. There also are provisions in our articles of
+incorporation and bylaws that we may use to delay or block a takeover attempt, including a provision that prohibits any person from voting
+more than 10% of our outstanding shares of common stock unless the acquisition of such shares is approved in advance by at least two-thirds
+of our board of directors. Furthermore, shares of restricted stock and stock options that we may grant to employees and directors, stock
+ownership by our management and directors and other factors may make it
+
+ 
+
+ 29 
+
+ 
+
+ 
+
+ 
+
+more difficult for companies or persons to acquire
+control of Magnolia Bancorp without the consent of our board of directors, and may increase the cost of an acquisition. Taken as a whole,
+these statutory or regulatory provisions and provisions in our articles of incorporation and bylaws could result in our being less attractive
+to a potential acquirer and therefore could adversely affect the market price of our common stock. For additional information, see "Restrictions
+on Acquisition of Magnolia Bancorp" and "Management – New Stock Benefit Plans."
+
+ 
+
+You may not revoke your decision to purchase Magnolia Bancorp common
+stock in the subscription offering or in any community offering after you send us your stock order form.
+
+ 
+
+Funds submitted or automatic withdrawals authorized
+in connection with the purchase of shares of common stock in the subscription offering and in any community offering will be held by
+us until the completion or termination of the conversion, including any extension of the expiration date and consummation of any syndicated
+community offering. Because the completion of the conversion will be subject to regulatory approvals and an update of the independent
+appraisal, among other factors, there may be one or more delays in completing the conversion. Orders submitted in the subscription offering
+and in any community offering are irrevocable, and purchasers will have no access to their funds unless the stock offering is terminated,
+or extended beyond January 31, 2025, or the number of shares to be sold in the stock offering is decreased to fewer than 616,250 shares
+or increased to more than 958,813 shares.
+
+ 
+
+The distribution of subscription rights could have adverse income
+tax consequences.
+
+ 
+
+If the subscription rights granted in connection
+with the subscription offering are deemed to have an ascertainable value, receipt of such rights may be taxable in an amount equal to
+such value. Whether subscription rights are considered to have ascertainable value is an inherently factual determination. We have received
+an opinion of counsel that it is more likely than not that such rights have no value; however, such opinion is not binding on the Internal
+Revenue Service.
+
+ 
+
+ 
+
+ 30 
+
+ 
+
+ 
+
+ 
+
+SELECTED FINANCIAL AND
+OTHER DATA
+
+ 
+
+Set forth below is selected financial and other
+data of Mutual Savings and Loan Association for the periods and at the dates indicated.
+The following is only a
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/MHUA_meihua_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/MHUA_meihua_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..32cc4848b33bf4580f32864c26e72bcbc45c9ddd
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights certain information about us, this offering and selected information contained elsewhere in or incorporated by reference into this prospectus supplement, and does not contain all of the information that you need to consider in making your investment decision. For a more complete understanding of our business and this offering, you should carefully read this entire prospectus supplement and the accompanying prospectus, including our historical financial statements and the notes thereto, which are incorporated herein by reference. You should read Risk Factors beginning on page 19 of this prospectus for more information about important risks that you should consider before making a decision to invest in our securities. Company Overview Meihua International is a Cayman Islands exempted company incorporated on November 10, 2020. Kang Fu International is our wholly owned subsidiary formed in Hong Kong on October 13, 2015. We operate our business through our operating subsidiaries in China, namely 1) Yangzhou Huada, a wholly foreign owned subsidiary of Kang Fu International Medical, formed on December 24, 2001, located in Yangzhou, Jiangsu Province, PRC; 2) Jiangsu Yada, a wholly owned subsidiary of Yangzhou Huada, formed on December 5, 1991, located in Yangzhou, Jiangsu Province, PRC; 3) Jiangsu Huadong, a wholly owned subsidiary of Jiangsu Yada, formed on November 18, 2000, located in Yangzhou, Jiangsu Province, PRC, 4) Hainan Guoxie Technology Group Co., Ltd., or Hainan Guoxie, of which Kang Fu owns 55% shares, formed on October 7, 2021, located in Qionghai City, Hainan Province, and 5) Hainan Ruiying Technology Co., Ltd., or Hainan Ruiying, of which Jiangsu Huadong owns 51% shares, form on October 25, 2023, located in Hainan Free Trade Port Boao Hope City, Hainan Province. Through our operating subsidiaries in the PRC, Yangzhou Huada, Jiangsu Yada, Jiangsu Huadong, Hainan Guoxie, and Hainan Ruiying, we are mainly specialized in the research, development, manufacturing and sales of Class I, Class II and Class III disposable medical devices both domestically and internationally. Pursuant to the Regulations on the Supervision and Administration of Medical Devices promulgated on January 4, 2000, which is effective on June 1, 2014 and amended by the State Council on May 4, 2017, medical devices are classified into the following three categories based on the degree of risk. Class Standard (per PRC National Medical Device Management regulations) I Class I medical devices shall refer to those devices with low level of risks and whose safety and effectiveness can be ensured through routine administration. II Class II medical devices shall refer to those devices with moderate risks that must be strictly controlled and regulated to ensure their safety and effectiveness. III Class III medical devices shall refer to those devices with relatively high risks that must be strictly controlled and regulated through special measures to ensure their safety and effectiveness. We provide our customers with one-stop solution for a variety of safety and quality disposable medical devices. The safety and quality of disposable medical devices are always our core values. We attribute our success to our sustainable and organic growth driven by our capacity expansion based on market demand, our deep understanding of our target end markets and our sound relationships with our customers, distributors, independent sales agents, and suppliers. Our Revenue Model We generate revenues through 1) manufacturing and sales of Class I, II, III disposable medical devices under our own brands, 2) resales of Class I, II, III disposable medical devices sourced by us from other manufacturers. For the fiscal years ended December 31, 2022, 2021, and 2020, we recognized $103,346,341, $104,037,710, and $89,061,010, respectively, in revenues, of which our own brand sales accounted for 48.88%, 46.19%, and 49.94%, respectively, and the resales of sourced disposable medical devices from other manufactures accounted for 51.12%, 53.81%, and 50.06%, respectively. 1 Our disposable medical devices reach end users both domestically and internationally. For the fiscal years ended December 31, 2022, 2021, and 2020, our total sales to domestic direct end users customers and domestic distributor customers accounted for 99.52%, 85.78%, and 81.90% of our revenues, respectively. For the fiscal years ended December 31, 2022, 2021, and 2020, our sales to overseas distributing customers accounted for 0.48%, 14.22%, and 18.10%, respectively, of our revenues. We sell disposable medical devices through our direct sales force and distributors. For the fiscal years ended December 31, 2022, 2021, and 2020, our sales through direct sale channels accounted for 9.16%, 9.13%, and10.59%, respectively, of our revenues, and our sales through distributors accounted for 90.84%, 90.87%, and 89.41%, respectively, of our revenues, of which domestic distributors accounted for 90.36%, 76.65%, and 71.31%, respectively, and exporting distributors accounted for 0.48%,14.22%, and 18.10%, respectively, of our revenues. Our Products Our products are sold throughout the PRC. Internationally, our products are exported to more than 30 countries, including Europe, North America, South America, Asia, Africa and Oceania. Our current product portfolio (consisting of both self-manufactured and out-sourced products) includes: 1) Class I disposable medical devices, such as, disposable medical X-ray films, medical dry films, dry laser imagers, gauze bandages, examination gloves, pharmaceutical packaging materials and containers, low-density polyethylene (LDPE) bottles for eye drops, high-density polyethylene (HDPE) bottles for tablets, etc.; 2) Class II disposable medical devices, such as, disposable full anesthesia kits, medical brush, woman s examination kits, urethral catheterization kits, gynecological examination kits, endotracheal intubation, medical masks, anal bags, and suction connecting tube, etc.; and 3) Class III disposable medical devices, such as disposable infusion pumps, anesthesia puncture kits, electronic pumps, etc. As a medical device manufacturing and sales company, we are subject to extensive government regulation and supervision in the PRC. Pursuant to PRC laws, we must obtain production licenses for Class II and III disposable medical devices, an operation license for Class III disposable medical devices, and filing or registration certificates for certain Class I, II or Class III disposable medical devices. As of the date of this prospectus supplement, we are current on all licenses and certificates and have obtained Class I, II and III disposable medical device qualifications in the PRC. In addition, we maintain a robust quality assurance system. We have received international CE certification and ISO 13485 system certification. We have also registered with the FDA (registration number: 3006554788, 3007912861) for more than 30 products as of the date hereof, including but not limited to ID bracelets, surgical tapes, elastic and adhesive bandages, which are all FDA Class I products. Our operating subsidiaries in the PRC focus on the manufacturing and sales of disposable medical devices as follows: Yangzhou Huada Yangzhou Huada mainly manufactures and sells Class I disposable medical devices, such as disposable pharmaceutical packaging materials and containers using LDPE for eye drops and high-density polyethylene ( HDPE ) bottles for tablets, as well as disposable plastic baby bottles, NB/PSN rubber covers and 8.2mL folded spoons for tools and containers, etc. Additionally, Yangzhou Huada is also engaged in the resales of Class I and II disposable medical devices sourced from other manufacturers when we provide one-stop shopping experience to our customers. 2 Jiangsu Yada Jiangsu Yada mainly manufactures and sells both domestically and internationally 1) Class I disposable medical devices, such as medical dry imaging films; and 2) Class II disposable medical devices, such as disposable woman s examination kits, suction connecting tubes, and Class II 6866 medical polymer materials and products (including but not limited to transfusion equipment and pipelines, endotracheal intubation for respiratory anesthesia or ventilation), etc. In addition to above, Jiangsu Yada is also engaged in the domestic and international resales of 1) Class I and Class II disposable medical devices sourced from other manufacturers when we provide one-stop shopping experience to our customers. Jiangsu Huadong Jiangsu Huadong mainly manufactures and sales both domestically and internationally 1) Class I medical devices, such as medical x-ray films, multi-functional self-extracting X-ray film machines, dry films for medical use, gauze bandages, examination gloves, etc.; 2) Class II medical devices, such as disposable full anesthesia kits, urethral catheterization kits, gynecological examination kits, endotracheal intubation, medical masks, and various tubes, etc.; and 3) Class III medical devices, such as disposable infusion pumps, anesthesia puncture kits, electronic pumps, etc. In addition to above, Jiangsu Huadong is also engaged in the domestic and international resales of Class I, II and III medical devices sourced from other manufacturers when we provide one-stop shopping experience to our customers. Hainan Guoxie Leveraging the geographical and policy advantages of Hainan Province, Hainan Guoxie aims to become a manufacturer of advanced and high-tech medical equipment in Hainan Province. As of the date of this prospectus supplement, Hainan Guoxie is under construction. Hainan Ruiying Hainan Ruiying is a trading and import-export company, aiming to introduce cutting-edge patented pharmaceuticals, medical technologies, and civilian household equipment from renowned markets like the United States and Japan to China. The core focus of Hainan Ruiying will be in acting as a portal and facilitating the introduction of new medical technology, devices, and equipment to the Chinese market, including state-of-the-art medical devices like hearing aids, ultrasonic earwax cleaners, and advanced blood glucose meters. As of the date of this prospectus supplement, the Company has not engaged in any business operations. Our Holding Company Structure The Registered Notes and Conversion Shares offered pursuant to this prospectus supplement are the securities of Meihua International, an exempted company which was incorporated under the laws of the Cayman Islands on November 10, 2020 by our shareholder Yongjun Liu. Meihua s direct subsidiary is Kang Fu International Medical, a Hong Kong company. Kang Fu International Medical was incorporated on October 13, 2015 by four shareholders, Yongjun Liu, Yin Liu, Ace Capital Limited and King Tai International Holding Limited. On November 22, 2019, Yongjun Liu acquired 9,300,000 shares in Kang Fu International Medical from Ace Capital Limited and 4,500,000 shares in Kang Fu International Medical from King Tai International Holding Limited, respectively. Upon consummation of the share transfer, Yongjun Liu and Yin Liu constituted all of the shareholders of Kang Fu International Medical, holding 100% shares of Kang Fu International Medical. On December 21, 2020, Meihua in turn acquired 41,400,000 shares (69% of the outstanding shares) from Yongjun Liu and 18,600,000 shares (31% of the outstanding shares) from Yin Liu, respectively, resulting in Kang Fu International Medical becoming Meihua International s wholly owned subsidiary. In exchange for the acquisition on Kang Fu, Meihua issued a total of 15,935,000 Ordinary Shares to Mr. and Mrs. Liu, who in turn transferred their shares to Bright Accomplish Limited, a holding company for which they are the sole shareholders, on December 21, 2020. Bright Accomplish Limited is Meihua International s controlling shareholder, holding approximately 63.54% of Meihua International s Ordinary Shares as of the date of this prospectus supplement. 3 Meihua International is not a Chinese operating company, but a Cayman Islands holding company with operations conducted by its subsidiaries located in mainland China. Meihua International operates its business through its indirect subsidiaries in China. Below is a list of Meihua International s operating subsidiaries: Yangzhou Huada Medical Device Co., Ltd., or Yangzhou Huada: a subsidiary wholly owned by Kang Fu International Medical and established in Yangzhou, Jiangsu Province, PRC on December 24, 2001 with a registered capital of $602,400, which manufactures and sells Class I disposable medical devices under our own brands, and distributes Class I and Class II disposable medical devices sourced from other manufacturers, to our domestic customers. Specifically, Yangzhou Huada mainly focuses on the manufacturing, sales and distributions of non-bottled products, such as brushes, ID bracelets for domestic sales. Jiangsu Yada Technology Group Co., Ltd., or Jiangsu Yada: a subsidiary wholly owned by Yangzhou Huada and established in Yangzhou, Jiangsu Province, PRC on December 5, 1991 with a registered capital of RMB51,390,000, which manufactures and sells Class I and Class II disposable medical devices under our own brands, and distributes Class I and Class II disposable medical devices sourced from other manufacturers, to our domestic and overseas customers. Specifically, Jiangsu Yada mainly focuses on overseas sales. Jiangsu Huadong Medical Device Industrial Co., Ltd., or Jiangsu Huadong: a subsidiary wholly owned by Jiangsu Yada and established in Yangzhou, Jiangsu Province, PRC on November 18, 2000 with a registered capital of RMB50,000,000, which manufactures and sells Class I, II and III disposable medical devices under our own brands, and distributes Class I, II and III disposable medical devices sourced from other manufacturers, to our domestic and overseas customers. Specifically, Jiangsu Huadong mainly focuses on the manufacturing, sales and distributions of polyethylene bottled products, such as eye drop bottles and tablet bottles. Hainan Guoxie Technology Group Co., Ltd., or Hainan Guoxie: a subsidiary of which 55% of registered capital (subscribed but unpaid registered capital) was acquired by Kang Fu International Medical from an individual Qin Wang with nil consideration on July 6, 2022, in order to conduct local business activities in Hainan. Hainan Guoxie was established in Qionghai, Hainan Province, China on October 7, 2021 with a registered capital of RMB100,000,000. Hainan Ruiying Technology Co., Ltd, or Hainan Ruiying: a subsidiary of which 51% of registered capital (subscribed but unpaid registered capital) is owned by Jiangsu Huadong and established in Qionghai City, Hainan Province, China on October 25, 2023 with registered capital of RMB10,000,000 for purposes of serving as a trading and import-export company with a focus on facilitating the introduction of new medical technology, devices and equipment. Meihua International owns 100% of Kang Fu International Medical. Kang Fu International Medical owns 100% of Yangzhou Huada and 55% of Hainan Guoxie. Yangzhou Huada owns 100% of Jiangsu Yada. Jiangsu Yada, in turn, owns 100% of Jiangsu Huadong. Jiangsu Huadong owns 51% of Hainan Ruiying. The following diagram illustrates the Company s corporate structure as of the date of this prospectus supplement, including Meihua International s principal subsidiary and their respective principal subsidiaries. 4 Key Information Related to Doing Business in China Risks and Uncertainties Related to Doing Business in China Meihua faces various legal and operational risks and uncertainties as a company which its principal subsidiaries based in and primarily operating in China. Most of Meihua s subsidiaries operations are conducted in the PRC, and are governed by PRC laws, rules, and regulations. Because PRC laws, rules, and regulations are relatively new and quickly evolving, and because of the limited number of published decisions and the non-precedential nature of these decisions, and because the laws, rules and regulations often give the relevant regulator certain discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. The PRC government has the power to exercise significant oversight and discretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to us or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current policies and practices. See Risk Factors Risks Related to Doing Business in China Because all of our operations are in China, our business is subject to the complex and rapidly evolving laws and regulations there. The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our Ordinary Shares, and PRC s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business, as set forth at page 39 of this prospectus. The PRC government has significant oversight and discretion over the conduct of our business, and may intervene in or influence our operations through adopting and enforcing rules and regulatory requirements. For example, in recent years the PRC government, has enhanced regulation in areas such as anti-monopoly, anti-unfair competition, cybersecurity and data privacy. See Risk Factors Risks Related to Our Business and Industry If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors outside of China and, as a result, cause the value of such securities to significantly decline or be worthless ; and Uncertainties with respect to the PRC legal system could adversely affect us, as set forth at page 39 of this prospectus. In addition, our Ordinary Shares may be delisted from Nasdaq or prohibited from being traded over-the-counter under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditor for two consecutive years. Our auditor has been inspected by the PCAOB on a regular basis and it is not subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited under the Holding Foreign Companies Accountable Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, the Nasdaq Stock Market may determine to delist our Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, a legislation entitled Consolidated Appropriations Act, 2023 (the Consolidated Appropriations Act ) was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and reduces the number of consecutive non-inspection years required for triggering the listing and trading prohibitions from three years to two years,, thus reducing the time period before our securities may be prohibited from trading or delisted. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB s access in the future, the PCAOB Board will consider the need to issue a new determination. Our securities may be delisted or prohibited from trading if the PCAOB determines that it cannot inspect or investigate completely our auditor under the Holding Foreign Companies Accountable Act. Our auditor, Kreit & Chiu CPA LLP, is headquartered in New York, NY with its office at 733 Third Avenue, Floor 16, #1014, New York, NY 10017, and has been inspected by the PCAOB on a regular basis. See Risk Factors Risks Related to Doing Business in China Although the audit report included in this report was issued by U.S. auditors who are currently inspected by the PCAOB, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors would be deprived of the benefits of such inspection and our Ordinary Shares may be delisted or prohibited from trading, as set forth at page 41 of this prospectus. 5 Permissions and Approvals Required to be Obtained from PRC Authorities for our Business Operations As a medical device manufacturing and sales company, we are subject to extensive government regulation and supervision in the PRC. Pursuant to PRC laws, we must obtain production license for Class II and III disposable medical devices and production filing for Class I disposable medical device, operation license for Class III disposable medical devices and operation filing for Class II disposable medical devices, and filing or registration certificates for certain Class I, II or Class III disposable medical devices. As of the date of this prospectus supplement, we are current on all licenses and certificates and have obtained Class I, II and III disposable medical device qualifications in the PRC. However, if we fail to timely renew our medical device licenses or registration certificates, it could adversely affect our reputation, financial conditions and results of operations. See Risk Factors Risks Related to Our Business and Industry If we fail to timely renew our medical device licenses or registration certificates, it could adversely affect our reputation, financial conditions and results of operations, as set forth at page 34 of this prospectus. Permissions and Approvals Required to be Obtained from PRC Authorities for our Securities Offerings As of the date of this prospectus supplement, we believe that we and our PRC subsidiaries, (1) are not required to obtain permissions from any PRC authorities to operate or issue our Ordinary Shares to foreign investors, (2) are not subject to permission requirements from the China Securities Regulatory Commission (the CSRC ), the Cyberspace Administration of China (the CAC ) or any other entity that is required to approve our PRC subsidiaries operations, and (3) have not received or were denied such permissions by any PRC authorities. Nevertheless, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Given the current PRC regulatory environment, it is uncertain when and whether we or our PRC subsidiaries, will be required to obtain permission from the PRC government to continue to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings. As of the date of this report, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or other PRC governmental authorities. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and relevant five supporting guidelines, together as the New Overseas Listing Rules, which became effective on March 31, 2023. According to the New Overseas Listing Rules, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to complete the filing procedure with the CSRC and report relevant information. In addition, an overseas-listed company must also submit the filing with respect to its follow-on offerings, issuance of convertible corporate bonds and exchangeable bonds, and other equivalent offering activities, within the time frame specified by the Trial Measures. The New Overseas Listing Rules laid out the regulatory filing requirements for both direct and indirect overseas listings and clarify the determination criteria for indirect overseas listing in overseas markets. For more detailed information, see Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China Potential Chinese governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Pursuant to the New Overseas Listing Rules, (i) in connection with our previous issuance of securities to foreign investors, neither we, nor our PRC subsidiaries are required to obtain any permissions or approvals from the CSRC, and (ii) should we decide to issue additional equity or equity-linked securities for listing overseas in the future, we are not required to obtain any permissions or approvals from any PRC government authorities, except for the requisite filing with the CSRC in connection with such issuance. Failure to comply with the filing requirements may result in an order of rectification, a warning and fines up to RMB10 million to the non-compliant domestic companies, and the directly responsible persons of the companies will be warned and fined between RMB500,000 and RMB5 million. Furthermore, if the controlling shareholder and the actual controller of the non-compliant companies organizes or instigates the breach, they will be fined between RMB1 million and RMB10 million. In addition to above filing requirements, the Filings Rules also requires an issuer to report to the CSRC within three business days after occurrence of any the following events: (i) its change of control; (ii) its being subject to investigation or sanctions by any overseas securities regulators or overseas authorities; (iii) its change of listing status or listing segment; (iv) voluntary or mandatory delisting; and (v) material change of its principal business operations to the extent that it ceases to be subject to the filing requirements of the Trial Measures. 6 Securities Purchase Agreement with the Selling Shareholders On December 27, 2023, the Company entered into a securities purchase agreement (the SPA ) with Anson Investment Master Fund LP and Anson East Master Fund LP (together, the Investors ), pursuant to which the Company agreed to issue, from time to time, up to $50,500,0000 in the Company s securities (the Offering ), consisting of convertible notes, issuable at a 7.0% original issue discount (the Convertible Notes ), and accompanying ordinary share purchase warrants (the Warrants ) with five-year terms and exercisable for a number of the Company s ordinary shares, par value $0.0005 per share (the Ordinary Shares ), equal to 50% of the number obtained from dividing each Convertible Note s principal amount by the applicable VWAP (as defined in the SPA), subject to adjustment pursuant and a 4.99% beneficial ownership limitation. Pursuant to the SPA, the Company agreed to issue to the Investors at the initial closing of the Offering (the First Closing ) $6,000,000 in Notes, convertible at the lower of (i) $2.738 per share (or 110% of the VWAP of the Ordinary Shares on December 27, 2023) or (ii) a price per share equal to 95% of the lowest VWAP of the Ordinary Shares during the seven (7)-trading day period immediately preceding the applicable conversion date, subject to certain adjustments and a 4.99% beneficial ownership limitation, and Warrants exercisable for up to an aggregate of 1,205,255 ordinary shares, at an exercise price of $2.9869 per share (or 120% of the VWAP of the Ordinary Shares on December 27, 2023). The Convertible Notes do not bear interest except upon the occurrence of an event of default thereunder, have 364-day maturity dates, must be redeemed by the Company at a premium in the event of (i) a Subsequent Financing (as defined in the SPA), (ii) a Change of Control (as defined in the SPA) and (iii) certain equity conditions listed therein. The Company also has the option to redeem the Notes in the event that the Company deems it in its best interest to do so, such as if it believes an event of default under the Notes is imminent. The Notes contain certain other covenants and events of default customary for similar transactions. The First Closing occurred on January 2, 2024. After the First Closing, and subject to the satisfaction of certain additional conditions, including an Investor holding an outstanding Convertible Note with a principal amount below $500,000, additional tranches of funding may occur pursuant to the SPA (each, an Additional Closing ). In conjunction with each Additional Closing, Investors will receive an additional Convertible Note containing substantially the same terms as the initial Convertible Notes issued, convertible into Ordinary Shares at 110% of the VWAP of the Ordinary Shares on the trading day immediately preceding such Additional Closing and subject to adjustment, and a Warrant exercisable for Ordinary Shares equal to 50% of the number obtained from dividing the principal amount of the Note by the VWAP on the trading day immediately prior to such Additional Closing, and such Warrant will be exercisable for 120% of the VWAP of the Ordinary Shares on the trading day immediately preceding such Additional Closing. In addition, pursuant to the SPA and subject to certain exceptions, the Company (i) granted the Investors the right to participate in a Subsequent Financing (as defined in the SPA) until 12 months from the date on which no Convertible Notes or Warrants are outstanding, (ii) agreed not to issue or announce the issuance or proposed issuance of any Ordinary Shares or Ordinary Share Equivalents (as defined in the SPA) or file any registration statement with respect thereto during (x) the 60-day period beginning on the date of the SPA and (y) the 60-day period commencing on each Additional Closing and (iii) agreed not to enter into a Variable Rate Transaction (as defined in the SPA), or conduct a dilutive issuance (unless Investor approval is received) until such time that no Convertible Notes or Warrants are outstanding. In the event of a Subsequent Financing, the Investor has the right to demand the Company use 30% of such proceeds to repay their outstanding Convertible Notes at a 105% premium and on a pro rata basis. Additionally, the Company agreed not to effect a reverse split or reclassification of its capital stock within 12 months from the date of the SPA without the Investors prior consent, and subject to certain exceptions, and not to incur any additional indebtedness over $500,000 without the Investors prior consent, which consent is not to be unreasonably withheld. The SPA contains certain other representations and warranties, covenants and indemnities customary for similar transactions.1 The Convertible Note and the Ordinary Shares underlying the Notes are being issued pursuant to an effective shelf registration statement on Form F-3, as amended (File No. 333-27419), initially filed with the U.S. Securities and Exchange Commission ( SEC ) on August 24, 2023 and declared effective on September 29, 2023. On January 2, 2024, the Company filed a prospectus supplement pursuant to Rule 424(b)(5) of the Securities Act, registering the Convertible Notes issued at the First Closing and the Ordinary Shares underlying such Convertible Notes. 7 Registration Rights Agreement Concurrently with the entry into the SPA and pursuant to its terms, the Company entered into a registration rights agreement (the RRA ) with the Investors, pursuant to which the Company agreed to register the resale of the Ordinary Shares issuable upon exercise of the Warrants issued at the First Closing (the Warrant Shares ) on a registration statement on Form F-3 or Form F-1, in the event Form F-3 is not available then available to the Company, (the Registration Statement ) with the SEC. In addition, in accordance with the terms of the RRA, the Company will be obligated to register any other Notes, Warrants and Ordinary Shares underlying such future issuances of Notes or Warrants that may be sold and issued to the Investors in accordance with the terms of the SPA. The Company agreed to use its best efforts to cause the Registration Statement registering the Warrant Shares to be declared effective by the SEC within sixty (60) calendar days (or, in the event of a full review by the SEC, within 90 calendar days) after the date of the RRA, and to use its best efforts to keep such Registration Statement continuously effective until the earliest of (i) the date on which the securities may be resold by the Selling Stockholders (as defined therein) without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144 of the Securities Act ( Rule 144 ), without the requirement for the Company to be in compliance with the current public information under Rule 144 or any other rule of similar effect or (ii) the date on which all of the securities have been sold pursuant to this prospectus or Rule 144 or any other rule of similar effect. Placement Agent On December 27, 2023, the Company also entered into a placement agent agreement (the PAA ) with Maxim Group LLC ( Maxim or Placement Agent ), to engage Maxim as its exclusive Placement Agent for the Offering. Maxim acted as the sole Placement Agent for the Offering. At closing of the Offering, on January 2, 2024, in accordance with the terms of the PAA, the Company paid the Placement Agent an aggregate cash fee equal to 7.0% of the gross proceeds raised in the Offering, plus up to $50,000 for all travel and other out-of-pocket expenses, including the reasonable and accounted fees and expenses of legal counsel to the Placement Agent. Summary of Risk Factors Investing in our securities involves significant risks. Before making any investment in our securities, in addition to reviewing the summary risk factors set forth below, you should carefully consider all of the information in our 2022 Annual Report, any amendment or update thereto reflected in subsequent filings with the SEC, including in our annual reports on Form 20-F, any amendments thereto, and all other information contained in this prospectus, and as updated by our subsequent filings under the Exchange Act. These risks are discussed more fully under Item 3. Key Information D. Risk Factors in our 2022 Annual Report and in the section titled Risk Factors beginning on page 19 of this prospectus. 8 Risks Related to Our Business and Industry (for a more detailed discussion of the summary risk factors below, see Risk Factors Risks Related to Our Business and Industry beginning at page 24 below) Risks and uncertainties related to our business include, but are not limited to, the following: in connection with the initial public offering of our Ordinary Shares in February 2022, we entered into certain agreements with a Hong Kong entity pursuant to which we believe we were defrauded of in excess of $10 million; because we failed to disclose such agreements at the time of the initial public offering, regardless of the arguably fraudulent nature of such agreements, we may be subject to potential liabilities or litigation exposure as a result of such agreements; our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates; any failure to maintain effective quality control over our products and services could materially adversely affect our business; due to the nature of our business, we may experience or be exposed to significant liability claims or complaints from customers, doctors, patients or hospitals, litigation and regulatory investigations and proceedings, such as claims arising in relation to medical device safety, or adverse publicity involving our products, which could adversely affect our financial condition and results of operations; a significant interruption in the operations of our third-party suppliers and other business partners could potentially disrupt our operations; while we utilize numerous suppliers, we do not have long term contracts with any of those suppliers and they could reduce order quantities or terminate their sales to us at any time; we are dependent on our top customers. If we fail to acquire new customers or retain existing customers in a cost-effective manner, our business, financial condition and results of operations may be materially and adversely affected; if we fail to provide a one-stop solution to our customers, we may lose customers, which would cause our financial conditions and results of operations to be adversely affected; the continuing development of our products depends upon our maintaining strong working relationships with our customers, distributors and independent sales agents; if we are unable to collect account receivables from our customers, our results of operations and cash flows could be adversely affected; 9 we may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations; changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results; we have no business liability or disruption insurance, which could expose us to significant costs and business disruption; pandemics and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations, which could materially and adversely affect our business, financial condition, and results of operations; failure to keep up with the changes in domestic industry policies or standards could have a material and adverse effect on our reputation, financial condition and results of operations; if we fail to timely renew our medical device licenses or registration certificates, it could adversely affect our reputation, financial conditions and results of operations; Risks Related to Our Corporate Structure (for a more detailed discussion of the summary risk factors below, see Risk Factors Risks Related to Our Corporate Structure beginning at page 34 below) We are also subject to risks and uncertainties related to our corporate structure, including, but not limited to, the following: our directors and officers currently own an aggregate of 63.54% of the total voting power of our outstanding Ordinary Shares; you may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited because we are incorporated under Cayman Islands law; recently introduced economic substance legislation of the Cayman Islands may impact the Company or its operations; 10 Risks Related to Doing Business in China (for a more detailed discussion of the summary risk factors set forth below, see Risk Factors Risks Related to Doing Business in China beginning at page 36 below) We face certain risks and uncertainties related to doing business in China in general, including, but not limited to, the following: because all of our operations are in China, our business is subject to the complex and rapidly evolving laws and regulations there. The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our Ordinary Shares; if the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors outside of China and, as a result, cause the value of such securities to significantly decline or be worthless; potential Chinese governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless; changes in China s economic, political or social conditions or government policies could have a material adverse effect on our business and operations; we may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business; PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of future securities offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business; although the audit report included in the 2022 Annual Report was issued by U.S. auditors who are currently subject to inspection by the PCAOB, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors would be deprived of the benefits of such inspection and our Ordinary Shares may be delisted or prohibited from trading; any failure to comply with PRC regulations regarding cybersecurity and data protection may subject us to fines and other legal or administrative sanctions, claims or legal proceedings; 11 U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in the PRC; if we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders; we face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies; Risks Related to Our Ordinary Shares (for a more detailed discussion of the summary risk factors set forth below, see Risks Related to Our Ordinary Shares beginning at page 48 below) In addition to the risks described above, we are subject to general risks and uncertainties related to our Ordinary Shares and the trading market, including, but not limited to, the following: the market price for our Ordinary Shares may be volatile because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Ordinary Shares in order to obtain return on your investment; substantial future sales or perceived potential sales of Ordinary Shares in the public market could cause the price of our Ordinary Shares to decline; we may need additional capital and may sell additional Ordinary Shares or other equity securities or incur indebtedness, which could result in additional dilution to our shareholders or increase our debt service obligations; certain existing shareholders have substantial influence over our company and their interests may not be aligned with the interests of our other shareholders; we are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements; and we may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses. 12 Cash Flows Through Our Company and Dividend Payments The structure of cash flows within our organization, and a summary of the applicable regulations, is as follows: 1. Our equity structure is a direct holding structure, pursuant to which the overseas entity listed in the U.S., Meihua International Medical Technologies Co., Ltd., directly controls Yangzhou Huada and other domestic operating entities which are directly owned through the Hong Kong company, Kang Fu. 2. Within our direct holding structure, the cross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the PRC. After foreign investors funds enter Meihua International at the close of securities offerings, the funds can be directly transferred to Kang Fu, and then transferred to subordinate operating entities through the WFOE. As of the date of this prospectus supplement, we have not made any dividends or distributions to any U.S. investors. While we don t presently intend to issue dividends to our shareholders, if the Company distributes dividends to our shareholders in the future, we will transfer the dividends to Kang Fu in accordance with the laws and regulations of the PRC, and then Kang Fu will transfer the dividends to Meihua International and the dividends will then be distributed from Meihua International to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions. 3. In the reporting periods presented in for the year ended December 31, 2022, no cash and other asset transfers occurred among the Company and its subsidiaries other than as summarized as below: For the year ended December 31, 2022 (in US$) Inter-company cash transfers: Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Cash transferred from Meihua to Kang Fu International Medical (1) $ (26,010,150 ) $ 26,010,150 - Cash transferred from Kang Fu International Medical to Meihua (2) $ 390 $ (390 ) - Cash transferred from Kang Fu International Medical to PRC subsidiaries (3) - $ (20,389,970 ) $ 20,389,970 Cash transferred from PRC subsidiaries to Kang Fu International Medical (4) - $ 130,000 $ (130,000 ) (1) Meihua transferred $26,010,150 to Kang Fu International Medical as a working capital loan. (2) Kang Fu International Medical transferred $390 to Meihua for repayment of a working capital loan. (3) Kang Fu International Medical contributed $20,389,970 to PRC subsidiaries as a capital contribution.* (4) Yangzhou Huada, one of the PRC subsidiaries, transferred $130,000 to Kang Fu International Medical as a working capital loan. * On February 18, 2022, the Company closed its initial public offering of Ordinary Shares and received approximately US$35 million. In March and April 2022, the Company transferred approximately US$26.0 million to Kang Fu International Medical for working capital purpose then Kang Fu International Medical made capital injection in aggregated of approximately US$20.4 million to PRC subsidiaries - Yangzhou Huada and Hainan Guoxie. 13 For the year ended December 31, 2021 (in US$) Inter-company cash transfers: Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Cash transferred from Kang Fu International Medical to PRC subsidiaries (5) - $ (46,297 ) $ 46,297 Cash transferred from PRC subsidiaries to Kang Fu International Medical (6) - $ 768,042 $ (768,042 ) (5) Kang Fu International Medical transferred $46,297 to PRC subsidiaries for repayment of a working capital loan. (6) Yangzhou Huada, one of the PRC subsidiaries, transferred $768,042 to Kang Fu International Medical as a working capital loan. For the year ended December 31, 2020 (in US$) Inter-company cash transfers: Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Cash transferred from PRC subsidiaries to Kang Fu International Medical (7) - $ 499,998 $ (499,998 ) (7) Yangzhou Huada, one of the PRC subsidiaries, transferred $499,998 to Kang Fu International Medical as a working capital loan. 4. No dividends or distributions of a subsidiary have been made to the Company for the years ended December 31, 2020, 2021 and 2022. For the foreseeable future, the Company intends to use the earnings for research and development, to develop new products and to expand its production capacity. As a result, we do not expect to pay any cash dividends for the near term. Our PRC subsidiaries ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capital. These reserves are not distributable as cash dividends. According to the PRC Company Law and Foreign Investment Law, each of our PRC subsidiaries, as a foreign invested enterprise, or FIE, are required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, under the EIT Law, which became effective in January 2008, the maximum tax rate for the withholding tax imposed on dividend payments from PRC foreign invested companies to their overseas investors that are not regarded as resident for tax purposes is 20%. The rate was reduced to 10% under the Implementing Regulations for the EIT Law issued by the State Council. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, such as tax rate of 5% in the case of Hong Kong companies that holds at least 25% of the equity interests in the foreign-invested enterprise, and certain requirements specified by PRC tax authorities are satisfied. To address persistent capital outflows and the RMB s depreciation against the U.S. dollar in the fourth quarter of 2016, the People s Bank of China and the State Administration of Foreign Exchange, or SAFE, implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, should we wish to distribute dividends to our shareholders, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing such debt may restrict their ability to pay dividends or make other payments. In addition, the 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. Pursuant to the tax agreement between Mainland China and the Hong Kong Special Administrative Region, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. 14 Selected Condensed Consolidating Financial Schedule In the tables below, we provide you with historical selected financial data for the years ended December 31, 2022 and 2021, which have been derived from our consolidated financial statements for those years. Historical results are not necessarily indicative of the results that may be expected for any future period. Condensed Consolidating Schedule Statement of Operations For the Year Ended December 31, 2022 Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Eliminations Consolidated Total Revenues $- $- $103,346,341 $- $103,346,341 Cost $- $- $65,247,864 $- $65,247,864 Gross profit $- $- $38,098,477 $- $38,098,477 Income (loss) from operations $(2,757,913) $(4,046,265) $17,606,140 $- $10,801,962 Income before consolidation $8,994,612 $13,481,369 $- $(22,475,981) $- Net income $6,242,969 $8,994,611 $13,416,105 $(22,475,981) $6,177,704 For the Year Ended December 31, 2021 Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Eliminations Consolidated Total Revenues $- $- $104,037,710 $- $104,037,710 Cost $- $- $64,232,469 $- $64,232,469 Gross profit $- $- $39,805,241 $- $39,805,241 Income (loss) from operations $(99,738) $(16,387) $26,377,079 $- $26,260,954 Income before consolidation $21,049,317 $19,812,052 $- $(40,861,369) $- Net income $20,949,579 $21,049,317 $19,812,052 $(40,861,369) $20,949,579 Condensed Consolidating Schedule Balance Sheet As of December 31, 2022 Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Eliminations Consolidated Total Cash and restricted cash $6,038,630 $1,611,955 $19,086,115 $- $26,736,700 Total current assets $33,625,172 $52,461,542 $120,694,223 $(71,461,782) $135,319,155 Investments in subsidiaries $104,497,765 $108,984,522 $- $(213,482,287) $- Total non-current assets $104,497,765 $108,984,522 $28,258,424 $(213,482,287) $28,258,424 Total assets $138,122,937 $161,446,064 $148,952,647 $(284,944,069) $163,577,579 Total liabilities $- $1,274 $24,897,225 $- $24,898,499 Total shareholders equity $138,122,937 $161,444,790 $124,055,422 $(284,944,069) $138,679,080 Total liabilities and shareholders equity $138,122,937 $161,446,064 $148,952,647 $(284,944,069) $163,577,579 As of December 31, 2021 Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Eliminations Consolidated Total Cash and restricted cash $ - $ 129,037 $ 8,020,239 $ - $ 8,149,276 Total current assets $ 1,616,971 $ (5,839,105 ) $ 88,203,305 $ 13,295,179 $ 97,276,350 Investments in subsidiaries $ 106,251,369 $ 106,092,745 $ - $ (212,344,114 ) $ - Total non-current assets $ 106,251,369 $ 106,092,745 $ 30,776,439 $ (203,539,522 ) $ 39,581,031 Total assets $ 107,868,340 $ 100,253,640 $ 118,979,744 $ (190,244,343 ) $ 136,857,381 Total liabilities $ 99,738 $ 443,265 $ 28,545,776 $ - $ 29,088,779 Total shareholders equity $ 107,768,602 $ 99,810,375 $ 90,433,968 $ (190,244,343 ) $ 107,768,602 Total liabilities and shareholders equity $ 107,868,340 $ 100,253,640 $ 118,979,744 $ (190,244,343 ) $ 136,857,381 15 Condensed Consolidating Schedule Statement of Cash Flows For the Year Ended December 31, 2022 Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Eliminations Consolidated Total Net cash (used in) provided by operating activities $ (28,820,953 ) $ 21,906,025 $ (2,248,110 ) $ - $ (9,163,038 ) Net cash used in investing activities $ - $ (20,165,956 ) $ (8,620,292 ) $ 20,165,956 $ (8,620,292 ) Net cash provided by (used in) financing activities $ 34,859,583 $ (257,150 ) $ 22,809,023 $ (20,165,956 ) $ 37,245,500 For the Year Ended December 31, 2021 Meihua (Cayman) Kang Fu International Medical (HK) PRC subsidiaries Eliminations Consolidated Total Net cash provided by (used in) operating activities $ - $ 604,599 $ (659,262 ) $ - $ (54,663 ) Net cash used in investing activities $ - $ - $ (833,817 ) $ - $ (833,817 ) Net cash (used in) provided by financing activities $ - $ (817,571 ) $ 2,677,805 $ - $ 1,860,234 Corporate Information Our principal executive offices are located at 88 Tongda Road, Touqiao Town, Guangling District, Yangzhou, 225000 People s Republic of China, and our phone number is +86-0514-89800199. We maintain corporate websites at http://meihuamed.com and http://ir.meihuamed.com. The information contained in, or accessible from, our website or any other website does not constitute a part of this prospectus supplement. Our agent for service of process in the United States is Dorsey & Whitney LLP, 51 West 52nd Street, New York, New York 10016 and its phone number is (212) 415-9200. Implications of Being an Emerging Growth Company As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an emerging growth company pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include, but are not limited to: being permitted to present only two years of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition and Results of Operations in our SEC filings; not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation in periodic reports, proxy statements and registration statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We have elected to use the extended transition period under the JOBS Act. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross revenues of at least US$1.235 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a large accelerated filer under the Exchange Act, which would occur as of the end of our fiscal year if the market value of our Ordinary Shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. 16 Implications of Being a Foreign Private Issuer We are incorporated under the laws of the Cayman Islands, and more than 50 percent of our outstanding voting securities are not directly or indirectly held by residents of the United States. Therefore, we are a foreign private issuer, as defined in Rule 405 under the Securities Act and Rule 3b-4(c) under the Exchange Act. As a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example: we are not required to provide as many Exchange Act reports or provide periodic and current reports as frequently, as a domestic public company; for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; we are not required to provide the same level of disclosure on certain issues, such as executive compensation; we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any short-swing trading transaction. As an exempted company with limited liability incorporated under the laws of the Cayman Islands that is listed on Nasdaq, the Company is subject to Nasdaq corporate governance listing standards. Under Nasdaq rules, a foreign private issuer may, in general, follow its home country corporate governance practices in lieu of some of the Nasdaq corporate governance requirements. Pursuant to the home country rule exemption set forth under Nasdaq Listing Rule 5615(a)(3)(A), a foreign private issuer may follow its home country practice in lieu of the requirements of the Nasdaq Marketplace Rule 5600 series so long as the issuer discloses in its annual report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home country practice followed in lieu of such requirement. As such, we have exercised the home country rule exemption and elected to be exempt from the Nasdaq Marketplace Rule 5635(d) and notified Nasdaq of our decision to exercise such exemption. Nasdaq Marketplace Rule 5635(d) sets forth the circumstances under which shareholder approval is required prior to an issuance of securities, other than in a public offering, equal to 20% or more of the voting power outstanding at a price less than the lower of: (x) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (y) the average Nasdaq Official Closing Price of the Ordinary Shares (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. We have notified Nasdaq that we have elected to be exempt from the Nasdaq Marketplace Rule 5635(d). In addition, we will disclose the home country rule exemption of Nasdaq Marketplace Rule 5635(d) in our annual report on Form 20-F for the fiscal year ending December 31, 2023. Ogier, our Cayman Islands counsel, has provided a letter to the Nasdaq Stock Market certifying that under Cayman Islands law, we are not required to comply with above-mentioned requirements. 17 THE OFFERING Ordinary Shares Offered: 1,205,255 ordinary shares issuable upon exercise of outstanding warrants Ordinary Shares outstanding before this offering: 24,234,673 Ordinary Shares outstanding after this offering (1): 25,439,928 Use of Proceeds While we may receive proceeds from the Selling Shareholders exercise of the Warrants (which may, in certain circumstances, be exercised cashlessly), we will not receive any proceeds from the sale of the Ordinary Shares underlying the Warrants offered in this prospectus. For further information, see the Use of Proceeds section below. Risk Factors See Risk Factors beginning on page 19 of this prospectus as well as other information included in this prospectus and our Annual Report on Form 20-F/A, as filed with the SEC on August 29, 2023, for a discussion of certain factors you should carefully consider before investing in our securities. Nasdaq Global Market Symbol MHUA (1)The number of shares outstanding following completion of the Offering do not include shares issuable upon conversion of the Convertible Notes held by the Selling Shareholders. The $6,000,000 in Convertible Notes sold to the Selling Shareholders in a primary offering on Form F-3 are convertible from time to time at the lower of (i) $2.738 per share or (ii) a price per share equal to 95% of the lowest VWAP of the Ordinary Shares during the seven trading day period immediately preceding the applicable conversion date, subject to certain adjustments and a 4.99% beneficial ownership limitation. 18 RISK FACTORS Investment in any securities offered pursuant to this prospectus supplement and the accompanying prospectus involves risks. You should carefully consider the risk factors described below and in our 2022 Annual Report and the accompanying prospectus, any amendment or update thereto reflected in subsequent filings with the SEC, including in our annual reports on Form 20-F, and all other information contained or incorporated by reference in this prospectus, as updated by our subsequent filings under the Exchange Act. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities. Risks Related to this Offering Our recent entry into a Securities Purchase Agreement with the Selling Shareholders for the sale of up to $50.5 million in Convertible Notes and Warrants, of which we have sold $6.0 million to date, along with any subsequent conversion and/or exercise thereof, may depress the price of our Ordinary Shares and encourage short sales by third parties, which could further depress the price of our Ordinary Shares. To the extent that the Selling Shareholders opt to purchase additional Convertible Notes and Warrants from the Company, for up to an additional $44,500,000 in convertible notes and warrants, there could be substantial additional dilution and additional pressure placed on the market price of our Ordinary Shares in the event such Convertible Notes are converted. The risk of dilution from such issuances of Ordinary Shares may cause shareholders to sell our Ordinary Shares held by them, which could further contribute to any decline in the price of our Ordinary Shares. Any downward pressure on the price of our Ordinary Shares caused by the sale or potential sale of such Ordinary Shares could encourage short sales by third parties. In a short sale, a prospective seller borrows shares from a stockholder or broker and sells the borrowed shares. The prospective seller hopes that the share price will decline, at which time the seller can purchase shares at a lower price for delivery back to the lender. The seller profits when the share price declines because it is purchasing shares at a price lower than the sale price of the borrowed shares. Such sales could place downward pressure on the price of our Ordinary Shares by increasing the number of Ordinary Shares being sold, which could further contribute to any decline in the market price of our Ordinary Shares. In addition, such price depression could also result in our failure to meet the Nasdaq minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1). If the closing bid price of our Ordinary Shares falls below $1.00 per Ordinary Share for 30 consecutive trading days, we cannot assure you that we will regain compliance within the timeframes set by Nasdaq, and, although we would need to take such actions to maintain listing, such as completing a reverse stock split, we cannot assure you that our Ordinary Shares would not be delisted from the Nasdaq. Raising additional capital and the sale of additional Ordinary Shares or other equity securities could result in dilution to our shareholders, while the incurrence of debt may impose restrictions on our operations. We may require additional cash resources due to certain future developments, including any investments or acquisitions we may decide to pursue. If our cash resources are insufficient to satisfy our cash requirements, we may seek to sell equity or debt securities or obtain a credit facility in addition to or outside of the Convertible Note and Warrant offering. Such sale of equity securities would result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. Furthermore, the issuance of additional securities by us, whether equity or debt, or the possibility of such issuance, may cause the market price of our Ordinary Shares to decline and existing shareholders may not agree with our financing plans or the terms of such financings. 19 Future sales of our Ordinary Shares, whether by us or our shareholders, could cause our share price to decline. If our existing shareholders sell, or indicate an intent to sell, substantial amounts of our Ordinary Shares on the public market, the trading price of Ordinary Shares could decline significantly. Similarly, the perception in the public market that our shareholders might sell Ordinary Shares could also depress the market price of our Ordinary Shares. A decline in the price of our Ordinary Shares might impede our ability to raise capital through the issuance of additional Ordinary Shares or other equity securities. In addition, the issuance and sale by us of additional Ordinary Shares or securities convertible into or exercisable for Ordinary Shares, or the perception that we will issue such securities, could reduce the trading price for our Ordinary Shares as well as make future sales of equity securities by us less attractive or not feasible. Securities analysts may not cover our Ordinary Shares and this may have a negative impact on the market price of our Ordinary Shares. The trading market for our Ordinary Shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts. We do not currently have and may never obtain research coverage by independent securities and industry analysts. If no independent securities or industry analysts commence coverage of us, the trading price for our Ordinary Shares would be negatively impacted. If we obtain independent securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our Ordinary Shares, changes their opinion of our shares or publishes inaccurate or unfavorable research about our business, our share price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our Ordinary Shares could decrease and we could lose visibility in the financial markets, which could cause our share price and trading volume to decline. Techniques employed by short sellers may drive down the market price of our Ordinary Shares. Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market. Public companies listed in the United States that have a substantial majority of their operations in China have at times been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. We may in the future be the subject of unfavorable allegations made by short sellers. Any such allegations may be followed by periods of instability in the market price of our Ordinary Shares and negative publicity. If and when we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable federal or state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations and shareholder s equity, and the value of any investment in our Ordinary Shares could be greatly reduced or rendered worthless. Management will have broad discretion as to the use of the proceeds from the exercise of any Warrants by the Selling Shareholders, and uses may not improve our financial condition or market value. Because we have not designated the amount of net proceeds from the exercise of any Warrants by the Selling Shareholders to be used for any particular purpose, our management will have broad discretion as to the application of such proceeds. Our management may use the proceeds for working capital and general corporate purposes that may not improve our financial condition or advance our business objectives. 20 Risks and Uncertainties Related to Doing Business in China Meihua faces various legal and operational risks and uncertainties as a company which its principal subsidiaries based in and primarily operating in China. Most of Meihua s subsidiaries operations are conducted in the PRC, and are governed by PRC laws, rules, and regulations. Because PRC laws, rules, and regulations are relatively new and quickly evolving, and because of the limited number of published decisions and the non-precedential nature of these decisions, and because the laws, rules and regulations often give the relevant regulator certain discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. The PRC government has the power to exercise significant oversight and discretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to us or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current policies and practices. See Risk Factors Risks Related to Doing Business in China Because all of our operations are in China, our business is subject to the complex and rapidly evolving laws and regulations there. The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our Ordinary Shares. And PRC s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business. The PRC government has significant oversight and discretion over the conduct of our business, and may intervene in or influence our operations through adopting and enforcing rules and regulatory requirements. For example, in recent years the PRC government, has enhanced regulation in areas such as anti-monopoly, anti-unfair competition, cybersecurity and data privacy. See Risk Factors Risks Related to Our Business and Industry If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors outside of China and, as a result, cause the value of such securities to significantly decline or be worthless. ; and Uncertainties with respect to the PRC legal system could adversely affect us. 21 In addition, our Ordinary Shares may be delisted from Nasdaq or prohibited from being traded over-the-counter under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditor for two consecutive years. Our auditor has been inspected by the PCAOB on a regular basis and it is not subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited under the Holding Foreign Companies Accountable Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, the Nasdaq Stock Market may determine to delist our Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, a legislation entitled Consolidated Appropriations Act, 2023 (the Consolidated Appropriations Act ) was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and reduces the number of consecutive non-inspection years required for triggering the listing and trading prohibitions from three years to two years,, thus reducing the time period before our securities may be prohibited from trading or delisted. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB s access in the future, the PCAOB Board will consider the need to issue a new determination. Our securities may be delisted or prohibited from trading if the PCAOB determines that it cannot inspect or investigate completely our auditor under the Holding Foreign Companies Accountable Act. Our auditor, Kreit & Chiu CPA LLP, is headquartered in New York, NY with its office at 733 Third Avenue, Floor 16, #1014, New York, NY 10017, and has been inspected by the PCAOB on a regular basis. See Risk Factors Risks Related to Doing Business in China Although the audit report included in this report was issued by U.S. auditors who are currently inspected by the PCAOB, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors would be deprived of the benefits of such inspection and our Ordinary Shares may be delisted or prohibited from trading. Permissions and Approvals Required to be Obtained from PRC Authorities for our Business Operations As a medical device manufacturing and sales company, we are subject to extensive government regulation and supervision in the PRC. Pursuant to PRC laws, we must obtain production license for Class II and III disposable medical devices and production filing for Class I disposable medical device, operation license for Class III disposable medical devices and operation filing for Class II disposable medical devices, and filing or registration certificates for certain Class I, II or Class III disposable medical devices. As of the date of this prospectus, we are current on all licenses and certificates and have obtained Class I, II and III disposable medical device qualifications in the PRC. However, if we fail to timely renew our medical device licenses or registration certificates, it could adversely affect our reputation, financial conditions and results of operations. See Risk Factors Risks Related to Our Business and Industry If we fail to timely renew our medical device licenses or registration certificates, it could adversely affect our reputation, financial conditions and results of operations. 22 Permissions and Approvals Required to be Obtained from PRC Authorities for our Securities Offerings As of the date of this prospectus, we believe that we and our PRC subsidiaries, (1) are not required to obtain permissions from any PRC authorities to operate or issue our Ordinary Shares to foreign investors, (2) are not subject to permission requirements from the China Securities Regulatory Commission (the CSRC ), the Cyberspace Administration of China (the CAC ) or any other entity that is required to approve our PRC subsidiaries operations, and (3) have not received or were denied such permissions by any PRC authorities. Nevertheless, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Given the current PRC regulatory environment, it is uncertain when and whether we or our PRC subsidiaries, will be required to obtain permission from the PRC government to continue to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings. As of the date of this report, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or other PRC governmental authorities. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and relevant five supporting guidelines, together as the New Overseas Listing Rules, which became effective on March 31, 2023. According to the New Overseas Listing Rules, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to complete the filing procedure with the CSRC and report relevant information. In addition, an overseas-listed company must also submit the filing with respect to its follow-on offerings, issuance of convertible corporate bonds and exchangeable bonds, and other equivalent offering activities, within the time frame specified by the Trial Measures. The New Overseas Listing Rules laid out the regulatory filing requirements for both direct and indirect overseas listings and clarify the determination criteria for indirect overseas listing in overseas markets. For more detailed information, see Item 3. Key Information D. Risk Factors Risks Related to Doing Business in China Potential Chinese governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Pursuant to the New Overseas Listing Rules, (i) in connection with our previous issuance of securities to foreign investors, neither we, nor our PRC subsidiaries are required to obtain any permissions or approvals from the CSRC, and (ii) should we decide to issue additional equity or equity-linked securities for listing overseas in the future, we are not required to obtain any permissions or approvals from any PRC government authorities, except for the requisite filing with the CSRC in connection with such issuance. Failure to comply with the filing requirements may result in an order of rectification, a warning and fines up to RMB10 million to the non-compliant domestic companies, and the directly responsible persons of the companies will be warned and fined between RMB500,000 and RMB5 million. Furthermore, if the controlling shareholder and the actual controller of the non-compliant companies organizes or instigates the breach, they will be fined between RMB1 million and RMB10 million. In addition to above filing requirements, the Filings Rules also requires an issuer to report to the CSRC within three business days after occurrence of any the following events: (i) its change of control; (ii) its being subject to investigation or sanctions by any overseas securities regulators or overseas authorities; (iii) its change of listing status or listing segment; (iv) voluntary or mandatory delisting; and (v) material change of its principal business operations to the extent that it ceases to be subject to the filing requirements of the Trial Measures. 23 Risks Related to Our Business and Industry In connection with the initial public offering of our Ordinary Shares in February 2022, we entered into certain agreements with a Hong Kong entity pursuant to which we believe we were defrauded of in excess of $10 million; because we failed to disclose such agreements at the time of the initial public offering, regardless of the arguably fraudulent nature of such agreements, we may be subject to potential liabilities or litigation exposure as a result of such agreements. The Company closed its initial public offering (the IPO ) of its ordinary shares (the Ordinary Shares ) on February 18, 2022, through which the Company raised $39.4 million through the sale of 3,940,000 Ordinary Shares at a purchase price of $10.00 per share. During the roadshow leading up to the IPO, a Hong Kong investment company named Tai He International Group Limited ( Tai He ) was referred to the Company by Shengang Securities Company Limited ( Shengang ), the Company s co-underwriter based in the People s Republic of China ( PRC ). Tai He, through negotiations with Shengang, asserted that it would participate in the IPO as an investor. As a development stage PRC medical device company, the Company s management had no experience in the U.S. capital markets and relied on its investment bankers and underwriters in providing guidance and advice concerning its U.S. public offering. Accordingly, the Company was unaware of the actual motives of Tai He. Based on the Company s trust in Shengang and given the circumstances that the Company was unable to make further verification, the Company hastily entered into a series of agreements with Tai He (the Tai He Agreements ). Pursuant to the Tai He Agreements, Tai He agreed to invest a minimum of $35 million in the IPO subject to the Company making a $7.0 million refundable deposit (the Refundable Deposit ) and advancing a $3.0 million service fee for investor relations and other services (together, the Services ) payable to Tai He. The Company, its affiliates and individual shareholders paid the $7.0 million Refundable Deposit and $3.0 million service fee to Tai He in several installments from January 27, 2022 to March 11, 2022. After March 11, 2022, the Company has made no other payments to, nor had any direct interaction with, Tai He, and, in actuality, the Company never directly communicated with Tai He during the negotiations, only communicating about Tai He and the Tai He Agreements through Shengang. After the IPO, through the Company s internal risk control process, the Company learned that Tai He does not appear to be an investor in the Company and, when the Company attempted to inquire about it, Tai He refused to speak with the Company. Based on the facts as investigated and understood by the Company, the Company believes that it was defrauded by Tai He and that Tai He never actually invested $35 million in the IPO. In fact, the Company learned that Tai He made no investments in the Company at all, and Tai He has no involvement in the Company s IPO matters. In addition, the Refundable Deposit has not been repaid to the Company and no Services have been provided to the Company by Tai He. As a result, the Company believes that the Tai He Agreements may be deemed a fraud perpetrated by Tai He and Shengang against the Company by Tai He taking advantage of asymmetric information, including the Company s lack of knowledge and understanding of the U.S. markets, IPO rules and processes, and the trust of the Company. After consultation with professionals, the Company is now aware that the Tai He Agreements were required to be disclosed to the public and the Company believes that the agreements themselves are fraudulent and non-enforceable, and therefore the Company is disclosing the Tai He Agreements to meet the compliance requirements of the Securities and Exchange Commission ( SEC ). Further, the Company acknowledges that it had improperly relied on the advice, direction and counsel of Shengang when entering into the Tai He Agreements. The Company is now proactively working to terminate the Tai He Agreements and recover the monies already paid to Tai He by the Company. Due to the uncertainty of collection, the Company has written off approximately $4.8 million deposit and fully expensed $2.3 million service fee paid by the Company to Tai He in the year ended December 31, 2022. The Company and its executive management team intends to cooperate with the SEC, as well as any other relevant authorities, to ensure that its investors interests are protected while such matters are resolved. Nonetheless, the existence of the Tai He Agreements and the Company s failure to disclose them could expose the Company potential shareholder litigation and/or SEC enforcement or other regulatory action. Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates. Our operating history may not be indicative of our future growth or financial results. There is no assurance that we will be able to grow our revenues in future periods. Our growth rates may decline for any number of possible reasons, and some of them are beyond our control, including decreasing customer demand, increasing competition, declining growth of the medical device industry in general, emergence of alternative business models, or changes in government policies or general economic conditions. We will continue to expand our sales network and product offerings to bring greater convenience to our customers and to increase our customer base and number of transactions. However, the execution of our expansion plan is subject to uncertainty and the total number of items sold and number of transacting customers may not grow at the rate we expect for the reasons stated above. If our growth rates decline, investors perceptions of our business and prospects may be adversely affected and the market price of our Ordinary Shares could decline. 24 Failure to maintain the quality and safety of our products could have a material and adverse effect on our reputation, financial condition and results of operations. The quality and safety of our products, whether self-manufactured or outsourced, are critical to our success. As a medical device manufacturer with a history of over 30 years, and a management team with more than 40 years of industry experience, quality and safety are maintained as our core value. Our medical devices are directly used on the human body and are essential to human health. We pay close attention to quality control, monitoring each step in the process from procurement to production and from warehouse to delivery. Maintaining consistent product quality depends significantly on the effectiveness of our quality control system, which in turn depends on a number of factors, including but not limited to the design of our quality control system, employee training to ensure that our employees adhere to and implement our quality control policies and procedures and the effectiveness of monitoring of any potential violation(s) of our quality control policies and procedures. There can be no assurance that our quality control system will always prove to be effective. In addition, the quality of the products or services provided by our suppliers or business partners is subject to factors beyond our control, including the effectiveness and the efficiency of their quality control system, among others. There can be no assurance that our suppliers or business partners will always be able to adopt appropriate quality control systems and meet our stringent quality control requirements in respect of the products or services they provide. Any failure of our suppliers or business partners to provide satisfactory products or services could harm our reputation and adversely impact our operations. In addition, we may be unable to receive sufficient compensation from suppliers and business partners for the losses caused by them. As of the date of this report, we are unaware of any material accidents related to the quality or safety of our products. Any failure to maintain effective quality control over our products and services could materially adversely affect our business. The quality of our services and products is critical to the success of our business, and such quality to a large extent depends on the effectiveness of our quality control system. We have developed a rigorous quality control system that enables us to monitor each stage of the production process. However, despite our quality control management system, we cannot eliminate all risks of errors, defects or failures. We may fail to detect or cure defects as a result of a number of factors, many of which are outside our control, including: technical or mechanical malfunctions in the production process; human error or malfeasance by our quality control personnel; tampering by third parties; and defective raw materials or equipment. Failure to detect quality defects in our products could result in patient injury, customer dissatisfaction, or other problems that could seriously harm our reputation and business, expose us to liability, and adversely affect our revenue and profitability. In 2018, our PRC subsidiaries Jiangsu Yada and Jiangsu Huadong were fined an immaterial amount for noncompliance with certain local laws and regulations, which non-compliance was cured by us in the same year. For the fiscal year of 2022 and as of the date of report, we are not aware of any material investigations, prosecutions, disputes, claims or other proceedings relating to quality or quality control issues, nor has the Company received any notices of, been punished for, nor can we foresee any punishment being made by any related government authorities of the PRC as of the date of this report. Due to the nature of our business, we may experience or be exposed to significant liability claims or complaints from customers, doctors, patients or hospitals, litigation and regulatory investigations and proceedings, such as claims arising in relation to medical device safety, or adverse publicity involving our products, which could adversely affect our financial condition and results of operations. We face an inherent risk of liability claims or complaints related to the use of our products by our customers, doctors, patients and hospitals. We take those complaints and claims seriously and endeavor to reduce such complaints by implementing various remedial measures. Nevertheless, we cannot assure you that we can successfully prevent or address all such complaints. 25 Any complaints or claims against us, even if meritless and unsuccessful, may divert management s attention and other resources from our business and adversely affect our business and operations. Such complaints or claims may cause customers to lose confidence in us and our brand, which may adversely affect our business and results of operations. Furthermore, negative publicity including but not limited to negative online reviews on social media and crowd-sourced review platforms, industry findings or media reports related to medical device quality and safety, public health concerns, illness, injuries, whether or not accurate, and whether or not concerning our products, can adversely affect our business, results of operations and reputation. We face potential liability, expenses for legal claims and exposure to other harm due to the nature of our business. For example, customers could assert legal claims against us in connection with personal injuries or illness related to the use of medical devices we sell. The PRC government, media outlets and public advocacy groups have been increasingly focused on customer protection in recent years. Selling of defective products may expose us to liabilities associated with customer protection laws. We may be deemed responsible for compensating customer losses even if personal injuries or illness are not directly caused by us. Such liability could arise through the actions of our suppliers or business partners. Thus, we may be held liable if our suppliers or other business partners fail to comply with applicable product quality and safety related rules and regulations. In such a situation, though we can ask the responsible parties to indemnify us for such liability, even if we receive full indemnification our reputation could still be adversely affected. We may face additional exposure to claims and lawsuits. These claims could divert management time and attention away from our business and result in significant costs to investigate and defend, regardless of the merits of the claims. In some instances, we may elect or be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims, which could harm our business, financial condition and results of operations. In addition, our directors, management and employees may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and expense in relation to medical device quality and safety, commercial, labor, employment, securities or other matters, which could adversely affect our reputation and results of operations. As of the date of this report, we are not aware of any notices, warnings, investigations, prosecutions, disputes, claims or other proceedings related to customer rights protection having been brought against us, nor have we been punished or fined or can we foresee any punishment or fines to be made by any government authorities of the PRC or any other jurisdiction. We face the risk of fluctuations in the cost, availability and quality of our raw materials, which could adversely affect our results of operations. The cost, availability and quality of our principal raw materials, such as rubber, chemical PE, polyethylene, polypropylene, nylon, non-woven fabrics and other bulk commodities, are important to our operations. After years of development, we have established long-term cooperative relationships with numerous raw material suppliers under a positive price negotiation and adjustment mechanism. However, if the cost of raw materials increases due to policy changes, large market price fluctuations or any other reasons, our business and results of operations could be adversely affected. Lack of availability of raw materials, whether due to shortages in supply, delays or interruptions in processing, failure of timely deliver materials or otherwise, could interrupt our operations and adversely affect our financial results. Defective raw materials or raw materials with quality issues could subject us to product liability claims or legal actions, which could adversely affect our financial conditions and results of operations. A significant interruption in the operations of our third-party suppliers and other business partners could potentially disrupt our operations. We have limited control over the operations of our third-party suppliers and other business partners and any significant interruption in their operations may have an adverse impact on our operations. For example, a significant interruption in the operations of our supplier s manufacturing facilities could cause delay or termination of shipment of the raw materials to us, which may cause delay or termination of shipment of ordered products to our customers, resulting in damage to our customer relationships. If we could not solve the impact of the interruptions of operations of our third-party suppliers, our business operations and financial results may be materially and adversely affected. Although we believe that we could establish alternate sources from other suppliers for most of our raw materials, any delay in locating and establishing relationships with other sources could result in shortages or back orders for such raw materials. There can be no assurance that such replacement suppliers will provide the raw materials that are needed by us in the quantities that we request or at the prices that we are willing to pay. Any shortage in quantities or increase in prices could adversely affect our financial conditions and results of operations. 26 As the relevant land plots are of allocated land use right, we may be required to pay the land granting fees to convert such allocated land use rights to granted land use rights. Allocated land use rights may only be held by Chinese state-owned enterprises, government authorities and public entities or used for certain prescribed purposes - for example, military installations and infrastructure projects. Allocated lands may be requisitioned by the state at any time and without compensation. An allocated land use right may be converted to a granted land use rights by the payment of land granting fees to the land authority. Therefore, we might be required to convert the land use rights of the relevant land plots from allocated to granted by payment of the land granting fees. While we utilize numerous suppliers, we do not have long term contracts with any of those suppliers and they could reduce order quantities or terminate their sales to us at any time. While we utilize numerous suppliers, we do not have long term contracts with any of those suppliers. As a result, at any time, our suppliers could reduce the quantities of products they sell to us or cease selling products to us altogether. Such reductions or terminations could have a material adverse impact on our revenues, profits and financial condition. Overall tightening of the labor market, increases in labor costs or any possible labor unrest may adversely affect our business and results of operations. Our business requires a substantial number of personnel. Any failure to retain and maintain stable and dedicated workforce by us may lead to disruption to our business operations. Although we have not experienced any labor shortages to date, we have observed an overall tightening and increasingly competitive labor market. We have experienced, and expect to continue to experience, increases in labor costs due to increases in salary, social benefits and employee headcount. We compete with other companies in our industry and other labor-intensive industries for labor, and we may not be able to offer competitive remuneration and benefits compared to them. If we are unable to manage and control our labor costs, our business, financial condition and results of operations may be materially and adversely affected. We are dependent on our top customers. If we fail to acquire new customers or retain existing customers in a cost-effective manner, our business, financial condition and results of operations may be materially and adversely affected. Maintaining existing customers and developing new customers are always essential to our success. Although we are not heavily dependent on one or two customers, we are still dependent on our top customers. For the years ended December 31, 2022, 2021 and 2020, our top five customers contributed approximately 56.53%, 56.96%, and 53.47%, respectively, to our revenue. Our ability to cost-effectively attract new customers and retain existing customers, especially our top customers, is crucial to driving net revenues growth and achieving profitability. We have invested significantly in branding, sales and marketing to acquire and retain customers since our inception. For example, we attend domestic and international expos and exhibitions in marketing our products and attracting new customers. We also expect to continue to invest significantly to acquire new customers and retain existing ones, especially our top customers. There can be no assurance that new customers will stay with us, or the net revenues from new customers we acquire will ultimately exceed the cost of acquiring those customers. In addition, if our existing customers, especially our existing top customers no longer find our products appealing, or if our competitors offer more attractive products, prices, discounts or better customer services, our existing customers may lose interest in us, decrease their orders or even stop ordering from us. If we are unable to retain our existing customers, especially our top customers or to acquire new customers in a cost-effective manner, our revenues may decrease and our results of operations will be adversely affected. If we are unable to build and maintain sufficient sales and distribution network to meet increasing demand of our products, our ability to execute on our business plan as outlined in this report will be impaired. We sell our products through our direct sales force and distribution channel. As of the date of this report, we have 81 employees in our sales department and 5,000 independent sales agents, 3,004 distributors for domestic sales and 324 exporting distributors for overseas sales. Each of the aforementioned 324 exporting distributors may sell medical devices to at least three overseas customers. We have also established a cooperative network with more than 525 hospitals through our direct sales network. For the years ended December 31, 2022, 2021, and 2020, our direct sales force contributed 9.16%, 9.13%, and 10.59% a, respectively, to our revenues, and distributors contributed 90.84%, 90.87%, and 89.41%, respectively, to our revenues. 27 Although our sales and distribution satisfy our existing business needs, they might be insufficient to meet demand for our products as we continue to grow our business, which could result in harm to our sales and business operations, financial condition and results of operations. To mitigate such risk, we intent to invest our internally generated cash from operations and capital to be raised to add additional teams to our direct sales force, expand our geographic reach with new distribution channels into other provinces within China and overseas. If our planned efforts to expand our direct sales force and distribution channels are not effective, our ability to execute on our business plan and to realize continued growth with be impaired. If we fail to provide a one-stop solution to our customers, we may lose customers, which would cause our financial conditions and results of operations to be adversely affected. We sell our own brand of products and the products of other brands. For the fiscal year ended December 31, 2022, 2021, and 2020, we recognized total revenues of $103,346,341, $104,037,710, and $89,061,010, respectively, of which our own brand sales accounted for 48.88%, 46.19%, and 49.94%, respectively, and the resales of sourced disposable medical devices from other manufacturers accounted for 51.12%, 53.81%, and 50.06%, respectively. When we receive an order containing products out of our product portfolio, we may procure such products per the specific order requirements from other manufacturers and provide our customers with a one-stop shopping experience. Lack of availability of these products from other manufacturers, whether due to shortages in supply, delays or interruptions in processing, failure of timely delivery or otherwise, could interrupt our operations and adversely affect our financial results. Our industry is intensely competitive. We may face competition from, and we may be unable to compete successfully against, new entrants and established companies with greater resources. The medical device industry is intensely competitive and includes thousands of companies both domestically and internationally. As more medical device companies seek to outsource more of the design, prototyping and manufacturing of their products, we will face increasing competitive pressures to grow our business in order to maintain our competitive position and we may encounter competition from, and lose customers to, other companies with design, technological and manufacturing capabilities similar to ours. Some of our potential competitors may have greater name recognition, greater operating revenues, larger customer bases, longer customer relationships and greater financial, technical, personnel and marketing resources than we have. If we are unsuccessful competing with our competitors for our existing and prospective customers business, our financial conditions and results of operation may be adversely affected. Furthermore, increased competition may reduce our market share and profitability and require us to increase our sales and marketing efforts and capital commitment in the future, which could negatively affect our results of operations or force us to incur further losses. Although we continually aim to grow our customer base, there is no assurance that we will be able to continue to do so in the future against current or future competitors, and such competitive pressures may have a material adverse effect on our business, financial condition and results of operations. The continuing development of our products depends upon our maintaining strong working relationships with our customers, distributors and independent sales agents. The research, development, marketing and sales of our current products and potential new and improved products or future product indications for which we receive regulatory clearance or approval depend upon our maintaining working relationships with our customers, distributors and independent sales agents. See Our Research and Development below. We rely on those professionals to provide us with considerable knowledge and experience regarding the research, development, marketing and sales of our products. Distributors and independent sales agents assist us in marketing and sales, as well as collecting customers feedbacks and advice related to our products. Researchers at hospital and medical institution customers keep us informed of their latest requirements and R&D results. If we cannot maintain our strong working relationships with these professionals and continue to receive their advice and input, the development, improvement and marketing of our products could suffer, which could have a material adverse effect on our business, financial condition and results of operations. Technological change may adversely affect sales of our products and may cause our products to become obsolete. The medical device market is characterized by extensive research and development and rapid technological change. Technological progress or new developments in our industry could adversely affect sales of our products. Our products could be rendered obsolete because of future innovations by our competitors or others, which would have a material adverse effect on our business, financial condition and results of operations. Consolidation in the medical device industry could have an adverse effect on our revenue and results of operations. Many medical device companies are consolidating to create new companies with greater market power. As the medical device industry consolidates, competition to provide goods and services to industry participants will become more intense. These industry participants may try to use their market power to negotiate price concessions or reductions for our products. If we reduce our prices because of consolidation in the healthcare industry, our revenue would decrease, which could have a material adverse effect on our business, financial condition and results of operations. 28 If we fail to identify, acquire and develop other products, we may be unable to grow our business. As a significant part of our growth strategy, we intend to develop and commercialize additional products through our research and development program or by acquiring additional technologies and patents from third parties. The success of this strategy depends upon our ability to identify, select and acquire the technologies and patents on terms that are acceptable to us. Any patents and technology we identify or acquire may require additional development efforts prior to commercial manufacturing and sale, including approval or clearance by the applicable regulatory authorities. All products are prone to the risks of failure inherent in medical device product development, including the possibility that the product will not be shown to be sufficiently safe and effective for approval or clearance by regulatory authorities. In addition, we cannot assure you that any such products that are approved or cleared will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace. If we are unable to develop suitable potential products through internal research programs or by obtaining patents or technologies from third parties, it could have a material adverse effect on our business, financial condition and results of operations. If we are not able to implement our strategies to achieve our business objectives, our business operations and financial performance will be adversely affected. Our business plan and growth strategy are based on currently prevailing circumstances and the assumption that certain circumstances will or will not occur, as well as the inherent risks and uncertainties involved in various stages of development. However, there is no assurance that we will be successful in implementing our strategies or that our strategies, even if implemented, will lead to the successful achievement of our objectives. If we are not able to successfully implement our strategies, our business operations and financial performance will be adversely affected. We are dependent upon certain key executives and highly qualified managers and we cannot assure their retention. Our success depends, in part, upon the continued services of key members of our management team. Our executives and managers knowledge of the market, our business and our company represents a key strength of our business, which cannot be easily replicated. The success of our business strategy and our future growth also depends on our ability to attract, train, retain and motivate skilled managerial, sales, administration, development and operating personnel. Although we have developed a mature production system, a stable and reliable sales network and marketing team, a complete after-sales service system, and a research and development process and team that keeps us abreast of market needs, and also developed complete management systems, including personnel management and welfare systems, raw material procurement and supply systems, warehousing systems, safe production and manufacturing procedures and systems, capital utilization management systems, sales and after-sales service systems, quality assessment, review and inspection systems, labor safety security system, accountability system for violations of laws and disciplines, and a comprehensive information feedback system, which ensure the normal business development of the company, if we loss any of our key personnel, there can be no assurance that our existing personnel will be adequate or qualified to carry out our strategy, or that we will be able to hire or retain experienced, qualified employees to carry out our strategy. The loss of one or more of our key management or operating personnel, or the failure to attract and retain additional key personnel, could have a material adverse effect on our business, financial condition and results of operations. If we fail to adopt new technologies to evolving customer needs or emerging industry standards, our business may be materially and adversely affected. To remain competitive, we must continue to stay abreast of the constantly evolving industry trends and enhance and improve our technology accordingly. Our success will depend, in part, on our ability to identify, develop or acquire leading technologies useful in our business. There can be no assurance that we will be able to use new technologies effectively or meet customer s requirements. If we are unable to adapt in a cost-effective and timely manner in response to changing market conditions or customer preferences, whether for technical, legal, financial or other reasons, our business may be materially and adversely affected. 29 Changes to our payment terms with both customers and suppliers may materially adversely affect our operating cash flows. We may experience significant pressure from our suppliers to reduce the number of days our accounts payable remain outstanding. At the same time, we may experience pressure from our customers to extend the number of days before paying our accounts receivable. Any failure to manage our accounts payable and accounts receivable may have a material adverse effect on our business, financial condition and results of operations. If we are unable to collect account receivables from our customers, our results of operations and cash flows could be adversely affected. Our business depends on our ability to successfully obtain payment from customers of the amounts they owe us for products sold. As of December 31, 2022 and 2021, our accounts receivable balance amounted to $68,945,792 and $67,101,297, respectively. This growth in receivables reflects, in part, our growth in sales. If we are unable to timely collect our accounts receivable on a timely and consistent basis, however, our cash flows and access to operating capital could be adversely affected. If we fail to manage our inventory effectively, our operations and financial condition may be materially and adversely affected. If we fail to manage our inventory effectively, we may be subject to a heightened risk of inventory obsolescence, a decline in inventory value, and significant inventory write-downs or write-offs. As of December 31, 2022 and 2021, our inventory balance amounted to $1,122,038 and $1,251,393, respectively. Economic recessions could have a significant, adverse impact on our business. Our revenues are generated from sales of medical devices both domestically and internationally and we anticipate that revenues from such sales will continue to represent a substantial portion of our total revenues in the near future. Our sales and earnings can also be affected by changes in the general economy. The medical device industry historically has experienced cyclical fluctuations in financial results due to economic recession, downturns in business cycles of our customers, interest rate fluctuations, and other economic factors beyond our control. Deterioration in the economic environment subjects our business to various risks, which may have a material and adverse impact on our operating results and cause us to not reach our long-term growth goals. For example, a downturn in the economy could directly affect the discretionary spending power of our customers and in turn, depress the number of orders for our products. We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations. We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate intellectual property rights held by third parties. For instance, our subsidiary, Jiangsu Huadong was historically a third defendant in an intellectual property infringement case, under which certain products purchased by Jiangsu Huadong involved patent infringement. As of the date of this report, such case has been settled and Jiangsu Huadong has permanently stopped purchasing and selling the infringing products and destroyed the products in stock as requested by court s decision. In the future, however, we may be subject to other legal proceedings and claims relating to the intellectual property rights of others. Such future proceedings could also involve existing intellectual property of which we are not aware and on which our products may inadvertently infringe. We cannot assure you that holders of intellectual property purportedly relating to some aspect of our technology or business, if any such holders exist, would not bring such intellectual property claims or enforcement actions against us in China or any other jurisdiction. If we are found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property going forward, and, in addition, we may incur licensing fees or be forced to develop alternatives of our own. In addition, we may incur significant expenses, and may be forced to divert management s time and other resources from our business and operations to defend against these infringement claims, regardless of their merits. Successful infringement or licensing claims made against us may result in significant monetary liabilities and may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual property in question, and our business, financial position and results of operations could be materially and adversely affected. Further, the application and interpretation of China s patent laws and the procedures and standards for granting patents in China are still evolving and uncertain, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis or interpretation concerning their implementation. 30 We may not be able to prevent others from the unauthorized use of our intellectual property, which could materially harm our business and competitive position. We rely on a combination of trademark, fair trade practice, patent, copyright and trade secret protection laws in China, as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights. We enter into confidentiality agreements with our employees that include terms identifying all employee-developed intellectual property as service inventions belonging to the Company. In addition, we are carful to remain current in our annual patent fee payments. We regard our trademark, patents, know-how, proprietary technologies, and similar intellectual property as critical to our success. We may become an attractive target to intellectual property attacks in the future with the increasing recognition of our brand. Any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages. In addition, there can be no assurance that (i) all of our intellectual property rights will be adequately protected, or (ii) our intellectual property rights will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. Intellectual property protection may not be sufficient in China. Confidentiality agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in China. In addition, policing any unauthorized use of our intellectual property is difficult, time-consuming and costly and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property. In the event that we must resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results. The U.S. government has recently made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies, including imposing tariffs affecting certain products manufactured in China. It is unknown whether and to what extent new tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry and customers. Although cross-border business currently contributes a small portion of our business, as we continue to sell our products internationally in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact the competitive position of our products or prevent us from being able to sell products in certain countries. If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition, results of operations. We have no business liability or disruption insurance, which could expose us to significant costs and business disruption. The insurance industry in China is still at an early stage of development, and insurance companies in China currently offer limited business-related insurance products. We do not have any business liability or disruption insurance to cover our operations. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Any uninsured risks may result in substantial costs and the diversion of resources, which could adversely affect our results of operations and financial condition. We may incur liabilities that are not covered by insurance. While we seek to maintain appropriate levels of insurance, not all claims are insurable and we may experience major incidents of a nature that are not covered by insurance. We maintain accident insurance for some of our high risk employees, such as electricians. We also provide social security insurance including pension, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance and housing fund plans through a PRC government-mandated benefit contribution plan for our employees. We do not carry any key-man life insurance, product liability and professional liability insurance. Even if we were to purchase these kinds of insurance, the insurance may not fully protect us from the financial impact of defending against product liability or professional liability claims. We have not purchased any property insurance or business interruption insurance. We have determined that the costs of insuring for related risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical. We consider our insurance coverage to be sufficient for our business operations in China. We maintain an amount of insurance protection that we believe is adequate, but there can be no assurance that such insurance will continue to be available on acceptable terms or that our insurance coverage will be sufficient or effective under all circumstances and against all liabilities to which we may be subject. If we were to incur substantial losses or liabilities due to fire, explosions, floods, other natural disasters or accidents or business interruption, our results of operations could be materially and adversely affected. We could, for example, be subject to substantial claims for damages upon the occurrence of several events within one calendar year. In addition, our insurance costs may increase over time in response to any negative development in our claims history or due to material price increases in the insurance market in general. 31 Pandemics and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations, which could materially and adversely affect our business, financial condition, and results of operations. Global pandemics, epidemics in China or elsewhere in the world, or fear of spread of contagious diseases, such as Ebola virus disease (EVD), coronavirus disease 2019 (COVID-19), Middle East respiratory syndrome (MERS), severe acute respiratory syndrome (SARS), H1N1 flu, H7N9 flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt our business operations, reduce or restrict our supply of products and services, incur significant costs to protect our employees and facilities, or result in regional or global economic distress, which may materially and adversely affect our business, financial condition, and results of operations. Actual or threatened war, terrorist activities, political unrest, civil strife, and other geopolitical uncertainty could have a similar adverse effect on our business, financial condition, and results of operations. Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which could materially and adversely affect our business, financial condition, and results of operations. We are also vulnerable to natural disasters and other calamities. We cannot assure you that we are adequately protected from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar events. Any of the foregoing events may give rise to interruptions, damage to our property, delays in production, breakdowns, system failures, technology platform failures, or internet failures, which could cause the loss or corruption of data or malfunctions of our manufacturing facility as well as adversely affect our business, financial condition, and results of operations. Our international sales are subject to a variety of risks that could adversely affect our profitability and operating results. We sell disposable medical devices internationally. For the fiscal years ended December 31, 2022, 2021, and 2020, our international sales accounted for 0.48%, 14.22%, and 18.10%, respectively, of our revenues. Although we take measures to minimize risks inherent to our international sales, the following risks may have a negative effect on our profitability and operating results, impair the performance of our foreign sales or otherwise disrupt our business: fluctuations in the value of currencies could cause exchange rates to change and impact our profitability; greater difficulty in collecting accounts receivable and longer payment cycles, which can be more common in our international sales, could adversely impact our operating results over a particular fiscal period; and changes in foreign regulations, export duties, taxation and limitations on imports or exports could increase our operational costs, impose fines or restrictions on our ability to carry on our business or expand our international sales. We are subject to a variety of environmental laws that could be costly for us to comply with, and we could incur liability if we fail to comply with such laws or if we are responsible for releases of contaminants to the environment. Our operating subsidiaries are all located in PRC. The manufacturing of our products will generate wastewater, exhaust gas, solid waste and equipment noise. Chinese laws impose various environmental controls on the management, handling, generation, manufacturing, transportation, storage, use and disposal of wastewater, exhaust gas, solid waste, equipment noise and other materials used or generated in the manufacturing of our products. If we fail to comply with any present or future environmental laws, we could be subject to fines, corrective action, other liabilities or the suspension of production. 32 We pay great attention to environmental protection and governance and have formulated a systematic environmental protection management system in the treatment of our wastewater, exhaust gas, solid waste and equipment noise in accordance with national requirements. However, changes in environmental laws may result in costly compliance requirements or otherwise subject us to future liabilities. To the extent these changes affect our customers and require changes to their demand in medical devices, our customers may have a reduced need for our products, and, as a result, our revenue could adversely affect. In addition, with the implementation of the fund-raising investment project, our pollutant emissions will increase, resulting in the increase of the environmental protection spending and the difficulty of environmental protection management, which could have an adverse effect on our financial conditions and results of operations. As of the date of this report, the Company is not aware of any investigations, prosecutions, disputes, claims or other proceedings in respect of environmental protection, nor has the Company been punished or can foresee any punishment to be made by any environmental administration authorities of the PRC. Failure to keep up with the changes in domestic industry policies or standards could have a material and adverse effect on our reputation, financial condition and results of operations. As a medical device manufacturer, the products we manufacture and sell are closely related to human health, which is subject to strict supervision by relevant Chinese authorities. The related national government authorities have issued a series of regulatory guidelines and industry policies to ensure the healthy development of the industry. In recent years, as China further deepens the reform of its medical and health system, relevant government departments have successively implemented a series of regulations and policies regarding industry standards, bidding, price formation mechanisms, circulation systems and other related fields, which have brought wide and profound impact on the livelihood and development of pharmaceutical companies. In April 2016, the General Office of the State Council issued the Notice on Key Tasks for Deepening the Reform of the Pharmaceutical and Healthcare System in 2016, proposing to actively encourage the implementation of the two-invoice system in pilot cities for comprehensive reform of public hospitals. In December 2016, the Medical Reform Office of the State Council promulgated the Opinions on the Implementation of the Two-Invoice System in Drug Procurement by Public Medical Institutions (for Trial Implementation), which means that the Two Invoice System has been officially launched and will be further promoted nationwide. Under the two-invoice system, invoices are issued once when pharmaceutical products are sold from manufacturers to wholesalers; and then, invoices are issued again when wholesalers resell the products to hospitals. The aim is to shorten circulation links and reduce hospital procurement costs. Under the two-invoice system, consumable products manufacturers with advantages of brand and economies of scale could increase their coverage of terminals. At the same time, the two-invoice system also presents consumable products manufacturers with higher requirements for the construction and optimization of marketing channels. Manufacturers will need to grow their marketing teams, expand sales networks and improve refined service capabilities. The deepening of the reform of the domestic pharmaceutical industry and the strengthening of supervision may affect our operations and profitability in the domestic market. If we fail to adapt to the profound changes in industry policies in a timely manner, it could materially and adversely affect our business, financial condition and results of operations. We depend on our professional technology research and development talents and we cannot assure their retention. Our success partly depends upon the retention of our professional technology research and development talents ( R&D Talents ). As a high-tech enterprise in the medical device industry, we have a professional R&D Talents team comprised of 30 employees as of the date of this report, who have expertise in polymer materials, medicine, molds, and mechanical automation and possess high-level professional technology expertise and profound industry experience. Among those R&D Talents, seven have a bachelor s degree and the other 23 have received an associate degree. There can be no assurance that our existing R&D Talents will be adequate or qualified to carry out our strategy, or that we will be able to hire or retain new R&D Talents to carry out our strategy. The loss of one or more of our R&D Talents, or the failure to attract and retain additional R&D Talents, could have a material adverse effect on our business, financial condition and results of operations. In addition, if we fail to establish a competitive incentive mechanism in terms of career prospects, salary, benefits and working environment, we may face the risk of instability in the scientific research team, which could adversely affect our long-term development. 33 Loss of certain procurement bids could have a material and adverse effect on our reputation, financial conditions and results of operations. According to the Notice of the Ministry of Health on Further Strengthening the Management of Centralized Procurement of Medical Devices (Wei Gui Cai Fa [2007] No. 208), centralized procurement of medical equipment within the large medical equipment management list is required. For other medical equipment and consumables, the provincial health administrative department shall study and formulate a centralized procurement catalog at the provincial and prefecture level based on actual conditions. In recent years, China has actively promoted a provincial-level bidding platform for medical devices with reference to the drug procurement bidding platform. At present, some provinces and cities have conducted a unified bid for some types of medical devices. According to the Notice of the Office of the National Healthcare Security Administration on Centralized Pharmaceutical Purchasing and Price Management in 2023 (Yi Bao Ban Han [2023] No. 13) and the Notice on Key Tasks for Deepening the Reform of the Pharmaceutical and Healthcare System in 2022 (Guo Ban Fa [2022] No. 14) it is a strategy to continually promote the volume-based centralized procurement for medical devices in a long-term period. Under the centralized procurement model, the price information becomes more transparent and open, which will put greater downward pressure on the winning bid price of the product. If we lose a bid to our competitors due to the disadvantage of product price or other reason, we will lose some hospital customers. If the local procurement platform does not solicit a supplementary bid for a long time or reopen the bid, it could have a material and adverse effect on our reputation, financial conditions and results of operations. If our employees or customers are involved in improper medical device sales transactions, it could adversely affect our reputation, financial conditions and results of operations. We have established and improved our internal control system against unfair business practices, to prevent, minimize and eliminate employees and customers improper behaviors in the medical device sales transactions, including unauthorized rebates. There can be no assurance that our existing internal control system will be adequate to prevent, minimize and eliminate such improper transactions, that we will be able to effectively implement our internal control polices, or that we will be able to perfect our internal control system to eliminate such improper transactions. If any individual employees or downstream customers have improper business practices in the purchase and sale of medical devices, we may be identified by the relevant regulatory authorities as a violator of relevant laws and regulations and thus included in the blacklist of commercial records, which could adversely affect our reputation, financial conditions and results of operations. If we fail to timely renew our medical device licenses or registration certificates, it could adversely affect our reputation, financial conditions and results of operations. As a medical device manufacturer with all of our operating subsidiaries located in PRC, all of our manufacturing and sales activities must comply with relevant Chinese laws and regulations. Pursuant to the Measures for the Administration of Registration of Medical Devices promulgated on June 27, 2014and effective on October 1, 2014, as amended from time to time and currently amended as Measures for the Administration of Registration and Recordation of Medical Devices effective on October 1, 2021, Class I medical devices are subject to recordation administration with Class II and Class III medical devices subject to registration administration. We are in the business of manufacturing and sales of Class I, II and III medical devices. If we fail to timely record or register our medical devices, our financial conditions and results of operations will be adversely affected. As of the date of this report, we are current in the recording and/or registration of all of our medical devices. Risks Related to Our Corporate Structure Our directors and officers currently own an aggregate of 63.54% of the total voting power of our outstanding Ordinary Shares. Currently, our directors and officers collectively own an aggregate of 63.54% of the total voting power of our outstanding Ordinary Shares. These beneficial owners could have significant influence on determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions. In cases where their interests are aligned and they vote together, these beneficial owners will also have the power to prevent or cause a change in control. Without the consent of some or all of these shareholders, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. The interests of these beneficial owners may differ from the interests of our other shareholders. The concentration in the ownership of our Ordinary Shares may cause a material decline in the value of our Ordinary Shares. 34 You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited because we are incorporated under Cayman Islands law. We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands (the Companies Act ) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the memorandum and articles of association and any special resolutions passed by such companies, and the register of mortgages and charges of such companies) or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers. As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders. Cayman Islands law provides shareholders with only limited rights to convene a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company s articles of association. Our articles of association allow our shareholders holding shares representing in aggregate not less than ten percent of our voting share capital in issue, to convene a general meeting of our shareholders, in which case our directors are obliged to call such meeting. Advance notice of at least seven days is required for the convening of our general meetings. A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing a majority of the paid up voting share capital in the Company. Recently introduced economic substance legislation of the Cayman Islands may impact the Company or its operations The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity. Effective January 1, 2019, the International Tax Co-operation (Economic Substance) Act, 2018 (the Substance Law ) and issued Regulations and Guidance Notes came into force in the Cayman Islands introducing certain economic substance requirements for relevant entities which are engaged in certain relevant activities, which in the case of exempted companies incorporated before January 1, 2019, will apply in respect of fiscal years commencing July 1, 2019, onwards. A relevant entity includes an exempted company incorporated in the Cayman Islands; however, it does not include an entity that is tax resident outside the Cayman Islands. Accordingly, for so long as the Company is a tax resident outside the Cayman Islands, it is not required to satisfy the economic substance test under the Substance Law. Although it is presently anticipated that the Substance Law will have little material impact on the Company or its operations, as the legislation is new and remains subject to further clarification and interpretation it is not currently possible to ascertain the precise impact of these legislative changes on the Company. 35 Certain judgments obtained against us by our shareholders may not be enforceable. We are a Cayman Islands company and substantially all of our assets are located in mainland China. All of our current business operations are conducted in mainland China. In addition, all of our current officers, including Yongjun Liu, Xin Wang, Lianzhang Zhao, Xiaoming E, Huijuan Zhao and Wenzhang Jia are nationals and residents of the PRC. Substantially all of the assets of these persons are located in the PRC. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against our assets or the assets of our directors and officers. Risks Related to Doing Business in China Because all of our operations are in China, our business is subject to the complex and rapidly evolving laws and regulations there. The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our Ordinary Shares. As a business operating in China, we are subject to the laws and regulations of the PRC, which can be complex and evolve rapidly. The PRC government has the power to exercise significant oversight and discretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to us or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may: Delay or impede our development, Result in negative publicity or increase our operating costs, Require significant management time and attention, and Subject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably impact the ability or manner in which we conduct our business and could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our products, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected as well as materially decrease the value of our Ordinary Shares. If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors outside of China and, as a result, cause the value of such securities to significantly decline or be worthless. Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted outside of China and/or foreign investments in China based issuers. The PRC has recently promulgated new rules that require companies collecting or holding large amounts of data to undergo a cybersecurity review prior to listing in foreign countries, a move that will significantly tighten oversight over China-based internet giants. The Measures for Cybersecurity Review (2021 version) was promulgated on December 28, 2021 and became effective on February 15, 2022. These measures specify that any online platform operators controlling the personal information of more than one million users which seek to list on a foreign stock exchange are subject to prior cybersecurity review. As our business belongs to the medical instrument industry in China, and our business does not involve the collection of user data or involve any other type of restricted industry, our business is generally outside the scope of the Measures for Cybersecurity Review. Based on the advice of counsel and our understanding of currently applicable PRC laws and regulations, our recent registered initial public offering in the U.S. was not subject to the review or prior approval of the CAC or the CSRC. Uncertainties still exist, however, due to the possibility that laws, regulations or policies in the PRC could change or rapidly evolve in the future. Any future action by the PRC government expanding the categories of industries and companies whose foreign securities offerings are subject to review by the CSRC or the CAC could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless. 36 Potential Chinese governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. In addition, an overseas offering and listing is prohibited under any of the following circumstances: (1) if the intended securities offering and listing is specifically prohibited by national laws and regulations and relevant provisions; (2) if the intended securities offering and listing may constitute a threat to or endangers national security as reviewed and determined by competent authorities under the State Council in accordance with law; (3) if there are material ownership disputes over the equity, major assets, and core technology, etc. of the issuer; (4) if, in the past three years, the domestic enterprise or its controlling shareholders or actual controllers have committed corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist market economy, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for suspicion of major violations; (5) if, in past three years, directors, supervisors, or senior executives have been subject to administrative punishments for severe violations, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for suspicion of major violations; (6) other circumstances as prescribed by the State Council. The Administration Provisions defines the legal liabilities of breaches such as failure in fulfilling filing obligations or fraudulent filing conducts, imposing a fine between RMB 1 million and RMB 10 million, and in cases of severe violations, a parallel order to suspend relevant business or halt operation for rectification, revoke relevant business permits or operational license. On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. The Trial Measures and its supporting guidelines reiterate the basic principles of the Draft Rules Regarding Overseas Listing and impose substantially the same requirements for the overseas securities offering and listing by domestic enterprises. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete the filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application, or its completion of follow-on offering in the same overseas market where it has listed (including issuance of any corporate convertible bonds, exchangeable bonds and other equity-linked securities, but excluding the offering for employees incentive, dividend distribution by shares and share split). If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. According to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies from the CSRC, or the CSRC Notice, which was promulgated on February 17, 2023 and became effective on the same day, the domestic companies that have already been listed overseas before the effective date of the Trial Measures (i.e. March 31, 2023) shall be deemed as existing issuers (the Existing Issuers ). Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic companies obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been approved) for their indirect overseas offering and listing prior to March 31, 2023 but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30, 2023. Those issuers that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings. Within such six-month transition period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing procedures with the CSRC. However, since the Trial Measures were newly promulgated, their interpretation, application and enforcement remain unclear. If the filing procedure with the CSRC under the Trial Measures is required for any subsequent offerings, listing or any other capital raising activities, which may subject us to additional compliance requirements in the future, we cannot assure you that we will be able to get the clearance of filing procedures under the Trial Measures on a timely basis, or at all. If we do not complete any required record-filing or if we incorrectly conclude that record-filing is not required or if the CSRC or other regulatory agencies promulgate new rules, explanations or interpretations requiring that we obtain their prior approvals or record-filing for any follow-on offering, we may be unable to obtain such approvals and record-filing which could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors. 37 Furthermore, the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence our operations at any time, which are beyond our control. Therefore, any such action may adversely affect our operations and significantly limit or hinder our ability to offer or continue to offer securities and reduce the value of such securities. As of the date of this report, we and our PRC subsidiaries have not been involved in any investigations on cybersecurity review initiated by the Cyber Administration of China or related governmental regulatory authorities, and have not received any requirements to obtain permissions from any PRC authorities to issue our Ordinary Shares to foreign investors or were denied such permissions by any PRC authorities. However, given the current PRC regulatory environment, it is uncertain when and whether we or our PRC subsidiaries, will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings. As of the date of this report, except for the potential uncertainties disclosed above, we have not received any inquiry, notice, warning, sanctions or regulatory objection from the CSRC or other PRC governmental authorities. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. Changes in China s economic, political or social conditions or government policies could have a material adverse effect on our business and operations. Substantially all of our assets and operations are located in the PRC. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in the PRC generally. The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over the PRC s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. While the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in the PRC, in the policies of the Chinese government or in the laws and regulations in the PRC could have a material adverse effect on the overall economic growth of the PRC. Such developments could adversely affect our business and operating results, lead to a reduction in demand for our services and adversely affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may nonetheless have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results. Non-compliance with labor-related laws and regulations of the PRC may have an adverse impact on our financial condition and results of operation. We have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September 2008 and was amended in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations. We believe our current practice complies with the Labor Contract Law and its amendments. However, the relevant governmental authorities may take a different view and impose fines on us. 38 As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be materially and adversely affected. The PRC s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business. All of our operations are located in the PRC and substantially of our net revenues are derived from customers where the contracting entity is located in the PRC. Accordingly, our business, financial condition, results of operations, prospects and certain transactions we may undertake may be subject, to a significant extent, to economic, political and legal developments in the PRC. The PRC s economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the PRC s economy has been transitioning from a planned economy to a more market-oriented economy since the late 1970s, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over the PRC s economic growth through allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Changes in any of these policies, laws and regulations could adversely affect the economy in the PRC and could have a material adverse effect on our business. The PRC government has implemented various measures to encourage foreign investment and sustainable economic growth and to guide the allocation of financial and other resources. However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce new measures that will have a negative effect on us. PRC s social and political conditions may change and become unstable. Any sudden changes to PRC s political system or the occurrence of widespread social unrest could have a material adverse effect on our business and results of operations. Uncertainties with respect to the PRC legal system could adversely affect us. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters generally. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in the PRC. However, the PRC has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in the PRC. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, these regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial costs and diversion of resources and management attention. You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in the PRC against us or our management named in the report based on foreign laws. We conduct substantially all of our operations in the PRC, and substantially all of our assets are located in the PRC. In addition, all of our officers and directors are PRC nationals and reside within PRC. As a result, it may be difficult for our shareholders to effect service of process upon us or our directors and officers inside the PRC. In addition, the PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions. Therefore, recognition and enforcement in the PRC of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. 39 We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business. We rely principally on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services of any debt we may incur. Our PRC subsidiaries ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries, as a Foreign Invested Enterprise, or FIE, are required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50 percent of its registered capital. These reserves are not distributable as cash dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries to distribute dividends or other payments to their respective shareholders could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business. In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of future securities offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business. Any funds we transfer to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in the PRC. According to the relevant PRC regulations on foreign-invested enterprises, or FIEs, in the PRC, capital contributions to our PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce, or MOFCOM or its local branches and registration with a local bank authorized by the State Administration of Foreign Exchange, or SAFE. In addition, (i) a foreign loan of less one year duration procured by our PRC subsidiaries is required to be registered with SAFE or its local branches and (ii) a foreign loan of one year duration or more procured by our PRC subsidiaries is required to be applied to the NDRC in advance for undergoing recordation registration formalities. Any medium or long-term loan to be provided by us to our PRC operating subsidiaries, must be registered with the NDRC and the SAFE or its local branches. We may not be able to complete such registrations on a timely basis, with respect to future capital contributions or foreign loans by us to our PRC subsidiaries. If we fail to complete such registrations, our ability to use the proceeds of any future securities offerings and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business. On March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect as of June 1, 2015. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capital for expenditure beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises. The SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, effective in June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency to Renminbi on a self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. On October 23, 2019, the SAFE issued the Notice of the State Administration of Foreign Exchange on Further Facilitating Cross-border Trade and Investment, or the SAFE Circular 28, which, among other things, expanded the use of foreign exchange capital to domestic equity investment area. The foreign-invested enterprises, whose business scope do not include equity investment, are allowed to lawfully make domestic equity investments by using their capital on the premise without violation to prevailing special administrative measures for access of foreign investments (negative list) and the authenticity and compliance with the regulations of domestic investment projects. As this circular is relatively new, there remains uncertainty as to its interpretation and application and any other future foreign exchange related rules. Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19, SAFE Circular 16 and SAFE Circular 28 may significantly limit our ability to use Renminbi converted from the net proceeds of future securities offerings to fund our PRC subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiaries, which may adversely affect our business, financial condition and results of operations. 40 Although the audit report included in this prospectus was issued by U.S. auditors who are currently inspected by the PCAOB, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors would be deprived of the benefits of such inspection and our Ordinary Shares may be delisted or prohibited from trading. The audit report included in this prospectus for our 2022 and 2021 fiscal year was issued by Kreit & Chiu CPA LLP ( KC ), a U.S.-based accounting firm that is registered with the PCAOB and can be inspected by the PCAOB. The audit report included in this prospectus for our 2020 fiscal year was issued by Briggs & Veselka Co. ( B&V ), which was also a U.S.-based accounting firm that was registered with the PCAOB and can be inspected by the PCAOB. We have no intention of engaging any auditor not based in the U.S. and not subject to regular inspection by the PCAOB. As an auditor of companies that are registered with the SEC and publicly traded in the United States and a firm registered with the PCAOB, KC is required under the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. If we were to engage a different auditor at any time in the future, we would engage an auditor that is U.S.-based and subject to full PCAOB inspection with all materials related to the audit of our financial statements accessible to the PCAOB. There is no guarantee, however, that any future auditor engaged by the Company would remain subject to full PCAOB inspection during the entire term of our engagement. In such case, we will engage a new qualified and fully inspected auditor, which may result in us delaying or restating our financial statements. The PCAOB was unable to conduct inspections in the PRC without the approval of Chinese government authorities. If it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in the PRC that prevents the PCAOB from regularly evaluating our auditors audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. As part of a continued regulatory focus in the U. S. on access to audit and other information currently protected by national law, in particular PRC s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of the U.S. Congress which, if passed, would require the SEC to maintain a list of issuers for which PCAOB was not able to inspect or investigate the audit work performed by a foreign public accounting firm completely. The proposed Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges ( EQUITABLE ) Act prescribes increased disclosure requirements for these issuers and, beginning in 2025, the delisting from U.S. national securities exchanges such as the Nasdaq of issuers included on the SEC s list for three consecutive years. It is unclear if this proposed legislation will be enacted. Furthermore, there have been recent deliberations within the U.S. government regarding potentially limiting or restricting China-based companies from accessing U.S. capital markets. On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act (the HFCAA ), which includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor s local jurisdiction. The U.S. House of Representatives passed the HFCAA on December 2, 2020, and the HFCAA was signed into law on December 18, 2020. Additionally, in July 2020, the U.S. President s Working Group on Financial Markets issued recommendations for actions that can be taken by the executive branch, the SEC, the PCAOB or other federal agencies and department with respect to Chinese companies listed on U.S. stock exchanges and their audit firms, in an effort to protect investors in the United States. In response, on November 23, 2020, the SEC issued guidance highlighting certain risks (and their implications to U.S. investors) associated with investments in China-based issuers and summarizing enhanced disclosures the SEC recommends China-based issuers make regarding such risks. On December 2, 2021, the SEC adopted final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. We will be required to comply with these rules if the SEC identifies us as having a non-inspection year (as defined in the interim final rules) under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. Under the HFCAA, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not able to be inspected by the PCAOB for three consecutive years, and this ultimately could result in our Ordinary Shares being delisted. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act ( AHFCAA ), which, if enacted, would amend the HFCAA and require the SEC to prohibit an issuer s securities from trading on any U.S. stock exchanges if its auditor is not able to be inspected by the PCAOB for two consecutive years instead of three. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People s Republic of China, because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. On December 23, 2022, the AHFCAA was enacted, which amended the HFCAA by requiring the SEC to prohibit an issuer s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the China Securities Regulatory Commission (the CSRC ), the Ministry of Finance of the PRC (the MOF ), and the PCAOB signed a Statement of Protocol (the Protocol ), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB s access in the future, the PCAOB will consider the need to issue a new determination. 41 Our securities may be delisted under the HFCAA if the PCAOB is unable to inspect auditors with presence in China for three consecutive years. The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections deprives our investors of the benefits of such inspections. The above recent developments may have added uncertainties to our ability to continue to list on Nasdaq or to offer our securities and we cannot assure you whether Nasdaq or other regulatory authorities would apply additional and more stringent criteria to us since we are an emerging growth company and substantially all of our operations are conducted in China. The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. Moreover, on December 29, 2022, legislation entitled Consolidated Appropriations Act, 2023 (the Consolidated Appropriations Act ) was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to the HFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two. If our Ordinary Shares are unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our Ordinary Shares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Ordinary Shares. We are a controlled company within the meaning of the Nasdaq listing rules, and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders. Our largest shareholder, Mr. Yongjun Liu, owns more than a majority of the voting power of our outstanding Ordinary Shares. Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a controlled company and is permitted to phase in its compliance with the independent committee requirements. Although we do not intend to rely on the controlled company exemptions under the Nasdaq listing rules even if we are deemed a controlled company, we could elect to rely on these exemptions in the future. If we were to elect to rely on the controlled company exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment. The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how long such appreciation of RMB against the U.S. dollar may last and when and how the relationship between the RMB and the U.S. dollar may change again. All of our revenues and substantially all of our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the Ordinary Shares in U.S. dollars. To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our Ordinary Shares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount. Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, we primarily rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China may be used to pay dividends to our company. However, approval from or registration with appropriate government authorities is required, in principle, where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the Ordinary Shares. 42 Any failure to comply with PRC regulations regarding cybersecurity and data protection may subject us to fines and other legal or administrative sanctions, claims or legal proceedings. The PRC Criminal Law, as amended by its Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen s personal information obtained during the course of performing duties or providing services, or obtaining such information through theft or other illegal means. On November 7, 2016, the Standing Committee of the National People s Congress of the PRC issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017. Pursuant to the Cyber Security Law, network operators must not collect users personal information without their consent and may only collect users personal information necessary to the provision of services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations. The Civil Code of the PRC (issued by the National People s Congress of the PRC on May 28, 2020 and effective from January 1, 2021) provides the main legal basis for privacy and personal information infringement claims under PRC civil law. PRC regulators, including the Cyberspace Administration of China (the CAC ), the Ministry of Industry and Information Technology and the Ministry of Public Security, have been increasingly focused on regulation in areas of data security and data protection. The PRC regulatory requirements regarding cybersecurity are constantly evolving. For example, various PRC regulatory bodies, including the CAC, the Ministry of Public Security and the State Administration for Market Regulation ( SAMR ), have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. In April 2020, the PRC government promulgated the 2020 Cybersecurity Review Measures, which came into effect on June 1, 2020. In July 2021, the CAC and other related authorities released a draft amendment to the 2020 Cybersecurity Review Measures for public comments. On December 28, 2021, the PRC government promulgated the 2022 Cybersecurity Review Measures, which came into effect and replaced the 2020 Cybersecurity Review Measures on February 15, 2022. According to the 2022 Cybersecurity Review Measures, (i) critical information infrastructure operators that purchase network products and services and internet platform operators that conduct data processing activities shall be subject to cybersecurity review in accordance with the 2022 Cybersecurity Review Measures if such activities affect or may affect national security; and (ii) internet platform operators holding personal information of more than one million users and seeking to have their securities list on a stock exchange in a foreign country shall file for cybersecurity review with the Cybersecurity Review Office. Under the Regulation on Protecting the Security of Critical Information Infrastructure promulgated by the State Council on July 30, 2021, effective September 1, 2021, critical information infrastructure is defined as important network facilities and information systems in important industries and fields, such as public telecommunication and information services, energy, transportation, water conservancy, finance, public services, e-government and national defense, science, technology and industry, as well as other important network facilities and information systems that, in case of destruction, loss of function or leak of data, may severely damage national security, the national economy and the people s livelihood and public interests. As of the date of this prospectus, neither we nor any of our PRC Subsidiaries has been informed by any PRC governmental authority that we or any of our PRC Subsidiaries is a critical information infrastructure operator. On November 14, 2021, the CAC released the Administrative Regulations on the Management of Network Data Security (Draft for comments) or the Draft Administrative Regulation. Under the Draft Administrative Regulation, (i) data processors, i.e., individuals and organizations who can decide on the purpose and method of their data processing activities at their own discretion, that process personal information of more than one million individuals shall apply for cybersecurity review before listing in a foreign country; (ii) foreign- listed data processors shall carry out annual data security evaluation and submit the evaluation report to the municipal cyberspace administration authority; and (iii) where the data processor undergoes merger, reorganization and subdivision that involves important data and personal information of more than one million individuals, the recipient of the data shall report the transaction to the in-charge authority at the municipal level. 43 According to the currently in-effect PRC laws and regulations, we believe that neither we nor any of our PRC Subsidiaries is subject to the cybersecurity review, reporting or other permission requirements by the CAC under the applicable PRC cybersecurity laws and regulations with respect to the offering of our securities or the business operations of our PRC Subsidiaries, because neither we nor any of our PRC Subsidiaries qualifies as a critical information infrastructure operator or has conducted any data processing activities that affect or may affect national security or holds personal information of more than one million users. Additionally, as of the date of this prospectus, neither we nor any of our PRC Subsidiaries has been required by any PRC governmental authority to apply for cybersecurity review, nor have we or any of our PRC Subsidiaries received any inquiry, notice, warning, sanction in such respect or been denied permission from any PRC regulatory authority to list on U.S. exchanges. However, as PRC governmental authorities have significant discretion in interpreting and implementing statutory provisions and there remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations if the PRC regulatory authorities take a position contrary to ours, we cannot assure you that we or any of our PRC Subsidiaries will not be deemed to be subject to PRC cybersecurity review requirements under the 2022 Cybersecurity Review Measures or the Draft Administrative Regulations (if enacted), nor can we assure you that we or our PRC Subsidiaries would be able to pass such review. If we or any of our PRC Subsidiaries fails to receive any requisite permission or approval from the CAC for future offerings or the business operations of our PRC Subsidiaries, or the waiver for such permission or approval, in a timely manner, or at all, or inadvertently concludes that such permission or approval is not required, or if applicable laws, regulations or interpretations change and obligate us to obtain such permission or approvals in the future, we or our PRC Subsidiaries may be subject to fines, suspension of business, website closure, revocation of business licenses or other penalties, as well as reputational damage or legal proceedings or actions against us, which may have a material adverse effect on our business, financial condition or results of operations. In addition, we could become subject to enhanced cybersecurity review or investigations launched by PRC regulators in the future pursuant to new laws, regulations or policies. As of the date of this prospectus, we have not been involved in any investigations or become subject to a cybersecurity review initiated by the CAC, and we have not received any inquiry, notice, warning, sanctions in such respect or any regulatory objections with respect to our business operations or in connection with future offerings from the CAC. However, as the Cybersecurity Review Measures and the Draft Administrative Regulation were newly issued, there remain uncertainties as to how it would be interpreted and enforced, and to what extent it may affect us. Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions. Among other things, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ( M&A Rules ) and Anti-Monopoly Law of the People s Republic of China promulgated by the Standing Committee of the NPC which became effective in 2008 and amended in 2022 ( Anti-Monopoly Law ), established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. Such regulation requires, among other things, that State Administration for Market Regulation ( SAMR ) be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Provisions of the State Council on the Standard for Declaration of Concentration of Business Operators, issued by the State Council in 2008 and amended in 2018, are triggered. Moreover, the Anti-Monopoly Law requires that transactions which involve the national security, the examination on the national security shall also be conducted according to the relevant provisions of the State. In addition, PRC Measures for the Security Review of Foreign Investment which became effective in January 2021 require acquisitions by foreign investors of PRC companies engaged in military-related or certain other industries that are crucial to national security be subject to security review before consummation of any such acquisition. We may pursue potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from the MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. 44 PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us. In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE. Certain of our shareholders that we are aware of are subject to SAFE regulations, and we expect all of these shareholders will have completed all necessary registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. We cannot assure you, however, that all of these shareholders will continue to make required filings or updates in a timely manner, or at all. We can provide no assurance that we are or will in the future continue to be informed of identities of all PRC residents holding direct or indirect interest in our company. Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiaries ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected. Furthermore, as these foreign exchange regulations are still relatively new and their interpretation and implementation have been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. As of the date of this disclosure, to our knowledge these PRC resident shareholders have applied for foreign exchange registration under the SAFE Circular 37 and other related rules. Although they are in the process of making foreign exchange registration, they may still face the above said possible fines in accordance with the PRC Laws. 45 Failure to make adequate contributions to various employee benefit plans and withhold individual income tax on employees salaries as required by PRC regulations may subject us to penalties. Companies operating in the PRC are required to participate in various government-mandated employee benefit contribution plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses. The requirement of employee benefit contribution plans has not been implemented consistently by the local governments in the PRC given the different levels of economic development in different locations. Companies operating in the PRC are also required to withhold individual income tax on employees salaries based on the actual salary of each employee upon payment. We may be subject to late fees and fines in relation to the underpaid employee benefits and under-withheld individual income tax, our financial condition and results of operations may be adversely affected. Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions. Pursuant to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, promulgated by SAFE in 2012, or SAFE Notices No. 7, PRC citizens and non-PRC citizens who reside in China for a continuous period of no less than one year who participate in any stock incentive plan of an overseas publicly listed company offered to the director, supervisor, senior management and other employees of, and any individual who has labor relationship with its domestic affiliated entities are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our directors, executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of no less than one year and who have been granted stock options are subject to these regulations. Failure to complete the SAFE registrations for our employee incentive plans may subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law. In addition, the State Administration of Taxation, or SAT, has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, our employees working in the PRC who exercise stock options or are granted restricted shares will be subject to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee stock options or restricted shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options or are granted with restricted shares. If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities. U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in the PRC. Any disclosure of documents or information located in the PRC by foreign agencies may be subject to jurisdiction constraints and must comply with the PRC s state secrecy laws, which broadly define the scope of state secrets to include matters involving economic interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located in the PRC. Furthermore, under the current PRC laws, an on-site inspection of our facilities by any of these regulators may be limited or prohibited. 46 If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with its de facto management body within the PRC is considered a resident enterprise and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules define the term de facto management body as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise. In 2009, the State Administration of Taxation, or SAT, issued a circular, known as SAT Circular 82, which provides certain specific criteria for determining whether the de facto management body of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular applies only to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT s general position on how the de facto management body text should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its de facto management body in China, and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise s primary assets, accounting books and records, company seals, and board of directors and shareholder resolutions are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. We believe our company is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term de facto management body. If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income tax purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we would be required to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition of the Ordinary Shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of the Ordinary Shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates may be reduced by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in our Ordinary Shares. We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. On February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets, as such persons need to determine whether their transactions are subject to these rules and whether any withholding obligation applies. On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax. Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a substance over form principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who pays for the transfer is obligated to withhold the applicable taxes currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. 47 We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing obligations or taxed if our company is transferor in such transactions and may be subject to withholding obligations if our company is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin 37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations. Risks Related to Our Ordinary Shares The market price for our Ordinary Shares may be volatile. The trading prices of our Ordinary Shares are likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, like the performance and fluctuation in the market prices or the underperformance or deteriorating financial results of internet or other companies based in China that have listed their securities in the United States in recent years. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in their trading prices. The trading performances of other Chinese companies securities after their offerings, including internet and e-commerce companies, may affect the attitudes of investors toward Chinese companies listed in the United States, which consequently may impact the trading performance of our Ordinary Shares, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or other matters of other Chinese companies may also negatively affect the attitudes of investors towards Chinese companies in general, including us, regardless of whether we have conducted any inappropriate activities. In addition, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, such as the large decline in share prices in the United States, China and other jurisdictions in late 2008, early 2009 and the second half of 2011, which may have a material adverse effect on the market price of our Ordinary Shares. In addition to the above factors, the price and trading volume of our Ordinary Shares may be highly volatile due to multiple factors, including the following: regulatory developments affecting us, our consumers, or our industry; conditions in the medical supplies business and the public perception of the legitimacy and ethics of certain business practices of our competitors or other market players within the industry; announcements of studies and reports relating to the quality of our product and service offerings or those of our competitors; changes in the economic performance or market valuations of other medical supplies businesses; actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; changes in financial estimates by securities research analysts; announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures or capital commitments; additions to or departures of our senior management; detrimental negative publicity about us, our management or our industry; fluctuations of exchange rates between the Renminbi and the U.S. dollar; release or expiry of lock-up or other transfer restrictions on our outstanding Ordinary Shares; and sales or perceived potential sales of additional Ordinary Shares. 48 The trading market for our Ordinary Shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who cover us downgrade shares or publish inaccurate or unfavorable research about our business, the market price for our Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our Ordinary Shares to decline. If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Ordinary Shares, the market price for our Ordinary Shares and trading volume could decline. The trading market for our Ordinary Shares are influenced by research or reports that industry or securities analysts publish about our business. If industry or securities analysts decide to cover us and in the future downgrade our Ordinary Shares, the market price for our Ordinary Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our Ordinary Shares to decline. Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Ordinary Shares for return on your investment. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Ordinary Shares as a source for any future dividend income. Our board of directors has discretion as to whether to distribute dividends, subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium; provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Ordinary Shares will likely depend entirely upon any future price appreciation of our Ordinary Shares. There is no guarantee that our Ordinary Shares will appreciate in value or even maintain the price at which you purchased our Ordinary Shares. You may not realize a return on your investment in our Ordinary Shares and you may even lose your entire investment in our Ordinary Shares. Substantial future sales or perceived potential sales of Ordinary Shares in the public market could cause the price of our Ordinary Shares to decline. Sales of Ordinary Shares in the public market, or the perception that these sales could occur, could cause the market price of our Ordinary Shares to decline. As of the date of this report, we have 24,234,973 Ordinary Shares outstanding. All of the 3,940,000 Ordinary Shares sold in our recent initial public offering are freely transferable without restriction or additional registration under the Securities Act of 1933, as amended, or the Securities Act, and we recently sold $6,000,0000 in 7% OID convertible notes ( Convertible Notes ) in a primary offering pursuant to a takedown from our shelf registration statement on Form F-3, which Notes will be convertible from time to time at the lower of $2.738 per share or 95% of the lowest VWAP over the seven trading days prior to conversion. All of our executive officers and directors and shareholders holding at least ten percent of our Ordinary Shares are subject to a six month lock-up agreement that was entered into in conjunction with the Convertible Notes offering. Ordinary Shares subject to these lock-up agreements become eligible for sale in the public market upon expiration of these lock-up agreements, subject to volume and other restrictions as applicable under Rules 144 and 701 under the Securities Act. To the extent shares issued upon conversion of the Convertible Notes, as well as exercise of the Warrants and sale of the Warrant Shares being registered herein, as well as any shares held by our executive officers, directors or significant shareholders, are sold into the market, the market price of our Ordinary Shares could decline. Moreover, the perceived risk of this potential dilution could cause shareholders to attempt to sell their shares and investors to short our Ordinary Shares. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. For further information about our recent offering of Convertible Notes, see Our recent entry into a Securities Purchase Agreement with the Selling Shareholders for the sale of up to $50.5 million in Convertible Notes and Warrants, of which we have sold $6.0 million to date, along with any subsequent conversion and/or exercise thereof, may depress the price of our Ordinary Shares and encourage short sales by third parties, which could further depress the price of our Ordinary Shares, below. 50 the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the selective disclosure rules by issuers of material nonpublic information under Regulation FD. We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our financial results on a semi-annual basis in the form of press releases, distributed pursuant to the rules and regulations of the Nasdaq Global Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq Global Market corporate governance requirements; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq Global Market corporate governance requirements. However, presently, we do not have any immediate plans to rely on home country practice with respect to our corporate governance. We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses. As discussed above, we are a foreign private issuer and, therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our Ordinary Shares are directly or indirectly held by residents of the U.S. and we fail to meet additional requirements necessary to maintain our foreign private issuer status. In the future, if we lose our foreign private issuer status as of the last date of our second fiscal quarter, we would be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms beginning on the following January 1, which are more detailed and extensive than the forms available to us as a foreign private issuer. In such case, we would also have to comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders would become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq Global Market listing rules. As a U.S. listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting and other expenses that we do not presently incur as a foreign private issuer listed on a U.S. securities exchange. If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired. Prior to our initial public offering in February of 2022, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Since then, we have been in a continuing process to develop, establish, and put in place a system to maintain internal controls and procedures that will allow our management to report on, and our independent registered public accounting firm to attest to, our internal controls over financial reporting if and when required to do so under Section 404 of the Sarbanes-Oxley Act of 2002. Although our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act until the date we are no longer an emerging growth company, our management will be required to report on our internal controls over financial reporting under Section 404. 51 As of December 31, 2022, our management assessed the effectiveness of our internal control over financial reporting. The material weaknesses relate to the fact that the Company does not have accounting personnel with sufficient knowledge of U.S. GAAP and SEC reporting procedures. Management concluded that as of December 31, 2022, our internal control over financial reporting were ineffective. In order to address and resolve the foregoing material weakness, we have implemented measures designed to improve our internal control over financial reporting to remediate this material weakness, including hiring Shanghai Bluehill Advisory Co., Ltd. as our consultant and who has the requisite training and experience in the preparation of financial statements in compliance with applicable SEC requirements. With the assistance of our consultant, we are currently in compliance with U.S. GAAP and SEC reporting requirements. In addition to hiring an outside consultant, we also plan to take remedial measures including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; and (iii) setting up an internal audit function as well as engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control. The implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remedied. Our failure to correct theses material weaknesses or our failure to discover and address any other material weaknesses could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our Ordinary Shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud. In addition, once we cease to be an emerging growth company as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation. 52 DESCRIPTION OF THE SECURITIES THAT WE ARE OFFERING Warrants and Warrant Shares General On December 27, 2023, we entered into a Securities Purchase Agreement (the Securities Purchase Agreement ) with the Selling Shareholders pursuant to which we agreed to issue to the Investors up to $50,500,000 in senior convertible promissory notes and accompanying warrants exercisable for a number of Ordinary Shares equal to 50% of the number obtained from dividing each such note s principal amount by the applicable VWAP (as defined in the Securities Purchase Agreement). On the same date, we agreed to sell to such Selling Shareholders $6,000,000 of senior convertible notes (the Convertible Notes ), which were offered and sold in a primary offering registered pursuant to a shelf registration statement on Form F-3, and five-year warrants (the Warrants ) to purchase up to 1,205,255 Ordinary Shares at an exercise price of $2.9869 per share, subject to certain adjustments, which Warrants were sold concurrently through a private placement. The Convertible Notes were sold with a 7% original issue discount ( OID ), or $420,000. As such, the Selling Shareholders paid for the Convertible Notes and Warrants by delivering $5,580,000, before deducting fees and other offering expenses payable by the Company, in cash consideration to the Company. The following description relates to the particular material terms of the Warrants being registered herein. The Warrants are immediately exercisable upon issuance (the Initial Exercise Date ) at an exercise price of $2.9869 per share, subject to customary adjustments thereunder, and will expire on the fifth (5th) anniversary of the Initial Exercise Date. The Warrants are exercisable on a cashless basis if there is no effective registration statement registering the Warrant Shares for resale at the time of exercise. The Warrants and the Warrant Shares being registered herein were initially sold pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. Accordingly, the Selling Shareholders may exercise such Warrants and sell the Ordinary Shares underlying such Warrants only pursuant to an effective registration statement under the Securities Act covering the resale of such shares, an exemption under Rule 144 under the Securities Act, or another applicable exemption under the Securities Act. For a complete description of the documents entered into in relation to such concurrent private placement, you should review a copy of the form of Warrant and form of Registration Rights Agreement, which are included as exhibits to the Company s Current Report on Form 6-K, filed with the SEC on December 28, 2023. Concurrent Primary Offering Concurrently with the private placement of the Warrants and Warrant Shares we are registering herein, we simultaneously sold $6,000,000 in 7% OID Convertible Notes to the Selling Shareholders. The Convertible Notes, which were sold pursuant to a prospectus supplement filed on Form F-3, are described below. Maturity Date The Convertible Notes will mature 364 days after the date of issuance. Interest The Convertible Notes bear no interest unless an event of default thereon has occurred. From and after the occurrence of any such event of default, the aggregate unconverted and then outstanding principal amount of the Convertible Notes shall be paid at the rate of ten percent (10%) per annum. See Events of Default below. Conversion The Convertible Notes are convertible at any time after the issuance, at the option of the Investors, into our Ordinary Shares at the lower of (i) $2.738 per share, (ii) 95% of the lowest VWAP of the Ordinary Shares during the seven (7)-trading day period immediately preceding the applicable conversion date, in each case subject to adjustment as provided therein. Certain Adjustments The conversion price is subject to a standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other similar transaction. 53 Mandatory Redemption If, at any time while the Convertible Notes are outstanding the Company carries out one or more Subsequent Financings, the Investors have the right to require us to first use up to 30% of the gross proceeds of such Subsequent Financing to redeem all or a portion of the Registered Notes, on a pro rata basis, for an amount in cash equal to the outstanding principal amount of the Registered Notes, plus all accrued but unpaid interest, plus all liquidated damages, if any, and any other amounts, if any, multiplied by 1.05. If, at any time while the Convertible Notes are outstanding, a Change of Control occurs, the Investors will have the right to require us to redeem all of the Convertible Notes, plus all accrued but unpaid interest, plus all liquidated damages, if any, and any other amounts, if any, then owing to the Investors in respect of the Convertible Notes. Negative Covenants We will be subject to certain customary affirmative and negative covenants regarding the incurrence of certain indebtedness, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends, distributions or redemptions, and the transfer of assets, among other matters. Events of Default The Convertible Notes include certain customary and other events of default, including, among other things, failure to maintain an effective registration statement to allow the Investors to resell the Ordinary Shares, whether such shares are issued pursuant to the Convertible Notes, the Warrants, or any Additional Notes or Additional Warrants that may be subsequently sold to the Investors, and maintain our Nasdaq listing. In connection with such an event of default, the aggregate unconverted and then outstanding principal amount of the Convertible Notes are required to be paid at the rate of ten percent (10%) per annum, plus any interest or penalties that may be then owed. Change of Control In connection with a Change of Control, the Investors have the right to require us to redeem all of the Convertible Notes, plus all accrued but unpaid interest, plus all liquidated damages, if any, and any other amounts, if any, then owing to the Investors in respect of the Convertible Notes for an amount in cash equal to the total amount owed to the investors multiplied by 1.05. Conversion Limitation Each Investor will not have the right to convert any portion of the Convertible Notes, to the extent that, after giving effect to such conversion, the Investors (together with certain of its related parties) would beneficially own in excess of 4.99% of our Ordinary Shares outstanding immediately after giving effect to such conversion. The Investors may from time to time increase this limit to 9.99%, provided that any such increase will not be effective until the 61st day after delivery of a notice to us of such increase. Related Transaction Agreements In connection with the concurrent private placement of Warrants contemplated by the Securities Purchase Agreement, on December 27, 2023, we and the Selling Shareholders entered into a Registration Rights Agreement (the Registration Right Agreement ) pursuant to which we agreed to file with the SEC an additional registration statement (the Registration Statement ) to register the Ordinary Shares underlying the Warrants and any additional notes or additional warrants purchased by the Investors in any Additional Closings (as defined in the Securities Purchase Agreement) within 60 calendar days following the date of the Registration Rights Agreement. In addition, on December 27, 2023, the Company entered into a placement agent agreement ( Placement Agent Agreement ) pursuant to which Maxim Group LLC ( Maxim ) was engaged to act as exclusive placement agent in the offering and would be entitled to an aggregate cash fee of 7.0% of the gross proceeds of the offering, plus up to $50,000 for all travel and other out-of-pocket expenses, including reasonable and accounted for fees and expenses of Maxim s legal counsel. The above summaries of certain terms and provisions of the Convertible Notes, the Warrants, the Securities Purchase Agreement, the Registration Rights Agreement and Placement Agent Agreement are not complete and are subject to, and qualified in its entirety by, the provisions of the forms of such documents, which have been filed as exhibits to the Company s Current Report on Form 6-K on December 28, 2023. You should review the copies of such documents before you invest in our securities. 54 USE OF PROCEEDS We will not receive any proceeds from the sale of the Warrant Shares by the Selling Shareholders. However, we may receive funds upon the Selling Shareholders exercise of the Warrants. In the event we receive funds from the Selling Shareholder s exercise of the Warrants, pursuant to the Securities Purchase Agreement, we have agreed to use the net proceeds to fund our ongoing general corporate and working capital needs. However, the amount and timing of our actual expenditures will depend on numerous factors, including our business strategy and development efforts. Pending these uses, the proceeds will be invested in short-term bank deposits. We may also use a portion of the net proceeds for the acquisitions of businesses, products, technologies, or licenses that are complementary to our business, although we have no present commitments or agreements to do so. 55 PRINCIPAL AND SELLING SHAREHOLDERS The table below sets forth certain information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus, by: each of our directors and executive officers; all of our executive officers and directors as a group; each person known to us to beneficially own more than five percent of our ordinary shares; and the selling stockholders. The ordinary shares being offered by the Selling Shareholders are those issuable to the Selling Shareholders pursuant to the terms of certain of the Company s warrants sold to the Selling Shareholders pursuant to the Securities Purchase Agreement. For additional information regarding the issuances of the Warrants, see Private Placement of Warrants above. 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 sale of the Convertible Notes (sold in a primary offering described in Concurrent Primary Offering above) and the accompanying Warrants being described herein, the Selling Shareholders have not had any material relationship with us within the past three years. The table below lists the Selling Shareholders and other information regarding the beneficial ownership of our ordinary shares by each of the Selling Shareholders. The second column lists the number of ordinary shares beneficially owned by each Selling Shareholder, based on its ownership of the Convertible Notes and accompanying Warrants, as of February 22, 2024, assuming the conversion of the Convertible Notes and accompanying Warrants held by the Selling Shareholders on that date, without regard to any limitations on conversion. The third column lists the ordinary shares being offered by this prospectus by the Selling Shareholders. In accordance with the terms of a registration rights agreement with the Selling Shareholders, this prospectus covers the resale of 1,205,255 ordinary shares issuable upon exercise of the Warrants, The fourth column assumes the sale of all of the shares offered by the Selling Shareholders pursuant to this prospectus. Under the terms of the Convertible Notes and Warrants held by the Selling Shareholders, a Selling Shareholder may not be issued shares under the notes or accompanying warrants to the extent such issuance would cause such Selling Shareholder, together with its affiliates and attribution parties, to beneficially own a number of ordinary shares which would exceed 4.99% of our then outstanding ordinary shares following such conversion. The number of shares in the second column does not reflect this limitation. The selling shareholders may sell all, some or none of their shares in this offering. See Plan of Distribution. Name of Shareholder Number of Shares Owned Prior to Offering Maximum Number of Shares to be Offered for the Account of the Selling Shareholder Number of Shares Owned After
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+Prospectus Summary 1 The Offering 3 Risk Factors 4 Use of Proceeds 22 Dividend Policy 22 Management s Discussion and Analysis of Financial Condition and Results of Operations 23 Business 35 Legal Proceedings 40 Management 41 Executive Compensation 47 Certain Relationships and Related Party Transactions 52 Principal Stockholders 54 Description of Capital Stock 56 Selling Stockholders 59 Determination of Offering Price 61 Plan of Distribution 61 Material U.S. Federal Income Tax Considerations for Non-U.S. Holders of Our Common Stock 62 Legal Matters 66 Experts 66 Where You Can Find Additional Information 66 Index to Financial Statements F-1 You should rely only on the information contained in this prospectus, any prospectus supplement . Neither we nor the Selling Stockholders have authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus and any prospectus supplement does not constitute an offer to sell, or a solicitation of an offer to purchase, the common stock offered by this prospectus and any prospectus supplement in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation of an offer in such jurisdiction. You should not assume that the information contained in this prospectus, any prospectus supplement is accurate as of any date other than the date on the front cover of the applicable document. Neither the delivery of this prospectus nor any distribution of common stock pursuant to this prospectus shall, under any circumstances, create any implication that there has been no change in the information set forth in 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. When used herein, unless the context requires otherwise, references to the Company, Marpai, we, our and us refer to Marpai, Inc., Delaware corporation, collectively with our wholly owned subsidiaries, Marpai Captive, Inc. ( Marpai Captive ), Marpai Administrators LLC (formerly known as Continental Benefits, LLC) ( Marpai Administrators ), Marpai Health, Inc. ( Marpai Health ), its wholly owned Israeli subsidiary EYME Technologies, Ltd. ( EYME ), and Maestro Health, LLC ( Maestro Health ), unless otherwise indicated or required by the context. All dollar amounts refer to U.S. dollars unless otherwise indicated. i TRADEMARKS Our logo and some of our trademarks and tradenames are used in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this prospectus may appear without the , TM and SM symbols, but those references are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensor to these trademarks, tradenames and service marks. ii SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever we use words such as potential, possible, continue, believes, intends, plans, expects, estimate, may, will, should, or anticipates and negatives or derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Forward-looking statements are based on information we have when those statements are made or management s good faith belief as of that time with respect to future events, and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to: our ability to effectively manage our operations and achieve growth; our ability to protect our intellectual property and continue to innovate; our expectations of the financial performance of the Company; our success in retaining or recruiting, or changes required in, our officers, key employees, or directors; the potential insufficiency of our disclosure controls and procedures to detect errors or acts of fraud; the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; the success of competing products or technologies that are or may become available; our potential ability to obtain additional financing; acts of terrorism, outbreaks of pandemics or other significant adverse public health safety events or conditions, war or other hostilities, supply chain disruptions, or other manmade natural disasters beyond our control; compliance with, and changes to federal, state and local laws and regulations, accounting rules, tax laws and similar matters; the impact of healthcare reform legislations; our public securities potential liquidity and trading; and our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended (the JOBS Act ); and our current and future capital requirements and our ability to satisfy our capital needs through financing transactions or otherwise. The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. Please see Risk Factors for additional risks that could adversely impact our business and financial performance. Moreover, new risks regularly emerge and it is not possible for our management to predict or articulate all the risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the date of this prospectus. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus. MARKET, INDUSTRY AND OTHER DATA We obtained the statistical data, market data and other industry data and forecasts described in this prospectus from market research, publicly available information and industry publications. Industry publications generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy and completeness of the information. Similarly, while we believe that the statistical data, industry data and forecasts and market research are reliable, we have not independently verified the data, and we do not make any representation as to the accuracy of the information. We have not sought the consent of the sources to refer to their reports appearing in this prospectus. iii PROSPECTUS SUMMARY This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations and our audited financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, references to the Company, we, registrant, our and us refer to Marpai, Inc., a Delaware corporation, collectively with its wholly-owned subsidiaries, Marpai Captive, Inc. ( Marpai Captive ), Marpai Administrators LLC ( Marpai Administrators ), Maestro Health, LLC ( Maestro Health ), and Marpai Health, Inc. ( Marpai Health ) and its wholly owned Israeli subsidiary EYME Technologies, Ltd. ( EYME ), unless otherwise indicated or required by the context. About Marpai Marpai, Inc. is a technology platform company, which operates as a national Third-Party Administrator ( TPA ) through its subsidiaries, which uses artificial intelligence ( AI ) and data analytics combined with cost containment programs to help our Clients lower their cost of healthcare by enabling better health outcomes for their employees and families. Our mission is to positively change healthcare for the benefit of (i) our Clients who are self-insured employers that pay for their employees healthcare benefits and engage us to administer the Members healthcare claims, and we refer to them as our Clients , (ii) employees and their family members who receive these healthcare benefits from our Clients, and we refer to them as our Members , and (iii) healthcare providers including, doctors, doctor groups, hospitals, clinics, and any other entities providing healthcare services or products, and we refer to them as the Providers. We provide affordable, intelligent, healthcare programs for self-insured Clients in the U.S. Our goal is to use our Clients claim data to identify in advance potential healthcare issues. We provide the tools for our Members, who are mindful and stay out of their way. We support those Members who may need additional support to address health concerns at an earlier stage, allowing for more cost-effective treatment. We believe that digital health is undergoing a massive transformation, as innovators evolve from offering point solutions to more integrated approaches. We believe that we are uniquely poised to answer that call and usher in the next generation of digital health. Corporate Information Our address is 615 Channelside Drive, Suite 207, Tampa, Florida 33602, and our telephone number is (855) 389-7330. Our corporate website is: www.marpaihealth.com. Summary Risk Factors Our business is subject to numerous risks and uncertainties that you should consider before investing in our company. You should carefully consider the risks described more fully below before making a decision to invest in our Common Stock. If any of these risks occurs, our business, financial condition and results of operations would likely be materially adversely affected. These risks, include, but are not limited to, the following: The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. If we are unable to obtain additional capital, we may not be able to continue our operations on the scope or scale as currently conducted or at all, and that could have a material adverse effect on our business, results of operations and financial condition; We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve profitability; We expect that we will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our shareholders ownership interests, and such offers or availability for sale of a substantial number of our shares of common stock may cause the price of our publicly traded shares to decline; The loss, termination, or renegotiation of any contract with our current Clients could materially adversely affect our financial conditions and operating results. 1 We are a party to several disputes and lawsuits, and we may be subject to liabilities arising from these and similar disputes in the future; If our member guidance programs fail to provide accurate and timely predictions, or if they are associated with wasteful visits to Providers or unhelpful recommendations for Members, then this could lead to low customer satisfaction, which could adversely affect our results of operations; Issues in the use of AI, including deep learning in our platform and modules, could result in reputational harm or liability; If the markets for our AI modules and Member guidance program fail to grow as we expect, or if Clients fail to adopt our Member guidance program and AI modules, our business, operating results, and financial condition could be adversely affected; We rely on healthcare benefits brokers and consultants as our principal sales channel, and some of these companies are large and have no allegiance to us. If we do not satisfy their employer clients, they may steer Clients, as well as others, to other TPAs; Our pricing may change over time and our ability to efficiently price our services will affect our results of operations and our ability to attract or retain Clients; Our sales cycles can be long and unpredictable, and our sales efforts require a considerable investment of time and expense. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our results of operations and growth could be harmed; Because we generally recognize revenue ratably over the term of the contract for our services, a significant downturn in our business may not be reflected immediately in our results of operations, which increases the difficulty of evaluating our future financial performance; If we do not have access to AI talent or fail to expand our AI models, we may not remain competitive, and our revenue and results of operations could suffer; If our security measures are breached or unauthorized access to client data is otherwise obtained, our product and service offerings may be perceived as not being secure, Clients may reduce the use of or stop using our services, and we may incur significant liabilities; We rely on third-party providers, including Amazon Web Services, for computing infrastructure, network connectivity, and other technology-related services needed to deliver our service offerings. Any disruption in the services provided by such third-party providers could adversely affect our business and subject us to liability; We rely on Internet infrastructure, bandwidth providers, data center providers, other third parties, and our own systems for providing services to our users, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation, potentially require us to issue credits to our Clients, and negatively impact our relationships with Members, and Clients or Providers, adversely affecting our brand and our business; We employ third-party licensed software and software components for use in or with our Member guidance programs, and the inability to maintain these licenses or the presence of errors in the software we license could limit the functionality of these programs and result in increased costs or reduced service levels, which would adversely affect our business; Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand; We may not be able to adequately defend against piracy of intellectual property in foreign jurisdictions; We may be sued by third parties for alleged infringement of their proprietary rights or misappropriation of intellectual property; Our member guidance programs utilize open-source software, and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business; Government regulation of healthcare creates risks and challenges with respect to our compliance efforts and our business strategies; and Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally. 2 THE OFFERING Common Stock Offered by the Selling Stockholders: Up to 5,705,996 shares of common stock. Common Stock Outstanding prior to this Offering: 14,361,686. Use of Proceeds: We will not receive any proceeds from the sale of the 5,705,996 shares of common stock subject to resale by the Selling Stockholders under this prospectus. Risk Factors: An investment in the common stock offered under this prospectus is highly speculative and involves substantial risk. Please carefully consider the Risk Factors section and other information in this prospectus for a discussion of risks. Additional risks and uncertainties not presently known to us or that we currently deem to be immaterial may also impair our business and operations. OTCQX trading symbol MRAI . (1) The number of shares of our common stock to be outstanding after this offering is based on the 14,361,686 shares of our common stock outstanding as of December 23, 2024 and excludes the following: 745,639 shares of common stock issuable upon the exercise of options to purchase shares of common stock outstanding as of December 23, 2024, with a weighted-average exercise price of $4.59 per share; 1,025,000 shares of common stock issuable upon vesting of restricted stock units; 644,718 shares of common stock issuable upon the exercise of warrants to purchase shares of common stock outstanding as of December 23, 2024, with a weighted-average exercise price of $16.40 per share; and 542,355 shares of common stock reserved for future issuance under our 2021 Global Stock Incentive Plan (the 2021 Plan ). 232,668 shares of common stock reserved for future issuance under our 2024 Global Stock Incentive Plan (the 2024 Plan ). 3 RISK FACTORS Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this prospectus, including our financial statements and the related notes and the section titled Management s Discussion and Analysis of Financial Condition and Results of Operations in this prospectus, before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of our common stock could decline and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. Currently, our revenues are concentrated with one major customer and our revenues may decrease significantly if we were to lose our major customer. Due to our limited operating history, we have a limited customer base and have depended on a major customer for a significant portion of our revenue. For the three month periods ended September 30, 2024 and 2023, we had one customer that accounted for 14.6% and 11.3% of total revenue, respectively. For the nine month periods ended September 30, 2024 and 2023, we had one customer that had 15.4% and 10.9% of total revenue, respectively. At September 30, 2024, two customers accounted for 51.4%, and 11.3% of accounts receivable. At December 31, 2023, two customers accounted for 16.6% and 14.0% of accounts receivable. If our major customers were to terminate their agreement with us, or if we fail to adequately perform under our agreement, and if we are unable to diversify our customer base, our revenue could decline, and our results of operations could be adversely affected. The consolidated financial statements for the year ended December 31, 2023, include an explanatory paragraph in our independent registered public accounting firm s audit report stating that there are conditions that raise substantial doubt about our ability to continue as a going concern. As of December 31, 2023, we had an accumulated deficit of $76.7 million and negative working capital of $3.8 million. As of December 31, 2023, we had $0.6 million of short-term debt, $19.4 million of long-term debt and $1.1 million of unrestricted cash on hand. For the year ended December 31, 2023, we recognized a net loss of $28.8 million and negative cash flows from operations of $15.7 million. Since inception, the Company has met its cash needs through proceeds from issuing convertible notes, warrants and sales of its common stock. We currently project that we will need additional capital to fund our current operations and capital investment requirements until we scale to a revenue level that permits cash self-sufficiency. As a result, we expect we will need to raise additional capital to support our operations until such time. This projection is based on the market size and growth, our current expectations regarding revenues, expenditures, cash burn rate and other operating assumptions. The sources of this capital are anticipated to be from the sale of equity and/or debt securities. We may also seek to sell assets which we regards as non-strategic. Any of the foregoing may not be achievable on favorable terms, or at all. Additionally, any debt or equity transactions may cause significant dilution to existing stockholders. As we seek additional sources of financing, there can be no assurance that such financing or asset sales would be available to us on favorable terms or at all. If we are unable to raise additional capital moving forward, our ability to operate in the normal course and continue to invest in our product portfolio may be materially and adversely impacted and we may be forced to scale back operations or divest some or all of our assets. 4 As a result of the above, in connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board s ( FASB ) Accounting Standards Update ( ASU ) 2014-15, Disclosures of Uncertainties about an Entity s Ability to Continue as a Going Concern, management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these consolidated financial statements. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern. Our independent registered public accounting firm, UHY LLP ( UHY ), has included an explanatory paragraph in their audit report that accompanies our consolidated financial statements as of and for the year ended December 31, 2023, stating that there are conditions that raise substantial doubt about our ability to continue as a going concern. In the past we have had a high annual customer attrition rate. The loss, termination, or renegotiation of any contract with our current Clients could have a material adverse effect on our financial conditions and operating results. Our largest two Clients together represented approximately 15.2% and 8.0% of our total gross revenue in 2023 and 2022, respectively. For the three month periods ended September 30, 2024 and 2023, we had one customer that accounted for 14.6% and 11.3% of total revenue, respectively. For the nine month periods ended September 30, 2024 and 2023, we had one customer that had 15.4% and 10.9% of total revenue, respectively. In the year ended December 31, 2023, we improved our attrition rate from approximately 33% in the comparable prior period to 10%. We believe Clients left due to the poor integration of Maestro Health, or transitioned back to a fully funded program or were acquired by other companies. Although we have initiated remedial actions to reduce attrition rates further, there is no assurance that we will be able to reduce the attrition rates. If the high customer attrition rate continues, our future revenue growth will suffer and our operating results will be negatively impacted, and we may encounter difficulty in recruiting new Clients due to erosion of customer confidence. We are party to several disputes and lawsuits, and we may be subject to liabilities arising from these and similar disputes in the future. In the normal course of the claims administration services business, we expect to be named from time to time as a defendant in lawsuits by the insureds Members contesting decisions by us or our Clients with respect to the settlement of their healthcare claims. Our Clients have brought claims for indemnification based on alleged actions on our part or on the part of our agents or employees in rendering services to Members. Any future lawsuits against us could be disruptive to our business. The defense of the lawsuits will be time-consuming and require attention of our senior management and financial resources, and the resolution of any such litigation may have a material adverse effect on our business, financial condition, and results of operations. If our TopCare program fails to provide accurate and timely predictions, or if it is associated with wasteful visits to Providers or unhelpful recommendations for Members, then this could lead to low customer satisfaction, which could adversely affect our results of operations. When our AI models make a prediction, we advise the Member to reach out to his or her primary care physician or make suggestions to the Member on the best providers in the area via our TopCare program since we do not provide medical prognosis. However, Members may not follow our advice or accept our suggestions. We believe that not taking our recommendations will lead to higher claims costs to our Clients. If claim costs remain the same or are not lower than those before we were hired, our Clients may be dissatisfied with our services, terminate or refuse to renew contracts with us. In addition, our AI models may not always work as planned, and the predictions could have false positives. These errors may lead to wasteful visits to the Providers, Clients dissatisfaction and attrition, which may lead to loss of revenue. Our economic models assume that the costs stemming from these false positives is a small fraction of the total savings that may be achieved by preventing or better managing chronic conditions and steering Members who will have high-cost medical procedures to high-quality, lower cost providers. This assumption, however, has yet to be proven. To date, we have no actual case data to support this assumption. 5 We are subject to regulatory approvals in the various states we operate and the failure to obtain or renew such regulatory approvals or licenses may impact our business. As part of our TPA business, we are required to obtain regulatory approvals and licenses in the various jurisdictions we operate. The failure to maintain our licenses, or obtain the approval, from relevant regulatory agencies may impact our ability to continue providing TPA services in those jurisdictions, which could impact our revenues and results of operations. If the markets for our AI modules and member guidance program fail to grow as we expect, or if self - insured employers fail to adopt our member guidance programs and AI modules, our business, operating results, and financial condition could be adversely affected. It is difficult to predict self-insured employer adoption rates and demand for our AI modules and member guidance program, the entry of competitive platforms, or the future growth rate and size of the healthcare technology and TPA markets. We expect that a significant portion of our revenue will come from our AI-based solutions and our member guidance program. Although demand for healthcare technology, deep learning (an advanced form of AI), and data analytics platforms and AI applications has grown in recent years, the market for these platforms and applications continues to evolve. There can be no assurances that this market will continue to grow or, even if it does grow, that Clients will choose our AI modules, member guidance program, or platform. Our future success will depend largely on our ability to penetrate the market for healthcare technology driven by TPAs, as well as the continued growth and expansion of what we believe to be an emerging market for healthcare administration focused on AI platforms and applications that are faster, easier to adopt, and easier to use. Our ability to penetrate the TPA market depends on a number of factors, including the cost, performance, and perceived value associated with our AI solutions, as well as Clients willingness to adopt a different approach to data analysis. We plan to spend considerable resources to educate Clients about digital transformation, AI, and deep learning in general and our AI solutions. However, there can be no assurances that these expenditures will help our AI modules and Member guidance program achieve widespread market acceptance. Furthermore, prospective Clients may have made significant investments in legacy healthcare analytics software systems and may be unwilling to invest in new platforms and applications. If the market fails to grow or grows more slowly than we expect or self-insured employers fail to adopt our AI modules and Member guidance program, our business, operating results, and financial condition could be adversely affected. We operate in a highly competitive industry, and the size of our target market may not remain as large as we anticipate. The market for healthcare solutions is very competitive. We compete with nearly 1,000 health insurance entities, all of whom are vying for the same business the management of healthcare benefits for self-insured employers. There is only one TPA at a time for every employer wanting to provide health benefits via a self-insured model, and an employer may remain with the same TPA for many years. This means that although the market is very large, not all of it is accessible by us in any one year. We provide administrative services to only self-insured employers who provide healthcare benefits to their employees. These self-insured employers can always elect to abandon self-insurance and simply buy medical insurance from one of the large players such as Aetna, Cigna, or United Healthcare. There can be no assurances that our Clients or prospective Clients will remain self-insured for any given period of time. If the number of employers which choose to self-insure declines, the size of our targeted market will shrink. In addition to the very large health insurance companies, there are new players in the market such as, Collective Health, Clover Health, Bind Health Insurance, Bright Health Group, Oscar and Centavo. These companies have raised hundreds of millions of dollars and have greater financial and personnel resources than we do and are pursuing a business strategy like ours and share our vision to use technology to transform the healthcare payer space. We believe that like us, Collective Health and Clover Health are also targeting self-insured employers. 6 We rely on healthcare benefits brokers and consultants as our principal sales channel, and some of these companies are large and have no allegiance to us. If we do not satisfy their employer clients, they may steer not only an unsatisfied client, but others as well, to other TPAs. Brokers are a key sales channel for us to reach the self-insured employer market. These brokers work with many insurance companies and TPAs at the same time. Brokers and consultants earn their fees by also charging employers on a per employee per month ( PEPM ) basis. As they often own the relationship with the employer, they may view our fees as competitive to how much they can earn. They may steer our Clients to another TPA if they believe doing so can maximize their own fees. If we do not deliver competitive pricing, quality customer service, and high member satisfaction, these brokers can take the business they brought us to another TPA. Due to the brokers power to influence employer groups, the brokers play an outsized role in our industry, and may exert pressure on our pricing or influence the service levels we offer to our Clients, all of which can lead to lower price PEPM for us, or an increase in our customer service staffing and other operating costs. Our pricing may change over time and our ability to price our services competitively will affect our results of operations and our ability to attract or retain Clients. Our current pricing model, like most in the industry, is based on a PEPM fee. In the future, we may change our pricing model to capture more market share. We may also enter into different pricing schemes with Clients, including but not limited to shared savings. In a shared savings pricing model, we share the risk with the Client. For example, if the Clients claims cost is $10 million, we may estimate that we can bring that down to $9 million with our service offering. Instead of charging a fixed PEPM fee, we would earn revenue from a share of the cost savings in a shared savings model. In the example above, if the share were 30% and we managed to achieve a reduction of $1 million, we would earn $300,000 as a shared savings fee. Since there is no guarantee how much savings, if any, will actually be achieved, shared savings puts some of our revenue at risk. If cost savings are not achieved as expected, our revenue and results of operations could suffer. Our sales cycles can be long and unpredictable, and our sales efforts require a considerable investment of time and expense. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our results of operations and growth would be harmed. Our sales process entails planning discussions with prospective Clients, analyzing their existing solutions and identifying how these prospective Clients can use and benefit from our services. The sales cycle for a new Client, from the time of prospect qualification to completion of the sale, may take as long as a year. We spend substantial time, effort, and money in our sales efforts without any assurance that our efforts will result in the sale of our services. In addition, our sales cycle and timing of sales can vary substantially from Client to Client because of various factors, including the discretionary nature of prospective Clients purchasing and budget decisions, the announcement or planned introduction of product and service offerings by us or our competitors, and the purchasing approval processes of prospective Clients. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our results of operations and growth would be harmed. Because we generally recognize revenues ratably over the term of the contract for our services, a significant downturn in our business may not be reflected immediately in our results of operations, which increases the difficulty of evaluating our future financial performance. We generally recognize technology and professional services revenue ratably over the term of a contract, which is typically one to three years. Consequently, a decline in new contracts in any quarter may not affect our results of operations in that quarter but could reduce our revenue in future quarters. Additionally, the timing of renewals or non-renewals of a contract during any quarter may only affect our financial performance in future quarters. For example, the non-renewal of a subscription agreement late in the quarter will have minimal impact on revenue for that quarter but will reduce our revenue in future quarters. Accordingly, the effect of significant declines in sales may not be reflected in our short-term results of operations, which would make these reported results less indicative of our future financial results. By contrast, a non-renewal occurring early in a quarter may have a significant negative impact on revenue for that quarter and we may not be able to offset a decline in revenue due to non-renewal with revenue from new contracts entered later in the same quarter. In addition, we may be unable to quickly adjust our costs in response to reduced revenue. 7 The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies. Our solution is a technology-driven platform that relies on innovation to remain competitive. The process of developing new technologies and products is complex, and we develop our own AI and deep learning, healthcare technologies, and other tools to differentiate our platform and AI modules. In addition, our dedication to incorporating technological advancements into our platform requires significant financial and personnel resources and talent. Our development efforts with respect to these initiatives could distract management from current operations and could divert capital and other resources from other growth initiatives important to our business. We operate in an industry experiencing rapid technological change and frequent platform introductions. We may not be able to make technological improvements as quickly as demanded by our Clients, which could harm our ability to attract new Clients and therefore, our market share. In addition, we may not be able to effectively implement new technology- driven products and services as projected. Failure by our Clients to obtain proper permissions and waivers may result in claims against us or may limit or prevent our use of data, which could harm our business. We require our Clients to provide necessary notices and to obtain necessary permissions and waivers for use and disclosure of the information that we receive, and we require contractual assurances from them that they have done so and will do so. If they do not obtain necessary permissions and waivers, then our use and disclosure of information that we receive from them or on their behalf may be restricted or prohibited by state, federal or international privacy or data protection laws, or other related privacy and data protection laws. This could impair our functions, processes, and databases that reflect, contain, or are based upon such data and may prevent the use of such data, including our ability to provide such data to third parties that are incorporated into our service offerings. Furthermore, this may cause us to breach obligations to third parties to whom we may provide such data, such as third-party service or technology providers that are incorporated into our service offerings. In addition, this could interfere with or prevent data sourcing, data analyses, or limit other data-driven activities that benefit us. Moreover, we may be subject to claims, civil and/or criminal liability or government or state attorneys general investigations for use or disclosure of information by reason of lack of valid notice, permission, or waiver. These claims, liabilities or government or state attorneys general investigations could subject us to unexpected costs and adversely affect our financial condition and results of operations. If our security measures are breached or unauthorized access to client data is otherwise obtained, our product and service offerings may be perceived as not being secure, Clients may reduce the use of or stop using our services, and we may incur significant liabilities. Our business involves the storage and transmission of our Members proprietary information, including personal or identifying information regarding Members and their protected health information ( PHI ). As a result, unauthorized access or security breaches to our system or platform as a result of third-party action, employee error, malfeasance, or otherwise could result in the loss or inappropriate use of information, litigation, indemnity obligations, damage to our reputation, and other liability including but not limited to government or state Attorney General investigations. Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until after they are launched against a target, we may not be able to anticipate these techniques or implement adequate preventative measures. Moreover, the detection, prevention, and remediation of known or unknown security vulnerabilities, including those arising from third-party hardware or software, may result in additional direct or indirect costs and management time. Any or all of these issues could adversely affect our ability to attract new Clients, cause existing Clients to elect not to renew their contracts, result in reputational damage, or subject us to third-party lawsuits, regulatory fines, mandatory disclosures, or other action or liability, which could adversely affect our results of operations. Our general liability insurance may not be adequate to cover all potential claims to which we are exposed and may not be adequate to indemnify us for liability that may be imposed, or the losses associated with such events, and in any case, such insurance may not cover all of the specific costs, expenses, and losses we could incur in responding to and remediating a security breach. A security breach of another significant provider of cloud-based solutions may also negatively impact the demand for our product and service offerings. 8 We may acquire other companies or technologies, which could divert our management s attention, result in dilution to our stockholders, and otherwise disrupt our operations and we may have difficulty integrating any such acquisitions successfully or realizing the anticipated benefits therefrom, any of which could have an adverse effect on our business, financial condition, and results of operations. We may seek to acquire or invest in businesses, applications, and services, or technologies that we believe could complement or expand our product and service offerings, enhance our AI capabilities, or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions. We may have difficulty integrating other technologies, other team members, or selling our Member guidance program to acquired Clients and we may not be able to achieve the intended benefits from any such acquisition. In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our results of operations based on this impairment assessment process, which could adversely affect our results of operations. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect the results of operations. In addition, if an acquired business fails to meet our expectations, our business, financial condition, and results of operations may suffer. Risks Related to Protecting Our Technology and Intellectual Property We rely on third-party providers, including Amazon Web Services, for computing infrastructure, network connectivity, and other technology-related services needed to deliver our service offerings. Any disruption in the services provided by such third-party providers could adversely affect our business and subject us to liability. Our member guidance program is hosted from and use computing infrastructure provided by third parties, including Amazon Web Services, and other computing infrastructure service providers. Our computing infrastructure service providers have no obligation to renew their agreements with us on commercially reasonable terms or at all. If we are unable to renew these agreements on commercially reasonable terms, or if one of our computing infrastructure service providers is acquired, we may be required to transition to a new provider and we may incur significant costs and possible service interruption in connection with doing so. Problems faced by our computing infrastructure service providers, including those operated by Amazon Web Services, could adversely affect the experience of our Clients. Amazon Web Services has also had and may in the future experience significant service outages. Additionally, if our computing infrastructure service providers are unable to keep up with our growing needs for capacity, this could have an adverse effect on our business. For example, a rapid expansion of our business could affect our service levels or cause our third-party hosted systems to fail. Our agreements with third-party computing infrastructure service providers may not entitle us to service level credits that correspond with those we offer to our Clients. Any changes in third-party service levels at our computing infrastructure service providers, or any related disruptions or performance problems with our product and service offering, could adversely affect our reputation and may damage our clients stored files, result in lengthy interruptions in our services, or result in potential losses of client data. Interruptions in our services might reduce our revenue, cause us to issue refunds to clients for prepaid and unused subscriptions, subject us to service level credit claims and potential liability, allow our clients to terminate their contracts with us, or adversely affect our renewal rates. 9 We rely on Internet infrastructure, bandwidth providers, data center providers, other third parties, and our own systems for providing services to our users, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation, potentially require us to issue credits to our Clients, and negatively impact our relationships with Members or Clients, adversely affecting our brand and our business. We serve our Clients primarily from third-party data-hosting facilities. These facilities are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, and similar events. They are also subject to break-ins, sabotage, intentional acts of vandalism, and similar misconduct. Their systems and servers could also be subject to hacking, spamming, ransomware, computer viruses or other malicious software, denial of service attacks, service disruptions, including the inability to process certain transactions, phishing attacks and unauthorized access attempts, including third parties gaining access to Members accounts using stolen or inferred credentials or other means, and may use such access to prevent use of Members accounts. Despite precautions taken at these facilities, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice, or other unanticipated problems at two or more of the facilities could result in lengthy interruptions in our services. Even with our disaster recovery arrangements, our services could be interrupted. Our ability to deliver our Internet- and telecommunications-based services is dependent on the development and maintenance of the infrastructure of the Internet and other telecommunications services by third parties. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, and security for providing reliable Internet access and services and reliable mobile device, telephone, facsimile, and pager systems, all at a predictable and reasonable cost. We have experienced and expect that we will experience interruptions and delays in services and availability from time to time. We rely on internal systems as well as third-party vendors, including data center, bandwidth, and telecommunications equipment or service providers, to provide our services. We do not maintain redundant systems or facilities for some of these services. In the event of a catastrophic event with respect to one or more of these systems or facilities, we may experience an extended period of system unavailability, which could negatively impact our relationship with users or clients. To operate without interruption, both we and our service providers must guard against: damage from fire, power loss, and other natural disasters; communications failures; security breaches, computer viruses, ransomware, and similar disruptive problems; and other potential interruptions. Any disruption in the network access, telecommunications, or co-location services provided by these third-party providers or any failure of or by these third-party providers or our own systems to handle the current or higher volume of use could significantly harm our business. We exercise limited control over these third-party vendors, which increases our vulnerability to problems with the services they provide. Any errors, failures, interruptions, or delays experienced in connection with these third-party technologies and information services, or our own systems could negatively impact our relationships with users and clients, adversely affect our brands and business, and expose us to third-party liabilities. The insurance coverage under our policies may not be adequate to compensate us for all losses that may occur. In addition, we cannot provide assurance that we will continue to be able to obtain adequate insurance coverage at an acceptable cost. The reliability and performance of the Internet may be harmed by increased usage or by denial-of-service attacks. The Internet has experienced a variety of outages and other delays because of damage to portions of its infrastructure, and it could face outages and delays in the future. These outages and delays could reduce the level of Internet usage as well as the availability of the Internet to us for delivery of our Internet-based services. We typically provide service level commitments under our client contracts. If we fail to meet these contractual commitments, we could be obligated to provide credits or refunds for prepaid amounts related to unused subscription services or face contract terminations, which could adversely affect the results of operations. Finally, recent changes in law could impact the cost and availability of necessary Internet infrastructure. Increased costs and/or decreased availability would negatively affect the results of operations. 10 We employ third-party licensed software and software components for use in or with our member guidance program, and the inability to maintain these licenses or the presence of errors in the software we license could limit the functionality of our member guidance program and result in increased costs or reduced service levels, which would adversely affect our business. Our software applications might incorporate or interact with certain third-party software and software components (other than open-source software), such as claims processing software, obtained under licenses from other companies. We pay these third parties a license fee or royalty payment. We anticipate that we will continue to use such third-party software in the future. Although we believe that there are commercially reasonable alternatives to the third-party software, we currently make available, this may not always be the case, or it may be difficult or costly to replace. Furthermore, these third parties may increase the price for licensing their software, which could negatively impact the results of operations. Our use of additional or alternative third-party software could require clients to enter into license agreements with third parties. In addition, if the third-party software we make available has errors or otherwise malfunctions, or if the third-party terminates its agreement with us, the functionality of our member guidance program may be negatively impacted, and our business may suffer. Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand. Our success and ability to compete depend largely upon our intellectual property. To date, we have three patent applications pending in the U.S. We take reasonable steps to protect our intellectual property, especially when working with third parties. However, the steps we take to protect our intellectual property rights may be inadequate. For example, other parties, including our competitors, may independently develop similar technology, duplicate our services, or design around our intellectual property and, in such cases, we may not be able to assert our intellectual property rights against such parties. Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. We make business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach we select may ultimately prove to be inadequate. Even in cases where we seek patent protection, there is no assurance that the resulting patents will effectively protect every significant feature of our model, technology, or proprietary information, or provide us with any competitive advantages. Moreover, we cannot guarantee that any of our pending patent applications will issue or be approved. The United States Patent and Trademark Office and various foreign governmental patent agencies also require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application process and after a patent has issued. There are situations in which noncompliance can result in abandonment or lapse of the patent, or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If this occurs, our competitors might be able to enter the market, which would have a material adverse effect on our business. Effective trademark, copyright, patent, and trade secret protection may not be available in every country in which we conduct business. Further, intellectual property law, including statutory and case law, particularly in the United States, is constantly developing, and any changes in the law could make it harder for us to enforce our rights. To protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. An adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and could put our related pending patent applications at risk of not being issued. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. In addition, during litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Negative publicity related to a decision by us to initiate such enforcement actions against a client or former client, regardless of its accuracy, may adversely impact our other client relationships or prospective client relationships, harm our brand and business, and could cause the market price of our common stock to decline. Our failure to secure, protect, and enforce our intellectual property rights could adversely affect our brand and our business. 11 We may not be able to adequately defend against piracy of intellectual property in foreign jurisdictions. Considerable research in AI is being performed in countries outside of the United States, and several potential competitors are in these countries. The laws protecting intellectual property in some of those countries may not provide adequate protection to prevent our competitors from misappropriating our intellectual property. Several of these potential competitors may be further along in the process of product development and operate large, company-funded research and development programs. As a result, our competitors may develop more competitive or affordable products, or achieve earlier patent protection or product commercialization than we are able to achieve. Competitive products may render any products or product candidates that we develop obsolete. Our Member guidance program utilizes open-source software, and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business. We use software modules licensed to us by third-party authors under open-source licenses in our Member guidance program. Some open-source licenses contain affirmative obligations or restrictive terms that could adversely impact our business, such as restrictions on commercialization or obligations to make available modified or derivative works of certain open-source code. If we were to combine our proprietary software with certain open-source software subject to these licenses in a certain manner, we could, under certain open-source licenses, be required to release or otherwise make available the source code to us proprietary software to the public. This would allow our competitors to create similar products with lower development effort and time and ultimately could result in a loss of sales for us. Although we employ practices designed to manage our compliance with open-source licenses and protect our proprietary source code, we may inadvertently use open-source software in a manner we do not intend and that could expose us to claims for breach of contract and intellectual property infringement. If we are held to have breached the terms of an open-source software license, we could be required to, among other things, seek licenses from third parties to continue offering our products on terms that are not economically feasible, pay damages to third parties, to re-engineer our products, to discontinue the sale of our products if re-engineering cannot be accomplished on a timely basis, or to make generally available, in source code form, a portion of our proprietary code, any of which could adversely affect our business, results of operations, and financial condition. The terms of many open-source licenses have not been interpreted by U.S. courts, and, as a result, there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our member guidance program. Risks Related to Conducting our Business Under a Complex and Evolving Set of Governmental Regulations Government regulation of the healthcare industry creates risks and challenges with respect to our compliance efforts and our business strategies. In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could create unexpected liabilities for us, cause us to incur additional costs, and restrict our operations. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. 12 Many healthcare laws are complex, and their application to specific services and relationships may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate the data analytics and improvement services that we provide, and these laws and regulations may be applied to our product and service offerings in ways that we do not anticipate, particularly as we develop and release new and more sophisticated solutions. Certain changes to laws impacting our industry, or perceived intentions to do so, could affect our business and the results of operations. Some of the risks we face from healthcare regulation are described below: False Claims Laws. There are numerous federal and state laws that prohibit submission of false information, or the failure to disclose information, in connection with submission (or causing the submission) and payment of claims for reimbursement. For example, the federal civil False Claims Act prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim. In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. If our advisory services to clients are associated with action by clients that is determined or alleged to be in violation of these laws and regulations, it is possible that an enforcement agency would also try to hold us accountable. Any determination by a court or regulatory agency that we have violated these laws could subject us to significant civil or criminal penalties, invalidate all or portions of some of our client contracts, require us to change or terminate some portions of our business, require us to refund portions of us services fees, subject us to additional reporting requirements and oversight under a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, cause us to be disqualified from serving clients doing business with government payers, and have an adverse effect on our business. Our Clients failure to comply with these laws and regulations in connection with our services could result in substantial liability (including, but not limited to, criminal liability), adversely affect demand for our services, and force us to expend significant capital, research and development, and other resources to address the failure. Health Data Privacy Laws. There are numerous federal and state laws related to health information privacy. In particular, the federal Health Insurance Portability and Accountability Act of 1996, as amended by the HITECH and their implementing regulations, which we collectively refer to as HIPAA, include privacy standards that protect individual privacy by limiting the uses and disclosures of PHI and implementing data security standards that require covered entities to implement administrative, physical, and technological safeguards to ensure the confidentiality, integrity, availability, and security of PHI in electronic form. In addition to enforcement actions initiated by regulatory bodies under HIPAA, violations or breaches caused by us or our contractors may result in related claims against us by clients, which may be predicated upon underlying contractual responsibilities, and by Members, which may be predicated upon tort law or state privacy claims, as HIPAA does not contain a private right of action. HIPAA also specifies formats that must be used in certain electronic transactions, such as admission and discharge messages and limits the fees that may be charged for certain transactions, including claim payment transactions. By processing and maintaining PHI on behalf of our covered entity clients, we are a HIPAA business associate and mandated by HIPAA to enter into written agreements with our covered entity clients known as Business Associate Agreements ( BAAs ) that require us to safeguard PHI. BAAs typically include; oa description of our permitted uses of PHI; oa covenant not to disclose that information except as permitted under the BAAs and to require that our subcontractors, if any, are subject to the substantially similar restrictions; oassurances that reasonable and appropriate administrative, physical, and technical safeguards are in place to prevent misuse of PHI; oan obligation to report to our client any use or disclosure of PHI other than as provided for in the BAAs; oa prohibition against our use or disclosure of PHI if a similar use or disclosure by our client would violate the HIPAA standards; othe ability of our clients to terminate the underlying support agreement if we breach a material term of the BAAs and are unable to cure the breach; othe requirement to return or destroy all PHI at the end of our services agreement; and oaccess by the Department of Health and Human Services ( HHS ) to our internal practices, books, and records to validate that we are safeguarding PHI. In addition, we are also required to maintain BAAs, which contain similar provisions, with our subcontractors that access or otherwise process PHI on our behalf. We may not be able to adequately address the business risks created by HIPAA implementation, and meet the requirements imposed by HIPAA. Furthermore, we are unable to predict what changes to HIPAA or other laws or regulations might be made in the future or how those changes could affect our business or the costs of compliance. For example, in 2018, the HHS Office for Civil Rights published a Request for Information in the Federal Register seeking comments on several areas in which HHS is considering making both minor and significant modifications to the HIPAA privacy and security standards to, among other things, improve care coordination. We are unable to predict what, if any, impact the changes in such standards will have on our compliance costs or our product and service offerings. 13 We will also require large sets of de-identified information to enable us to continue to develop AI algorithms that enhance our product and service offerings. If we are unable to secure these rights in Client BAAs or because of any future changes to HIPAA or other applicable laws, we may face limitations on the use of PHI and our ability to use de-identified information that could negatively affect the scope of our product and service offering as well as impair our ability to provide upgrades and enhancements to our services. We outsource important aspects of the storage and transmission of client and member information, and thus rely on third parties to manage functions that have material cyber-security risks. We attempt to address these risks by requiring outsourcing subcontractors who handle client information to sign BAAs contractually requiring those subcontractors to adequately safeguard PHI in a similar manner that applies to us and in some cases by requiring such outsourcing subcontractors to undergo third-party security examinations as well as to protect the confidentiality of other sensitive client information. In addition, we periodically hire third-party security experts to assess and test our security measures. However, we cannot be assured that these contractual measures and other safeguards will adequately protect us from the risks associated with the storage and transmission of client proprietary information and PHI. Centers for Medicare and Medicaid Services ( CMS ) takes the position that an electronic fund transfer ( EFT ) payment to a health care provider is a standard transaction under HIPAA. As a standard transaction , these provider payments may be subject to certain limitations on the fees that may be charged for an EFT payment transaction with a health care provider. We outsource important aspects of our EFT payments to health care providers and thus rely on third parties to manage the EFT transactions and assure that the fees charged comply with HIPAA. The application of HIPAA to EFT payments is complex, and their application to specific value-added services for health care providers may not be clear. Our failure to accurately anticipate the application of HIPAA s fee restrictions on certain standard transactions could create significant liability for us, resulting in negative publicity, and material adverse effect on our business and operating results. In addition to the HIPAA privacy and security standards, most states have enacted patient confidentiality laws that protect against the disclosure of confidential medical and other personally identifiable information ( PII ) and many states have adopted or are considering new privacy laws, including legislation that would mandate new privacy safeguards, security standards, and data security breach notification requirements. Such state laws, if more stringent than HIPAA requirements, are not preempted by the federal requirements, and we are required to comply with them. In addition, the Federal Trade Commission, and analogous state agencies, may apply consumer protection laws to the context of data privacy. For example, the Federal Trade Commission has sanctioned companies for unfair trade practices when they failed to implement adequate security protection measures for sensitive personal information, or when they provided inadequate disclosures to consumers about the expansive scope of data mined from consumer activity. Failure by us to comply with any of the federal and state standards regarding patient privacy and/or privacy more generally may subject us to penalties, including significant civil monetary penalties and, in some circumstances, criminal penalties. In addition, such failure may injure our reputation and adversely affect our ability to retain clients and attract new clients. Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us. Anti-Kickback and Anti-Bribery Laws. There are federal and state laws that prohibit payment for patient referrals, patient brokering, remuneration of Members, or billing based on referrals between individuals or entities that have various financial, ownership, or other business relationships with healthcare providers. In particular, the federal Anti-Kickback law prohibits offering, paying, soliciting, or receiving anything of value, directly or indirectly, for the referral of members covered by Medicare, Medicaid, and other federal healthcare programs or the leasing, purchasing, ordering, or arranging for or recommending the lease, purchase, or order of any item, good, facility, or service covered by these programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. Some enforcement activities focus on below or above market payments for federally reimbursable health care items or services as evidence of the intent to provide a kickback. Many states also have similar anti-kickback laws, some of which are applicable to all patients and that are not necessarily limited to items or services for which payment is made by a federal healthcare program. In addition, the federal physician self-referral prohibition the Stark Law is very complex in its application and prohibits physicians (and certain other healthcare professionals) from making a referral for a designated health service to a provider in which the referring healthcare professional (or spouse or any immediate family member) has a financial or ownership interest, unless an enumerated exception applies. The Stark Law also prohibits the billing for services rendered resulting from an impermissible referral. Many states also have similar anti-referral laws that are not necessarily limited to items or services for which payment is made by a federal healthcare program and may include patient disclosure requirements. Moreover, both federal and state laws prohibit bribery and similar behavior. Any determination by a state or federal regulatory agency that we or any of our clients, vendors, or partners violate or have violated any of these laws could subject us to significant civil or criminal penalties, require us to change or terminate some portions of our business, require us to refund portions of our services fees, subject us to additional reporting requirements and oversight under a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, cause us to be disqualified from serving clients doing business with government payers, and have an adverse effect on our business. Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us. 14 Corporate Practice of Medicine Laws and Fee-Splitting Laws. Many states have enacted laws prohibiting physicians from practicing medicine in partnership with non-physicians, such as business corporations. In addition, many states prohibit certain licensed professionals, such as physicians, from splitting professional fees with non-licensees. As we do not engage in the practice of medicine, we do not contract with providers to render medical care, and we do not split fees with any medical professionals, we do not believe these laws restrict our business. Our activities involve only monitoring and analyzing historical claims data, including our Members interactions with licensed healthcare professionals, and recommending the most suitable healthcare providers and/or sources of treatment. We do not provide medical prognosis or healthcare. In accordance with various states corporate practice of medicine laws and states laws and regulations which define the practice of medicine, our call center staff are prohibited from providing Members with any evaluation of any medical condition, diagnosis, prescription, care and/or treatment. Rather, our call center staff can only provide Members with general and publicly available information that is non-specific to the Members medical conditions and statistical information about the prevalence of medical conditions within certain populations or under certain circumstances. Our call center staff do not discuss Members individual medical conditions and are prohibited from asking Members for any additional PHI as such term is defined under HIPAA. Our call center staff have been trained and instructed to always inform Members that they are not licensed medical professionals, are not providing medical advice, and that Members should reach out to their medical provider for any medical advice. Medical professional regulation. The practice of most healthcare professions requires licensing under applicable state law. In addition, the laws in some states prohibit business entities from practicing medicine. In the future, we may contract with physicians, nurses, and nurse practitioners, who will assist our clients with the clients care coordination, care management, population health management, and patient safety activities that do not constitute the practice of medicine. We do not intend to provide medical care, treatment, or advice. However, any determination that we are acting in the capacity of a healthcare provider and acted improperly as a healthcare provider may result in additional compliance requirements, expense, and liability to us, and require us to change or terminate some portions of our business, including the use of licensed professionals to conduct the foregoing activities. Medical Device Laws. The U.S. Food and Drug Administration ( FDA ) may regulate medical or health-related software, including machine learning functionality and predictive algorithms, if such software falls within the definition of a device under the federal Food, Drug, and Cosmetic Act ( FDCA ). However, the FDA exercises enforcement discretion for certain low-risk software, as described in its guidance documents for Mobile Medical Applications, General Wellness: Policy for Low-Risk Devices, and Medical Device Data Systems, Medical Image Storage Devices, and Medical Image Communications Devices. In addition, in December of 2016, President Obama signed into law the 21st Century Cures Act, which included exemptions for certain medical-related software, including software used for administrative support functions at a healthcare facility, software intended for maintaining or encouraging a healthy lifestyle, electronic health record ( EHR software ), software for transferring, storing, or displaying medical device data or in vitro diagnostic data, and certain clinical decision support software. The FDA has also issued draft guidance documents to clarify how it intends to interpret and apply the new exemptions under the 21st Century Cures Act. Although we believe that our software products are currently not subject to active FDA regulation, we continue to follow the FDA s developments in this area. There is a risk that the FDA could disagree with our determination or that the FDA could develop new final guidance documents that would subject our Product to active FDA oversight. If the FDA determines that any of our current or future analytics applications are regulated as medical devices, we would become subject to various requirements under the FDCA and the FDA s implementing regulations. Depending on the functionality and FDA classification of our analytics applications, we may be required to: register and list our AI products with the FDA; notify the FDA and demonstrate substantial equivalence to other products on the market before marketing our analytics applications; submit a de novo request to the FDA to down-classify our analytics applications prior to marketing; or obtain FDA approval by demonstrating safety and effectiveness before marketing our analytics applications. 15 The FDA can impose extensive requirements governing pre- and post-market conditions, such as service investigation and others relating to approval, labeling, and manufacturing. In addition, the FDA can impose extensive requirements governing software development controls and quality assurance processes. The AI algorithm has undergone testing to follow the Quality System regulation (that includes camp s) (good manufacturing practices) and quality controls in the design, development, AI training and testing. Marpai AI algorithms have been validated by our R&D team to determine generalizability, accuracy and reliability and are monitored carefully. Additionally, the algorithms were trained on large, diverse patient datasets to ensure they are not biased and that they perform as assumed across diverse sets of patients and settings. The regulatory landscape is evolving, and the FDA is in the process of issuing a comprehensive guidance on AI software which may change how our product is regulated. Many states have licensing and other regulatory requirements requiring licensing of businesses which provide medical review services. These laws typically establish minimum standards for qualifications of personnel, confidentiality, internal quality control, and dispute resolution procedures. To the extent we are governed by these regulations, these regulatory programs may result in increased costs of operation for us, which may have an adverse impact upon our ability to compete with other available alternatives for healthcare cost control. In addition, new laws regulating the operation of managed care provider networks have been adopted by several states. These laws may apply to managed care provider networks we have contracts with. To the extent we are governed by these regulations, we may be subject to additional licensing requirements, financial and operational oversight and procedural standards for beneficiaries and providers. These laws and regulations may change rapidly, and it is frequently unclear how they apply to our business. Any failure of our products or services to comply with these laws and regulations could result in substantial civil or criminal liability and could, among other things, adversely affect demand for our services, force us to expend significant capital, research and development, and other resources to address the failure, invalidate all or portions of some of our contracts with our clients, require us to change or terminate some portions of our business, require us to refund portions of our revenue, cause us to be disqualified from serving clients doing business with government payers, and give our clients the right to terminate our contracts with them, any one of which could have an adverse effect on our business. Additionally, the introduction of new services may require us to comply with additional, yet undetermined, laws and regulations. The security measures that we and our third-party vendors and subcontractors have in place to ensure compliance with privacy and data protection laws may not protect our facilities and systems from security breaches, acts of vandalism or theft, computer viruses, misplaced or lost data, programming and human errors, or other similar events. Under the HITECH Act, as a business associate, we may also be liable for privacy and security breaches and failures of our subcontractors, in addition to those that may be caused by us. Even though we provide for appropriate protections through our agreements with our subcontractors, we still have limited control over their actions and practices. A breach of privacy or security of individually identifiable health information by a subcontractor may result in an enforcement action, including criminal and civil liability, against us. We are not able to predict the extent of the impact such incidents may have on our business. Our failure to comply may result in criminal and civil liability because the potential for enforcement action against business associates is now greater. Enforcement actions against us could be costly and could interrupt regular operations, which may adversely affect our business. While we have not received any notices of violation of the applicable privacy and data protection laws and believe we are in compliance with such laws, there can be no assurances that we will not receive such notices in the future or suffer a breach. 16 Any failure or perceived failure by us to comply with federal or state laws or regulations, industry standards, or other legal obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release, or transfer of personally identifiable information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines, and penalties or adverse publicity and could cause our clients to lose trust in us, which could have an adverse effect on our reputation and business. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new products and features could be limited. Any of these developments could harm our business, financial condition, and results of operations. Privacy and data security concerns, whether valid or not valid, may inhibit market adoption of our platform. The healthcare regulatory and political framework is uncertain and evolving. Healthcare laws and regulations are rapidly evolving and may change significantly in the future, which could adversely affect our financial condition and results of operations. For example, in March 2010, the Patient Protection and ACA was adopted, which is a healthcare reform measure that provides healthcare insurance for approximately 30 million more Americans. The ACA includes a variety of healthcare reform provisions and requirements that substantially changed the way healthcare is financed by both governmental and private insurers, which may significantly impact our industry and our business. Many of the provisions of the ACA phase in over the course of the next several years, and we may be unable to predict accurately what effect the ACA or other healthcare reform measures that may be adopted in the future, including amendments to the ACA, will have on our business. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Act, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the Fifth Circuit U.S. Court of Appeals held that the individual mandate is unconstitutional and remanded the case to the lower court to reconsider its earlier invalidation of the full ACA. Pending review, the ACA remains in effect, but it is unclear at this time what effect the latest ruling will have on the status of the ACA. Nevertheless, upon review by the U.S. Supreme Court, the plaintiffs in the Texas action were determined to lack standing, and as such, the case was reversed and remanded. Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally. The future success of our business depends upon the continued use of the Internet as a primary medium for communication, business applications, and commerce. Federal or state government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium. Legislators, regulators, government bodies or agencies may also make legal or regulatory changes or interpret or apply existing laws or regulations that relate to the use of the Internet in new and materially different ways. Changes in these laws, regulations or interpretations could require us to modify our platform to comply with these changes, to incur substantial additional costs or divert resources that could otherwise be deployed to grow our business, or expose us to unanticipated civil or criminal liability, among other things. In addition, government agencies and private organizations have imposed, and may in the future impose, additional taxes, fees, or other charges for accessing the Internet or commerce conducted via the Internet. Internet access is frequently provided by companies that have significant market power and could take actions that degrade, disrupt, or increase the cost of our clients use of our platform, which could negatively impact our business. These developments could limit the growth of Internet-related commerce or communications generally or result in reductions in the demand for Internet-based platforms and services such as ours, increased costs to us or the disruption of our business. In addition, as the Internet continues to experience growth in the numbers of users, frequency of use and amount of data transmitted, the use of the Internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of Internet activity, security, reliability, cost, ease-of-use, accessibility, and quality of service. The performance of the Internet and its acceptance as a business tool has been adversely affected by viruses, worms, and similar malicious programs and the Internet has experienced a variety of outages and other delays because of damage to portions of its infrastructure. If the use of the Internet generally, or our platform specifically, is adversely affected by these or other issues, we could be forced to incur substantial costs, demand for our platform could decline, and our results of operations and financial condition could be harmed. 17 Risks Related to Operating as a Public Emerging Growth Company The requirements of being a public company maty strain our resources, divert management s attention, and affect our ability to attract and retain executive management and qualified board members. As a public company, we are subject to the reporting requirements of the Exchange Act and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management s attention may be diverted from other business concerns, which could harm our business, results of operations, and financial condition. As a result of disclosure of information in filings required of a public company, our business and financial condition is more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, results of operations, and financial condition. Risk Related to Our Common Shares Our issuance of additional capital stock in connection with financing, acquisitions, investments, the 2021 Plan, the 2024 Plan or otherwise will dilute all other stockholders. We expect that we will need to raise additional capital through equity and possibly debt financing to fund our ongoing operations and possible acquisitions. If we raise capital through equity financing in the future, that will result in dilution to all other stockholders. If we raise debt in the future, this debt may be perceived as increasing the risk associated with investing in our Common Stock which may have a negative impact on the price of the stock. We also expect to grant substantial equity awards to employees, directors, and consultants under the 2021 Plan and 2024 Plan and we expect to ask our shareholders to approve a substantial increase to this incentive plan which will enable our board of directors to grant additional equity grants in the future, all of which will result in dilution or potential dilution to all the stockholders. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per-share value of our common stock to decline. We do not intend to pay dividends on our common stock and, consequently, the ability of common stockholders to achieve a return on investment will depend on appreciation, if any, in the price of our Common Stock. You should not rely on an investment in our common stock to provide dividend income. We do not plan to declare or pay any dividends on our capital stock in the foreseeable future. Instead, we intend to retain any earnings to finance the operation and expansion of our business. As a result, common stockholders may only receive a return on their investment if the market price of our common stock increases. 18 The market price of our common stock may be volatile and may decline regardless of our operating performance, and you may lose all or part of your investments. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: overall performance of the equity markets and/or publicly listed technology companies; actual or anticipated fluctuations in our net revenue or other operating metrics; changes in the financial projections we provide to the public or our failure to meet these projections; failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors; the economy as a whole and market conditions in our industry; rumors and market speculation involving us or other companies in our industry; announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; new laws or regulations or new interpretations of existing laws or regulations applicable to our business; lawsuits threatened or filed against us; recruitment or departure of key personnel; other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and the expiration of contractual lock-up or market standoff agreements. In addition, extreme price and volume fluctuations in the stock markets have affected and continue to affect many technology companies stock prices. Often, their stock prices have fluctuated in ways unrelated or disproportionate to the companies operating performance. In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because technology and healthcare technology companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management s attention and resources, which could harm our business. A possible short squeeze due to a sudden increase in demand of our common stock that largely exceeds supply may lead to price volatility in our common stock. Investors may purchase our common stock to hedge existing exposure in our common stock or to speculate on the price of our common stock. Speculation on the price of our common stock may involve long and short exposures. To the extent aggregate short exposure exceeds the number of shares of our common stock available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our common stock for delivery to lenders of our common stock. Those repurchases may in turn dramatically increase the price of us common stock until investors with short exposure can purchase additional common stock to cover their short position. This is often referred to as a short squeeze. A short squeeze could lead to volatile price movements in our common stock that are not directly correlated to the performance, or prospects of our common stock and once investors purchase the shares of common stock necessary to cover their short position the price of our common stock may decline. Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current Board and limit the market price of our Common Stock. 19 Provisions in our second amended and restated certificate of incorporation (the Certificate of Incorporation ) and bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and bylaws, include provisions that: permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; and; provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws. Moreover, Section 203 of the Delaware General Corporation Law ("DGCL") may discourage, delay, or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock. Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit stockholders ability to obtain a favorable judicial forum for disputes with us. Our bylaws provide, to the fullest extent permitted by law, that a state or federal court located within the State of Delaware will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. This exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Nothing in our bylaws precludes stockholders that assert claims under the Securities Act or the Exchange Act from bringing such claims in state or federal court, subject to applicable law. This choice of forum provision may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision which will be contained in us bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. Our Amended and Restated Certificate of Incorporation provides that derivative actions brought on our behalf, actions against our directors, officers, employees, or agent for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and the stockholders shall be deemed to have consented to this choice of forum provision, which may have the effect of discouraging lawsuits against our directors, officers, other employees or agents. Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any stockholder for (a) any derivative action or proceeding brought on our behalf, (c) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any director, officer, employee or agent of the Company to the Company or the Company s stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL or the Company s Certificate of Incorporation or bylaws, (d) any action to interpret, apply, enforce or determine the validity of the Company s Certificate of Incorporation or bylaws, or (e) any action asserting a claim governed by the internal affairs doctrine. The federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint, claim or proceeding asserting a cause of action arising under the Exchange Act or the Securities Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provision in our Certificate of Incorporation. 20 The choice-of-forum provision may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, and may result in increased costs to a stockholder who has to bring a claim in a forum that is not convenient to the stockholder, which may discourage such lawsuits. Although under Section 115 of the DGCL, exclusive forum provisions may be included in a company s certificate of incorporation, the enforceability of similar forum provisions in other companies certificates or incorporation or bylaws has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. If a court were to find the exclusive forum provision of our Certificate of Incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board. Effective May 29, 2024, our Common Stock was suspended from trading on Nasdaq and our common stock commenced trading on OTCQX. As we previously disclosed, on May 31, 2023, Nasdaq Listing Qualifications staff ( Staff ) notified us that the market value of our listed securities ( MVLS ) was below the minimum $35,000,000 required for continued listing as set forth in Listing Rule 5550(b)(2). In accordance with Listing Rule 5810(c)(3)(C), we were provided 180 calendar days, or until November 27, 2023, to regain compliance. On November 28, 2023, the Staff notified us that it had determined to delist us as we did not comply with the MVLS requirement for listing on Nasdaq. On November 29, 2023, we requested a hearing. A hearing on the matter was held on February 22, 2024, where we presented our compliance plan. Subject to our meeting certain requirements by March 31, 2024, the Hearings Panel granted us an extension until May 28, 2024, to regain compliance with the Market Value of Listed Securities ( MVLS ) requirement of $35,000,000 or satisfy any of the alternative requirements in Listing Rule 5550(b). On May 24, 2024, we informed the staff of the Nasdaq Stock Market LLC of our intention to withdraw from the Nasdaq hearings process and transition the listing of our common stock from Nasdaq and have the common stock quoted on the OTCQX. Our common stock was suspended from trading on Nasdaq effective at the opening of trading on Wednesday, May 29, 2024, and shares of our common stock commenced trading on OTCQX immediately thereafter. On June 3, 2024, the Nasdaq hearings panel filed a Form 25 with the Securities and Exchange Commission which formally delisted the Company s common stock from Nasdaq. We have since transferred our common stock to OTCQX to ensure that a trading market may continue to exist for our securities. There is no guarantee, however, that a broker will continue to make a market in the common stock or that trading thereof will continue on OTCQX or otherwise. FINRA sales practice requirements may limit a stockholder s ability to buy and sell our stock. The Financial Industry Regulatory Authority ( FINRA ) has adopted rules that relate to the application of the SEC s penny stock rules in trading our securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that investor prior to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional investors, broker/dealers must make reasonable efforts to obtain information about the investor s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low priced securities will not be suitable for at least some investors. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing a shareholder s ability to resell shares of our common stock. Our common stock is currently deemed to be penny stock , which makes it more difficult for investors to sell their shares. Our common stock is currently subject to the penny stock rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share. These rules require, among other things, that brokers who trade penny stock to persons other than established customers complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities. 21 USE OF PROCEEDS We will not receive any proceeds from the sale of the 5,705,996 shares of common stock subject to resale by the Selling Stockholder under this prospectus. We will incur all costs associated with the preparation and filing of the registration statement of which this prospectus is a part. Brokerage fees, commissions and similar expenses, if any, attributable to the sale of shares offered hereby will be borne by the Selling Stockholder. DIVIDEND POLICY We presently intend to retain our earnings, if any, to finance the development and growth of our business and operations and do not anticipate declaring or paying cash dividends on our common stock in the foreseeable future. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our Board and will depend on then-existing conditions, including our operating results, financial condition, contractual restrictions, capital requirements, business prospects, and other factors our Board may deem relevant. 22 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS We are a technology platform company which operates subsidiaries that provide TPA and value-oriented health plan services to employers that directly pay for employee health benefits. Our mission is to positively change healthcare for the benefit of (i) our Clients who are self-insured employers that pay for their employees healthcare benefits and engage us to administer the latter s healthcare claims, and we refer to them as our Clients , (ii) employees and their family members who receive these healthcare benefits from our Clients, and we refer to them as our Members , and (iii) healthcare providers including, doctors, doctor groups, hospitals, clinics, and any other entities providing healthcare services or products, and we refer to them as the Providers. We provide affordable, intelligent, healthcare programs for self-insured employers in the U.S. We provide administrative services, and act as TPA to self-insured employers who provide healthcare benefits to their employees. Most of our Clients are small and medium-sized companies as well as local government entities. Representation in the Financial Statements of Marpai, Inc. The consolidated financial statements of Marpai, Inc and the discussion of the results of our operations in this prospectus, reflect the results of the operations of Marpai Health (and its subsidiary EYME) and Marpai Administrators for all periods presented, the results of Maestro Health since its acquisition on November 1, 2022 and the results of Marpai Captive Since its inception. Results of Operations The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended December 31, 2023 and 2022 and our unaudited interim financial statements for the three and nine months ended September 30, 2024 and 2023, which are included herein. Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 The following tables set forth our consolidated results of operations for the periods indicated. (dollars in thousands) Three Months Ended September 30, 2024 2023 Change % Revenue $7,008 $8,729 $(1,721) (19.7)% Costs and expenses Cost of revenue (exclusive of depreciation and amortization shown separately below) 5,033 5,691 (658) (11.6)% General and administrative 2,813 4,986 (2,173) (43.6)% Sales and marketing 345 1,842 (1,497) (81.3)% Information technology 1,273 1,269 4 0.3% Research and development 7 267 (260) (97.4)% Depreciation and amortization 213 927 (714) (77.0)% Loss on disposal of assets 7 (7) (100.0)% Loss on sale of business unit 73 73 N/A Facilities 311 769 (458) (59.6)% Total costs and expenses 10,068 15,758 (5,690) (36.1)% Operating loss (3,060) (7,029) 3,969 (56.5)% Other income and (expenses) Other income, net 119 130 (11) (8.5)% Interest expense, net (620) (383) (237) 61.9% Foreign loss gain 1 (14) 15 (107.1)% Total other expense (500) (267) (233) (87.3)% Loss before income taxes (3,560) (7,296) 3,736 51.2% Income tax expense Net loss $(3,560) $(7, 296) $3,736 51.2% Net loss per share, basic and fully diluted $(0.30) $(0.98) $0.68 69.4% 23 Nine months Ended September 30, 2024 2023 Change % Revenue $21,582 $28,448 $(6,866) (24.1)% Costs and expenses Cost of revenue (exclusive of depreciation and amortization shown separately below) 15,078 18,530 (3,452) (18.6)% General and administrative 9,954 15,938 (5,984) (37.5)% Sales and marketing 1,383 5,494 (4,111) (74.8)% Information technology 3,608 4,775 (1,167) (24.4)% Research and development 22 1,291 (1,269) (98.3)% Depreciation and amortization 2,078 2,974 (896) (30.1)% Impairment of goodwill and intangible assets 7,588 7,588 N/A Loss on disposal of assets 350 (350) (100.0)% Loss on sale of business unit 73 73 N/A Facilities 1,197 1,918 (721) (37.6)% Total costs and expenses 40,981 51,270 (10,289) (20.1)% Operating loss (19,399) (22,822) 3,423 (15.0)% Other income and (expenses) Other income (expense), net 360 231 129 55.8% Interest expense, net (1,890) (1,102) (788) 71.5% Foreign exchange loss (3) (32) 29 (90.6)% Total other expense (1,533) (903) (630) 69.8% Loss before income taxes (20,932) (23,725) 2,793 (11.8)% Income tax expense Net loss $(20,932) $(23,725) $2,793 (11.8)% Net loss per share, basic and fully diluted $(1.96) $(3.62) $1.66 45.9% Revenues and Cost of Revenue During the three months ended September 30, 2024 and 2023, our total revenue was $7.0 million and $8.7 million, respectively, representing a decrease in revenue of $1.7 million. The decline is primarily due to customer turnover. The market is evolving, and we are adapting our approach to better serve our customers needs. While we have seen some customer turnover, we are confident that our new initiatives will lead to long-term revenue growth. During the nine months ended September 30, 2024 and 2023, our total revenue was $21.6 million and $28.4 million, respectively, representing a decrease in revenue of $6.9 million. The decline is primarily due to customer turnover. The market is evolving, and we are adapting our approach to better serve our customers needs. While we have seen some customer turnover, we are confident that our new initiatives will lead to long-term revenue growth. Total revenues consist of fees that we charge our customers in consideration for administering their self-insured healthcare plans as well as fees that we receive for ancillary services such as care management, case management, cost containment services, and other services provided to our customers by us or other vendors. During the three months ended September 30, 2024 and 2023, our cost of revenue exclusive of depreciation and amortization was $5.0 million and $5.7 million, respectively, representing a decrease of $658 thousand, in line with the decrease in revenue. During the nine months ended September 30, 2024 and 2023, our cost of revenue exclusive of depreciation and amortization was $15.1 million and $18.5 million, respectively, representing a decrease of $3.5 million, in line with the decrease in revenue. 24 Total cost of revenues consists of (i) service fees, which primarily include vendor fees associated with the client s benefit program selections, (ii) the direct labor cost associated with claim management and processing services, and (iii) direct labor costs associated with providing customer support and services to the clients, members, and other external stakeholders. General and Administrative Expenses We incurred $2.8 million of general and administrative expenses for the three months ended September 30, 2024 compared to $5.0 million for the three months ended September 30, 2023, a decrease of $2.2 million. The reason for the decrease is due to (i) the actions taken throughout 2023 and the first nine months of 2024 to aligning the two TPA companies into one amounting to approximately $2.2 million in savings and (ii) the elimination of non value-added services amounting to approximately $640 thousand in savings. We incurred $10.0 million of general and administrative expenses for the nine months ended September 30, 2024 compared to $15.9 million for the nine months ended September 30, 2023, a decrease of $6.0 million. The reason for the decrease is due to (i) the actions taken throughout 2023 and the first nine months of 2024 to aligning the two TPA companies into one amounting to approximately $4.7 million in savings and (ii) the elimination of non value-added services amounting to approximately $1.4 million in savings. Sales and Marketing Expenses We incurred $345 thousand of sales and marketing expenses for the three months ended September 30, 2024 compared to $1.8 million for the three months ended September 30, 2023, a decrease of $1.5 million. The reason for the decrease is due to the actions taken throughout 2023 and the first nine months of 2024 to align the two TPA companies into one amounting to approximately $1.5 million in savings. We incurred $1.4 million of sales and marketing expenses for the nine months ended September 30, 2024 compared to $5.5 million for the nine months ended September 30, 2023, a decrease of $4.1 million. The reason for the decrease is due to the actions taken throughout 2023 and the first nine months of 2024 to align the two TPA companies into one amounting to approximately $4.1 million in savings. Information Technology Expenses We incurred $1.3 million of information technology expenses for the three months ended September 30, 2024 compared to $1.3 million for the three months ended September 30, 2023, an increase of $4 thousand. We incurred $3.6 million of information technology expenses for the nine months ended September 30, 2024 compared to $4.8 million for the nine months ended September 30, 2023, a decrease of $1.2 million. The reason for the decrease is due to the actions taken throughout 2023 and the first nine months of 2024 to align the two TPA companies into one amounting to approximately $1.2 million in savings. Research and Development Expenses We incurred $7 thousand of research and development expenses for the three months ended September 30, 2024 compared to $267 thousand for the three months ended September 30, 2023, a decrease of $260 thousand. The decrease is attributable to focusing our efforts and eliminating certain development projects amounting to approximately $260 thousand. We incurred $22 thousand of research and development expenses for the nine months ended September 30, 2024 compared to $1.3 million for the nine months ended September 30, 2023, a decrease of $1.3 million. The decrease is attributable to focusing our efforts and eliminating certain development projects amounting to approximately $1.3 million. 25 Depreciation and Amortization We incurred $213 thousand of depreciation and amortization expenses for the three months ended September 30, 2024 compared to $927 thousand for the three months ended September 30, 2023, a decrease of $714 thousand. This decrease was primarily due to the impairment of intangibles in September of 2024 of $273 thousand and a reduction due to software amortization by approximately $434 thousand. We incurred $2.1 million of depreciation and amortization expenses for the nine months ended September 30, 2024 compared to $3.0 million for the nine months ended September 30, 2023, a decrease of $896 thousand. This decrease was primarily due to a reduction by approximately $203 thousand in the depreciation of assets that were disposed of during the prior year, the impairment of intangibles in September of 2024 of $273 thousand and software becoming fully amortized in 2024 amounting to approximately $470 thousand, partially offset by the new patents placed into service during 2024 amounting to approximately $65 thousand. Impairment of Goodwill and Intangible Assets The Company conducts an annual impairment test of goodwill and intangible assets at December 31st or if events or circumstances exist that would indicate that the Company s goodwill may be impaired. As circumstances changed during the three months ended June 30, 2024, that would, more likely than not, reduce the Company s fair value below its net equity value, the Company performed qualitative and quantitative analyses of the potential impairment of its goodwill and intangible assets, specifically evaluating trends in market capitalization, current and future cash flows, revenue growth rates, and the impact of macroeconomic conditions on the Company and its performance. Based on the analysis performed, the Company determined that its goodwill and intangible assets were fully impaired in June 2024 due to the continuation of revenues being below management s expectations, continued operating losses and negative operating cash flows, reductions in the Company s stock price and market capitalization, and the delisting from the Nasdaq and subsequent transition to the OTCQX market in the second quarter of 2024 where the Company s common stock has been thinly traded. As a result, the Company recorded a goodwill and intangible asset impairment charge in the amount of $7.6 million in June 2024, which is reflected in the nine months ended September 30, 2024. Interest Expense, net We incurred $620 thousand of interest expense for the three months ended September 30, 2024 compared to $383 thousand for the three months ended September 30, 2023, an increase of $237 thousand. Interest expense increased primarily due to the debt to Libertas Funding LLC ( Libertas ) and JGB Collateral LLC ( JGB ) which was partially offset by the decrease in interest due to AXA S.A., a French soci t anonyme ( AXA ) for the acquisition of Maestro being partially paid down in 2023. We incurred $1.9 million of interest expense for the nine months ended September 30, 2024 compared to $1.1 million for the nine months ended September 30, 2023, an increase of $788 thousand. Interest expense increased primarily due to the debt to and JGB which was partially offset by the decrease in interest due to AXA for the acquisition of Maestro being partially paid down in 2023. 26 Comparison of the Years Ended December 31, 2023 and 2022 Years Ended December 31, 2023 2022 Change % Revenue Revenue $37,155,050 $24,341,874 $12,813,176 53% Costs and Expenses Cost of revenue (exclusive of depreciation and amortization shown separately below) 24,239,117 17,136,330 7,102,787 41% General and administrative 19,176,895 12,318,529 6,858,366 56% Sales and marketing 6,596,981 6,938,513 (341,532) -5% Information technology 5,834,255 6,372,795 (538,540) -8% Research and development 1,311,695 3,708,068 (2,396,373) -65% Depreciation and amortization 3,896,833 3,538,237 358,596 10% Impairment of goodwill 3,017,600 3,017,600 n/a Facilities 2,472,192 1,012,827 1,459,365 144% Loss on disposal of asset 335,106 273,430 61,676 23% Gain on Sale of Business Unit (1,748,641) (1,748,641) n/a Total Costs and Expenses 65,132,033 51,298,729 13,833,304 27% Operating Loss (27,976,983) (26,956,855) (1,020,128) 4% Other income and (expenses) Other income, net 488,869 234,472 254,397 108% Interest expense, net (1,527,449) (266,778) (1,260,671) 473% Foreign exchange loss (26,475) (361) (26,114) 7234% Total other expense (1,065,055) (32,667) (1,032,388) 3160% Loss before income taxes (29,042,038) (26,989,522) (2,052,516) 8% Income tax benefit (290,138) (521,132) 230,994 -44% Net Loss $(28,751,900) $(26,468,390) $(2,283,510) 9% Net loss per share, basic and fully diluted $(4.14) $(5.23) $1.09 -21% Revenue and Cost of Revenue During the years ended December 31, 2023 and 2022, our total revenue was $37,155,050 and $24,341,874 respectively. Revenues increased mainly owing to the addition of revenue derived from Maestro Health amounting to $16,683,732 (which was not included in our operating results prior to its acquisition on November 1, 2022), new services offered to existing Clients amounting to $292,811, and captive revenue of $325,905 partially offset by a decline of $4,080,498 in revenue due to the termination by the Company, effective September 2022, of a contract with a Client that failed to meet its contractual obligations. Total revenues consist of fees that we charge Clients in consideration for administering their self-insured healthcare plans as well as fees that we receive for ancillary services such as care management, case management, cost containment services, and other services provided to our customers by us or other vendors. During the years ended December 31, 2023 and 2022, our cost of revenue exclusive of depreciation and amortization was $24,239,117 and $17,136,330, respectively. The main reason for the increase in the cost of revenue was due to the addition of Maestro Health's cost of revenue, which amounted to $8,800,986 and were not included in our operating results prior the Maestro Acquisition, and an increase in cost of revenues amounting to $1,211,882 relating to the addition of a large customer, partially offset by the reduction in the cost of revenues amounting to $2,874,938 relating to the termination of the customer contract described above. Total cost of revenues consists of (i) service fees, which primarily include vendor fees associated with the Client s benefit program selections, (ii) the direct labor costs associated with claim management and processing services, and (iii) direct labor costs associated with providing customer support and services to the Clients, Members, Providers, and other external stakeholders as well as direct labor costs associated with care and case management services. 27 Research and Development Expenses We incurred $1,311,695 of research and development expenses for the year ended December 31, 2023 compared to $3,708,068 for the year ended December 31, 2022, a decrease of $2,396,373. The decrease is attributable to (i) decreased expenditures in EYME amounting to approximately $1,415,068, associated primarily with a lower number of research and development employees during 2023 as compared to 2022, (ii) a decrease in employee stock based compensation of $326,411, and (iii) in 2022, there was an allocation of $654,894 of the President of Production and Development s time to research and development expenses, with no allocation of such time to research and development in 2023 due to the change in the President of Production and Development s job responsibilities. General and Administrative Expenses We incurred $19,176,895 of general and administrative expenses for the year ended December 31, 2023 compared to $12,318,529 for the year ended December 31, 2022, an increase of $6,858,366. The increase is due to general and administrative expenses generated by the acquisition of Maestro Health amounting to $6,759,171 (which were not included in the operating results of the Company prior to the Maestro Acquisition). Sales and Marketing Expenses We incurred $6,596,981 of sales and marketing expenses for the year ended December 31, 2023 compared to $6,938,513 for the year ended December 31, 2022, a decrease of $341,532. This decrease in sales and marketing expenses was primarily due to the reduction in outside marketing of $953,029, reduced trade show cost of $492,371, partially offset by sales and marketing expenses generated by Maestro Health amounting to $1,116,283 (which were not included in the operating results of the Company prior to the Maestro Acquisition). Information Technology Expenses We incurred $5,834,255 of information technology expenses for the year ended December 31, 2023 compared to $6,372,795 for the year ended December 31, 2022, a decrease of $538,540. The decrease in information technology expenses was due to employee reassignment due to department reorganization of approximately $826,000 (ii) in 2022, there was an allocation of $654,894 of the President of Production and Development s time to information technology expenses, with no allocation of such time to information technology in 2023 due to the change in the President of Production and Development s job responsibilities, offset by additional information technology expenses generated by Maestro Health amounting to $2,279,090 (which were not included in the operating results of the Company prior to the Maestro Acquisition). Facilities expenses, depreciation and amortization We incurred facilities expenses of $2,472,192 and depreciation and amortization expenses of $3,896,833 for the year ended December 31, 2023 compared to facilities expenses of $1,012,827 and depreciation expenses of $3,538,237 for the year ended December 31, 2022. These increases were due to facilities expenses of $1,255,094 and depreciation and amortization expense of $381,119 generated by Maestro Health (which were not included in the operating results of the Company prior to the Maestro Acquisition). Loss on Disposal of Assets We incurred a $335,106 loss on disposal of assets for the year ended December 31, 2023, compared to $273,430 for the year ended December 31, 2022. This increase was primarily due to disposal of furniture and leasehold improvement assets that were no longer needed as the lease terms ended. Gain on Sale of Business Unit For the year ended December 31, 2023 we realized a $1,748,641 gain on sale of our non-core FSA/HSA business unit. Interest Expense, net We incurred $1,527,449 of interest expense for the year ended December 31, 2023, compared to $266,778 for the year ended December 31, 2022, an increase of $1,260,671. Interest expense increased primarily due to the interest accrued on outstanding debt relating to the acquisition of Maestro Health which closed on November 1, 2022. 28 Net Loss Net loss for the year ended December 31, 2023 amounted to $28,751,900 as compared to a loss of $26,468,390 for the year ended December 31, 2022. The increase in the net loss was due to increased general and administrative expenses, facilities, and goodwill impairment, partially offset by reductions in sales and marketing expenses, information technology expenses, and research and development expenses, for the reasons mentioned above. Loss per share for the year ended December 31, 2023 was $4.14, as compared to $5.23 loss per share for the year ended December 31, 2022. The loss per share for the year ended December 31, 2023 decreased mainly as a result of an increase in our weighted average number of shares due to the issuance of additional shares during the year ended December 31, 2023. The increase in weighted average common shares outstanding primarily reflects as a result of the issuances of new shares of common stock in April 2023. Liquidity and Capital Resources As of September 30, 2024, we had an accumulated deficit of approximately $97.7 million, unrestricted cash and cash equivalents of approximately $830 thousand and negative working capital of approximately $3.3 million. For the nine months ended September 30, 2024, we recognized a net loss of approximately $20.9 million and negative cash flows from operations of approximately $10.3 million. We have spent most of our cash resources on funding our operating activities. Through September 30, 2024, we have financed our operations primarily with the proceeds from loans, the issuance of convertible promissory notes and warrants, and sales of our equity securities. On January 16, 2024, we entered into a securities purchase agreement (the Second SPA ) with certain Company insiders consisting of HillCour Investment Fund, LLC ( HillCour ), an entity controlled by our Chief Executive Officer, our Chairman, and one of our directors, pursuant to which we agreed to issue and sell 1,322,100 shares of Common Stock in a private placement, at a purchase price of $0.9201 per share (or the consolidated closing bid price of our Common Stock on Nasdaq as of January 16, 2024). On April 15, 2024, we entered into a Securities Purchase Agreement (the Purchase Agreement ) with each of the purchasers that are parties thereto (each, including its successors and assigns, a Purchaser and collectively, the Purchasers ) and JGB. Pursuant to the terms of the Purchase Agreement, on April 15, 2024, the Company issued the Senior Secured Convertible Debentures (the Debentures ) due on April 15, 2027, for a principal sum of $11.83 million, subject to the redemption of $5 million at the Company s election. In accordance with the Purchase Agreement JGB purchased an aggregate of $6.35 million in principal amount of the Debentures. On June 21, 2024, the Company elected not to redeem an additional $5 million of the Debentures with JGB. On August 28, 2024, we entered into a securities purchase agreement with two investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 2,702,702 shares of its Common Stock (of which HillCour purchased 1,351,351 shares of Common Stock) in a private placement, at a purchase price of $0.481 per share (or the closing bid price of the Company s Common Stock on OTCQX as of August 28, 2024). On December 5, 2024, we entered into a securities purchase agreement with four investors, including Yaron Eitan, the Company s Chairman, Steve Johnson, our Chief Financial Officer and John Powers, our President and Chief Operating Officer, pursuant to which we agreed to issue and sell an aggregate of 621,194 shares of our Common Stock (of which Mr. Eitan purchased 110,619 shares of Common Stock, Mr. Johnson purchased 5,000 shares of Common Stock and Mr. Powers purchased 10,000 shares of Common Stock) in a private placement, at a purchase price of $1.13 per share (or the closing bid price of the Common Stock on OTCQX as of December 5, 2024). Management continues to evaluate additional funding alternatives and is seeking to raise additional funds through the issuance of equity or debt securities. If we are unable to raise additional capital moving forward, our ability to operate in the normal course and continue to invest in our product portfolio may be materially and adversely impacted and we may be forced to scale back operations or divest some or all of our assets. As a result of the above, in connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Accounting Standards Update ( ASU ) 2014-15, Disclosures of Uncertainties about an Entity s Ability to Continue as a Going Concern, management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these condensed consolidated financial statements are available to be issued. The condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern. 29 Cash Flows The following tables summarizes selected information about our sources and uses of cash and cash equivalents for the nine months ended September 30, 2024 and 2023: Comparison of the Nine Months Ended September 30, 2024 and 2023 (in thousands) Nine months Ended September 30, 2024 2023 Net cash used in operating activities $(10,251) $(15,324) Net cash provided by investing activities 27 Net cash provided by financing activities 8,567 6,432 Net decrease in cash and cash equivalents and restricted cash $(1,684) $(8,865) Net Cash Used in Operating Activities Net cash used in operating activities totaled $10.3 million for the nine months ended September 30, 2024, a decrease of $5.0 million as compared to $15.3 million for the nine months ended September 30, 2023. The primary reason for the decrease was the reduction in our net loss from the prior year. Net cash used in operating activities was primarily driven by our net loss for the period of $20.9 million, net of (i) non-cash items totaling $14.1 million and (ii) a decrease in net working capital items amounting to $3.4 million. Net Cash Provided by Investing Activities A total of $0 was provided by investing activities in the nine months ended September 30, 2024 a decrease of $27 thousand as compared to $27 thousand for the nine months ended September 30, 2023. The primary reason for the decrease was no disposal of property and equipment. Net Cash Provided by Financing Activities A total of $8.6 million was received from financing activities during the nine months ended September 30, 2024, an increase of $2.1 million compared to $6.4 million for the nine months ended September 30, 2023. The net proceeds for 2024 were provided from private offerings of common stock of $4.0 million, net proceeds from the Debentures of $5.5 million, proceeds from the sale of future cash receipts on accounts receivable of $1.5 million partially offset by the repayment of the AXA loan of $631 thousand, and payments to the buyer of receivables of $1.8 million. The net proceeds for 2023 were provided from the public offering of common stock of $6.4 million. Critical Accounting Policies and Estimates Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the applicable periods. We evaluate our estimates, assumptions and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change the results from those reported. New Accounting Pronouncements We have considered recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on our condensed consolidated financial statements. 30 Liquidity and Capital Resources for the year Ended December 31, 2023 As of December 31, 2023, we had an accumulated deficit of approximately $76.7 million, short-term debt of $0.6 million, long-term debt of $19.4 million, unrestricted cash of approximately $1.1 million and negative working capital of approximately $3.8 million. We have spent most of our cash resources on funding our operating activities. Through December 31, 2023,we financed our operations primarily with the proceeds from the issuance of convertible promissory notes and warrants as well as sales of our equity securities. In accordance with the terms of the AXA Agreement, $2,294,751, or 35% of the net proceeds from the offering, were expected to be used to pay down the debt to the seller. Based on an agreement reached with the seller 50% of the amount due or $1,147,376 was paid to the seller on July 19, 2023, and the balance will be paid no later than September 18, 2023. On September 18, 2023, we paid AXA $200,000 towards fulfilling our obligation to pay the remaining $1,147,375, and AXA agreed to receive the remaining balance of $947,375 over the course of six payments of $157,896 no later then April 2024. We expect to complete our obligation in the allotted time frame. Management continues to evaluate additional funding alternatives and is seeking to raise additional funds through the issuance of equity or debt securities. If we are unable to raise additional capital moving forward, our ability to operate in the normal course and continue to invest in its product portfolio may be materially and adversely impacted and we may be forced to scale back operations or divest some or all of our assets. As a result of the above, in connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Accounting Standards Update ( ASU ) 2014-15, Disclosures of Uncertainties about an Entity s Ability to Continue as a Going Concern, management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these consolidated financial statements are available to be issued. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern. On December 14, 2023, we, through Maestro Health, entered into an asset purchase agreement (the Asset Purchase Agreement ) with Payflex Systems USA, Inc. ( Payflex ), pursuant to which we agreed to sell certain of our assets relating to our consumer directed benefits business. Pursuant to the Asset Purchase Agreement, Payflex agreed to pay us $1 million in cash as well as assume certain liabilities. In addition, provided that two customer agreements remain in place by January 1, 2025 and September 1, 2024, respectively, Payflex shall pay an additional contingent fee of $500,000 per Client. The Asset Purchase Agreement contains customary representations and warranties and covenants. The transaction contemplated by the Asset Purchase Agreement closed on December 14, 2023. On December 14, 2023, we entered into a securities purchase agreement (the First SPA ) with HillCour Investment Fund, LLC, an entity controlled by our Chief Executive Officer, Damien Lamendola, pursuant to which we agreed and sold 150,000 shares of common stock in a private placement, at a purchase price of $1.97 per share. On January 16, 2024, we entered into a securities purchase agreement (the Second SPA ) with certain Company insiders consisting of HillCour Investment Fund, LLC, our Chairman, Yaron Eitan, and one of our directors, Robert Pons, pursuant to which we agreed and sold 1,322,100 shares of our common stock in a private placement, at a purchase price of $0.9201 per share (the consolidated closing bid price of our common stock on Nasdaq as of January 16, 2024). The securities issued in the First SPA and Second SPA are exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder. The securities have not been registered under the Securities Act and may not be sold in the United States absent registration or an exemption from registration. 31 On February 5, 2024, we entered into an Agreement of Sale of Future Receipts (the Libertas Agreement ) with Libertas Funding LLC ( Libertas ) to sell future receipts totaling $2,193,000 for a purchase price of $1,700,000. The future receipts sold were to be delivered weekly to Libertas at predetermined amounts over a period of nine months. The agreement contains an early delivery discount fee for delivering the future receivables before the expatriation of the Libertas Agreement and other provisions. Our Chief Executive Officer, Damien Lamendola, provided a guarantee for the funding agreement through various entities he controls. On March 7, 2024, we entered into a securities purchase agreement with HillCour Investment Fund, LLC, an entity controlled by the Company s Chief Executive Officer, Damien Lamendola, pursuant to which we agreed to and sold 910,000 shares of common stock in a private placement, at a purchase price of $1.65 per share. Cash Flows The following table summarizes selected information about our sources and uses of cash, cash equivalents and restricted cash for the years ended December 31, 2023 and 2022: Comparison of the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 Net cash used in operating activities $(15,749,206) $(35,239,299) Net cash (used in) provided by investing activities 1,026,912 32,422,576 Net cash provided by financing activities 5,096,562 196 Net decrease in cash and cash equivalents and restricted cash $(9,625,732) $(2,816,527) Net Cash Used in Operating Activities Net cash used in operating activities totaled $15,749,206 for the year ended December 31, 2023 and $35,239,299 for the year ended December 31, 2022, a decrease of $19,490,093 in net cash used in operations. Net cash used in operating activities for the year ended December 31, 2023 was primarily driven by our net loss for the year of $28,751,900 partially offset by non-cash items totaling approximately $10,658,231 as well as a decrease in net working capital items amounting to approximately $2,344,462. Net Cash Provided by Investing Activities A total of $1,026,912 was used in investing activities in the year ended December 31, 2023 and $32,422,576 provided the year ended December 31, 2022, a decrease of $31,395,664. The decrease in net cash provided by investing activities was mainly due to the cash and restricted cash acquired as part of the Maestro Health Acquisition during the year ended December 2022, partially offset by proceeds from sale of a business unit of $1,000,000 during the year ended December 31, 2023. Net Cash Provided by Financing Activities Financing activities provided net cash of $5,096,562 and $196 during the years ended December 31, 2023 and 2022, respectively. In 2023 the cash provided from financing activities was primarily from common stock issuances in a public offering offset by the repayment of the AXA Loan of $1,663,168 compared to 2022 when it was related to proceeds from the exercise of options. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the applicable periods. We evaluate our estimates, assumptions and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our consolidated financial statements, which, in turn, could change the results from those reported. 32 Critical accounting policies that were impacted by the estimates, judgments and assumptions used in the preparation of our consolidated financial statements are discussed below. Capitalized Software We comply with the guidance of ASC Topic 350-40, Intangibles Goodwill and Other Internal Use Software , in accounting for the Company s internally developed system projects that we utilize to provide our services to customers. These system projects generally relate to the Company s software that is not intended for sale or otherwise marketed. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Once a project has reached the development stage, we capitalize direct internal and external costs until the software is substantially complete and ready for its intended use. Costs for upgrades and enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred. These capitalized software costs are amortized on a project by- project basis over the expected economic life of the underlying software on a straight-line basis, which is generally three to five years. Amortization commences when the software is available for its intended use. Goodwill Goodwill is recognized and initially measured as any excess of the acquisition-date consideration transferred in a business combination over the acquisition-date amounts recognized for the net identifiable assets acquired. Goodwill is not amortized but is tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not result in an impairment of goodwill. We operate in one reporting segment and reporting unit; therefore, goodwill is tested for impairment at the consolidated level. First, we assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than it s carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a quantitative goodwill impairment test comparing the fair value of the applicable reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, we recognize an impairment loss in the consolidated statement of operations for the amount by which the carrying amount exceeds the fair value of the reporting unit. We perform the annual goodwill impairment test on December 31, 2023. The Company s analysis led to the write off of approximately $3.0 million in goodwill.. We performed a quarterly impairment test on June 30, 2024. The Company s Analysis led to the write off of the approximate remainder of $3.0 million in goodwill. Income Taxes We account for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis, net operating losses, tax credit and other carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates when the assets and liabilities are expected to be realized or settled. We regularly review deferred tax assets for realizability and establishes valuation allowances based on available evidence including historical operating losses, projected future taxable income, expected timing of the reversals of existing temporary differences, and appropriate tax planning strategies. If our assessment of the realizability of a deferred tax asset changes, an increase to a valuation allowance will result in a reduction of net earnings at that time, while the reduction of a valuation allowance will result in an increase of net earnings at that time. We follow ASC Topic 740-10-65-1 in accounting for uncertainty in income taxes by prescribing rules for recognition, measurement, and classification in financial statements of tax positions taken or expected to be in a tax return. This prescribes a two-step process for the financial statement measurement and recognition of a tax position. The first step involves the determination of whether it is more likely than not (greater than 50 percent likelihood) that a tax position will be sustained upon examination, based on the technical merits of the position. The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized in the financial statements at the largest amount of benefit that is a greater than 50 percent likelihood of being realized upon ultimate settlement. This topic also provides guidance on the accounting for related interest and penalties, financial statement classification and disclosure. Our policy is that any interest or penalties related to uncertain tax positions are recognized in income tax expense when incurred. We have no uncertain tax positions or related interest or penalties requiring accrual on December 31, 2023 and December 31, 2022. 33 Revenue Recognition We recognize revenue when control of the promised services is transferred to our customers in an amount that reflects the consideration expected to be entitled to in exchange for those services. As we complete our performance obligations, which are identified below, we have an unconditional right to consideration, as outlined in our contracts. All of our contracts with customers obligate us to perform services. Services provided include health and welfare administration, dependent eligibility verification, COBRA administration, benefit billing, clinical care, and cost containment. Revenue is recognized over time as services are provided as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report claims, and control of these services is transferred to the customer. We have the right to receive payment for all services rendered. The transaction price of a contract is the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer. To determine the transaction price of a contract, we consider our customary business practices and the terms of the contract. For the purpose of determining transaction prices, we assume that the services will be transferred to the customer as promised in accordance with existing contracts and that the contracts will not be canceled, renewed, or modified. Our contracts with customers have fixed fee prices that are denominated per employee per month. We include amounts of variable consideration in a contract s transaction price only to the extent that it is probable that the amounts will not be subject to significant reversals (that is, downward adjustments to revenue recognized for satisfied performance obligations). In determining amounts of variable consideration to include in a contract s transaction price, we rely on our experience and other evidence that supports our qualitative assessment of whether revenue would be subject to a significant reversal. We consider all the facts and circumstances associated with both the risk of a revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. Share-Based Compensation We account for share-based awards issued to employees in accordance with ASC Topic 718, Compensation Stock Compensation . In addition, we issue share-based compensation to non-employees in exchange for consulting services and accounts for these in accordance with the provisions of Accounting Standards Update ( ASU ) 2018-07, Improvements to Nonemployee Share-Based Payment Accounting ( ASU 2018-07 ). Compensation expense is measured at the grant date, based on the calculated fair value of the award, and recognized as an expense over the requisite service period, which is generally the vesting period of the grant. For modification of share-based payment awards, we record the incremental fair value of the modified award as share-based compensation on the date of modification for vested awards or over the remaining vesting period for unvested awards. The incremental compensation is the excess of the fair value of the modified award on the date of modification over the fair value of the original award immediately before the modification. The sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date is recognized over the requisite service period. We estimate the expected term of our stock options granted to employees using the simplified method, whereby the expected term equals the average of the vesting term and the original contractual term of the option. We utilize this method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. For stock options granted to non-employees, we utilize the contractual term of the option as the basis for the expected term assumption. All other assumptions used to calculate the grant date fair value are generally consistent with the assumptions used for options granted to employees. For the purpose of calculating share-based compensation, we estimate the fair value of stock options using a Black-Scholes option-pricing model. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The expected volatility is based on the historical volatility of company data while the expected life of the stock options is based on historical and other economic data trended into the future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected option term. The dividend yield assumption is based on our history and expectation of no dividend payouts. If factors change and we employ different assumptions, share-based compensation expense may differ significantly from what has been recorded in the past. If there is a difference between the assumptions used in determining share-based compensation expense and the actual factors which become known over time, specifically with respect to anticipated forfeitures, we may change the input factors used in determining share-based compensation costs for future grants. These changes, if any, may materially impact our results of operations in the period such changes are made. Incremental compensation costs arising from subsequent modifications of awards after the grant date are recognized when incurred. In addition, we account for forfeitures of awards as they occur. For share-based awards that vest based on performance conditions, expense is recognized when it is probable that the conditions will be met. 34 BUSINESS Our Business Marpai, Inc. is a technology platform company, which operates as a national TPA through its subsidiaries, which uses AI and data analytics combined with cost containment programs to help our Clients lower their cost of healthcare by enabling better health outcomes for their employees and families. Our mission is to positively change healthcare for the benefit of (i) our Clients who are self-insured employers that pay for their employees healthcare benefits and engage us to administer the Members' healthcare claims, and we refer to them as our Clients , (ii) employees and their family members who receive these healthcare benefits from our Clients, and we refer to them as our Members , and (iii) healthcare providers including, doctors, doctor groups, hospitals, clinics, and any other entities providing healthcare services or products, and we refer to them as the Providers. We provide affordable, intelligent, healthcare programs for self-insured Clients in the U.S. Market Overview According to the CMS, in 2022 U.S. healthcare spending reached $5 trillion, creating significant market opportunities for technology and service providers who help manage costs, improve member experience, and provide other solutions to health plans and plan sponsors. More employers, particularly among the small and mid-sized enterprises ("SME"), are taking advantage of innovative captive and consortium models to move towards self-insuring and gaining greater control over their healthcare spending compared to the fully insured model. Self-insuring enables an employer to capture the margin an insurance company would otherwise take while also enabling significant savings as an employer does a better job managing its member population. Health plans and employers increasingly looking for technologies and strategies to control costs, including payment integrity, care management, care navigation, reference-based pricing, claims repricing, centers of excellence, specialty/narrow networks, and subrogation. Point solutions continue to consolidate while TPAs and direct primary care providers have become increasingly strategic relationships for the SME and a natural consolidator of cost containment technologies and services. Market Opportunities Since 1999, there has been a nearly 47% increase in employee lives shifting to self-funded plans according to the Kaiser Family Foundation. Marpai is transforming the self-funded employer health plan market through cutting-edge technology and an exclusive Marpai Saves network for enhanced outcomes and reduced cost. Our goal is to use our Clients claim data to identify in advance potential healthcare issues. We provide the tools for our Members, who are mindful and stay out of their way. We support those Members who may need additional support to address health concerns at an earlier stage, allowing for more cost-effective treatment Our Products and Services We derive our revenues from three general sources: Health Plan Administration services, Ancillary In-House services, and Third-Party Vendor services. Health Plan Administration Services Our core service offering includes handling all aspects of administration related to a healthcare plan. We typically design for our Client a healthcare benefit plan which allows the Client to define the coverage it would like to provide to its employees. We then manage the plan for the Client by providing the following services: Providing Members access to a provider network via relationships with Aetna, Cigna, and regional networks; Answering Members calls and requests related to their health plan via phone, email and via our mobile app; High touch services to help Members find providers and care management as well as to answer questions, including claims and benefits; 35 Validating and adjudicating claims from Members, including automated adjudication; Promoting health and use of high-quality medical professionals to the Member population; Paying claims on behalf of our Clients; and Sourcing stop-loss insurance via our underwriters. We do not bear the financial risk with respect to the cost of the claims for any Client. The risk is borne by the self-insured Clients and insurance companies, if the Client purchased stop-loss insurance policies to protect themselves from having higher than planned healthcare costs. We sell complementary services to our Clients including care management, case management, actuarial services, and bill review services. Our margin on these services varies greatly, but each service makes the overall package for our Clients more complete. In-House Ancillary Services Our In-House Ancillary Services are derived from our in-house products related to our role as the administrator of the Clients' health plans but are ancillary to paying claims such as; Clinical Care Management a nurse-led, proactive guide for at-risk Members across the care continuum so they get the right high-quality care at the right time and avoid excessive, inappropriate, and overpriced care. Instead of simply treating a condition, the nurses take a personal, holistic approach, to help Members. Repricing Insights out-of-network claims are a reality for any health plan. This product encompasses all the negotiation and adjudication related to out-of-network claims. Clients often save up to 60% on their out-of-network claims versus the initial billed amount. Marpai PACCS Pharmacy Advocacy Cost Containment Solution is our Member-driven pharmacy savings program that focuses on specialty and high-cost medications designed to generate up to 75% savings. MarpaiRx our new, national pharmacy benefit management program that saves Clients and Members money and delivers a high-touch Member experience. We grant access to prescriptions at affordable rates and coordinate pharmacy and medical benefits to ensure that the right care is delivered and paid for in a way that reduces the overall cost of healthcare. We disclose all rebate information to our clients. Third Party Services Some of our revenues are derived from services that are provided to our Clients and Members by third party vendors. We typically pass through most of these revenues to these vendors and their contribution to our gross profit is relatively small. These services include network access fees that are charged by the provider networks (such as Aetna or Cigna) which are used by our Members when they visit network providers (doctors, hospitals etc.) as well as some cost containment services, and other services provided by third party vendors (i.e. not by us). Company Goals We strive to be the leader in affordable, intelligent, healthcare for self-funded employers. Our approach delivers enhanced quality, lower healthcare costs and improved outcomes for our members. We are utilizing our competency in AI to drive efficiencies in operations and increase profitability. We will apply the lessons learned through our recent acquisition of Maestro Health to develop a plug and play roadmap to potentially integrate future TPA acquisitions. We see a significant opportunity to capitalize on the large fragmented TPA market with favorable macro-economic trends. Technology Delivers Superior Value Marpai Saves We bring deep learning and data analytics to the rapidly growing, TPA sector to deliver affordable, intelligent, healthcare to employers and their health plan members. We proactively engage Members in an effort to reduce avoidable, excessive, inappropriate and overpriced care. We use AI to identify and connect at-risk members to proven clinical solutions early, remind Members to have annual exams and guides them to low-cost, quality in-network providers. The myMarpai app is a personal health guide that gives members on-demand access to benefits, costs, deductibles, telehealth and more. 36 Government Regulation Overview The healthcare industry is highly regulated and continues to undergo significant changes as third-party payers, such as Medicare and Medicaid, traditional indemnity insurers, managed care organizations and other private payers, increase efforts to control cost, utilization, and delivery of healthcare services. Healthcare companies are subject to extensive and complex federal, state, and local laws, regulations, and judicial decisions. Fraud and Abuse Health care fraud and abuse laws have been enacted at the federal and state levels to regulate both the provision of services to government program beneficiaries and the methods and requirements for submitting claims for services rendered to such beneficiaries. In addition, certain fraud and abuse laws may extend to payer sources other than federal or state-funded programs. Under these laws, individuals and organizations can be penalized for various activities, including submitting claims for services that are not provided, are billed in a manner other than as actually provided, are not medically necessary, are provided by an improper person, are accompanied by an illegal inducement to utilize or refrain from utilizing a service or product, or are billed in a manner that does not comply with applicable government requirements. Both individuals and organizations are subject to prosecution under the criminal and civil fraud and abuse statutes relating to health care providers. Noncompliance with the Anti-Kickback Law can result in civil, administrative and/or criminal penalties, restrictions on the ability to operate in certain jurisdictions, and exclusion from participation in Medicare, Medicaid or other federal healthcare programs. In addition, non-compliance can result in the need to curtail and/or restructure operations. Any penalties, damages, fines, exclusions, curtailment or restructuring of operations could adversely affect the ability to operate a business, financial condition, and results of operations. A violation of the Anti-Kickback Law can serve as a false or fraudulent claim for purposes of the civil False Claims Act and the civil monetary penalties statute. The so-called Stark Law prohibits physician referrals of Medicare patients to an entity providing certain designated health services if the physician or an immediate family member of the physician has any financial relationship with the entity and the financial relationship does not fall within one of the enumerated exceptions to the Stark Law. The Stark Law also prohibits state receipt of federal Medicaid matching funds for services furnished pursuant to a prohibited referral. In addition to the Stark Law, many states have their own self-referral bans, which may extend to all self-referrals, regardless of the payer. The federal False Claims Act imposes liability for the submission (or causing the submission) of false or fraudulent claims for payment to the federal government, including for certain violations of the Stark Law. The knowing and improper failure to return an overpayment can serve as the basis for a False Claims Act action and Medicare and Medicaid overpayments must be reported and returned within 60 days of identification. Furthermore, violation of the Stark Law also resulted in denial of payment for the underlying testing services. The private parties (known as qui tam relators ) of the False Claims Act allow a private individual to bring an action on behalf of the federal government and to share in any amounts paid by the defendant to the government in connection with the action. Various states have enacted similar laws modeled after the False Claims Act that apply to items and services reimbursed under Medicaid and other state health care programs, and, in several states, such laws apply to claims submitted to all payers. The federal Healthcare Fraud Statute prohibits the knowing and willful execution of a scheme to defraud any health care benefit program, including a private insurer. It also prohibits falsifying, concealing or covering up a material fact or making any materially false, fictitious, or fraudulent statement in connection with the delivery of or payment for health care benefits, items, or services. In addition, state analogs often prohibit similar conduct. 37 The federal False Claims Act also provides that private parties may bring an action on behalf of (and in the name of) the United States to prosecute a federal False Claims Act violation. These qui tam relators may share in a percentage of the proceeds that result from a federal False Claims Act action or settlement. A person or entity found to have violated the federal False Claims Act may be held liable for a per claim civil penalty. For penalties assessed after June 19, 2020, whose associated violations occurred after November 2, 2015, the penalties range from $11,665 to $23,331 for each false claim, plus three times the amount of damages sustained by the government. The minimum and maximum per claim penalty amounts are subject to annual increases for inflation. Many states have also adopted some form of anti-kickback and anti-referral laws and false claims acts and civil monetary penalties and other fraud and abuse provisions that apply regardless of payer, in addition to items and services reimbursed under Medicaid and other state programs. A determination of liability under such laws could result in fines, penalties, and exclusion, as well as restrictions on the ability to operate in these jurisdictions. State and Federal Privacy and Data Security Laws The Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (HIPAA) and the Health Information Technology for Economic and Clinical Health Act of 2009 and its implementing regulations (HITECH) govern the collection, use, disclosure, maintenance and transmission of identifiable patient information ( Protected Health Information or PHI ). HIPAA and HITECH apply to covered entities, which may include health plans as well as to those entities that contract with covered entities ( Business Associates ). HITECH imposes breach notification obligations that require the reporting of breaches of Unsecured Protected Health Information or PHI that has not been encrypted or destroyed in accordance with federal standards. Furthermore, the regulations established standard data content and format requirements for submitting electronic claims and other administrative health transactions. Health care providers and health plans are required to use standard formats when transmitting claims, referrals, authorizations, and certain other transactions electronically. Business Associates are subject to potentially significant civil and criminal penalties for violating HIPAA. In addition to HIPAA, we are subject to other state and federal laws and regulations that address privacy, data protection and the collection, storing, sharing, use, transfer, disclosure and protection of certain types of data. Such regulations include the CAN-SPAM Act, the Telephone Consumer Protection Act of 1991, Section 5(a) of the Federal Trade Commission Act, and the California Consumer Privacy Act ( CCPA ), as amended by the California Privacy Rights Act ( CPRA ), which, where applicable, provides consumers with additional privacy rights. In addition, other federal and state laws afford additional protections to certain categories of sensitive information. Such protections are commonly afforded to substance abuse, mental health, or information concerning certain contagious diseases. In addition to the federal privacy and security laws and regulations, most states have enacted data security laws, and breach notification laws, governing other types of personal data such as employee and customer information. State Managed Care Laws State insurance and managed care laws and regulations regulate contractual relationships with managed care organizations, utilization review programs and third-party administrator activities. These regulations differ from state to state, and may contain network, contracting, and financial and reporting requirements, as well as specific standards for delivery of services, payment of claims, and adequacy of health care professional networks. These laws may apply to us in the event we engage in business transactions with state managed care programs. 38 State Laws Governing Licensure of Healthcare Professionals State professional licensing boards contain requirements for the licensure of health care professionals and typically require a healthcare professional who is providing professional services in that state to be licensed. Some state licensing boards specifically address the licensure of professionals who are providing services via telephone or other electronic means. The requirements for licensure generally apply where individuals are engaged in a licensed activity. If we elect to hire a licensed professional to engage in a licensed profession, those individuals may be subject to state licensing laws. In addition, hiring licensed professionals may implicate state prohibitions on the corporate practice of medicine. Employees As of December 31, 2023, we had a total of 162 full-time employees. None of them are parties to any labor agreements or are represented by a labor union. As we previously reported, we have made several reductions in our headcount primarily through attrition, elimination of duplicate positions, and the sale of a non-core operation late in 2023, resulting in a decrease in our number of employees. Competition Although we believe that the services we offer our Clients are differentiated, we operate in a highly competitive market. We only provide administrative services to self-insured employers who provide healthcare benefits to their employees. These self-insured employers can always elect to abandon self- insurance and simply buy medical insurance from one of the large players such as, Aetna, Cigna, or United Healthcare. There can be no assurances that our Clients or prospective Clients will remain self-insured for any given period. If the number of employers which choose to self-insure declines, the size of our targeted market will shrink. Also, there are other technology-driven companies focused on creating a TPA business among self- insured employers. Like us, they provide machine learning predictions models targeted at measuring risks for their employees, identifying members susceptible to adverse healthcare events before they occur, and provide proactive guidance for preventive care. We compete with nearly 1,000 health insurance entities, all of whom are vying for the same business the management of healthcare benefits for self-insured employers. There is only one TPA at a time for every employer wanting to provide health benefits via a self-insured model, and an employer may remain with the same TPA for many years. This means that although the market is very large, not all of it is accessible by us in any one year. In addition to the very large health insurance companies, there are new players in the market such as Collective Health, Bind Health Insurance, Bright Health Group (NYSE: BHG), Oscar Health, Inc. (NYSE: OSCR) and Centivo, which have all raised substantial venture capital funds, are pursuing a strategy similar to ours, and share our vision to use technology to transform the healthcare payer space. We believe that like us, Collective Health and Clover Health are also targeting at self-insured employers. Although all of them are relatively young companies, they have products in the market and are known to provide technology- driven TPA services. These companies claim to save employers money and also claim to have high retention rates. We believe our AI-enabled predictions further differentiate our solution by being able to steer Members to the appropriate Providers sooner. The ultimate gauge of success in our market will be who can help employers reduce the growth of long-term healthcare spending while also improving the quality of healthcare solutions. 39 LEGAL PROCEEDINGS From time to time, the Company may be subject to other legal proceedings, claims, investigations, and government inquiries (collectively, legal proceedings) in the ordinary course of business. It may receive claims from third parties asserting, among other things, infringement of their intellectual property rights, defamation, labor and employment rights, privacy, and contractual rights. There are no currently pending legal proceedings that the Company believes will have a material adverse impact on the Company s business or condensed consolidated financial statements. 40 MANAGEMENT Our directors and executive officers, their ages, positions currently held, and duration of such, are as follows: Name Age Position Date First Elected or Appointed Damien Lamendola 69 Chief Executive Officer and Director November 6, 2023 Steve Johnson 54 Chief Financial Officer November 6, 2023 John Powers 57 President & Chief Operating Officer January 11, 2024 Yaron Eitan 68 Chairman of the Board of Directors April 1, 2021 Sagiv Shiv 67 Director February 1, 2023 Mohsen Moazami 64 Director March 30, 2022 Colleen DiClaudio 46 Director October 28, 2021 Jennifer Calabrese 54 Director December 7, 2023 Robert Pons 68 Director December 7, 2023 Business Experience The following is a brief account of the education and business experience of each director and executive officer during at least the past five years, indicating each person s principal occupation during the period, and the name and principal business of the organization by which they were employed. Damien Lamendola, Chief Executive Officer and Director Mr. Lamendola has served as our Chief Executive Officer since November 2023. He joined our board of directors on April 1, 2021. Mr. Lamendola founded Continental Benefits, LLC in 2013 and was previously the Chief Executive Officer until 2019. Mr. Lamendola has served as President of HillCour Holding Corporation (f/k/a Welldyne Holding Corp.) since March 2002, and he continues to serve in this role. Mr. Lamendola also continues to serve HillCour Holding Corporation as a Board Member since 2017, WellDyneRx, LLC as a Board Member since 2017, and HillCour Investment Fund, LLC as Manager since 2017. As President of HillCour Holding Corporation, Mr. Lamendola leads and oversees all strategic operations of multiple operating companies in the health care space. He received a B.S. from McNeese State University and an M.B.A. from Washington University. We believe that Mr. Lamendola is qualified to serve as a member of our board of directors based on his perspective and experience building and leading strategic corporate operations and his expertise in the healthcare industry. Steve Johnson, Chief Financial Officer Mr. Johnson has served as our Chief Financial Officer since November 2023. Mr. Johnson has served as CFO and advisory board member of HillCour Holding Corporation (f/k/a Welldyne Holding Corp.) since September 2016, an investment firm with holdings in various healthcare companies. Mr. Johnson previously served as Chief Financial Officer of Continental Benefits, LLC which was subsequently acquired by the Company in April 2021. He received a B.B.A from The George Washington University and an M.B.A from Columbia Business School with dual concentrations in Accounting and Finance. 41 John Powers, President and Chief Operating Officer Mr. Powers has served as our President and Chief Operating Officer since January 2024. Prior to that, Mr. Powers served as the Chief Executive Officer for Homestead Strategic Holdings. From May 2021 through May 2022, he served as Vice President of Healthcomp Holdings, a privately held third party administrator, where he managed the integrated solutions while driving an industry-leading client-based Net Promoter Score (NPS) of 80. Prior to those roles, from July 2012 to May 2021, Mr. Powers served as Executive Vice President and Principal of Advanced Medical Pricing Solutions (AMPS) a leading healthcare cost containment company. In these positions, Mr. Powers was instrumental in driving tens of millions of dollars in savings for his clients. He received a B.A. from Millikin University. Yaron Eitan, Chairman of the Board of Directors Mr. Eitan has served as Chairman of our board of directors since April 1, 2021. He served as Chairman of the board of directors of Marpai Health since its inception in February 2019. Mr. Eitan has also served as a member of the board of directors of Nano Dimension, Ltd. (Nasdaq: NNDM) since April 2020, and he continues to serve in this role. He served as Executive Chairman of the board of directors of DeepCube Ltd. from February 2017 to March 2021. Mr. Eitan also continues to serve Emporus, Ltd. as Chairman since February 2020, and Selway Capital LLC as Managing Partner since December 2008. Mr. Eitan is a technology entrepreneur and investor of private and publicly traded companies with over 30 years of experience. He is the Chairman of deep learning company Emporus Technologies, Ltd. Previously, he was the Chairman of deep learning company DeepCube, Ltd. and co-founder and co-Chairman of 340Basics Technologies. He was a Partner at CNTP, a multi-stage investment fund, where he led all Israeli investments, and he has been a member of the board of directors of several technology companies. He received a B.S. from Haifa University and an M.B.A. from The Wharton School of the University of Pennsylvania. We believe that Mr. Eitan is qualified to serve as a member of our board of directors based on his significant technology and entrepreneurship expertise, the perspective he brings as the former Chairman of Marpai Health, and his deep learning background. Sagiv Shiv, Director Mr. Shiv joined our board of directors on February 1, 2023. Since 2023, Mr. Shiv has served as the Managing Director and the Head of M&A and Advisory Services at Aldwych Capital Partners. His professional experience includes leading the M&A and Advisory teams at National Securities Corp., StoneX Inc. and Merriman Capital. Mr. Sagiv has advised governments, agencies, private and public companies, and financial institutions, with a particular focus on cross-border and international assignments. Mr. Shiv also serves on the board of directors and is the chairman of the audit committee of Lomiko Metals Inc. (TSX-V:LMR) since December 2021. He has served on the boards of several publicly-traded companies, as well as on the boards of private entities and charities. Mr. Sagiv lectures at the IESE Graduate School of Business and the Griffith School of Management at Emanuel University, he has served as a peer reviewer on international finance for the Journal of Financial Management and Global Finance Journal and has advised on several published academic papers. Sagiv was an associate editor of the Nanotechnology Law & Business Journal, a member of the American Finance Association and the Financial Management Association. Mr. Sagiv holds a B.Sc. in Finance and Ph.D. International Finance. Mr. Sagiv is the recipient of the M&A Deal of the Year Award (cross-border, under $500 mil) for 2014 and of the Turnaround Deal of the Year Award (healthcare, under $50 mil) for 2019. Mr. Shiv holds Series 7, 63, 24 and 99 securities licenses with FINRA. We believe Mr. Shiv is qualified to serve on our board of directors based on his business and capital markets experience and relationships and contacts. 42 Mohsen Moazami, Director Mr. Moazami joined our board of directors on March 30, 2022. Mr. Moazami has had a distinguished career in the technology industry spanning various roles from, founder/Chief Executive Officer leading his company to a strong exit (Accenture), Fortune 50 executive and venture capital investing. He is a 2010 recipient of Ellis Island Medal of Honor. Since March 2019, Mr. Moazami has served as the Managing Partner of Seif Capital, a venture capital and advisory firm he founded. Since February 2021, he has also served as Chairman of the Board of Astrea Acquisition Corporation (Nasdaq: ASAXU). From April 2013 to December 2018, Mr. Moazami served as Managing Director of CNTP, a novel global tech investment firm he founded to combine the best attributes of venture capital and private equity business models. Prior to this, he spent 11 years as a member of the Cisco executive staff where he most recently was on the senior leadership team of the Emerging Markets which covered 132 countries. He has served on a variety of boards including Zoomdata, Aerospike, vArmour, Frame, Deep Instinct and Kaazing. Mr. Moazami received a Bachelor of Science from University of California, San Diego and a Masters in Engineering from Stanford University. We believe Mr. Moazami is qualified to serve on our board of directors based on his business experience and relationships and contacts. Colleen DiClaudio, Director Ms. DiClaudio joined our board of directors on October 28, 2021. Ms. DiClaudio has served as President and Founder of 340B Technologies d/b/a Nuvem since August 2014, and she continues to serve in this role. Ms. DiClaudio also continues to serve SRAX, Inc. as a member of its board of directors since September 2017, and she served as vice president of business development of CompleteCare Health Network from June 2009 through August 2014. As President and Founder of 340B Technologies DBA Nuvem, Ms. DiClaudio oversees day-to-day operations. She received a master s degree of Public Health from the University of Medicine and Dentistry of New Jersey and a bachelor s degree in Public Health from Stockton University. We believe that Ms. DiClaudio is qualified to serve as a member of our board of directors based on her experience in business development and the healthcare technology sector, as well as her entrepreneurial background. Jennifer Calabrese, Director Ms. Calabrese has served as a member of our board of directors since December 2023. Ms. Calabrese is the founder and Chief Executive Officer of Calabrese Consulting, LLC ( CCL ). Founded in 2012, CCL is a woman-owned, full-service accounting and advisory firm with over 40 employees, serving more than 350 clients around the world. Ms. Calabrese is a Certified Public Accountant, a Chartered Global Management Accountant, and a member of both The American Institute of Certified Public Accountants and The New York State Society of Certified Public Accountants. We believe that Ms. Calabrese is qualified to serve as a member of our board of directors based on her nearly 30 years of expertise in finance and accounting along with her service as an adjunct assistant professor in Accounting for Hofstra University. Robert Pons, Director Mr. Pons has served as a member of our board of directors since December 2023. Mr. Pons has served on the board of directors of fifteen publicly traded companies, utilizing his more than forty years of hands-on operating experience as a Chief Executive Officer and in senior executive positions in high growth companies and companies in need of turnaround strategies. Mr. Pons has served as President and Chief Executive Officer of Spartan Advisors, Inc., a management consulting firm specializing in telecom and technology companies, since January 2017. We believe that Mr. Pons is qualified to serve as a member of our board of directors based on his service on the board of directors of fifteen publicly traded companies, utilizing his more than forty years of hands-on operating experience as a Chief Executive Officer and in senior executive positions in high growth companies and companies in need of turnaround strategies. There are no family relationships between any of the directors or officers named above. 43 Number and Terms of Office of Officers and Directors Our Board has seven members, six of whom are deemed independent under SEC rules. Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our Board is authorized to appoint persons to the offices set forth in our certificate of incorporation as it deems appropriate. Director Independence Because our common stock is not currently listed on a national securities exchange, we currently use the definition in Nasdaq Listing Rule 5605(a)(2) for determining director independence, which provides that an "independent director" is a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot be considered independent if: the director is, or at any time during the past three years was, an employee of the company; the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service); a family member of the director is, or at any time during the past three years was, an executive officer of the company; the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient's consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or the director or a family member of the director is a current partner of the Company's outside auditor, or at any time during the past three years was a partner or employee of the company's outside auditor, and who worked on the company's audit. We have determined that Sagiv Shiv, Mohsen Moazami, Colleen DiClaudio, Robert Pons, , and Jennifer Calabrese meet this definition of independence. Committees of the Board of Directors Our Board has two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors, though we are not currently listed on a national securities exchange and are not subject to the Nasdaq rules. Each committee operates under a charter that has been approved by our board and has the composition and responsibilities described below. The charter of each committee is available on our website. 44 Audit Committee We have established an audit committee of the board of directors. Mr. Shiv, Ms. DiClaudio and Ms. Calabrese serve as members of our audit committee. Mr. Shiv serves as the chairman of the audit committee. Each member of the audit committee meets the financial literacy requirements of Nasdaq, though we are not subject to Nasdaq rules, and our board of directors has determined that Sagiv Shiv qualifies as an audit committee financial expert as defined in applicable SEC rules and has accounting or related financial management expertise. The audit committee s duties, which are specified in the charter adopted by us and include, but are not limited to: meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems; monitoring the independence of the independent registered public accounting firm; verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; inquiring and discussing with management our compliance with applicable laws and regulations; pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed, and establishing pre-approval policies and procedures; appointing or replacing the independent registered public accounting firm; determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; monitoring compliance on a quarterly basis and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance; obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm s independence; reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities; reviewing and discussing with management and the independent registered public accounting firm the annual audited consolidated financial statements, and recommending to the board whether the consolidated financial statements should be included in our Annual Report on Form 10-K; approving reimbursement of expenses incurred by our management team in identifying potential target businesses; and reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval. 45 Compensation Committee We have established a compensation committee of our board of directors. The members of our compensation committee are Robert Pons and Colleen DiClaudio. Colleen DiClaudio serves as chairman of the compensation committee. We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including: reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer s compensation, evaluating our Chief Executive Officer s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; reviewing and approving the compensation of all of our other Section 16 executive officers; reviewing our executive compensation policies and plans; implementing and administering our incentive compensation equity-based remuneration plans; assisting management in complying with our proxy statement and annual report disclosure requirements; approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; producing a report on executive compensation to be included in our annual proxy statement; and reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the SEC. Director Nominations We do not have a standing nominating committee, though we intend to form a corporate governance and nominating committee as and when required to do so by law. A majority of the independent directors may recommend a director nominee for selection by the board of directors. The Board believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate in the consideration and recommendation of director nominees are Sagiv Shiv and Colleen DiClaudio, and all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place. The Board will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Compensation Committee Interlocks and Insider Participation None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors. Code of Ethics We adopted a Code of Ethics applicable to our directors, officers, and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. 46 EXECUTIVE COMPENSATION Summary Compensation Table The following table provides summary information concerning cash and non-cash compensation paid or accrued for the fiscal years ending December 31, 2023 and 2022 to our named executive officers. Stock Salary Bonus Awards All Other Total Name and Principal Position Year ($) ($) ($) Compensation ($) Damien Lamendola, Chief Executive Officer and Director (1) 2023 $ $ Edmundo Gonzalez, Chief Executive Officer and Director (2) 2023 292,229 292,229 2022 363,464 212,618 576,082 Lutz Finger, President, Product and Development (3) 2023 203,125 125,000 490,870 772,045 1,591,040 2022 275,002 1,494,231 450,001 2,219,234 Steve Johnson, Chief Financial Officer (4) 2023 - - Yoram Bibring, Chief Financial Officer (5) 2023 223,125 65,810 288,935 2022 264,810 50,000 137,935 452,745 Gonen Antebi, Chief Operating Officer (6) 2023 297,917 106,896 404,813 (1)Damien Lamendola was appointed as our Chief Executive Officer in November 2023. On January 11, 2024, we entered into an employment agreement with Mr. Lamendola. Pursuant to the terms of the Lamendola Employment Agreement, Mr. Lamendola s gross annual salary will be $1.00. Mr. Lamendola has been a member of our board of directors since 2021. (2)Edmundo Gonzalez joined Marpai Health as Chief Executive Officer since its inception in February 2019 until his resignation in November 2023. This amount includes cash salary payments of $15,125 per month for CEO services as a consultant under a consulting agreement between Marpai Health and Grays West Ventures LLC dated July 29, 2019. Mr. Gonzalez became a Marpai employee on April 1, 2022. Mr. Gonzalez was issued 205,645 shares of our Class B common stock in exchange for his 205,645 restricted shares of Marpai Health on April 1, 2021. (3)Lutz Finger joined Marpai as President, Product and Development on February 28, 2022, until his resignation on August 15, 2023. Mr. Finger became a contract employee upon his termination receiving Cash payments of $27,086 per month for his services. Mr. Finger did not receive compensation of any kind from Marpai, or our Subsidiaries, in 2021. He was awarded 336,539 Restricted Stock Units under the 2021 Global Stock Incentive Plan (the 2021 Plan ) with a fair value of $4.44 per share dated June 14, 2022. He was awarded an additional 33,387 Restricted Stock Units under the 2021 Plan with a fair value of $3.80 per share dated February 28, 2023. He was awarded an additional 400,000 Restricted Stock Units under the 2021 Plan with a fair value of $0.91 per share dated August 2, 2023. (4)Steve Johnson joined Marpai as Chief Financial Officer on November 2023 and continues in this role. Mr. Johnson did not receive compensation of any kind from Marpai, or our Subsidiaries, in 2023. We entered an employment agreement with Mr. Johnson on January 11, 2024. (5)Yoram Bibring joined Marpai as Chief Financial Officer on September 1, 2021 until his resignation in November 2023. He was awarded 20,000 stock options under the 2021 Plan at an exercise price of $16 per share dated October 26, 2021. He was awarded an additional 18,904 stock options under the 2021 Plan at an exercise price of $4.44 per share dated June 14, 2022. (6)Gonen Antebi joined Marpai as Chief Operating Officer on February 1, 2023 and continued in this role until his separation on January 31, 2024. Upon his termination he became a consultant with monthly service fees of $5,000. He was awarded 75,000 stock options under the 2021 Plan at an exercise price of $3.48 per share dated January 18, 2023. 47 Director Compensation On March 20, 2022, our board of directors, upon the recommendation of our Compensation Committee, approved the change of our independent directors compensation to an annual fee of $50,000, payable quarterly. Our directors are and will continue to be reimbursed by us for any out-of-pocket expenses incurred in connection with activities conducted on our behalf. On December 7, 2023, our board of directors, upon the recommendation of our Compensation Committee, approved the termination of our independent directors compensation annual fee of $50,000, payable quarterly. In lieu of the cash compensation, the board of directors approved director compensation through the issuance of Restricted Stock Units based on the following schedule: 50,000 for independent directors and 60,000 for committee chairs and the Chairman of the board of directors. The RSUs vest 30% upon grant, 35% the following year and the remaining 35% one year following. In January 2024, 50,000 RSUs were issued to Ms. Calabrese, Mr. Dendy and Mr. Pons under the 2021 Plan. The remaining directors were issued their respective RSUs upon approval of the 2024 Plan. Other than indicated above, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments during Fiscal Year 2023. Benefit Plans We maintain a defined contribution employee retirement plan, or 401(k) plan, for our full-time employees. Our named executive officers are eligible to participate in the 401(k) plan on the same basis as our other full-time employees if they are considered an employee and not a consultant. The 401(k) plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code. The 401(k) plan provides that each participant may make pre-tax deferrals from his or her compensation up to the statutory limit, which is $19,500 for calendar year 2022, and other testing limits. Participants that are 50 years or older can also make catch-up contributions, which in calendar year 2020 may be up to an additional $6,500 above the statutory limit. Participant contributions are held and invested, pursuant to the participant s instructions, by the plan s trustee. We have no pension, or profit-sharing programs for the benefit of directors, officers, or other employees, but our officers and directors may recommend adoption of one or more such programs in the future. We do not sponsor any qualified or non-qualified pension benefit plans, nor do we maintain any non-qualified defined contribution or deferred compensation plans. 2021 Global Stock Incentive Plan On May 7, 2021, our board of directors, and the holders of all our issued and outstanding shares of common stock approved the adoption of 2021 Plan which is comprised of (i) an Israeli Sub-Plan that is designated for Israeli residents; and (ii) a U.S. Sub-Plan for U.S. persons. The 2021 Plan provides for the grant of incentive stock options, restricted stocks, restricted stock units, and other equity-based awards (collectively, the Awards ). We had reserved a total of 375,856 shares of Common Stock for grants of Awards to our employees, directors, advisory board members, consultants, and the like (collectively, the Participants ) under the 2021 Plan (including the Israeli Sub-Plan and the U.S. Sub-Plan) or otherwise as shall be determined by the board of directors or any committee designated by it. No option grants shall be made under the 2021 Plan or the Israeli Sub-Plan until the date which is 30 days after filing the relevant forms with the Israeli Tax Authority (the ITA ), or such earlier date at which the 2021 Plan may be approved by the ITA. At our annual stockholder meeting held on May 31, 2022, our stockholders approved an amendment to the 2021 Plan to increase the available number of shares issuable pursuant to the 2021 Plan from 375,856 to 1,950,855. At our annual stockholder meeting held on May 31, 2022, our stockholders approved an amendment to the 2021 Plan to increase the available number of shares issuable pursuant to the 2021 Plan from 1,905,855 to 2,450,855. The 2021 Plan shall expire in May 2031. If any common stock with respect to which the Participant has the right to purchase and/or receive under the 2021 Plan shall terminate, expire, or otherwise cease to exist, such common stock shall again be available for grant as Awards under the 2021 Plan. To date, incentive stock options for 1,701,092 shares of Common Stock have been approved by the board of directors for grant under the 2021 Plan, with 883,212 shares terminating and returning to the plan pool, and 72,241 shares being exercised. As of December 20, 2024, 78% of the options grant have vested, 13%, 6%, and 3% will vest in 2025, 2026, 2027, respectively. To date, RSUs for 1,243,328 shares of Common Stock have been approved by the board for grant under the 2021 plan, with 219,340 shares terminating and returning to the plan pool. As of December 20, 2024, 82% of the RSU s grant have vested, 9%, and 9% will vest in 2025, 2026, respectively 48 2024 Global Stock Incentive Plan On May 6, 2024, the shareholders of the Company approved the Company s 2024 Global Incentive Plan (the 2024 Plan ) with 2,227,910 shares of common stock initially issuable under the 2024 Plan. The 2024 Plan shall expire in May 2034. If any common stock with respect to which the Participant has the right to purchase and/or receive under the 2024 Plan shall terminate, expire, or otherwise cease to exist, such common stock shall again be available for grant as Awards under the 2024 Plan. To date, RSUs for 2,012,000 shares of Common Stock have been approved by the board for grant under the 2021 plan, with 16,758 shares terminating and returning to the plan pool. As of December 20, 2024, 48% of the RSU s grant have vested, 1%, 26%, and 25% will vest in 2024, 2025, 2026, respectively Director and Officer Liability Insurance We maintain director and officer liability insurance that provides financial protection for our directors and officers if they are sued in connection with the performance of their services and provides employment practices liability coverage, which insures for harassment and discrimination suits. Employment Agreements Chief Executive Officer On January 11, 2024, we entered into an employment agreement (the Lamendola Employment Agreement ) with our Chief Executive Officer, Damien Lamendola, effective as of January 2, 2024. Pursuant to the terms of the Lamendola Employment Agreement, Mr. Lamendola s gross annual salary will be $1.00. Mr. Lamendola will be eligible for bonuses and equity grants in amounts to be determined at the discretion of our board of directors and the Compensation Committee, as applicable. In addition, Mr. Lamendola will be granted an RSU for 600,000 shares of common stock, which shall vest over a two-year period, as follows: 30% of the shares subject to the RSU will vest immediately; 35% will vest one year after the commencement of his employment; and 35% will vest two years after the commencement of his employment. In addition, if and when we achieve five million dollars of unadjusted EBITDA within a calendar fiscal year, we will recommend to the board of directors that Mr. Lamendola be granted an equity award consisting of restricted stock units for 100,000 shares, with immediate vesting. Chief Financial Officer On January 11, 2024, we entered into an employment agreement (the Johnson Employment Agreement ) with our Chief Financial Officer, Steve Johnson, effective as of January 2, 2024. Pursuant to the terms of the Johnson Employment Agreement, Mr. Johnson s gross annual salary will be $35,568. Mr. Johnson will be eligible for bonuses and equity grants in amounts to be determined at the discretion of our board of directors of Directors and the Compensation Committee, as applicable. In addition, Mr. Johnson will be granted an RSU for 350,000 shares of common stock, which shall vest over a two-year period, as follows: 30% of the shares subject to the RSU will vest immediately; 35% will vest one year after the commencement of his employment; and 35% will vest two years after the commencement of his employment. In addition, if and when we achieve five million dollars of unadjusted EBITDA within a calendar fiscal year, we will recommend to our board of directors that Mr. Johnson be granted an equity award consisting of restricted stock units for 100,000 shares, with immediate vesting. Former Chief Executive Officer On July 29, 2019, we entered into a one-year consulting agreement with Grays West Ventures LLC for consulting services from our former Chief Executive Officer, Edmundo Gonzalez. Mr. Gonzalez received an annual base salary of $20,000 per month in 2019 and $15,125 in 2020, and compensation in the form of the right to purchase 822,581 shares of Marpai Health s common stock in 2019. No equity awards were granted to Mr. Gonzalez during 2020. Mr. Gonzalez did not receive any annual bonus during the fiscal years ended December 31, 2019, and December 31, 2020. Mr. Gonzalez received benefits equal to $4,533.52 in 2019, and $14,197.81 in 2020. On April 1, 2021, we entered into an at-will employment agreement with Mr. Gonzalez, which remained in effect until his termination on November 6, 2023. Mr. Gonzalez received a base salary of $350,000 per year, and he may receive an annual bonus based on mutually agreed performance targets. Mr. Gonzalez received participation in the Company s self-insured group medical and dental plan, a 401k plan with 5% contribution match by the company (up to allowed limits), and short-term and long-term disability benefits. 49 On December 6, 2023, we executed a separation agreement (the Gonzalez Agreement ) with Mr. Gonzalez. Pursuant to the terms of the Gonzalez Agreement, we agreed to extend, until December 6, 2024, the exercise period of Mr. Gonzalez s options which were granted under our 2021 Plan, including (i) the option grant dated June 14, 2022 for 214,308 shares of our Common Stock, which were fully vested upon grant, (ii) the option grant dated June 14, 2022 for 175,000 shares of our Common Stock, with a vesting commencement date of June 14, 2022, and (iii) the option grant dated June 14, 2022 for 75,000 shares of our Common Stock, with a vesting commencement date of June 14, 2022. Also, the Company agreed to issue Mr. Gonzalez a warrant (the Gonzalez Warrant ) to purchase up to 140,000 shares of our Common Stock, with an exercise price of $2.50 per share with a five (5) year term. The Gonzalez Warrant s purchase price is $0.23 per share, with the right to a cashless exercise. Former Chief Financial Officer On June 17, 2021, we entered into an at will employment agreement with our Chief Financial Officer, Yoram Bibring, which remained in effect until his termination on November 6, 2023. Mr. Bibring received a base salary of $255,000 per year. He may receive an annual bonus that is equal to 50% of the annualized rate of his base salary with the exception of Mr. Bibring s target 2021 bonus, which was $75,000, based on mutually agreed performance targets. Mr. Bibring s employment agreement also included compensation in the form of 125,000 options to purchase Common Stock, under our 2021 Plan, which vested over four years. On October 26, 2021 Mr. Bibring was granted 80,000 options with an exercise price of $4.00 per share, with 15,625 options vesting at the six-month anniversary of his initial employment, an additional 15,625 options vesting at the first anniversary of his initial employment date, 2,566 options vesting at each of the following 19 months after the first anniversary. The remaining 45,000 options were granted when our shareholders approved the increase of the pool reserved under our 2021 Plan. These options vested in 17 equal monthly installments of 2,647 options commencing on May 1, 2024. Mr. Bibring s employment agreement provides that full vesting will take place if Marpai is sold or otherwise in the event of a change in control of Marpai. Mr. Bibring received participation in the Company s self-insured group medical and dental plan, a 401k plan with 5% contribution match by the company (up to allowed limits), and short-term and long-term disability benefits. On December 5, 2023, we executed a separation agreement (the Bibring Agreement ) with Mr. Bibring. Pursuant to the terms of the Bibring Agreement, we agreed to pay Mr. Bibring severance in an amount equal to six (6) months of Mr. Bibring s base salary, totaling $127,500. Any of the aforementioned options which were unvested as of the date of the Bibring Agreement were terminated, effective as of the same date. President and Chief Operating Officer Effective January 2, 2024, we entered into an employment agreement with our President and Chief Operating Officer, John Powers (the Powers Employment Agreement ). Mr. Powers gross annual salary will be $150,000. Mr. Powers will be eligible for bonuses and equity grants in amounts to be determined at the discretion of the Company s Board of Directors and the Compensation Committee of the Company s Board of Directors, as applicable. In addition, Mr. Powers was granted a RSU for 150,000 shares of common stock, which shall vest over a two-year period, as follows: 30% of the shares subject to the RSU will vest immediately; 35% will vest one year after the commencement of his employment; and 35% will vest two years after the commencement of his employment. In addition, if and when we shall achieve five million dollars of unadjusted EBITDA within a calendar fiscal year, the Company will recommend to the board of directors that Mr. Powers be granted an equity award consisting of restricted stock units for 100,000 shares, with immediate vesting. Former Chief Operating Officer Effective February 1, 2023, we entered into an employment agreement with Gonen Antebi pursuant to which he was appointed to serve as our Chief Operating Officer, which remained in effect until January 16, 2024. Mr. Antebi was paid an annual base salary of $325,000 per year and was eligible for a bonus of up to 75% of his base salary depending on performance metrics as may be determined by the board of directors or our Compensation Committee. In addition, Mr. Antebi was paid a sign on bonus of $50,000, payable in cash within 15 days following the start date of his employment. Pursuant to his agreement, and subject to the approval of the board of directors, Mr. Antebi was eligible for an option to purchase 300,000 shares of our common stock (the Initial Award Option ), with an exercise price equal to $3.72. These options vested quarterly over the initial one-year term of his employment. In the event Mr. Antebi s employment is terminated without cause, we do not offer to renew his Agreement after the expiration of the initial one year term or any 1 year successive term or if Mr. Antebi terminates his employment for good reason, Mr. Antebi will be entitled to receive a severance payment of 6 months of his base salary (paid in regular installments), the payment of any earned, but unpaid, annual bonus, and the options from the Equity Grant that have vested as of the employment termination date Initial Award Option or Additional Award Option that would have vested as of such termination date. 50 On January 15, 2024, Mr. Antebi resigned from his position. In connection with Mr. Antebi s resignation, on January 16, 2024, the Company and Mr. Antebi entered into a separation agreement (the Antebi Agreement ) terminating Mr. Antebi s employment effective January 24, 2024. Pursuant to the terms of the Antebi Agreement, we agreed to grant Mr. Antebi severance in the form of a common stock purchase warrant (the Antebi Warrant ) to purchase up to 130,000 shares of common stock. The Antebi Warrant is exercisable at any time on or after January 31, 2024 until January 31, 2029 at an exercise price of $2.50 per share. Former President, Product and Development On February 28, 2022, we entered into an at will employment agreement with our President, Product Development, Lutz Finger according to which Mr. Finger will receive a base salary of $325,000 per year and will be eligible for a bonus of up to 50% of his base salary depending on performance metrics as may be determined by the Company s Board or compensation committee. Mr. Finger was paid a sign-on bonus (the Sign on Bonus ) of $250,000, payable in $125,000 cash and a $125,000 in shares of the Company s Common Stock, at the Company s discretion. Mr. Finger s employment Agreement also included compensation in the form of the initial grant of with a value of $2,000,000 Common Stock, which was granted on June 14, 2022. The initial grant vested in equal quarterly installments during the 12 month period following the start date of his employment. Additionally, Mr. Finger was eligible to receive a restricted stock grant on the one-year anniversary of his start date of employment of a number of shares of Common Stock equal to a value of $2,000,000 in the aggregate. The additional grant vested in equal quarterly installments during the 12 month period following the 1 year anniversary of the start date of his employment. The initial grant and the additional grant were issued pursuant to the Company s 2021 Plan. Pursuant to an amendment to the employment agreement in February 2023, we and Mr. Finger agreed that the initial grant will vest equally on the later of the following dates or the date the initial grant is approved by the board of directors: May 28, 2022, August 28, 2022, November 28, 2022 and August 1, 2023. In addition, it was agreed that should Mr. Finger separate from us for any reason before August 1, 2023, the final vesting installment scheduled for August 1, 2023, shall accelerate to the date of separation. In addition, we and Mr. Finger agreed that we may pay 50% of the Sign on Bonus in cash on the one-year anniversary of his start date and 50% will be paid in shares of Common Stock. In addition, if the Company elects to renew Mr. Finger s employment upon the expiration of the initial two-year term, the Company has agreed to pay Mr. Finger a one-time renewal bonus of $250,000 payable in cash or shares of the Company s Common Stock, at the Company s discretion. If paid in cash, such renewal bonus shall be paid within 15 days following the second anniversary of the start date of his employment, and if paid in shares such issuance shall be made following the 24 month anniversary of the start date of his employment, subject to a 12 month restriction period. If Mr. Finger s employment with the Company is terminated for reasons other than by the Company without cause, by Mr. Finger for good reason, or due to Mr. Finger s death or disability, within the second and third anniversaries of the start date of his employment, the Renewal Bonus will be repaid to the Company in full. Mr. Finger s employment agreement provides that he will be entitled to severance if (1) we terminate his employment without cause, (2) if the Company does not offer to renew his employment agreement after the expiration of the initial two-year term or any 1 year successive term or (2) if Mr. Finger terminates his employment for good reason. Mr. Finger will be entitled to receive a severance payment of 6 months of his base salary (paid in regular installments), the payment of any earned, but unpaid, annual bonus, and the issuance of the balance of the shares of the Initial Grant or Additional Grant that would have vested as of such termination date. The Company executed a separation agreement with Mr. Finger, pursuant to which Mr. Finger s position as the Company s President of Product and Development was terminated effective as of August 15, 2023. On August 15, 2023, the Company executed an advisory agreement (the Advisory Agreement ) with Mr. Finger pursuant to which Mr. Finger will continue to provide services to the Company. Pursuant to the terms of the Advisory Agreement, the Company agreed to retain Mr. Finger for a set term through December 31, 2023. We did not renew Mr. Lutz s Advisory Agreement and are in the process of renegotiating his separation agreement. 51 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS In addition to the compensation arrangements, including employment, termination of employment and with our directors and executive officers, including those discussed in the sections titled Management , Executive Compensation, and Description of Securities, the following is a description of each transaction since January 1, 2022 or any currently proposed transaction in which: we, Marpai Health or Marpai have been or are to be a party; the amount involved exceeded or exceeds $120,000 or 1% of the average of our total assets as of the end of the last two completed fiscal years; and any of our directors, executive officers, or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest. HillCour s Financial Support On December 14, 2023, we entered into a securities purchase agreement with HillCour, pursuant to which we agreed to issue and sell 150,000 shares of our common stock in a private placement, at a purchase price of $1.97 per share (or the consolidated closing bid price of our common stock on Nasdaq as of December 14, 2023). On January 16, 2024, we entered into a securities purchase agreement with certain insiders consisting of HillCour, our Chairman, Yaron Eitan, and our director, Robert Pons, pursuant to which we agreed to issue and sell 1,322,100 shares of our common stock in a private placement, at a purchase price of $0.9201 per share (or the consolidated closing bid price of our common stock on Nasdaq as of January 16, 2024). On March 7, 2024, we entered into a securities purchase agreement with HillCour, pursuant to which we agreed to issue and sell 910,000 shares of our common stock in a private placement, at a purchase price of $1.65 per share (or the consolidated closing bid price of our common stock on Nasdaq as of March 7, 2024). On August 28, 2024, we entered into a securities purchase agreement with two investors, including HillCour, pursuant to which we agreed to issue and sell an aggregate of 2,702,702 shares of its Common Stock (of which HillCour purchased 1,351,351 shares of Common Stock) in a private placement, at a purchase price of $0.481 per share (or the closing bid price of the Company s Common Stock on OTCQX as of August 28, 2024). On December 5, 2024, we entered into a securities purchase agreement with four investors, including Yaron Eitan, the Company s Chairman, Steve Johnson, the Company s Chief Financial Officer and John Powers, the Company s President and Chief Operating Officer, pursuant to which the Company agreed to issue and sell an aggregate of 621,194 shares of its Common Stock (of which Mr. Eitan purchased 110,619 shares of Common Stock, Mr. Johnson purchased 5,000 shares of Common Stock and Mr. Powers purchased 10,000 shares of Common Stock) in a private placement, at a purchase price of $1.13 per share (or the closing bid price of the Company s Common Stock on OTCQX as of December 5, 2024). Consulting Fees The Company has received consulting services from various current and former shareholders and directors, including Edmundo Gonzalez (the Company s former CEO) and Yaron Eitan in 2021 and Yaron Eitan in 2022. The total cost of these consulting services for the years ended December 31, 2023 and 2022 was approximately $88,000 and $208,000, respectively. There were no accounts payable to these certain shareholders as of December 31, 2023 and December 31, 2022. In April 2021, Marpai Health entered into a consulting agreement with Yaron Eitan for certain management consulting services where Marpai Health pays Mr. Eitan a monthly retainer of $15,000. Effective April 21, 2021, Marpai Health agreed to pay Mr. Eitan an additional fee of $7,750 per month for a total of $22,750 per month, payable until the earlier of company or Mr. Eitan decide to terminate or March 31, 2022. 52 In July 2023 Mr. Eitan s consulting agreement was terminated by mutual agreement and the Company and Mr. Eitan entered into an employment agreement. Under the terms of the employment agreement, Mr. Eitan s annual salary is $168,000 and he is entitled to the benefits typically afforded to employees of the Company. The employment agreement can be terminated at any time by the Company or Mr. Eitan. The Company executed a separation agreement with Mr. Finger, pursuant to which Mr. Finger s position as the Company s President of Product and Development was terminated effective as of August 15, 2023. On August 15, 2023, the Company executed the Advisory Agreement with Mr. Finger pursuant to which Mr. Finger will continue to provide services to the Company. Pursuant to the terms of the Advisory Agreement, the Company agreed to retain Mr. Finger for a set term through December 31, 2023, and commencing on January 1, 2024, the Advisory Agreement will continue and may be terminated by either party with thirty (30) days prior written notice. As consideration for Mr. Finger s services thereunder, the Company has agreed to pay Mr. Finger a monthly retainer fee in the amount of $27,086 until December 31, 2023, increasing to $27,912 on January 1, 2024. In addition, the Company agreed to issue Mr. Finger 400,000 restricted stock units under the Company s 2021 Plan which will fully vest on September 7, 2023. In addition, 96,154 restricted stock units previously issued to Mr. Finger will have their vesting accelerated to September 7, 2023. If the market value of the 496,154 restricted stock units calculated based on the closing price on Nasdaq on September 6, 2023, will be less than $1,000,000, then the Company will pay Mr. Finger such difference in cash. The Company will pay the Shortfall in three equal installments, on September 28, 2023, October 28, 2023 and November 28, 2023. If the market value of the 496,154 restricted stock units based on the closing price on Nasdaq on September 6, 2023 will exceed $1,000,000, then the restricted stock units equal to the value of the Excess will be cancelled by the Company on September 6, 2023, so that the total number of shares that vest on September 7, 2023 will equal $1,000,000. The total cost of these consulting services for the nine months ended September 30, 2024, and 2023 was approximately $0 and $95 thousand, respectively. The total cost of these consulting services for the three months ended September 30, 2024, and 2023 was approximately $0 and $0, respectively. No amounts due to these certain shareholders were included in accounts payable as of September 30, 2024 and December 31, 2023. Policy for Approval of Related Party Transactions Our Board adopted our Code of Ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board of directors) or as disclosed in our public filings with the SEC. Under our Code of Ethics, conflict of interest situations includes any financial transaction, arrangement, or relationship (including any indebtedness or guarantee of indebtedness) involving Marpai, Inc. Our Code of Ethics is posted on our Internet website at https://www.marpaihealth.com/. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Conduct by posting such information on the website address specified above. In addition, the audit committee of our board of directors has adopt a charter, providing for the review, approval and/or ratification of related party transactions, which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so, requested by the chairman of the committee, participate in some or all of the committee s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine whether: to permit or to prohibit the related party transaction. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, or directors, or our or any of their affiliates. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee, or officer. 53 PRINCIPAL STOCKHOLDERS ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The following table sets forth certain information, to the best knowledge and belief of the Company, as of December 20, 2024 (unless provided herein otherwise), with respect to holdings of our common shares by (1) each person known by us to be the beneficial owner of more than 5% of the total number of our common shares outstanding as of such date; (2) each of our directors; (3) each of our named executive officers; and (4) all of our directors and our executive officers as a group Unless otherwise indicated, the address of each person listed below is c/o Marpai, Inc., 615 Channelside Drive, Suite 207, Suite 1417, Tampa, FL, 33602. Percentage Beneficial Of Shares Number of Beneficially Name of Beneficial Owner Shares(1) Owned Directors and Named Executive Officers Damien Lamendola 5,673,550(2) 38.0% Steve Johnson 139,451(3) * John Powers 107,500(4) * Yaron Eitan 857,123(5) 5.7% Sagiv Shiv 59,167(6) * Jennifer Calabrese 32,500(7) * Robert Pons 91,700(8) * Colleen DiClaudio 100,450(9) * Mohsen Moazami 51,250(10) * All Directors and Executive Officers as a Group (14 Persons) 7,112,691(11) 49.5% Beneficial Owners over 5% IFCM MicroCap Fund LP 1,864,707(12) 13.0% *less than 1% (1)Based on 14,361,686 shares of common stock issued and outstanding as of December 20, 2024. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares subject to options, warrants or right to purchase or through the conversion of a security currently exercisable or convertible, or exercisable or convertible within 60 days, are reflected in the table above and are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person. 54 (2)Comprised of (i) 4,392,657 shares of Common Stock, held directly by HillCour Investment Fund, LLC, of which Mr. Lamendola is the Manager, and over which he holds the voting and dispositive power, (ii) 931,674 shares of the common stock held directly by WellEnterprises USA, LLC, a wholly owned subsidiary of HillCour, Inc., which is wholly owned by HillCour Holdings LLC (f/k/a HillCour Holding Corporation) ( HillCour Holdings ), a corporation controlled by Mr. Lamendola, and Mr. Lamendola holds the voting and dispositive power over the securities held by WellEnterprises USA, LLC, (iii) 200,000 shares of the Common Stock, held directly by Damien Lamendola (iv) 91,117 shares of Common Stock issuable upon the exercise of warrants at an exercise price of $5.71 per share expiring on January 17, 2025 held directly by HillCour Investment Fund, LLC, of which Mr. Lamendola is the Manager, and over which he holds the voting and dispositive power, and (iv) options to purchase 62,500 shares of Common Stock, exercisable at $4.44 per share, of which 53,102 are vested. (3)Consists of (i) 139,451 shares of the Common Stock, held directly by Steve Johnson, and (ii)11,390 shares of common stock issuable upon the exercise of warrants at an exercise price of $31.60 per share expiring on February 9, 2026. (4)Consists of (i) 55,000 shares of the Common Stock, and (ii) 52,500 shares of Common Stock Restricted stock units that are vested. (5)Consists of (i) 742,073 shares of the Common Stock, held directly by Yaron Eitan, (ii) 56,948 shares of common stock issuable upon the exercise of warrants at an exercise price of $31.60 per share expiring on February 9, 2026, (iv) options to purchase 62,500 shares of Common Stock, exercisable at $4.44 per share, of which 53,102 are vested, and (v) 5,500 shares of Common Stock restricted stock units that are vested. (6)Consists of (i) 18,000 shares of the Common Stock, (ii) options to purchase 43,750 shares of Common Stock, exercisable at $3.56 per share, of which 29,167 are vested, and (iii) 12,000 shares of Common Stock restricted stock units that are vested. (7)Consists of (i) 15,000 shares of the Common Stock, and (ii) 17,500 shares of Common Stock restricted stock units that are vested. (8)Consists of (i) 24,200 shares of the Common Stock, and (ii) 67,500 shares of Common Stock restricted stock units that are vested. (9)Consists of (i) 49,200 shares of the Common Stock, (i) options to purchase 43,750 shares of Common Stock, exercisable at $4.44 per share, of which all are vested, and (iii) 7,500 shares of Common Stock restricted stock units that are vested. (10)Consists of (i) options to purchase 43,750 shares of Common Stock, exercisable at $4.44 per share, of which all are vested, and (iii) 7,500 shares of Common Stock restricted stock units that are vested. (11)Consists of 6,555,865 shares of Common Stock, 159,455 shares of common stock issuable upon the exercise of warrants, options to purchase 222,871 shares of common stock and 174,500 restricted stock units. (12) Consists of 1,8464,707 shares of the Common Stock. The address for IFCM Micro Cap Fund LP is 350 Rumford Road, Lititz, PA 17543. Ian J. Cassel holds voting and dispositive power over the securities held by IFCM Micro Cap Fund LP. Based on information provided by IFCM Micro Cap Fund LP on December 12, 2024. 55 DESCRIPTION OF CAPITAL STOCK The following summary is a description of the material terms of our share capital. We encourage you to read our Certificate of Incorporation and bylaws which have been filed with the SEC, as well as the provisions of the Delaware General Corporation Law. General Our authorized capital stock currently consists of 227,791,050 shares of capital stock, par value $0.0001 per share, of which all are designated as Common Stock. The authorized and unissued shares of common stock are available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange on which our securities may be listed. Unless approval of our stockholders is so required, our Board does not intend to seek stockholder approval for the issuance and sale of our common stock. Common Stock The holders of our common stock are entitled to one vote per share. Our Certificate of Incorporation does not provide for cumulative voting. At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire are elected for a term of office to expire at the succeeding annual meeting of stockholders after their election. The holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our Board out of legally available funds; however, the current policy of our Board is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all assets that are legally available for distribution. The transfer agent and registrar for our common stock is American Stock Transfer and Trust Company, LLC. Their address is 6201 15th Avenue, 2nd Floor, Brooklyn, NY 11219, telephone: (718) 921-8300, (800) 937-5449. Meetings of Stockholders An annual meeting of our stockholders shall be held on the day and at the time as may be set by our Board, at which the stockholders shall elect the board of directors and transact such other business as may properly be brought before the meeting. All annual meetings of stockholders are to be held at our registered office in the State of Delaware or at such other place as may be determined by our Board. Special meetings of our stockholders may be called for any purpose or purposes, unless otherwise prescribed by statute, by our Board, the Chairman of the Board or the Chief Executive Officer, President or other executive officer of the Company, or at the request, in writing, of the stockholders of record, and only of record, owning not less than one-quarter of the entire capital stock of the Company issued and outstanding and entitled to vote. Business transacted at any special meeting of stockholders shall be confined to the purpose or purposes stated in the notice for such meeting. Anti-Takeover Effect of Delaware Law, Certain Charter and Bylaw Provisions We are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless: prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (i) shares owned by persons who are directors and also officers and (ii) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. 56 Section 203 defines a business combination to include: any merger or consolidation involving the corporation and the interested stockholder; any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation; subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; or the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with, or controlling, or controlled by, the entity or person. The term owner is broadly defined to include any person that, individually, with or through that person s affiliates or associates, among other things, beneficially owns the stock, or has the right to acquire the stock, whether or not the right is immediately exercisable, under any agreement or understanding or upon the exercise of warrants or options or otherwise or has the right to vote the stock under any agreement or understanding, or has an agreement or understanding with the beneficial owner of the stock for the purpose of acquiring, holding, voting or disposing of the stock. The restrictions in Section 203 do not apply to corporations that have elected, in the manner provided in Section 203, not to be subject to Section 203 of the Delaware General Corporation Law or, with certain exceptions, which do not have a class of voting stock that is listed on a national securities exchange or held of record by more than 2,000 stockholders. Our Certificate of Incorporation and bylaws do not opt out of Section 203. Section 203 could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price. Certificate of Incorporation and Bylaws Provisions of our Certificate of Incorporation and bylaws may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our Certificate of Incorporation and bylaws: provide that the authorized number of directors shall be fixed from time to time by resolution adopted by a majority of the voting power of the then-outstanding shares of our capital stock then entitled to vote at an election of directors voting together as a single class; 57 provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by a majority of the directors then in office, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify. A vacancy created by the removal of a director by the stockholders may be filled by the stockholders; do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); provide that special meetings of our stockholders may be called by resolution of our Board, or by our Chief Executive Officer, or by the holders of not less than one-quarter of all of the shares entitled to vote at the meeting; and set forth an advance notice procedure with regard to the nomination, other than by or at the direction of our Board, of candidates for election as directors and with regard to business to be brought before a meeting of stockholders. Transfer Agent and Registrar The transfer agent and registrar for our common stock is American Stock Transfer and Trust Company, LLC. Their address is 6201 15th Avenue, 2nd Floor, Brooklyn, NY 11219, telephone: (718) 921-8300, (800) 937-5449. Listing Our common stock is listed on the OTCQX Market under the symbol MRAI. Options As of December 20, 2024, we had outstanding options to purchase an aggregate of 745,639 shares of our Common Stock, with a weighted-average exercise price of approximately $4.59 per share. Warrants As of December 20, 2024, we had outstanding warrants to purchase 91,117 shares of our Common Stock at $5.72 per share, a warrants to purchase 242,977 shares of our Common Stock at $31.60 per share, warrant to purchase78,125 shares of our Common Stock at $20.00 per share, warrant to purchase 92,500 shares of our Common Stock at $5.00 per share and warrant to purchase 140,000 shares of our Common Stock at $2.50 per share. 58 SELLING STOCKHOLDERS On August 28, 2024, the Company entered into a securities purchase agreement with two investors, including HillCour, an entity controlled by the Company s Chief Executive Officer, Damien Lamendola, pursuant to which the Company agreed to issue and sell an aggregate of 2,702,702 shares of its Common Stock (of which HillCour purchased 1,351,351 shares of Common Stock) in a private placement, at a purchase price of $0.481 per share (or the closing bid price of the Company s Common Stock on OTCQX as of August 28, 2024). Pursuant to the terms of the securities purchase agreement, the Company agreed to register the shares of Common Stock sold in the private placement. On December 5, 2024, the Company entered into a securities purchase agreement with four investors, including Yaron Eitan, the Company s Chairman, Steve Johnson, the Company s Chief Financial Officer and John Powers, the Company s President and Chief Operating Officer, pursuant to which the Company agreed to issue and sell an aggregate of 621,194 shares of its Common Stock in a private placement, at a purchase price of $1.13 per share of the Company s Common Stock on OTCQX as of December 5, 2024. Pursuant to the terms of the securities purchase agreement, the Company agreed to register the shares of Common Stock sold in the private placement. The securities issued in the offering were exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder. The term Selling Stockholders also includes any transferees, pledgees, donees, or other successors in interest to the Selling Stockholders named in the table below. Unless otherwise indicated, to our knowledge, each person named in the table below has sole voting and investment power (subject to applicable community property laws) with respect to the shares of common stock set forth opposite such person s name. We will file a supplement to this prospectus (or a post-effective amendment hereto, if necessary) to name successors to any named Selling Stockholders who are able to use this prospectus to resell the common stock registered hereby. Name of Selling Stockholder Shares Beneficially Owned Before the Offering(1) Maximum Number of Shares to be Offered in the Offering Number of Shares Beneficially Owned Immediately After Sale of Maximum Number of
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+46 NORDICUS PARTNERS CORPORATION AND SUBSIDIARY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Nordicus Partners Corporation March 31, 2024 and 2023 Audited Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID 5525) F-2 Balance Sheets as of March 31, 2024 and 2023 F-3 Statements of Operations for the Years Ended March 31, 2024 and 2023 F-4 Statements of Stockholders Deficit for the Years Ended March 31, 2024 and 2023 F-5 Statements of Cash Flows for the Years Ended March 31, 2024 and 2023 F-6 Notes to the Consolidated Financial Statements F-7 Nordicus Partners Corporation September 30, 2024 and 2023 Unaudited Financial Statements Balance Sheets at September 30, 2024 (unaudited) and March 31, 2024 F-15 Statements of Operations for the Six Months Ended September 30, 2024 and 2023 (unaudited) F-16 Statements of Stockholders Equity for the Six Months Ended September 30, 2024 and 2023 (unaudited) F-17 Statements of Cash Flows for the Six Months Ended September 30, 2024 and 2023 (unaudited) F-18 Notes to the Financial Statements (unaudited) F-19 - F-28 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Nordicus Partners Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Nordicus Partners Corporation ( the Company ) as of March 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders equity, and cash flows for each of the years in the two-year period ended March 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024 and 2023 and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has an accumulated deficit, net losses, and incurred minimal revenue. These factors, among others, raise substantial doubt about the Company s ability to continue as a going concern. Management s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on the Company s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Emphasis of Matter Reverse Stock Split As discussed in Note 10 to the financial statements, the Company executed a reverse stock split at a ratio of 1 new share for every 10 shares previously held on November 8, 2024. The financial statements and related disclosures have been retroactively adjusted to reflect this reverse stock split. Our opinion is not modified with respect to this matter. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters. Fruci & Associates II, PLLC PCAOB ID #05525 We have served as the Company s auditor since 2023. Spokane, Washington July 2, 2024 except for reverse split discussed at Note 10, as to which the date is December 9, 2024 F-2 NORDICUS PARTNERS CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS March 31, 2024 March 31, 2023 ASSETS Current assets: Cash $49,933 $7,149 Receivable 44,481 Prepaids and other current assets 770 Total current assets 49,933 52,400 Website 7,640 2,625 Intangible assets Other assets Goodwill Investment in Mag Mile Capital, Inc. 1,750,000 Total Assets $1,807,573 $55,025 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Accounts payable and accrued expenses $5,019 $1,354 Accounts payable related party 12,127 Deferred revenue 7,500 Related party payable 13,886 13,886 Total current liabilities 26,405 27,367 Total Liabilities 26,405 27,367 Commitments and contingencies Stockholders equity: Preferred stock; $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding Common stock; $0.001 par value; 50,000,000 shares authorized; 1,110,226 and 829,626 shares issued; respectively 1,110 830 Common stock; $0.001 par value; 50,000,000 shares authorized; 4,965,626 and 1,110,226 shares issued and outstanding at September 30, 2024 and March 31, 2024, respectively 1,110 Treasury stock, 154 shares at cost (30,328) (30,328) Additional paid-in capital 45,696,761 42,254,154 Accumulated other comprehensive income (2,848) 665 Accumulated deficit (43,883,527) (42,197,663) Total stockholders equity 1,781,168 27,658 Non-controlling interest Total stockholders equity 1,781,168 27,658 Total liabilities and stockholders equity $1,807,573 $55,025 The accompanying notes are an integral part of these consolidated financial statements. F-3 NORDICUS PARTNERS CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS 2024 2023 For the Years Ended March 31, 2024 2023 Revenue $2,500 $ Operating expenses: Officer compensation 118,477 Stock based compensation related party 8,141,501 Professional fees 137,280 102,286 Consulting expense 39,602 General and administrative 54,331 196,500 Research and development Total operating expenses 310,088 8,479,889 Loss from operations (307,588) (8,479,889) Other income: Interest expense (382) Other income 9,386 8,055 Total other income 9,386 7,673 Loss from operations before provision for income taxes (298,202) (8,472,216) Provision for income taxes Net loss (298,202) (8,472,216) Net loss attributable to noncontrolling interests Net loss attributable to Nordicus Partners Corporation Other comprehensive income: Foreign currency translation adjustment (3,513) 665 Comprehensive Loss $(301,715) $(8,471,551) Net loss per common share basic and diluted $(0.29) $(14.27) Weighted average shared basic and diluted 1,035,475 593,886 The accompanying notes are an integral part of these consolidated financial statements. F-4 NORDICUS PARTNERS CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY FOR THE YEARS ENDED MARCH 31, 2024 AND 2023 Shares Amount Capital Deficit Stock Income Equity Additional Other Total Common Stock Paid-in Accumulated Treasury Comprehensive Stockholders Shares Amount Capital Deficit Stock Income Equity Balance at March 31, 2022 568,126 $568 - - $33,949,718 $(33,725,447) $(30,328) - $ - - $194,511 Stock-based compensation - fair value of warrants related party 8,141,501 8,141,501 Shares issued for acquisition 250,000 250 47,947 48,197 Exercise of warrants 11,500 12 114,988 115,000 Net loss - - (8,472,216) - 665 - - (8,471,551) Balance at March 31, 2023 829,626 830 - - 42,254,154 (42,197,663) (30,328) - 665 - - 27,658 Balance 829,626 830 - - 42,254,154 (42,197,663) (30,328) - 665 - - 27,658 Shares issued for stock investment 250,000 250 1,749,750 1,750,000 Exercise of warrants 30,600 30 305,970 306,000 Deemed dividend for warrant extension 1,387,662 (1,387,662) Cash distribution (775) (775) Net loss - - (298,202) - (3,513) - - (301,715) Balance at March 31, 2024 1,110,226 $1,110 - - $45,696,761 $(43,883,527) $(30,328) - $(2,848) - - $1,781,168 Balance 1,110,226 $1,110 - - $45,696,761 $(43,883,527) $(30,328) - $(2,848) - - $1,781,168 The accompanying notes are an integral part of these consolidated financial statements. F-5 NORDICUS PARTNERS CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS 2024 2023 For the Years Ended March 31, 2024 2023 Cash flows from operating activities: Net loss $(298,202) $(8,472,216) Adjustments to reconcile net loss to net cash flows used in operating activities Shares issued for services Derecognition of deferred revenue upon consolidation of Orocidin A/S Stock-based compensation related party 8,141,501 Changes in assets and liabilities: Prepaid expenses and other assets (4,245) 3,500 Receivables 44,481 Other assets Deferred revenue 7,500 Accounts payable related party (12,127) Accounts payable and accrued expenses 3,665 (41,132) Net cash used in operating activities (258,928) (368,347) Cash flows from investing activities: Cash paid for website costs Cash acquired in acquisition Net cash used in investing activities Cash flows from financing activities: Cash distribution to shareholder (775) Proceeds from note payable 40,000 Repayment of note payable (40,000) Cash advance - related party 13,886 Advance from related party Proceeds from Orocidin issuance of common stock in capital raise Proceeds from exercise of warrants 306,000 115,000 Net cash provided (used) by financing activities 305,225 128,886 Net change in cash 46,297 (239,461) Effect of exchange rate on cash (3,513) 665 Cash at beginning of period 7,149 245,945 Cash at end of period $49,933 $7,149 Supplemental disclosure of cash flow information: Income taxes paid $ $ Interest paid $ $ Supplemental disclosure of non-cash activity: Deemed dividend $1,387,662 $ Common stock issued for shares of Mag Mile Capital, Inc. $1,750,000 $ The accompanying notes are an integral part of these consolidated financial statements. F-6 NORDICUS PARTNERS CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2024 NOTE 1 - ORGANIZATION AND DESCRIPTION OF
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+PROSPECTUS SUMMARY This summary highlights information contained in this prospectus, or incorporated by reference into this prospectus, and does not contain all of the information that you should consider in making your investment decision. Before investing in our Common Stock, you should carefully read this entire prospectus, including the information set forth under the section entitled Risk Factors, as well as our consolidated financial statements, the related notes thereto, and other information incorporated by reference into this prospectus. Some of the statements in this prospectus and the information incorporated by reference into this prospectus constitute forward-looking statements. For additional information, refer to the section entitled Cautionary Note Regarding Forward-Looking Statements. Unless the context requires otherwise, the words we, us, our, the Company, NRx Pharmaceuticals, and NRX refer to NRx Pharmaceuticals, Inc., a Delaware corporation, and its wholly owned subsidiaries, NeuroRx, Inc., ("NeuroRx") and HOPE Therapeutics, Inc. ("HOPE"). Overview NRx Pharmaceuticals, Inc. (Nasdaq: NRXP) ( NRX or the Company ) is a clinical-stage bio-pharmaceutical company which develops and intends to distribute, through its wholly-owned operating subsidiaries, NeuroRx, Inc., ("NeuroRx") and HOPE Therapeutics, Inc. ("HOPE", and collectively with NRX and NeuroRx, the "Company", "we", "us", or "our"), novel therapeutics for the treatment of central nervous system disorders including suicidal depression, chronic pain, and post-traumatic stress disorder ("PTSD") and now schizophrenia. All of our current drug development activities are focused drugs that modulate on the N-methyl-D-aspartate ("NMDA") receptor in the brain and nervous system, a neurochemical pathway that has been disclosed in detail in our annual filings. NeuroRx is organized as a traditional research and development ("R&D") company, whereas HOPE is focused on developing a best-in-class network of clinics that currently offer ketamine and other lifesaving therapies to patients with suicidal depression and related disorders. The Company has two lead drug candidates that are expected to be submitted by year end for Federal Drug Administration ("FDA") approval with anticipated FDA decision dates under the Prescription Drug User Fee Act (PDUFA) by the end of Q2 2025: NRX-101, an oral fixed dose combination of D-cycloserine and lurasidone and NRX-100, a preservative-free formulation of ketamine for intravenous infusion. In February 2024, the Company incorporated HOPE as a wholly-owned subsidiary and in August 2024 completed an audit of HOPE's financial statements necessary for the intended spin-off of HOPE to the Company's shareholders at a future date. The Note Financing On August 12, 2024, the Company entered into a Securities Purchase Agreement (the Purchase Agreement ) with the Selling Stockholders, whereby the Company agreed to sell, in three equal tranches, (i) original issue discount senior secured promissory notes in the aggregate principal amount of up to approximately $16.3 million (the Notes ) for an aggregate purchase price of up to approximately $15.0 million, which Notes are convertible into shares of Common Stock; and (ii) warrants to purchase that amount of shares equal to 50% of the principal amount of the Notes divided by the volume weighted average price ( VWAP ) of the Company s Common Stock, as listed on the Nasdaq Capital Market ( Nasdaq ), on the day prior to the closing of each respective tranche under the Purchase Agreement (the Warrants ) (the Note Financing ). Upon the first closing under the Purchase Agreement, on August 14, 2024 the Company issued to the Selling Stockholders: (i) Notes in the aggregate principal amount of $5.435 million, for an aggregate purchase price of approximately $5.0 million exclusive of approximately $0.5 million offering costs; and (ii) Warrants to purchase up to 1,349,305 shares of the Company s Common Stock with an exercise price of $2.4168. Upon the second closing under the Purchase Agreement, on October 10, 2024 the Company issued to the Selling Stockholders: (i) Notes in the aggregate principal amount of $5.435 million, for an aggregate purchase price of approximately $5.0 million exclusive of approximately $0.5 million of offering costs; and (ii) Warrants to purchase up to 1,846,128 shares of the Company s Common Stock. Among other things, and provided that the Company receives the Shareholder Approval (as defined in the Purchase Agreement) pursuant to the Nasdaq Listing Rules, the conversion price of the Notes is subject to, among other customary provisions, downward adjustment in the event of any future issuance by the Company of Common Stock (or Common Stock Equivalents (as defined in the Notes)) below the then effective conversion price. On October 8, 2024, the Company obtained the Shareholder Approval at its 2024 Annual Meeting. 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 post-effective amendment filed pursuant to Rule 462(d) 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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, 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 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 the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. The Notes, subject to an original issuance discount of 8%, mature on the date that is 15 months from their respective date of issuance, accrue interest at a rate of 6% per annum (or 10% during the occurrence of any Event of Default (as defined in the Notes) are convertible into Common Stock and contain mandatory redemption features. The Notes contain certain covenants, and events of default and triggering events, respectively, which would require repayment of the obligations outstanding pursuant to such instruments. The obligations of the Company pursuant to the Notes are (i) secured by all assets of the Company and all subsidiaries of the Company pursuant to the Security Agreement and Patent Security Agreement, dated on or about August 14, 2024, by and among the Company, the subsidiaries of the Company, and the Investors, and (ii) guaranteed jointly and severally by the subsidiaries of the Company pursuant to the Subsidiary Guarantee, dated on or about August 14, 2024, by and among the Company, the subsidiaries of the Company, and the Selling Stockholders. The Warrants are exercisable beginning on the date of issuance and have a term of five years. The Company has agreed to register with the Securities and Exchange Commission (the SEC ) the resale of the shares of Common Stock issuable upon conversion of the Notes as well as the shares of Common Stock issuable upon the exercise of the Warrants pursuant to a registration rights agreement, dated on or about August 14, 2024, by and among the Company and the Selling Stockholders. On August 14, 2024, the Company filed a Prospectus Supplement to the Prospectus dated June 21, 2022 which registered 2,417,505 shares of Common stock underlying the Notes issued in the first closing. Pursuant to the registration statement, of which this prospectus forms a part, we are registering, on behalf of the Selling Stockholders, (i) 3,076,880 shares of Common Stock underlying the Notes issued in the second closing and (ii) 227,494 shares of Common Stock underlying certain Warrants issued in the first closing. Risk Factors Our business is subject to substantial risk. Please carefully review the section entitled Risk Factors beginning on page 4 of this prospectus for a discussion of the factors you should carefully consider before deciding to purchase the securities offered by this prospectus. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. You should be able to bear a complete loss of your investment. Corporate Information We were incorporated under the laws of the State of Delaware on September 18, 2017 under the name Big Rock Partners Acquisition Corp. Upon the closing of the business combination with NeuroRx, Inc. on May 24, 2021, we changed our name to NRx Pharmaceuticals, Inc. Our principal executive offices are located at 1201 Orange Street, Suite 600, Wilmington, Delaware 19801, our mailing address is 1201 North Market Street, Suite 111, Wilmington, DE 19801 and our telephone number is (484) 254-6134. Our website address is www.nrxpharma.com. The information contained in, or accessible through, our website does not constitute a part of this registration statement, of which this prospectus forms a part. We have included our website address in this prospectus solely as an inactive textual reference. The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where such offer or sale is not permitted. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED NOVEMBER 14, 2024 3,304,374 SHARES OF COMMON STOCK This prospectus relates to the resale from time to time of up to 3,304,374 shares of our common stock, par value $0.001 per share ( Common Stock ), by the selling stockholders identified herein (collectively, with any of such stockholders transferees, pledgees, assignees, distributees, donees or successors-in-interest, the Selling Stockholders ). The shares of Common Stock being registered hereunder (the Shares ) are issuable (i) upon conversion of certain 6.0% Senior Secured Convertible Notes for an aggregate principal amount of $5,435,000 (the Notes ); and (ii) upon exercise of certain warrants to purchase shares of Common Stock ( Warrants and, together with the Notes, the Securities ) held by the Selling Stockholders identified in herein. We will not receive any proceeds from the resale of the Shares by the Selling Stockholders in this offering. However, we may receive proceeds of up to approximately $550 thousand from the exercise of the Warrants by the Selling Stockholders, once the registration statement, of which this prospectus is a part, is declared effective and any and all restrictions on the exercise of such Warrants have been lifted. All selling and other expenses incurred by the Selling Stockholders will be paid by such stockholders, except for certain legal fees and expenses, which will be paid by us. The Selling Stockholders may sell, transfer or otherwise dispose of any or all of the Securities offered by this prospectus from time to time on The Nasdaq Capital Market or any other stock exchange, market, or trading facility on which the shares are traded, or in private transactions. The Securities may be offered and sold or otherwise disposed of by the Selling Stockholders at fixed prices, market prices prevailing at the time of sale, prices related to prevailing market prices, or privately negotiated prices. Refer to the section entitled Plan of Distribution for more information regarding how the Selling Stockholders may offer, sell, or dispose of their Securities. Our Common Stock is listed on The Nasdaq Capital Market, which we sometimes refer to herein as Nasdaq, under the symbol NRXP. The last reported sale price of our Common Stock on November 11, 2024 was $1.27 per share. Investing in the Securities involves a high degree of risk. Refer to the section entitled Risk Factors on page 4 of this prospectus and in the documents incorporated by reference herein for a discussion of the factors you should carefully consider before deciding to invest in the Securities. Neither the Securities and Exchange Commission (the Commission ) nor any state securities commission has approved or disapproved of the Securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2024
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diff --git a/parsed_sections/prospectus_summary/2024/NXXT_nextnrg_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/NXXT_nextnrg_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/ORKT_orangeklou_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/ORKT_orangeklou_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1 THE OFFERING 11 SUMMARY FINANCIAL INFORMATION 12 RISK FACTORS 13 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 27 USE OF PROCEEDS 28 DIVIDEND POLICY 28 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 29 OUR CORPORATE STRUCTURE AND HISTORY 40 BUSINESS 42 INDUSTRY OVERVIEW 43 MANAGEMENT 60 PRINCIPAL SHAREHOLDERS 66 RELATED PARTY TRANSACTIONS 67 DESCRIPTION OF SHARE CAPITAL AND CONSTITUTION 72 EXCHANGE CONTROLS AND LIMITATIONS AFFECTING SHAREHOLDERS 79 TAXATION 79
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diff --git a/parsed_sections/prospectus_summary/2024/PACS_pacs_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/PACS_pacs_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/PDYNW_palladyne_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/PDYNW_palladyne_prospectus_summary.txt
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/PRFX_painreform_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/PRFX_painreform_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in or incorporated by reference into this prospectus that we consider important. This summary does not contain all of the information you should consider before investing in our securities. Before you decide to invest in our securities, you should read the entire prospectus carefully, including the Risk Factors section and the financial statements and related notes incorporated by reference into this prospectus and the other documents incorporated by reference into this prospectus, which are described under Incorporation by Reference before making an investment in our securities. Company Overview We are a clinical stage specialty pharmaceutical company focused on the reformulation of established therapeutics. Our proprietary extended-release drug-delivery system is designed to provide an extended period of post-surgical pain relief without the need for repeated dose administration while reducing the potential need for the use of opiates. Our strategy is to incorporate generic drugs with our proprietary extended-release drug-delivery system in order to create extended release drug products and to take advantage of the 505(b)(2) regulatory pathway created by the FDA. The 505(b) (2) new drug application, or NDA, process, provides for FDA approval of a new drug based in part on data that was developed by others, including published literature references and data previously reviewed by the FDA in its approval of a separate application. PRF-110, our first product candidate, is based on the local anesthetic ropivacaine, targeting the post-operative pain relief market. PRF-110 is an oil-based, viscous, clear solution that is deposited directly into the surgical wound bed prior to closure to provide localized and extended post-operative analgesia. Recent Developments Increase in Authorized Share Capital On April 8, 2024, at an extraordinary general meeting of shareholders, our shareholders approved an increase in our authorized share capital by 15,000,000 ordinary shares, such that following the increase, our authorized share capital shall equal NIS 6,000,000 divided into 20,000,000 ordinary shares, par value NIS 0.30 per share. Warrant Repricing On December 26, 2023, we entered into an inducement offer letter agreement, or the Inducement Letter, with a certain holder, or the Holder, of certain of our existing warrants to purchase up to (i) 301,230 ordinary shares issued on July 14, 2023 at an exercise price of $9.00 per ordinary share, or the July 14 Warrants, and (ii) 166,666 ordinary shares issued on July 18, 2023 at an exercise price of $9.00 per ordinary share, or the July 18 Warrants and together with the July 14 Warrants, the Existing Warrants. Pursuant to the Inducement Letter, the Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 467,896 ordinary shares at a reduced exercise price of $2.85 per ordinary share, resulting in gross proceeds to us of approximately $1.3 million, in consideration of our agreement to issue new warrants to purchase ordinary shares, or the New Warrants, to purchase up to an aggregate of 935,792 ordinary shares at an exercise price of $2.85 per ordinary share. We engaged H.C. Wainwright & Co., LLC, or Wainwright to act as our exclusive placement agent in connection with the transactions contemplated by the Inducement Letter. We also agreed to issue to Wainwright or its designees warrants, or the Placement Agent Warrants, to purchase up to 32,753 ordinary shares (representing 7.0% of the Existing Warrants being exercised) which have the same terms as the New Warrants except the Placement Agent Warrants have an exercise price equal to $3.5625 per ordinary share (125% of the reduced exercise price of the Existing Warrants). Similar to the New Warrants, the Placement Agent Warrants are immediately exercisable from the date of issuance until the fifth anniversary of such date. The closing of the transactions contemplated pursuant to the Inducement Letter occurred on December 28, 2023. As filed with the Securities and Exchange Commission on April 15, 2024 Registration No. 333-277594 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 AMENDMENT NO. 1 TO FORM F-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PAINREFORM LTD. (Exact name of registrant as specified in its charter) State of Israel 2834 Not Applicable (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 65 Yigal Alon St. Tel Aviv, Israel 6744316 Tel: +972 3 7177051 Puglisi & Associates 850 Library Avenue Newark, DE 19711 Tel: (302) 738-6680 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Mark Selinger, Esq. Gary Emmanuel, Esq. Eyal Peled, Esq. Greenberg Traurig LLP One Vanderbilt Ave New York, NY 10017 +1 212 801 9200 Ronen Kantor, Esq. Doron Tikotzky Kantor Gutman & Amit Gross & Co. B.S.R. 4 Tower, 33 Floor 7 Metsada Street, Bnei Brak 5126112 Israel Tel: +972 3 613 3371 Robert F. Charron, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, NY 10105 Tel: (212) 370-1300 Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date hereof. 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, 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, 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 post-effective amendment filed pursuant to Rule 462(d) 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. 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 the Securities Act, or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine. Our ordinary shares, pre-funded warrants and common warrants can only be purchased together in this offering but will be issued separately. We are also registering the ordinary shares issuable from time to time upon the exercise of the pre-funded warrants and common warrants offered hereby. We refer to the ordinary shares, pre-funded warrants, if any, and common warrants collectively, as the securities. Our ordinary shares are listed on the Nasdaq under the symbol PRFX. On April 11, 2024, the last reported sale price of our ordinary shares on Nasdaq was $1.21 per ordinary share. There is no established trading market for the pre-funded warrants or the common warrants, and we do not expect an active trading market to develop. We do not intend to list the pre-funded warrants or the common warrants on any securities exchange or other trading market. Without an active trading market, the liquidity of the pre-funded warrants and the common warrants will be limited. The public offering price for the securities in this offering will be determined at the time of pricing and may be at a discount to the then current market price. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final public offering price. The final public offering price will be determined through negotiation between us and the investors based upon a number of factors, including our history and our prospects, the industry in which we operate, our past and present operating results, the previous experience of our executive officers and the general condition of the securities markets at the time of this offering. This offering will terminate on April 30, 2024, unless we decide to terminate the offering (which we may do at any time in our discretion) prior to that date. The securities will be offered at a fixed price and will be issued in a single closing. We have engaged H.C. Wainwright & Co., LLC, or the Placement Agent, to act as our exclusive Placement Agent in connection with this offering. The Placement Agent has agreed to use its reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The Placement Agent is not purchasing or selling any of the securities we are offering and the Placement Agent is not required to arrange the purchase or sale of any specific number of securities or dollar amount. We have agreed to pay to the Placement Agent the Placement Agent Fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus. There is no arrangement for funds to be received in escrow, trust or similar arrangement. There is no minimum offering requirement as a condition of closing of this offering. Because there is no minimum offering amount required as a condition to closing this offering, we may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us. We will bear all costs associated with the offering and investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to pursue our business goals described in this prospectus. In addition, because there is no escrow account and no minimum offering amount, investors could be in a position where they have invested in our company, but we are unable to fulfill all of our contemplated objectives due to a lack of interest in this offering. Further, any proceeds from the sale of securities offered by us will be available for our immediate use, despite uncertainty about whether we would be able to use such funds to effectively implement our business plan. See Plan of Distribution on page 25 of this prospectus for more information regarding these arrangements. We are a foreign private issuer, and an emerging growth company each as defined under the federal securities laws, and, as such, we are subject to reduced public company reporting requirements. See the section entitled Prospectus Summary Implications of Being an Emerging Growth Company and a Foreign Private Issuer for additional information. Investing in our securities involves a high degree of risk. Before buying any ordinary shares, you should carefully read the discussion of material risks of investing in our ordinary shares and our company. See Risk Factors beginning on page 5 of this prospectus and in the documents incorporated by reference into this prospectus for a discussion of information that should be considered in connection with an investment in our securities. Recent Developments Affecting Our Business In October 2023, Hamas terrorists infiltrated Israel s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers. Following the attack, Israel s security cabinet declared war against Hamas and commenced a military campaign against Hamas and these terrorist organizations in parallel continued rocket and terror attacks. Nevertheless, our clinical and business development activities remain on track. See also Risk Factors Conditions in the Middle East and in Israel may harm our operations . Reverse Stock Split On June 8, 2023, we effected a reverse share split of the ordinary shares at the ratio of 1-for-10, such that each ten (10) ordinary shares, par value NIS 0.03 per share, were consolidated into one (1) ordinary share, par value NIS 0.30. July 3, 2023 was the first date when our ordinary shares began trading on Nasdaq after implementation of the reverse split. Unless indicated otherwise by the context, all ordinary share, option, warrant and per share amounts as well as share prices appearing in this prospectus have been adjusted to give retroactive effect to the share split for all periods presented. Corporate Information We were incorporated under the laws of the State of Israel in November 2007. Our principal executive offices are located at 65 Yigal Alon St., Tel Aviv, Israel 6744316. Our telephone number is +972-3-717-7051. Our corporate website address is www.painreform.com. Information contained on or accessible through our website is not a part of nor incorporated into this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only. Puglisi & Associates, or Puglisi, serves as our authorized representative in the United States for certain limited matters. Puglisi s address is 850 Library Avenue, Newark, Delaware 19711. Per Ordinary Share and Accompanying Common Warrant Per Pre-funded Warrant and Accompanying Common Warrant Total Public offering price Placement agent fees (1) Proceeds to us (before expenses) (2) (3) (1) We have agreed to pay the Placement Agent cash fee equal to 7.0% of the gross proceeds raised in this offering. We have also agreed to reimburse the Placement Agent for certain of its offering-related expenses, including a management fee of 1.0% of the gross proceeds raised in this offering, to reimburse the Placement Agent for its non-accountable expenses in the amount of $50,000, for its legal fees and expenses and other out-of-pocket expenses in an amount up to $100,000, and for its clearing expenses in the amount of up to $15,950. In addition, we have agreed to issue to the Placement Agent, or its designees, warrants to purchase up to a number of our ordinary shares equal to 7.0% of the number of ordinary shares, including ordinary shares underlying the pre-funded warrants being offered at an exercise price equal to 125% of the combined public offering price per ordinary share and accompanying common warrant. See Plan of Distribution for additional information and a description of the compensation payable to the Placement Agent. (2) We estimate the total expenses of this offering payable by us, excluding the Placement Agent fee, will be approximately $0.12 million. Because there is no minimum number of securities or amount of proceeds required as a condition to closing in this offering, the actual public offering amount, Placement Agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering amounts set forth above. For more information, see Plan of Distribution. (3) Does not include proceeds from the cash exercise of the pre-funded warrants or common warrants, if any. Assumes no pre-funded warrants are issued. Investing in our securities involves a high degree of risk. See Risk Factors beginning on page 5 of this prospectus and in the documents incorporated by reference into this prospectus. Neither the Securities and Exchange Commission, or the SEC, nor any state or other foreign securities commission has approved nor disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. We anticipate that delivery of the securities against payment will be made on or about , 2024, subject to satisfaction of customary closing conditions. H.C. Wainwright & Co. The date of this prospectus is , 2024. Summary of the Offering Ordinary Shares to be offered Up to 4,132,231 ordinary shares on a best-efforts basis based on an assumed public offering price of $1.21 per ordinary share (the last reported sale price of our ordinary shares on the Nasdaq on April 11, 2024). Pre-funded warrants We are also offering to certain purchasers whose purchase of ordinary shares in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of each purchaser, 9.99%) of our outstanding ordinary shares immediately following the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants, or the pre-funded warrants, in lieu of ordinary shares that would otherwise result in such purchaser s beneficial ownership exceeding 4.99% (or, at the election of each purchaser, 9.99%) of our outstanding ordinary shares. The purchase price of each pre-funded warrant is $1.2099 (which is equal to the assumed public offering price per ordinary share to be sold in this offering minus $0.0001, the exercise price per ordinary share of each pre-funded warrant). The pre-funded warrants are immediately exercisable (subject to the beneficial ownership cap) and may be exercised at any time until all of the pre-funded warrants are exercised in full. For each pre-funded warrant we sell (without regard to any limitation on exercise set forth therein), the number of ordinary shares we are offering will be decreased on a one-for-one basis. We are also registering the ordinary shares issuable from time to time upon the exercise of the pre-funded warrants offered hereby. See Description of the Offered Securities for more information. Common Warrants Each ordinary share and each pre-funded warrant will be sold together with one common warrant. Each common warrant has an exercise price per ordinary share equal to $1.21 and expires on the fifth anniversary of the original issuance date. Because we will issue a common warrant for each ordinary share and for each pre-funded warrant sold in this offering, the number of common warrants sold in this offering will not change as a result of a change in the mix of ordinary shares and pre-funded warrants sold. This offering also relates to the ordinary shares issuable upon exercise of any common warrants sold in this offering. See Description of the Offered Securities for more information. Ordinary shares outstanding after this offering 6,158,474 ordinary shares (assuming no sale of any pre-funded warrants and no exercise of the common warrants). Use of proceeds Assuming the maximum number of ordinary shares are sold in this offering at an assumed public offering price of $1.21 per ordinary share, which represents the closing price of our ordinary shares on Nasdaq on April 11, 2024, and assuming no issuance of pre-funded warrants and no exercise of the common warrants in connection with this offering, we estimate the net proceeds of the offering will be approximately $4.3 million, after deducting the placement agent fees and estimated offering expenses payable by us. However, this is a best efforts offering with no minimum number of securities or amount of proceeds as a condition to closing, and we may not sell all or any of these securities offered pursuant to this prospectus; as a result, we may receive significantly less in net proceeds. We currently intend to use the net proceeds from this offering to advance our clinical studies, and for general corporate purposes. Pending such uses, we intend to invest the net proceeds in bank deposits. We have not determined the amount of net proceeds to be used specifically for such purposes. As a result, our management will have broad discretion in the application of the net proceeds of this offering. See Use of Proceeds for additional information. TABLE OF CONTENTS Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2024/PTHS_pelthos_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/PTHS_pelthos_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus or incorporated by reference into this prospectus. It may not contain all the information that may be important to you. You should read the entire prospectus carefully, including the section entitled "Risk Factors" beginning on page 10, the documents incorporated by reference and our financial statements and the related notes included elsewhere in this prospectus before making an investment decision to purchase our securities. In this prospectus, unless we indicate otherwise or the context requires, references to the "Company," "Chromocell," "we," "our," "ours," and "us" refer to Chromocell Therapeutics Corporation. The following summary is qualified in its entirety by the more detailed information and financial statements and notes thereto included elsewhere in this prospectus. Our Business Overview We are a clinical-stage biotech company focused on developing and commercializing new therapeutics to alleviate pain. Our clinical focus is to selectively target the sodium ion-channel known as "NaV1.7", which has been genetically validated as a pain receptor in human physiology. A NaV1.7 blocker is a chemical entity that modulates the structure of the sodium-channel in a way to prevent the transmission of pain perception to the central nervous system ("CNS"). Our goal is to develop a novel and proprietary class of NaV blockers that target the body s peripheral nervous system. We have formally launched two programs developing pain treatment therapeutics, both based on the same proprietary molecule, as follows: Neuropathic Pain: CC8464 is being developed to address certain types of neuropathic pain. The chemical characteristics of CC8464 restrict its entry into the CNS and limit its effect to the NaV1.7 receptors in the peripheral nervous system, which consists of the nerves outside the brain and spinal cord. Activation of other receptors in the CNS can result in side effects, including addiction and other centrally mediated adverse effects. Since CC8464 is designed to not penetrate the CNS it is highly unlikely to produce CNS mediated side effects including euphoria or addiction. Based on its characteristics, preclinical studies (described below) and the Phase 1 studies we have completed to date, we believe that CC8464, if approved, could become an attractive option for both patients and physicians as a treatment for moderate-to-severe pain in Erythromelalgia ("EM") and idiopathic small fiber neuropathy ("iSFN"). We conducted four Phase 1 trials with 207 patients. The results showed that CC8464 has a good overall tolerability and demonstrated no liver or renal toxicity, no central nervous system changes and no cardiovascular findings but may cause rashes in certain patients. The occurrence of rashes is not uncommon in the class of molecules to which CC8464 belongs and the rashes were resolved in all cases with topical steroids and/or topical antihistamines (with the exception of one patient requiring systemic steroids). As a result of the potential for rashes, following discussions with the U.S. Food and Drug Administration ("FDA"), we decided to launch a slow dose escalation study to further evaluate the incidence of rashes. By titrating the dose over nine weeks, we anticipate that we will reduce or eliminate this side effect. We expect that the slow dose escalation study will also help determine the need for dose escalation in the final treatment regime. Even though the FDA has in the past approved drugs that listed rashes as a potential side effect, we do not know if CC8464 will be approved by the FDA (or any foreign authority). We anticipate that the dose escalation will enroll the first patient dosing in the third quarter of 2024. The dose escalation trial will enroll approximately 20 healthy volunteers who will receive CC8464 over a period of approximately nine weeks, with the dose escalation study expected to take approximately nine months in total. We anticipate that the slower dose escalation will decrease the likelihood of drug-related skin reactions. The primary endpoint of the dose escalation trail will be safety and tolerability of the slower dose titration; however, we will also be measuring blood concentrations of CC8464, which will allow us to better understand the pharmacokinetics of CC8464. Even if it is ultimately determined that we will need an escalation period for chronic pain treatment therapy, which patients could well take for the remainder of their lives, we do not believe the dose escalation approach is consequential. We are conducting the escalation trial in Australia to avail ourselves of a 43.5% tax credit for clinical expenses incurred in Australia and, on January 9, 2023, established an Australian subsidiary through which the work will be conducted. The location of the proof-of-concept ("POC") has not been determined at this time, with availability of facilities and patient population, costs, tax credits, centers of excellence in the respective fields (EM or iSFN) are all factors in the ultimate determination of the location. We are currently working on the development of the Phase 2a POC plan and expect to launch the Phase 2a POC study in 2025 to assess the potential efficacy of CC8464 in EM and iSFN patients. Both are orphan indications for which we plan to apply for orphan drug designations. The orphan indication may decrease the scope of the ultimate development program that is necessary for approval and is associated with a marketing exclusivity period from the FDA along with some tax advantages. Though the Phase 2a POC study design has not yet been completed, the study will take approximately twelve months after it is initiated. The primary endpoint will be the amount of pain experienced from EM or iSFN with secondary endpoints including other measurements like pain relief and neuropathy scores. The final design may change based on feedback from regulatory authorities or information learned during the dose escalation trial. The potential population for EM in the United States is estimated to be between 5,000 and 50,000 patients and the potential population for ISFN in the United States is estimated to be between 20,000 and 80,000 patients. In both instances, we expect patients would potentially take our drug for the remainder of their lives, and given the lack of good therapeutic alternatives, we expect to have a robust, ongoing, and durable market. The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. Prospectus SUBJECT TO COMPLETION, DATED JULY 29, 2024 CHROMOCELL THERAPEUTICS CORPORATION 2,000,000 SHARES OF COMMON STOCK This prospectus relates to the offer and resale of up to 2,000,000 shares (the "Purchase Shares") of common stock, $0.0001 par value per share ("Common Stock"), of Chromocell Therapeutics Corporation ("Chromocell", the "Company", "we", "us" or "our") by Tikkun Capital LLC ("Tikkun", "Tikkun Capital" or the "Selling Stockholder") issued pursuant to a common stock purchase agreement, dated July 26, 2024 that we entered into with Tikkun (the "CEF Purchase Agreement"). The shares of Common Stock being offered by Tikkun may be issued pursuant to the CEF Purchase Agreement. We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of our Common Stock by Tikkun. However, we may receive up to $30.0 million in aggregate gross proceeds from sales of our Common Stock to Tikkun that we may make under the CEF Purchase Agreement, from time to time after the date of this prospectus. See the sections entitled "The Tikkun Committed Equity Financing" beginning on page 21 for a description of the transaction contemplated by the CEF Purchase Agreement and "Selling Stockholder" for additional information regarding Tikkun. Tikkun may sell the shares of our Common Stock included in this prospectus in a number of different ways and at varying prices. We provide more information about how Tikkun may sell the shares in the section entitled "Plan of Distribution." Tikkun is an "underwriter" within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the "Securities Act"). Tikkun will pay all brokerage fees and commissions and similar expenses in connection with the offer and resale of the shares by Tikkun pursuant to this prospectus. We will pay the expenses (except brokerage fees and commissions and similar expenses) incurred in registering under the Securities Act the offer and resale of the shares included in this prospectus by Tikkun, including legal and accounting fees. See "Plan of Distribution" beginning on page 36. Pickwick Capital Partners, LLC is acting as placement agent (the "Placement Agent") in connection with the transactions contemplated by the Purchase Agreement. The Placement Agent will receive a cash fee of $10,000. See "Plan of Distribution" beginning on page 36. Our Common Stock is listed on the NYSE American LLC ("NSYE American") under the symbol "CHRO." On July 26, 2024, the closing price of our Common Stock was $1.46. We are an "emerging growth company" as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See "Prospectus Summary—Implications of Being an Emerging Growth Company and a Smaller Reporting Company" beginning on page 6. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. Investing in our Common Stock involves a high degree of risk. See the section entitled "Risk Factors" beginning on page 10. You should carefully consider these risk factors and the documents which are incorporated by reference, as well as the other information contained in this prospectus, before you invest. The date of this prospectus is , 2024 The Phase 2a results will have significance beyond EM and iSFN and provide important insights about NaV1.7 as a potential target to find novel pain medications as an alternative to opioids, the continuing primary standard of care in analgesics. We believe that positive results from the Phase 2a study could not only act as support for CC8464 s potential in EM and iSFN but may also provide guidance of its potential for other indications of peripheral neuropathic pain. Eye Pain: Based on the same proprietary molecule as CC8464, our newly launched program, titled CT2000, is for the potential treatment of both acute and chronic eye pain. NaV1.7 receptors are present on the cornea, making it a viable biological target for treating eye pain. Eye pain may occur with various conditions, including severe dry eye disease, trauma and surgery. Existing therapies for eye pain (such as steroids, topical non-steroidal anti-inflammatory agents, lubricants, local anesthetics) are limited in their effectiveness and/or limited in the duration that they may be prescribed because of safety issues. We intend to explore the viability of developing CT2000 as a topical agent for the relief of eye pain. A potential advantage of this approach is that topical administration of CT2000 is unlikely to lead to any hypersensitivity or skin reactions, like what was noted with systemic administration of CC8464, because the systemic absorption from a topical administration would be extremely limited. We have commenced development of a topical ophthalmic formulation of CT2000 that would initially be evaluated for ophthalmic toxicology and then followed by a POC trial in patients. We expect the trials for this ophthalmic formulation of CT2000 to start in 2025. Current options for the treatment of ocular pain center on the use of corticosteroids and non-steroidal anti-inflammatory drug ("NSAID") based therapeutics. These options suffer from sight-threatening complications such as Glaucoma and corneal melting, thus there is a large unmet need for other approaches. As an example of the potential patient population, we estimate that there are approximately 5 million cases of corneal abrasions per year in the United States. In addition, other potential indications associated with eye pain include: severe dry eye, side effects from photorefractive keratectomy (PRK) and pterygium surgery, second eye cataract surgery, neuropathic corneal pain, and severe uveitis and severe iritis/scleritis. As NaV1.7 receptors are present on the cornea and is a viable biological target for treating eye pain, we believe that we have a sound scientific basis for our ability to treat a multitude of eye pain indications. We are in the process of formulating CT2000 eye drops and expect to move into animal toxicity studies in the second half of 2024. From there, we intend to move into proof-of-concept studies in humans. We may further expand our pipeline with other internal or external compounds in the future, but all other internally discovered compounds are pre-clinical and no commercial discussions about in-licensing have been initiated to date, other than as disclosed in this Report with respect to the licensing of the "Spray Formulations." Corporate Information Chromocell Holdings, our predecessor, was founded in 2002 to commercialize "Chromovert Technology," a proprietary discovery technology with a potential broad range of applications in the biomedical field, including the potential capability to create complex targets (cell-lines) needed for effective high-throughput screening that is commonly used both in therapeutics and flavors discovery. Initially, Chromocell Holdings focused on applications in the food and flavors space. In 2012, Chromocell Holdings started applying the technology in the therapeutics area. Chromocell Holdings focused its efforts on projects where it believed that the discovery of novel medications was largely held back by difficulties creating complex targets (cell lines) needed for effective high-throughput screening. The NaV1.7 ion-channel is a complex target with a well-established role in pain modulation and management believed it presented an opportunity to apply the technology in an area of unmet medical need. Upon creating the necessary NaV1.7 assays and conducting a large high-throughput campaign, Chromocell Holdings research team discovered CC8464. After pre-clinical studies and assessments, an Investigational New Drug Application ("IND") was filed and CC8464 was evaluated in a Phase 1 study with more than 100 subjects. In 2015, Chromocell Holdings signed an agreement with Astellas Pharma Inc. ("Astellas") for the joint development and commercialization of CC8464. Astellas terminated such agreement in 2018 and returned all rights, including all intellectual property rights on CC8464, to Chromocell Holdings. As both the flavors and the therapeutics businesses grew and increasingly required different expertise, capital and business concepts, Chromocell Holdings made the strategic decision to separate the two businesses. Chromocell Therapeutics Corporation (the "Company," "we," "us" and "our") was incorporated in Delaware on March 19, 2021. Our principal executive offices are located at 4400 Route 9 South, Suite 1000, Freehold, NJ 07728, and our telephone number is (877) 265-8266. Our website is www.chromocell.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus. We make available free of charge under the "Investors" section of our website all of our filings with the Securities and Exchange Commission (the "SEC"), including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to such documents, each of which is provided on our website as soon as reasonably practicable after we electronically file or furnish, as applicable, the information with the SEC. ABOUT THIS PROSPECTUS Neither we nor the Selling Stockholder have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, in any free writing prospectuses or in the documents incorporated by reference prepared by or on behalf of us or to which we have referred you. We and the Selling Stockholder do not take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities, in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus only, regardless of the time of delivery of this prospectus or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates. For investors outside the United States: we and the Selling Stockholder have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to this offering of the shares of Common Stock and the distribution of this prospectus outside the United States. Solely for convenience, our trademarks and tradenames referred to in this prospectus and the registration statement of which it forms a part may appear without the or symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames. Information contained in, and that can be accessed through our website, www.chromocell.com, does not constitute part of this prospectus or the registration statement of which it forms a part. INDUSTRY AND MARKET DATA We obtained the industry, statistical and market data in this prospectus from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. In presenting this information, we have made assumptions based on such data and other similar sources, and on our knowledge of, and our experience to date in, the potential markets for our compounds. Although we believe the data from these third-party sources is reliable, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled "Risk Factors" beginning on page 10 and elsewhere in this prospectus and in any documents that we incorporate by reference into this prospectus and the registration statement of which this prospectus forms a part. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us. BASIS OF PRESENTATION We were incorporated in Delaware on March 19, 2021. On August 10, 2022, we entered into that certain Contribution Agreement (the "Contribution Agreement") with Chromocell Corporation, a Delaware corporation ("Chromocell Holdings"). Pursuant to the Contribution Agreement, effective July 12, 2022 (the "Contribution Date"), Chromocell Holdings contributed all assets, liabilities and results of operations related to Chromocell Holdings therapeutic business, including all patents, pre-clinical and Phase 1 study results and data, and trade secrets related to the CC8464 compound, in exchange for the issuance by us of 10,000,000 shares of Common Stock and (ii) 600,000 shares of Series A Convertible Preferred Stock (the "Series A Preferred Stock"). Prior to the Contribution Date, we had only nominal assets and liabilities. Accordingly, the financial statements presented in this prospectus for periods prior to the Contribution Date have been prepared on a "carve-out" basis from the financial statements of Chromocell Holdings to represent our financial position and performance as if it had existed on a stand-alone basis. The financial statements presented in this prospectus for periods from and after the Contribution Date reflect our financial position and performance as a stand-alone entity. THE OFFERING On July 26, 2024 (the "Closing Date"), we entered into the CEF Purchase Agreement with Tikkun, providing for a committed equity financing facility (the "Committed Equity Financing"), pursuant to which, upon the terms and subject to the satisfaction of the conditions contained in the CEF Purchase Agreement, Tikkun has committed to purchase, at our direction in our sole discretion, up to an aggregate of $30,000,000 ("Total Commitment") of Purchase Shares, subject to certain limitations set forth in the CEF Purchase Agreement, from time to time during the term of the CEF Purchase Agreement. Concurrently with the execution of the Purchase Agreement, we and Tikkun also entered into a Registration Rights Agreement, dated as of July 26, 2024 (the "Registration Rights Agreement"), pursuant to which we agreed to file with the SEC one or more registration statements to register under the Securities Act the offer and resale by Tikkun of all of the shares of Common Stock that may be issued and sold by us to Tikkun from time to time under the CEF Purchase Agreement. Sales of Purchase Shares by the Company to Tikkun under the CEF Purchase Agreement, if any, may occur, from time to time at our sole discretion, over a period commencing upon the initial satisfaction of all conditions to Tikkun s purchase obligations set forth in the CEF Purchase Agreement (the "Commencement," and the date on which the Commencement occurs, the "Commencement Date"), including that the initial registration statement we are required to file with the SEC pursuant to the Registration Rights Agreement, which is the registration statement of which this prospectus forms a part, is declared effective by the SEC, and ending on the first day of the month next following the 24-month anniversary of the Closing Date, unless the CEF Purchase Agreement is terminated earlier under its terms. From and after the Commencement Date, we will have the right, but not the obligation, from time to time at our sole discretion, to direct Tikkun to purchase amounts of Purchase Shares that are specified by the Company to Tikkun in writing, subject to certain maximum amounts calculated pursuant to the CEF Purchase Agreement. The purchase price per share to be paid by Tikkun for Purchase Shares that we may elect to sell to Tikkun will be equal to 90% of the lowest daily VWAP of the Common Stock during the trading day immediately following the date that a VWAP Purchase Notice is timely delivered from us to Tikkun, provided that (i) we may not deliver more than one VWAP Purchase Notice to Tikkun on any single trading day, (ii) at least three trading days have elapsed since the trading day on which the most recent VWAP Purchase Notice was delivered by us to Tikkun, (iii) the closing sale price of the Common Stock on such date is not lower than $0.10, as adjusted for stock splits and similar transactions (the "Threshold Price"), and (iv) all Purchase Shares subject to all prior VWAP Purchases by Tikkun under the CEF Purchase Agreement have been received by Tikkun electronically as set forth in the CEF Purchase Agreement. The maximum number of Purchase Shares that may be required to be purchased pursuant to a VWAP Purchase Notice will be equal to the lowest of: (i) 100% of the average daily trading volume in the Common Stock for the five consecutive trading day period ending on (and including) the trading day immediately preceding the applicable day Tikkun receives a VWAP Purchase Notice; (ii) the product obtained by multiplying (A) the daily trading volume in the Common Stock on the applicable day Tikkun receives a VWAP Purchase Notice and (B) 0.30; and (iii) the quotient obtained by dividing (A) $2,000,000 by (B) the VWAP of the Common Stock on the trading day immediately preceding the applicable day Tikkun receives a VWAP Purchase Notice. There are no upper limits on the price per share that Tikkun must pay for Purchase Shares the Company directs Tikkun to purchase in a VWAP Purchase under the CEF Purchase Agreement. The purchase price per Purchase Share that the Company directs Tikkun to purchase in a VWAP Purchase under the CEF Purchase Agreement will be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction during the period used to determine the purchase price to be paid by Tikkun for such shares in such VWAP Purchase (as defined below). Tikkun has no right to require us to sell any Purchase Shares to Tikkun, but Tikkun is obligated to make purchases of Purchase Shares as directed by us, subject to the satisfaction of conditions set forth in the CEF Purchase Agreement at Commencement and thereafter at each time that the Company may direct Tikkun to purchase the Purchase Shares under the CEF Purchase Agreement. Actual sales of Purchase Shares by the Company to Tikkun under the CEF Purchase Agreement, if any, will depend on a variety of factors to be determined by us in our sole discretion from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. We may not issue or sell any shares of our Common Stock to Tikkun under the CEF Purchase Agreement which, when aggregated with all other shares of Common Stock then beneficially owned by Tikkun and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 13d-3 promulgated thereunder), would result in Tikkun beneficially owning more than 4.99% of the outstanding shares of the Common Stock (the "Beneficial Ownership Limit"). Under the applicable rules of the NYSE American, in no event may we issue to Tikkun and any of its affiliates under the CEF Purchase Agreement, or otherwise, more than 1,152,764 shares of Common Stock, which number of shares represents 19.99% of the shares of the Common Stock outstanding immediately prior to the execution of the CEF Purchase Agreement (the "Exchange Cap"), unless we obtain stockholder approval to issue shares of Common Stock to Tikkun and any of its affiliates in excess of the Exchange Cap under the CEF Purchase Agreement, or otherwise, and in accordance with applicable NYSE American listing rules (the "Stockholder Approval"). The Exchange Cap will not be applicable to limit the number of shares of Common Stock that we may sell to Tikkun in any VWAP Purchase that we effect pursuant to the CEF Purchase Agreement (if any), to the extent the purchase price per share paid by Tikkun for the shares of Common Stock in such VWAP Purchase is equal to or greater than the greater of book or market value of the Common Stock (calculated in accordance with the applicable listing rules of the NYSE American) at the time we deliver the VWAP Purchase Notice for such VWAP Purchase to Tikkun, adjusted as required by the NYSE American to take into account our payment of the Commitment Fee (as defined below) to Tikkun and the amount paid as reimbursement for the legal fees and disbursements of Tikkun s counsel in connection with this Committed Equity Financing, each as described in more detail below, and otherwise as may be necessary to ensure compliance with the applicable rules of the NYSE American. In any event, the CEF Purchase Agreement specifically provides that we may not issue or sell any shares of Common Stock under the CEF Purchase Agreement if such issuance or sale would breach any applicable rules or regulations of NYSE American. All of the assets, liabilities and results of operations of the Company as of and for the periods prior to the Contribution Date were identified based on the assets contributed to the Company from Chromocell Holdings. Management believes the assumptions underlying the Company s carve-out financial statements are reasonable. Nevertheless, the financial statements may not include all of the actual expenses that would have been incurred had the Company operated as a standalone company during the periods presented, and may not reflect the Company s results of operations, financial position and cash flows had the Company operated as a standalone company during the periods presented. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. On August 2, 2023, we entered into a Side Letter to the Contribution Agreement with Chromocell Holdings (the "Holdings Side Letter"). Pursuant to the Holdings Side Letter, and upon closing of the initial public offering by the Company on February 21, 2024 (the "IPO"): (a) Chromocell Holdings re-assumed all $1.6 million in direct liabilities previously assumed by the Company in accordance with the Contribution Agreement, (b) Chromocell Holdings waived the Company s obligations to make a cash payment in the amount of $0.6 million to Chromocell Holdings, and (c) in consideration thereof, the Company issued to Chromocell Holdings 2,600 shares of Series C Convertible Redeemable Preferred Stock of the Company, par value of $0.0001 per share (the "Series C Preferred Stock"). In connection with the completion of the IPO: (A) we effected a 1-for-9 reverse stock split with respect to our Common Stock effective February 15, 2024 (the "Reverse Stock Split"), (B) all 600,000 issued and outstanding shares of our Series A Preferred Stock automatically converted into 499,429 shares of Common Stock, (C) $389,757 and accrued interest of approximately $28,336 as of February 21, 2024 outstanding under our senior secured convertible notes issued in the April Bridge Financing (as defined below) after giving effect to the Representative Affiliate Transactions (as defined below), automatically converted into approximately 87,109 shares of Common Stock, (D) $197,421 and accrued interest of $8,169 as of February 21, 2024 outstanding under our senior secured convertible notes issued in the September Bridge Financing (as defined below) after giving effect to the Representative Affiliate Transactions, automatically converted into approximately 43,385 shares of Common Stock, which includes an additional 549 shares of Common Stock issuable as consideration for the September Bridge Financing (the "Bonus Shares"), (E) we issued 37,500 shares of Common Stock to an investor as consideration for its previous agreement to provide funding that is no longer necessary in connection with the IPO, (F) we effected the Representative Affiliate Transactions, and (G) we effected the transactions contemplated by the Holdings Side Letter, and issue an aggregate of 2,600 shares of Series C Preferred Stock to Chromocell Holdings pursuant thereto. We refer to these actions as the "IPO Transactions." In this prospectus, we include certain metrics on an "as adjusted" basis to give effect to the IPO Transactions. The net proceeds from sales, if any, under the CEF Purchase Agreement to the Company will depend on the frequency and prices at which we sell shares of our Common Stock to Tikkun. We expect that any proceeds received by us from such sales to Tikkun will be used to continue our clinical and pre-clinical work on CC8464 and CT2000 and for working capital and general corporate purposes. There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the CEF Purchase Agreement or Registration Rights Agreement, other than a prohibition (with certain limited exceptions) on the Company entering into specified "Variable Rate Transactions" (as such term is defined in the CEF Purchase Agreement). Such transactions include, among others, the issuance of convertible securities with a conversion or exercise price that is based upon or varies with the trading price of the Common Stock after the date of issuance, or our effecting or entering into an agreement to effect an "equity line of credit," an "at the market offering" or other similar continuous offering with a third party, in which we may offer, issue or sell Common Stock or any securities exercisable, exchangeable or convertible into Common Stock at future determined prices. Subject to specified exceptions included in the CEF Purchase Agreement, such restrictions shall remain in effect for a period commencing on the Closing Date and ending on first day of the month next following the 24-month anniversary of the Closing Date. During the term of the CEF Purchase Agreement, Tikkun covenanted not to enter into or effect, in any manner whatsoever, directly or indirectly, any short sales of the Common Stock or hedging transaction which establishes a net short position with respect to the Common Stock As consideration for Tikkun s commitment to purchase the Purchase Shares upon the terms of and subject to satisfaction of the conditions set forth in the CEF Purchase Agreement, we have paid $750,000 in cash to Tikkun as a commitment fee (the "Commitment Fee") on the first trading pay immediately following the Closing Date. In addition, as required under the CEF Purchase Agreement, the Company has reimbursed Tikkun for the reasonable legal fees and disbursements of Tikkun s legal counsel in the amount of $75,000. The CEF Purchase Agreement will automatically terminate upon the earliest of (i) the first day of the month next following the 24-month anniversary of the Closing Date, (ii) Tikkun s purchase of Purchase Shares having an aggregate purchase price equal to Total Commitment under the CEF Purchase Agreement, or (iii) the occurrence of certain other events set forth in the CEF Purchase Agreement. The Company has the right to terminate the CEF Purchase Agreement at any time after Commencement, at no cost or penalty, upon five trading days prior written notice to Tikkun, subject to certain conditions and the survival of certain provisions of the CEF Purchase Agreement and the Registration Rights Agreement. Tikkun may terminate the CEF Purchase Agreement upon five trading days prior written notice after the occurrence of certain events, including the occurrence of a Material Adverse Effect or a Fundamental Transaction (as such terms are defined in the CEF Purchase Agreement) or upon the occurrence of certain other events as set forth in the CEF Purchase Agreement. Neither the Company nor Tikkun may assign or transfer their respective rights and obligations under the CEF Purchase Agreement, and no provision of the CEF Purchase Agreement or the Registration Rights Agreement may be modified or waived by the Company or Tikkun. The CEF Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties. We do not know what the purchase price for our Common Stock will be and therefore cannot be certain as to the number of Purchase Shares we might issue to Tikkun under the CEF Purchase Agreement after the Commencement Date. Although the CEF Purchase Agreement provides that we may sell up to $30.0 million of our Common Stock to Tikkun, only 2,000,000 shares of our Common Stock are being registered for resale by Tikkun under this prospectus, which represents up to 2,000,000 Purchase Shares that may be issued to Tikkun from and after the Commencement Date, if and when we elect to sell shares to Tikkun under the CEF Purchase Agreement. Depending on the market prices of our Common Stock at the time we elect to issue and sell Purchase Shares to Tikkun under the CEF Purchase Agreement, we may need to register for resale under the Securities Act additional Purchase Shares in order to receive aggregate gross proceeds equal to the $30.0 million Total Commitment available to us under the CEF Purchase Agreement. As of July 26, 2024, there were 5,766,704 shares of our Common Stock outstanding, of which 2,206,205 shares are estimated to be held by non-affiliates. If all of the 2,000,000 shares offered by Tikkun for resale under this prospectus were issued and outstanding as of the date hereof (without taking into account the Exchange Cap limitation), such shares would represent approximately 25.8% of the total number of shares of our Common Stock outstanding and approximately 47.5% of the total number of shares of our Common Stock held by non-affiliates outstanding, in each case, as of the date hereof. If we issue and sell more than the 2,000,000 shares offered under this prospectus to Tikkun, which we have the right, but not the obligation, to do, we must first (i) the Stockholder Approval and (ii) register for resale under the Securities Act any such additional shares, which could cause additional substantial dilution to our stockholders. The number of shares ultimately offered for resale by Tikkun is dependent upon the number of Purchase Shares we may elect to sell to Tikkun under the CEF Purchase Agreement from and after the Commencement Date. There are substantial risks to our stockholders as a result of the sale and issuance of Purchase Shares to Tikkun under the CEF Purchase Agreement. These risks include substantial dilution, significant declines in our stock price and our inability to draw sufficient funds when needed. See "Risk Factors" beginning on page 10. Issuances of our Common Stock in this offering will not affect the rights or privileges of our existing stockholders, except that the economic and voting interests of each of our existing stockholders will be diluted as a result of any such issuance. Although the number of shares of our Common Stock that our existing stockholders own will not decrease, the shares owned by our existing stockholders will represent a smaller percentage of our total outstanding shares after any such issuances to Tikkun. Implications of Being an Emerging Growth and Smaller Reporting Company We qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). An emerging growth company may take advantage of relief from certain reporting requirements and other burdens that are otherwise applicable generally to public companies. These provisions include: reduced obligations with respect to financial data; an exception from compliance with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"); reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements. We may take advantage of these provisions for up to five years or such earlier time that we no longer qualify as an emerging growth company. We would cease to be an emerging growth company upon the earliest of: the last day of the fiscal year on which we have $1.235 billion or more in annual revenue, the date on which we become a "large accelerated filer" (i.e., as of our fiscal year end, the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30), the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period, or the last day of our fiscal year following the fifth anniversary of the date of the completion of the offering of our IPO. We may choose to take advantage of some but not all of these reduced reporting burdens. In addition, under the JOBS Act, emerging growth companies can take advantage of an extended transition period and delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies. If we were to subsequently elect instead to comply with public company effective dates, such election would be irrevocable pursuant to the JOBS Act. Also, we are a "smaller reporting company" (and may continue to qualify as such even after we no longer qualify as an emerging growth company). For as long as we qualify as a "smaller reporting company," we may provide reduced disclosure in the public filings that we make with the SEC than larger public companies, such as the inclusion of only two years of audited financial statements and only two years of management s discussion and analysis of financial condition and results of operations disclosure. As a result of qualifying as an emerging growth company and a smaller reporting company, to the extent we take advantage of the allowable reduced reporting burdens, the information that we provide to our stockholders may be different than what you might receive from other public reporting companies in which you hold equity interests. Summary Risk Factors We are subject to a number of risks that you should be aware of before making an investment decision to purchase our securities. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth in the section titled "Risk Factors", beginning on page 10, in deciding whether to invest in our securities. Among these important risks are the following: The report of the independent registered public accounting firm on our 2023 and 2022 financial statements contains a going concern qualification; We have identified material weaknesses in our internal control over financial reporting; The market price and trading volume of the Company s Common Stock may experience rapid and substantial volatility, which could cause a purchaser of our Common Stock to incur substantial losses; Our Common Stock is currently listed on the NYSE American. NYSE American may delist our Common Stock from trading, which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions; Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management; Our amended and restated certificate of incorporation (which, as so amended and restated, we refer to as our "certificate of incorporation") and our bylaws, as amended (which we refer to as our "bylaws") provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees; The Series C Preferred Stock of the Company has a liquidation preference over our Common Stock; The price of our securities may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our securities; Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies, CC8464 or CT2000; It is not possible to predict the actual number of shares we will sell under the CEF Purchase Agreement, or the actual gross proceeds resulting from those sales. We may not have access to the full amount available under the CEF Purchase Agreement with Tikkun; Sales of a substantial number of our Common Stock in the public market by our existing stockholders could cause the price of our shares of our Common Stock to fall; Investors who buy shares of our Common Stock at different times will likely pay different prices; We may require additional financing to sustain our operations and, without it, we will not be able to continue operations; The terms of the CEF Purchase Agreement limit the amount of shares of Common Stock we may issue to Tikkun, which may have an adverse effect on our liquidity; Future sales of substantial amounts of our Common Stock, or the possibility that such sales could occur, could adversely affect the market price of our Common Stock; Management will have broad discretion as to the use of the proceeds from our sale of Common Stock to Tikkun under the CEF Purchase Agreement, and such uses may not improve our financial condition or market value; and The other factors set forth under "Risk Factors." These and other risks are more fully described in the section entitled "Risk Factors" beginning on page 10 in this prospectus. If any of these risks actually occurs, our business, financial condition, results of operations, cash flows, and prospects could be materially and adversely affected. As a result, you could lose all or part of your investment in our securities. Securities Offered Common Stock offered by the Selling Stockholder Up to 2,000,000 Purchase Shares. Common Stock outstanding prior to this offering 5,766,704 shares. Common Stock outstanding after this offering 7,766,704 shares. Use of proceeds We will not receive any proceeds from the resale of shares of our Common Stock included in this prospectus by the Selling Stockholder. We may receive up to $30.0 million in aggregate gross proceeds under the CEF Purchase Agreement from sales of our Common Stock that we elect to make to Tikkun pursuant to the CEF Purchase Agreement, if any, from time to time in our sole discretion, from and after the Commencement Date. Any proceeds that we receive from the sales of the Purchase Shares to Tikkun under the CEF Purchase Agreement will be used to continue our clinical and pre-clinical work on CC8464 and CT2000. We intend to use the remaining proceeds, if any, for working capital and general corporate purposes. See "Use of Proceeds" beginning on page 29. Risk factors See "Risk Factors" beginning on page 10 and other information included in this prospectus and under similar headings in the other documents incorporated by reference into this prospectus for a discussion of factors you should consider carefully before deciding to invest in our securities. Transfer agent and registrar Our transfer agent and registrar for our Common Stock is Nevada Agency and Transfer Company, located at 50 W. Liberty Street, Suite 880, Reno, NV 89501. NYSE American symbol for Common Stock Our Common Stock is listed on NYSE American under the symbol "CHRO". Unless we specifically state otherwise or the context otherwise requires, the share information in this prospectus is based on 5,766,704 shares of Common Stock outstanding as of July 26, 2024 and: assumes no conversion of the Series C Preferred Stock issued at the close of the IPO; assumes no conversion of the Note; does not reflect 820,448 shares of Common Stock issuable upon the exercise of outstanding options granted under our equity incentive plan, with a weighted average exercise price of $6.16; does not reflect 257,993 shares of Common Stock underlying restricted stock units ("RSUs"), granted pursuant to our equity incentive plan; and does not reflect 1,500,002 shares of Common Stock that are reserved for future grants or sale under our equity incentive plan, as amended by our board of directors on June 12, 2024, which such amendment we expect to be approved by our stockholders at our 2024 annual meeting of stockholders. RISK FACTORS Investing in our securities involves a high degree of risk. You should carefully consider the following risks and all other information contained in this prospectus and in the documents that we incorporate by reference herein, including our financial statements and the related notes, before investing in our securities. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, also may become important factors that affect us. If any of the following risks occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In these circumstances, the market price of our Common Stock could decline, and you may lose all or part of your investment. Risks Related to Our Business The report of the independent registered public accounting firm on our 2023 and 2022 financial statements contains a going concern qualification. The report of the independent registered public accounting firm covering our financial statements for the years ended December 31, 2023 and 2022 stated that certain factors, including that we have suffered recurring losses from operations and have an accumulated deficit at December 31, 2023, raised substantial doubt as to our ability to continue as a going concern. Because we are not yet producing sufficient revenue to sustain our operating costs, we are dependent upon raising capital to continue our business. If we are unable to raise capital, we may be unable to continue as a going concern. We have identified material weaknesses in our internal control over financial reporting. Prior to our IPO, we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures. In connection with the audit and review, as applicable, of our financial statements for the years ended December 31, 2023 and 2022, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses in our case arose from inadequate segregation of duties, ineffective information technology controls and lack of certain financial reporting and transaction processing controls. If we are unable to remedy our material weaknesses, or if we generally fail to establish and maintain effective internal controls appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may conclude that our internal control over financial reporting is not effective, which could adversely impact our investors confidence and our stock price. Risks Related to this Offering and Ownership of our Common Stock The market price and trading volume of the Company s Common Stock may experience rapid and substantial volatility, which could cause a purchaser of our Common Stock to incur substantial losses. Recently, the market prices and trading volume of shares of Common Stock of other small publicly traded companies with a limited number of shares available to purchasers, have experienced rapid and substantial price volatility unrelated to the financial performance of those companies. Similarly, shares of our Common Stock may experience similar rapid and substantial price volatility unrelated to our financial performance, which could cause purchasers of our Common Stock to incur substantial losses, which may be unpredictable and not bear any relationship to our business and financial performance. Extreme fluctuations in the market price of our Common Stock may occur in response to strong and atypical retail investor interest, including on social media and online forums, the direct access by retail investors to broadly available trading platforms, the amount and status of short interest in our Common Stock and our other securities, access to margin debt, trading in options and other derivatives on our shares of Common Stock and any related hedging and other trading factors. If there is extreme market volatility and trading patterns in our Common Stock, it may create several risks for investors, including the following: the market price of our Common Stock may experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals; if our future market capitalization reflects trading dynamics unrelated to our financial performance or prospects, purchasers of our Common Stock could incur substantial losses as prices decline once the level of market volatility has abated; if the future market price of our Common Stock declines, purchasers of shares of Common Stock may be unable to resell such shares at or above the price at which they acquired them. We cannot assure such purchasers that the market of our Common Stock will not fluctuate or decline significantly in the future, in which case investors could incur substantial losses. Further, we may incur rapid and substantial increases or decreases in our Common Stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our Common Stock may fluctuate dramatically, and may decline rapidly, regardless of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could negatively affect the market price of our Common Stock or result in fluctuations in the price or trading volume of our Common Stock, including: actual or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market expectations with regard to our earnings; our current inability to pay dividends or other distributions; publication of research reports by analysts or others about us or the industry in which we operate, including the pharmaceutical or biotechnology industry which may be unfavorable, inaccurate, inconsistent or not disseminated on a regular basis; changes in market valuations of similar companies; market reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings of our existing stockholders; additions or departures of key personnel; actions by institutional or significant stockholders; short interest in our Common Stock or our other securities and the market response to such short interest; the dramatic increase in the number of individual holders of our Common Stock and their participation in social media platforms targeted at speculative investing; speculation in the press or investment community about our company or industries in which we operate; strategic actions by us or our competitors, such as acquisitions or other investments; legislative, administrative, regulatory or other actions affecting our business, our industry, including positions taken by the FDA; investigations, proceedings, or litigation that involve or affect us; the occurrence of any of the other risk factors included in this registration statement of which this prospectus forms a part and in the documents incorporated by reference; and general market and economic conditions. Our Common Stock is currently listed on the NYSE American. NYSE American may delist our Common Stock from trading, which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. Should we fail to satisfy the continued listing requirements for remaining listed on NYSE American, such as the corporate governance requirements or the minimum closing bid price requirement, NYSE American may take steps to delist our Common Stock. Such a delisting would likely have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so. In the event of a delisting, we would take actions to restore our compliance with NYSE American s listing requirements, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below NYSE American s minimum bid price requirement or prevent future non-compliance with such listing requirements. If we cannot maintain the listing of our Common Stock for trading on NYSE American, we could face significant material adverse consequences, including: a limited availability of market quotations for our Common Stock; reduced liquidity for our Common Stock; a determination that our Common Stock is a "penny stock" which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Stock; a limited amount of news and analyst coverage; and a decreased ability to issue additional Common Stock or obtain additional financing in the future. Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management. Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our Common Stock, thereby depressing the market price of our Common Stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions: allow the authorized number of our directors to be changed only by resolution of our board of directors; limit the manner in which stockholders can remove directors from the board; establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; limit who may call stockholder meetings; authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called "poison pill," that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and authorize "blank check" preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our Common Stock. Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware (the "DGCL"), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. Our certificate of incorporation and our bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. Our certificate of incorporation and our bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. Notwithstanding the foregoing, the exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive or concurrent jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act of the rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, and notwithstanding the provisions of our certificate of incorporation and our bylaws, compliance with the federal securities laws and the rules and regulations thereunder may not be waived by our investors. The choice of forum provision may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation and our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial condition, and results of operation. A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our Common Stock to drop significantly, even if our business is performing well. Sales of substantial amounts of our shares of Common Stock in the public market following the offering, or the perception that these sales could occur, could cause the market price of our securities to decline. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. All of the shares of Common Stock in the offering are immediately tradable without restriction under the Securities Act, except for any securities held by "affiliates," as that term is defined in Rule 144 under the Securities Act ("Rule 144"). The remaining shares of Common Stock of the Company outstanding, other than the 2,969,823 shares (the "Existing Selling Stockholder Shares") of Common Stock that we have registered on behalf of certain selling stockholders (the "Existing Selling Stockholders") identified in a separate prospectus (the "Existing Resale Prospectus") and which may be resold by such Existing Selling Stockholders from time to time, are restricted securities within the meaning of Rule 144 under the Securities Act but will be eligible for resale subject to applicable volume, means of sale, holding period and other limitations of Rule 144 under the Securities Act or pursuant to an exception from registration under Rule 701 under the Securities Act, subject to the lock-up agreements
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+PROSPECTUS SUMMARY The following summary highlights selected information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. It does not contain all the information that may be important to you and your investment decision. You should carefully read this entire prospectus, including the matters set forth under "Risk Factors" beginning on page 8, "Management s Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and related notes included elsewhere in this prospectus. Overview High Roller Technologies, Inc. is an evolving and growth-oriented global online gaming operator. We offer a compelling real money online casino platform. We define the term platform ("Platform") as the fusion of our technical IP, commercial partnerships, and operational expertise including an in-house developed domain customizable frontend and content management system (CMS) which offers enhanced search engine optimization, direct API integrations, faster load times, and better scalability. We utilize a third party player account management system (PAM) that offers us a high level of control over game integrations, payment provider solutions, and overall player management. Our experienced operational management team actively oversees engagement with our players and partners. Our Platform is based around a set of gaming products, which we refer to as "iCasino" and is offered to players in select markets throughout the world. We offer a wide range of games, including many that are available in land-based casinos. We currently offer more than 4,400 games from over 70 providers, representing largely the entire range of iCasino games which we believe are most attractive to our player base including video slots, blackjack, roulette, baccarat, craps, and video poker. A number of our most popular games are available to play with a live dealer including blackjack, video poker, roulette, baccarat, craps, Game Shows, which is the fastest growing live casino segment, and other popular live games. Our offerings incorporate attractive graphics, targeted bonuses, and interactive social elements in a secure environment featuring rapid onboarding and payouts. Our selections of games include but are not limited to those sourced from: Evolution Gaming Pragmatic Play Push Gaming No Limit City Play n GO Relax Gaming Red Tiger Gaming Big Time Gaming Netent Quickspin Games Global Launching Our Premium Brand HighRoller.com In January 2022 we launched our premium brand HighRoller.com, replacing our legacy iCasino brand, CasinoRoom.com. Our subsidiary, Interstellar Entertainment NV, is licensed by the Curacao Gaming Control Board, under license number OGL/2024/1042/0564. Following the closing of this Offering, we intend also to apply for an Estonian gaming license. Pending receipt of an Estonian gaming license, we entered into several agreements with Happy Hour Solutions Ltd., an affiliated company and holder of an Estonian gaming license, including: a Domain License Agreement, dated January 1, 2022 (which we refer to as the "Effective Date"), that gives Happy Hour Solutions the right to use our domain; a Nominee Agreement, dated the Effective Date, which allows Happy Hour Solutions to, among other business solutions, process payments made on the aforementioned domain and allows us to host, manage, administer, operate and support enter into contracts in the ordinary course of business in the name of Happy Hour Solutions, and in March 2024 an Online Gaming Operations Agreement, by which, as further described therein, we continue to supply Happy Hour Solutions with services that commenced as of the Effective Date, related to the operation of an online casino primarily through our existing personnel, technical solutions, and commercial relationships while utilizing the Happy Hour Solutions Estonian gaming license and to recognize the revenues generated thereof as agreed upon by the parties. We refer to these agreements collectively as the "Happy Hour Solutions Agreements." The Happy Hour Solutions Agreements terminate on the earlier of our receipt of an Estonian gaming license or December 31, 2025. The Happy Hour Solutions Agreements as described above are qualified in their entirety by the agreements filed as exhibits to the registration statement of which this prospectus is a part. See "Business- Licenses." We also hold an inactive gaming license from Malta, which we are in the process of terminating. We have not operated under our Malta license since June 2022. Our remote license and the Happy Hour Solutions Agreements provide us with the ability to generate revenues in certain jurisdictions within Europe, Asia-Pacific and the Americas. We plan to launch into one or more locally regulated markets utilizing proceeds from this offering but have not identified a particular target market or budgeted any particular amount for such entries. We currently expect that any such initial active entry into a regulated Americas market to occur within approximately twelve months following receipt of proceeds from this offering. See "Business". Our vision is to be the premium online destination for high rollers around the world. We believe the highroller.com domain provides us with a strategic asset to build a brand appealing to high value customers. While our Platform allows us to scale highroller.com and other brands attracting additional demographics. Our founders, board of directors, and management collectively have over 100 years of iGaming experience, having founded, listed, and successfully exited a range of companies working in some of the most competitive global iGaming and e-commerce markets. Our branding and operational focus is to establish and continue to grow significant market share in the international online casino markets. The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED OCTOBER 7, 2024 1,250,000 Shares Common Stock High Roller Technologies, Inc. This is a firm commitment initial public offering of shares of common stock of High Roller Technologies, Inc. Prior to this offering, there has been no public market for our common stock. We anticipate that the initial public offering price will be $8.00 per share of common stock. We have applied to have our common stock listed on NYSE American under the symbol "ROLR." If our application is not approved or if we otherwise determine that we will not be able to secure the listing of our common stock on NYSE American, we will not complete this offering. We are an "emerging growth company" as that term is used in the Jumpstart Our Business Startups Act of 2012 and have elected to comply with certain reduced public company reporting requirements. Investing in our common stock is highly speculative and involves a high degree of risk. See "Risk Factors" beginning on page 8. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Share Total Initial public offering price $ Underwriting discounts and commissions(1) $ Proceeds to us, before expenses $ (1) Underwriting discounts and commissions exclude a non-accountable expense allowance equal to 1.0% of the initial public offering price payable to the underwriters. See "Underwriting" beginning on page 83 for additional information regarding underwriters compensation. We have granted a 45-day option to the representative of the underwriters to purchase up to 187,500 additional shares of our common stock, solely to cover over-allotments, if any. The underwriters expect to deliver the shares to purchasers on or about , 2024. ThinkEquity The date of this prospectus is , 2024 Our growth will be driven by attracting and acquiring new players, engaging our existing users, by entering new geographical markets, and implementing a multi-brand strategy. See "Growth Strategy" below. We believe that one of our main competitive strengths is rooted in our founding team s proven expertise in digital performance marketing and operational excellence, along with the iCasino experience of our seasoned senior management. Launch of HighRoller.com and Relaunch of CasinoRoom.com as an Affiliate Marketing Website During the first quarter of 2022, we acquired HR Entertainment Ltd., a British Virgin Islands company, in order to obtain the premium HighRoller.com domain name and related intellectual property that we believe is a main component of our growth strategy. We consider this acquisition a principal lynchpin of our ongoing strategy of delivering one of the most exciting and immersive real money gaming experiences for the iCasino market. During the first quarter of 2022, we acquired Ellmount Entertainment Ltd., a Malta company, in order to obtain the CasinoRoom.com brand. We offered active Casino Room players the option to open accounts at HighRoller.com and commenced welcoming players onto what is in our view the more attractive iCasino platform. During the first half of 2022, we rebranded our iCasino operations from CasinoRoom.com to HighRoller.com and concurrently commenced to reposition our legacy gaming operator "CasinoRoom.com" into an online casino ratings and reviews portal to generate high-value leads and targeted search engine traffic (SEO) for HighRoller.com and customer leads for other casinos particularly in markets that we do not serve. The new CasinoRoom.com affiliate model site further enables us to support any future brands we may launch or acquire with targeted traffic. In March 2022, we relocated our principal offices from Stockholm, Sweden to Las Vegas, Nevada. We also maintain offices in Malta to support our administrative and operational activities. Market Trends Total addressable worldwide gambling market (TAM) in 2023 was estimated to be $540 billion of which iGaming is estimated to exceed $135 billion or about 25% of TAM. The market is expected to grow to $681 billion by 2027, of which iGaming is expected to account for $210 billion or about 31% of TAM. This estimated growth in the iGaming market represents a compound annual growth rate, or CAGR, of 9%.1 Our Business Model We offer our customers a wide array of popular and exciting casino games from over 70 leading third-party game developers. Our mission is to offer consistently superior customer experience by (i) providing fast onboarding, easy log-in and re-log-in, (ii) assuring efficient and secure payment processing, (iii) providing prompt payouts on player winnings, (iv) offering generous bonuses, bonus play and free spins on popular games, (v) utilizing an interactive environment for player engagement leading to longer stays online and more play, (vi) maintaining 24/7/365 customer service to assure customer satisfaction and (vii) providing an array of responsible gaming tools and AI models to ensure a safe gaming experience. We have also established a relationship with Spike Up Media LLC, an affiliate of our founders and one of the leading global providers of online lead generation to iCasino operators. We believe that our association with Spike Up Media generates high-quality, cost-effective lead generation providing us with higher lead to customer conversions, attractive payment terms and revenue sharing. Approximately 29% and 78% of our leads were generated by Spike Up Media during 2023 and 2022, respectively. We plan to continue mitigating this dependency through internal staffing and by working with other lead generators. Our initial payment arrangements with Spike Up Media for lead generation were at favorable rates to us resulting in more rapid payback of customer acquisition costs than we might otherwise expect from leads generated by other unaffiliated providers. Since March 2023, our arrangement for lead generation with Spike Up has changed to market rates which results in our having lower gross operating margins. Our current agreement with Spike Up Media allows for termination by either party at any time without penalty. If we were currently to lose the relationship with Spike Up our iCasino operations could suffer and we could experience a material negative impact on revenue and gross profit. Our Growth Strategy High Roller intends to achieve rapid, cost efficient and sustainable growth by utilizing high margin cash flow generated from online casino operations in our current international markets where we operate and to enter and grow sustainable revenues in newly regulated and soon to be regulated markets. We are implementing a multi-brand strategy, facilitated by our in house developed scalable CMS and frontend that allows us to scale our business by duplicating our Platform strengths across multiple domains with individualized branding and different target markets. We believe that this multi-brand strategy allows us to compete for increased market share in markets where players have accounts with multiple iCasino operators by offering a selection of brands that target different demographics in addition to launching new brands that are locally targeted. We expect that we will be able to launch competitive new brands as we identify opportunities in our existing markets or new markets. We soft launched our second brand, Fruta.com, in December 2023, allowing select players to test Fruta.com prior to going live in February 2024. In addition, we are exploring opportunities for future brand launches and currently expect to launch at least one new brand approximately every twelve months. We launched Fruta.com using our existing resources and gaming licenses. We believe that the scalability of the Platform will continue to allow the Company to launch and support additional brands with our existing resources. Management anticipates that the launch of additional brands will provide access to new target demographics and generate added revenue through existing player acquisition channels while maintaining the current cost structure with nominal incremental costs. Management believes that this launch of Fruta.com and the implementation of our multi-brand strategy will have no material negative impact on financial condition, operations, liquidity, or capital position of the Company. Our Competitive Strengths The Company is an evolving and growth-oriented online iCasino operator of B2C brands, leveraging its online operational and marketing expertise and assets as the foundation for what we believe to be a highly competitive growth model. We believe that the combination of our digital IP, commercial partnerships, operational expertise of our management team, and customer-centric approach that fosters loyalty are among our competitive strengths. Our Platform provides strong localization, ease of deposits and withdrawals, a bespoke player gaming experience, through our advanced technology. We use automated tools to interact in real-time with our customers and to promote responsible gaming. Our in house developed AI-based reward system rewards players in real-time based on the players activity, games of choice, average transactions and their value segment. We operate in a mix of remote licensed markets, which we refer to as Pre-regulated markets. Where we may reasonably operate using international licenses, as well as locally licensed markets, which we refer to as Regulated markets, requiring a local license. Pre-regulated markets have lower thresholds to enter and higher operating margins as local regulation typically entails increased compliance requirements and higher taxation. Pre-regulated markets, however, generally carry more long-term uncertainty, as emerging regulation is yet unclear. We are able to use proceeds from operations in Pre-regulated markets to invest into Regulated markets building long-term sustainable profits. We previously operated our legacy CasinoRoom.com iCasino operations in a number of Pre-regulated markets through our license from Malta. After transitioning to our highroller.com website, we ceased to use our Malta license since June 2022. We operate our HighRoller.com iCasino operations principally through our Curacao gaming license and through the agreements we have with Happy Hour Solutions, a subsidiary of Happy Hour Entertainment Holdings Ltd., which holds the Estonian gaming license. For both of these remote gaming licenses, licensors impose few territorial restrictions. Daniel Bradtke, one of the principals of Happy Hour Entertainment Holdings Ltd., serves as a member of our board of directors and Ben Clemes, who became our CEO on January 1, 2024, has served as a Portfolio Partner at Happy Hour Solutions and will continue in that role on a part time basis. We compete for customers by having optimized the HighRoller.com product for social media, including live streaming with interactive play allowing fans to bet side by side with their favorite streamers, which is an emerging feature within our industry. We believe that through a combination of more immersive play that has built-in virality and our focus on VIP customer experience and support all on our safe and secure platform, we can attract and retain a growing number of real money players. 1 https://h2gc.com Summary of Risk Factors Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our securities. These risks are discussed more fully in the section titled "Risk Factors" beginning on page 8 of this prospectus, and include, the following: Competition in the online casino gaming industry is intense and, as a result, we may fail to attract and retain users who may be attracted to competing betting and gaming options, which may harm our operations and growth prospects. We launched our HighRoller.com domain name in January 2022 as our principal iCasino Platform and have re-purposed our legacy CasinoRoom.com into a marketing platform to provide lead generation to online casinos. We have a limited history of operations and financial information on which to assess our current business strategy and no assurance can be given of long-term growth and consumer acceptance in which event our future revenue and results of operations may decline. Our financial statements have been prepared on a going concern basis and our financial condition creates substantial doubt as to whether we will be able to continue as a going concern. The success, including win or hold rates, of existing or future online wagering products depends on a variety of factors and is not completely controlled by us. If we fail to detect fraud or theft, including by our users and employees, our reputation may suffer, which could harm our brand and negatively impact our business, financial condition, results of operations and prospects and can result in government and civil investigations and litigations. Our growth prospects may suffer if we are unable to offer additional new and exciting gaming products. In addition, if we fail to make the right investment decisions in our offerings and technology platform, we may not attract and retain key users and our revenue and results of operations may decline. Recruitment and retention of our executives and key employees are vital to growing our business and meeting our business plans. Our inability to recruit executives or key employees, or the loss of any of our executives or other employees could harm our business. The nature of our business subjects us to taxation in a number of jurisdictions and changes in, or new interpretation of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our business, financial condition, results of operations and prospects. Our business operations are currently located outside of the United States, which subjects us to additional operational and regulatory risks that could adversely affect our operating results. Negative publicity or an adverse shift in public opinion regarding online casino wagering may adversely impact our business and user retention if such change in public opinion occurs in the market(s) that we operate in. Our business is subject to a variety of United States and foreign laws, many of which are in the process of being formulated and are constantly evolving. Any change in regulations or their interpretation, or the regulatory climate applicable to our products and services, could adversely impact our ability to operate our business, which could have a material adverse effect on our business, financial condition, results of operations and prospects. Our growth prospects depend on the legal status of real-money online iCasino gaming in various jurisdictions, and legalization may not occur in as many states as we expect or may occur at a slower pace than we anticipate or may be accompanied by legislative or regulatory restrictions or taxes that make it impracticable or less attractive to operate, which could adversely affect our future results of operations and make it more difficult to meet our expectations for financial performance. Failure to comply with regulatory requirements or to successfully obtain licenses or permits could adversely impact our ability to comply with licensing and regulatory requirements or to obtain or maintain licenses in other jurisdictions, and could cause financial institutions, online and mobile platforms and distributors to stop providing services to us. We rely on information technology and other systems and platforms, and failures, errors, defects or disruptions therein could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results and growth prospects. Our product offerings and other software applications and systems, and certain third-party platforms that we use could contain undetected errors which could adversely affect our operating results. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored therein could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure, other loss or theft of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disruption of our operations and the services we provide to users, damage to our reputation, and a loss of confidence in our products and services, each of which could adversely affect our business, financial condition, results of operations and prospects. We rely on third-party payment processors to process deposits and withdrawals made by our users on our platform, and if we cannot manage our relationships with these third parties and other payment-related risks, our business, financial condition, results of operations and prospects could be adversely affected. We rely on other third-party service and content providers and if those third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition, results of operations and prospects could be adversely affected. If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired and our business, financial condition, results of operations and prospects could be adversely affected. We identified material weaknesses in our internal control over financial reporting, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected. We may require additional capital to support our growth plans, and that capital may not be available on terms acceptable to us on timely basis, or at all. Inability to raise additional capital when required could hamper our growth and adversely affect our business. Economic downturns and political and market conditions beyond our control, including a reduction in consumer discretionary spending, could adversely affect our business, financial condition, results of operations and prospects. Our growth prospects and market potential will depend on our ability to obtain licenses to operate in a number of jurisdictions and to enter new markets, domestic and foreign, and if we fail to obtain these licenses our business, financial condition, results of operations and prospects could be impaired. The lack of public company experience of our management team could adversely impact our ability to comply with the reporting requirements of U.S. securities laws, which could have a materially adverse effect on our business. We may encounter difficulties in managing our growth, which could adversely affect our operations. There has been no prior public market for our common stock. The initial price of our common stock may not be indicative of the market price of our common stock after the offering. The stock price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price, as a result of which you could lose all or part of your investment. Investors in this offering will experience immediate and substantial dilution of $7.77 per share. Our amended and restated certificate of incorporation, as amended ("Certificate of Incorporation"), designates the Chancery courts of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us, our directors, officers or employees. Implications of Being an Emerging Growth Company and a smaller reporting company We qualify as an "emerging growth company" under Jumpstart Our Business Act of 2012, as amended, or the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include not being required to: have an independent registered public accounting firm report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; comply with any requirement that may be adopted by the Public Company Accounting Oversight Board to supplement the auditor s report by providing additional information about the audit and the financial statements (i.e., Critical Audit Matters); submit certain executive compensation matters to stockholder advisory votes, such as say-on-pay and say-on-frequency; and No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is accurate only as of its date. Market data and certain industry data and forecasts used throughout this prospectus were obtained from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. We have not independently verified any of the data from third party sources, nor have we ascertained the underlying economic assumptions relied upon therein. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable based on our management s knowledge of the industry, have not been independently verified. Forecasts are particularly likely to be inaccurate, especially over long periods of time. In addition, we do not necessarily know what assumptions regarding general economic growth were used in preparing the forecasts we cite. Statements as to our market position are based on the most currently available data. While we are not aware of any misstatements regarding the industry data presented in this prospectus, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus. Forecasts and other forward-looking information derived from such sources and included in this prospectus are subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus. See "Special Note Regarding Forward-Looking Statements." We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to in this prospectus are listed without the and symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names. Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the "Company," "High Roller," "we," "our," "ours," "us" or similar terms refer to High Roller Technologies, Inc., together with its subsidiaries. Neither we, nor any of our officers, directors, agents or representatives or underwriters, make any representation to you about the legality of an investment in our common stock. You should not interpret the contents of this prospectus or any free writing prospectus to be legal, business, investment or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial and other issues that you should consider before investing in our common stock. disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer s compensation to median employee compensation. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission ("SEC"). We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold investments. We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited consolidated financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. Corporate Information High Roller Technologies, Inc. was incorporated in Delaware in December 2021. Our principal subsidiaries are (i) HR Entertainment Ltd. (organized under the laws of the British Virgin Islands), online casino operator and service provider, (ii) Interstellar Entertainment NV (organized under the laws of Curacao), online casino operator and holder of our Curacao gaming license, (iii) Ellmount Entertainment Ltd., (organized under laws of Malta), an affiliate marketer and lead generator through our CasinoRoom.com brand, (iv) Wowly NV (organized under the laws of Curacao) which manages certain internet related advertising services on behalf of Ellmount Entertainment and (v) Lunar Ventures Limited (formerly High Roller Ventures Ltd.; organized under the laws of Malta), which provides customer and certain administrative support. Our principal executive offices are located at 400 South 4th Street, Suite 500 - #390, Las Vegas, Nevada 89101. Our telephone number is (702) 509-5244. The following chart provides our current corporate and group ownership structure: The following chart illustrates material relationships among our affiliated companies and principal shareholders: Our websites are www.highroller.com, www.casinoroom.com and www.fruta.com. Information contained on our websites or connected thereto does not constitute part of this prospectus, nor is that content incorporated by reference herein, and should not be relied upon in determining whether to make an investment in our common stock. The functional currency of our principal operating subsidiaries is the Euro. In this prospectus we, unless otherwise indicated, have translated the euro to the equivalent of US$1.0706, the rate quoted by the European Central Bank as of June 30, 2024. Reverse Stock Split On January 16, 2024 our Board approved and our shareholders ratified a 1-for-3.95689 reverse stock split of our outstanding shares of common stock, which became effective on January 16, 2024 (the "Reverse Split"). The ratio of the Reverse Split was arrived at in order to achieve a valuation that the Company and the underwriter believed would be acceptable to potential investors. Fractional shares, if any, were rounded up or down to the nearest whole share, as appropriate. As a result of the Reverse Split, all share and per share amounts included in this document have been retroactively adjusted for the impact of the reverse stock split for all periods presented. The Reverse Split did not impact the number of authorized shares of common stock which remained at 60,000,000 shares or the number of authorized shares of preferred stock which remained at 10,000,000 shares, nor the $0.001 par value of such shares. SUMMARY OF THE OFFERING Common stock offered by us 1,250,000 shares. Common stock to be outstanding after this offering 8,266,267 shares (8,453,767 shares if the underwriters exercise their over-allotment option in full). Underwriters option to purchase additional shares We have granted the underwriters an option for a period of 45 days to purchase up to an additional 187,500 shares of our common stock. Use of proceeds We estimate that net proceeds from this offering will be $9,500,000, if the underwriters exercise their over-allotment option in full, at an assumed initial public offering price of $8.00 per share, after deducting the underwriting discounts and commissions of $800,000, ($920,000 if the underwriters exercise their overallotment in full), and estimated offering expenses of approximately $1,080,000 payable by us. We intend to use the net proceeds from this offering for marketing, promotion and advertising, to finance expansion into the North American or other locally regulated markets inclusive of recruitment, costs of ongoing development of the platform, gaming licenses, computer software, marketing, for launching one or more new iCasino brands, as well as for general corporate and working capital purposes. We may also use a portion of the net proceeds to in-license, acquire or invest in complementary businesses or products; however, we have no current commitments or obligations to do so. See "Use of Proceeds" for a more complete description of the intended use of proceeds from this offering. Risk factors Investment in our common stock involves substantial risks. See "Risk Factors" beginning on page 8 and other information included in this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock. Proposed market symbol "ROLR" The number of shares of our common stock to be outstanding after this offering is based on 7,016,267 shares of our common stock outstanding as of September 16, 2024 and excludes as of that date: 39,172 shares of common stock issuable upon exercise of outstanding stock purchase warrants at an exercise price of $2.37 per share; 258,454 shares of common stock issuable upon exercise of outstanding stock options with a weighted average exercise price of $6.93 per share; 44,612 time-based restricted stock units issued to employees subject with various vesting schedules; 97,878 performance-based restricted stock units issued to employees subject to the completion of various performance milestones; 1,700,000 shares of common stock reserved for future issuance under our 2024 Equity Incentive Plan; and 62,500 shares of common stock issuable upon exercise of warrants to be issued to the representative of the underwriters as part of this offering at an exercise price of $10.00 (assuming an initial public offering price of $8.00 per share). Summary Consolidated Financial Data The following tables summarize our consolidated financial data as of (i) the six months ended, June 30, 2024 and 2023 which have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus and (ii) the fiscal years ended December 31, 2023 and 2022 which have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future for any period. You should read the consolidated financial data set forth below in conjunction with our consolidated financial statements and the accompanying notes and the information in the section titled "Management s Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. The summary consolidated financial data included in this section is not intended to replace the consolidated financial statements and related notes included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. Consolidated Statements of Operations Data: Six Months Ended June 30, Years Ended (unaudited) December 31, 2024 2023 2023 2022 Revenue $ 12,309,895 $ 14,914,559 $ 29,674,690 $ 18,491,548 Operating expenses Direct operating costs 6,491,375 6,895,370 13,648,111 7,542,798 General and administrative 4,631,742 5,026,003 10,529,123 7,232,256 Advertising and promotions 3,877,322 3,504,535 7,603,709 4,650,827 Product and software development 613,634 260,760 584,447 1,089,490 Loss on impairment of intangible assets — — — 935,263 Total operating expenses 15,614,073 15,686,668 32,365,400 21,450,634 Loss from operations (3,304,178 ) (772,109 ) (2,690,710 ) (2,959,086 ) Interest expense, net (50,215) (61,581 ) (114,208 ) (106,552 ) Other income (expense) 1,560 (54,292 ) — — Loss before income taxes (3,352,833 ) (115,873 ) (2,804,918 ) (3,065,638 ) Income tax expense (benefit) — — 12,933 (7,311 ) Net loss $ (3,352,833 ) $ (887,982 ) $ (2,817,851 ) $ (3,058,327 ) Other comprehensive loss Foreign currency translation adjustments (127,847 ) 1,850 54,413 (9,430 ) Comprehensive loss $ (3,480,680 ) $ (886,132 ) $ (2,763,438 ) $ (3,067,757 ) Net loss per common share Net loss per common share – basic and diluted $ (0.48 ) $ (0.14 ) $ (0.42 ) $ (0.55 ) Weighted average common shares outstanding – basic and diluted 7,001,102 6,318,094 6,641,774 5,591,007 Consolidated Balance Sheet Data: June 30, 2024 (Unaudited) Actual Pro Forma(1) Cash and cash equivalents, and restricted cash (current and non-current(2) $ 3,221,520 $ 12,069,591 Total assets(2) 12,038,753 19,954,926 Total liabilities(3) 12,541,842 12,338,015 Accumulated deficit (24,572,792 ) (24,572,792 ) Total stockholders equity (deficit) (503,090) 7,616,910 (1) On a pro forma basis after giving effect to the sale of shares of common stock by us in this offering at an assumed public offering price of $8.00 per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. (2) Pro forma cash reflects total proceeds after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us which is adjusted by $728,071 which has been paid as of June 30, 2024. (3) Pro forma total liabilities are adjusted by $203,827, which reflects deferred offering costs payable by us incurred and accrued but not yet paid as of June 30, 2024, which are deemed paid as of the closing date. RISK FACTORS Any investment in our common stock involves a high degree of risk. You should carefully consider the risks and other uncertainties described below, which we believe represent certain of the material risks to our business, together with the information contained elsewhere in this prospectus, before you make a decision to invest in our common stock. The risks and uncertainties described below are not the only ones that we may face. Additional risks and uncertainties that we are unaware of, or that we currently believe are immaterial or unlikely to occur could also impair our operations. If any of the following events occur or any additional risks presently unknown to us actually occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that event, the price of our common stock could decline and you could lose all or part of your investment. Risks Related to Our Business Competition in the retail and online iCasino industry is intense and, as a result, we may fail to attract and retain users, which may negatively impact our operations and growth prospects. The industries in which we operate are characterized by intense competition. We compete against other providers of retail or online iCasino gaming, as well as against providers of online and mobile entertainment and leisure products more generally. Other companies producing online gaming and/or interactive entertainment products and services are often established and well-financed, and other well-capitalized companies may introduce competitive services. Our competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than ours, which could negatively impact our business. Our competitors may also develop products, features, or services that are similar to ours or that achieve greater market acceptance. Such competitors may also undertake more far-reaching and successful product development efforts or marketing campaigns or may adopt more aggressive pricing policies. Furthermore, in the future, new competitors, whether licensed or not, may enter the online iCasino gaming industries. If we are not able to maintain or improve our market share, or if our offerings do not continue to be popular, our business, financial condition, results of operations and prospects could be adversely affected. Competitive pressures may also adversely affect our margins. For example, as we expand the competition may increase, and we may need to increase our marketing expenses, thereby lowering our margins, in order to compete. We operate in the global entertainment and gaming industries within the broader entertainment industry with our business-to-consumer ("B2C"), offerings such as online casino wagering, social gaming, and our B2B offerings through our Casino Room platform and other services. Our users face a vast array of entertainment choices. Other forms of entertainment, such as television, movies, sporting events and in-person casinos, are more well-established and may be perceived by our users to offer greater variety, affordability, interactivity and enjoyment. We compete with these other forms of entertainment for the discretionary time and income of our users. If we are unable to sustain sufficient interest in our online casino wagering, and social gaming platforms in comparison to other forms of entertainment, including new forms of entertainment, our business, financial condition, results of operations and prospects could be adversely affected. In addition, our ability to achieve growth in revenue in the future will depend, in large part, upon our ability to attract new users to our offerings and retain existing users of our offerings, as well as continued user adoption of online casino more generally. Growth in the online casino and gaming industries and the level of demand for and market acceptance of our product offerings will be subject to a high degree of uncertainty. We cannot assure that consumer adoption of our product offerings will continue or exceed current growth rates, that the industry will achieve more widespread acceptance or that we will be able to retain our customers if we are unable to keep pace with technological innovation and customer experiences. Our business depends on the success, including win or hold rates, of existing and future online gaming products, which rely on a variety of factors and are not completely controlled by us. The online casino gaming industries are characterized by an element of chance. Our revenue is impacted by variations in the hold percentage (the ratio of net win to total amount wagered), or actual outcome, on the online casino games that we offer to our customers. We use the hold percentage as an indicator of an online casino game s performance against its expected outcome. Although each online casino game generally performs within a defined statistical range of outcomes, actual outcomes may vary for any given period, particularly in the short term however should normalize over time to the return to player percentage as designed by the game mathematics combined with the outcome from the random number generator. In the short term, for online casino wagering, the element of chance may affect win rates (hold percentages); these win rates, may also be affected in the short term by factors that are largely beyond our control, such as the mix of games played or wagers placed, the financial resources of customers, the volume of wagers placed and the amount of time spent playing. For online casino games, it is possible a game will malfunction or is otherwise misprogrammed to pay out wins in excess of the game s mathematical design and award errant prizes. Factors that are nominally within our control, such as the level of incentives or bonuses or comps given to customers, might, for various reasons both within and beyond our control, not be well-managed and hence in turn might impact win rates. Similarly, inadvertently over-incentivizing customers can convert a casino game that would otherwise have been expected to be profitable for us into one with a positive expectation for the player. As a result of the variability in these factors, the actual win rates on our online casino gaming offerings may differ from the theoretical win rates we have estimated and could result in the winnings of our online casino gaming customers exceeding those anticipated. The variability of win rates (hold rates) also has the potential to negatively impact our business, financial condition, results of operations, prospects and cash flows. For casino games there can be no assurance that existing casino game features will always be allowed or that new casino game features will be allowed or that regulators will not seek to constrain the operation of games in any way, for example by limiting the rate or speed of game play. If game features or other relevant aspects of casino game design are constrained then our business, financial condition, results of operations, prospects and cash flows might be negatively impacted. Our success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner. As we operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products are subject to changing consumer preferences that cannot be predicted with certainty. We need to continually introduce new offerings and identify future product offerings that complement our existing platforms, respond to our users needs and improve and enhance our existing platforms to maintain or increase our user engagement and growth of our business. We may not be able to compete effectively unless our product selection keeps up with trends in the digital gaming industries in which we compete, or trends in new gaming products. Our forecasts, including for revenues, market share, expenses and profitability, are subject to significant risks, assumptions, estimates and uncertainties and may therefore differ materially from our expectations. We operate in rapidly changing and competitive industries, and our forecasts are subject to the risks and assumptions made by management with respect to our industries. Operating results are difficult to forecast because they generally depend on our assessment of the timing of adoption of future legislation and regulations by different states and countries, which are uncertain. Furthermore, if we invest in the development of new products or distribution channels that do not achieve significant commercial success, whether because of competition or otherwise, we may not recover the often substantial "up front" costs of developing and marketing those products and distribution channels or recover the opportunity cost of diverting management and financial resources away from other products or distribution channels. Additionally, as described below under "— Economic downturns and political and market conditions beyond our control, including a reduction in consumer discretionary spending, could adversely affect our business, financial condition, results of operations and prospects," our business may be affected by reductions in consumer spending from time to time as a result of a number of factors which may be difficult to predict. Moreover, while casino operations are largely unaffected by seasonality in aggregate as online casino gaming is largely an individual activity unaffected by external calendars we believe that there is however some evidence that seasonality effects may occur at the time of certain major national holidays and/or vacation periods, as a result of which our revenue and cash flows could be adversely affected during times of the year when customers are more likely to engage in other non-gaming activities. This may result in decreased revenue levels, and we may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in income. This inability could cause our operating results in a given quarter to be higher or lower than expected. If actual results differ from our estimates, analysts and investors may negatively react and our stock price could be materially impacted. Our financial statements have been prepared on a going concern basis and our financial condition creates substantial doubt as to whether we will be able to continue as a going concern. Our financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Our future operations are dependent upon achieving profitable operations in the future and completing a successful equity or debt financing. No assurance can be given that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability. As a result, our management has concluded that there is substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern. Our operating results may vary, which may make future results difficult to predict with certainty. In the past, our financial results have varied on a quarter-by-quarter basis and may continue to do so in the future. This variance is due to a variety of factors certain of which are beyond our control. Our financial results in any given quarter may be influenced by, among other things, consumer engagement and wagering results, and other factors which are outside of our control or we cannot predict. Our financial results are dependent, in part, on continued consumer engagement. Our consumer engagement in our online casino wagering services may vary or decrease, potentially resulting in a negative impact on our business, operations, financial condition or prospects, on account of, among other factors, the user s level of satisfaction with our platforms, our ability to improve, innovate and adapt our platform, outages and disruptions of online services, the offerings of our competitors, our marketing and advertising efforts, or declines in consumer activity generally as a result of, among other things, public sentiment or economic downturns. Additionally, our quarterly financial results may also be impacted on the number and amount of player wins and payouts we may experience. Though player wins are limited per stake in our online casino wagering product offering, when looking at wagers across a period of time these losses can potentially be significant. If we fail to detect fraud or theft, including by our users and employees, our reputation may suffer, which could harm our brand and reputation and negatively impact our business, financial condition, results of operations and prospects and can subject us to investigations and litigation. We may incur losses from various types of financial fraud, including use of stolen or fraudulent credit card data, claims of unauthorized payments by a user and attempted payments by users with insufficient funds. Bad actors use increasingly sophisticated methods to engage in illegal activities involving personal information, such as unauthorized use of another person s identity, account information or payment information and unauthorized acquisition or use of credit or debit card details, bank account information and mobile phone numbers and accounts. Under current credit card practices, we may be liable for use of funds on our Platform with fraudulent credit card data, even if the associated financial institution approved the credit card transaction. Acts of fraud or other forms of cheating by our gaming customers may involve various tactics, including collusion with our employees and the exploitation of loopholes in our promotional bonus schemes. Successful exploitation of our systems could have negative effects on our product offerings, services and user experience and could harm our reputation. Additionally, we may inadvertently send overly generous promotional schemes that users or regulators force us to honor. Failure to discover such acts or schemes in a timely manner could result in harm to our operations. In addition, negative publicity related to such schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and prospects. In the event of the occurrence of any such issues with our existing Platform or product offerings, substantial engineering and marketing resources and management attention, may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives. In addition, any misappropriation of, or access to, users or other proprietary information or other breach of our information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, force us to modify our business practices, damage our reputation and expose us to claims from our users, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition, results of operations and prospects. Despite the measures we have taken to detect and reduce the occurrence of fraudulent or other malicious activity on our platform, we cannot guarantee that any of our measures will be effective or will scale efficiently with our business. Our failure to adequately detect or prevent fraudulent transactions could harm our reputation or brand, result in litigation or regulatory action and lead to expenses that could adversely affect our business, financial condition, results of operations and prospects. Our current and projected performance relies upon high-bandwidth data capabilities and disruptions in the availability of these may negatively impact our business, financial conditions, results of operations and prospects. Our products require high-bandwidth data capabilities for placement of time-sensitive wagers. If high-bandwidth capabilities do not continue to grow or grow more slowly than generally anticipated, particularly for mobile devices, our user growth, retention, and engagement may be negatively impacted. In addition, the adoption of any laws or regulations that adversely affect the growth, popularity, or use of the Internet, including laws governing Internet neutrality, could decrease the demand for our products and increase our cost of doing business. Specifically, any laws that would allow Internet providers to impede access to content, or otherwise discriminate against content providers like us over their data networks, could have a material adverse effect on our business, financial condition, results of operations, and prospects. Additionally, if any of the third-party platforms used for distribution of our product offerings were to limit or disallow advertising on their platforms for whatever reason or technologies are developed that block the display of our ads, our ability to generate revenue could be negatively impacted. These changes could materially impact our business activities and practices, and if we or our advertising partners are unable to timely and effectively adjust to those changes, there could be an adverse effect on our business, financial condition, results of operations and prospects. We rely on third-party service providers such as (i) providers to validate the identity and identify the location of our customers, (ii) payment processors to process deposits and withdrawals made by our customers into our platforms, (iii) marketing and customer communications systems providers, (iv) casino content, product and technology providers, and (v) other outsourced services providers, among others. If our third-party providers do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected. There is no guarantee that the third-party geolocation and identity verification systems that we rely on will perform adequately or will be effective. We rely on our geolocation and identity verification systems to ensure that we are in compliance with certain laws and regulations, and any service disruption to those systems would prohibit us from operating our Platform and would adversely affect our business. Additionally, incorrect or misleading geolocation and identity verification data with respect to our current or potential customers received from third-party service providers may result in us inadvertently allowing access to our offerings to individuals who should not be permitted to access them, or otherwise inadvertently deny access to individuals who should be able to access our offerings, in each case based on inaccurate identity or geographic location determination. Our third-party geolocation service providers rely on their ability to obtain information necessary to determine geolocation from mobile devices, operating systems, and other sources. Changes, disruptions or temporary or permanent failure to access such sources by our third-party service providers may result in their inability to accurately determine the location of our customers. Moreover, our inability to maintain our existing contracts with third-party service providers, or to replace them with equivalent third parties, may result in our inability to access geolocation and identity verification data necessary for our day-to-day operations. If any of these risks materializes, we may be subject to disciplinary action, fines, lawsuits, and our business, financial condition, results of operations and prospects could be adversely affected. We also rely on a limited number of third-party payment processors to process deposits and withdrawals made by our customers on our Platform. If any of our third-party payment processors terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate payment processor and may not be able to secure similar terms or replace such payment processor in an acceptable time frame. Further, the software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised or experience outages. Any of these risks could cause us to lose our ability to accept online payments or other payment transactions or make timely payments to customers on our platform, any of which could make our Platform less trustworthy and convenient and adversely affect our ability to attract and retain our customers. Our payments are made by credit card, debit card or through other third-party payment services, which subjects us to certain regulations and to the risk of fraud. We may in the future offer new payment options to customers that may be subject to additional regulations and risks and/or may incur higher transaction charges. We are also subject to a number of other laws and regulations relating to the payments we accept from our customers, including with respect to money laundering, money transfers, privacy and information security. Although we have implemented processes and have dedicated teams to ensure compliance with applicable rules and regulations, there have in the past, and there may be in the future, incidences where certain relevant information relating to "know your customer" ("KYC") and/or anti-money laundering ("AML") is not detected or established. If we fail to comply with applicable rules and regulations, we may be subject to civil or criminal penalties, fines and/or higher transaction fees and may lose our ability to accept online payments or other payment card transactions, which could make our offerings less convenient and attractive to our customers. If any of these events were to occur, our business, financial condition, results of operations and prospects could be adversely affected. For example, if we are deemed to be a money transmitter as defined by applicable regulation, we could be subject to certain laws, rules and regulations enforced by multiple authorities and governing bodies in the United States and numerous state and local agencies who may define money transmitter differently. For example, certain U.S. states may have a more expansive view of who qualifies as a money transmitter. Additionally, we could be subject to additional laws, rules and regulations related to the provision of payments and financial services, and if we expand into new jurisdictions, the various regulations and regulators governing our business that we are subject to will expand as well. In addition to fines, penalties for failing to comply with applicable rules and regulations could include criminal and civil proceedings, forfeiture of significant assets or other enforcement actions. We could also be required to make changes to our business practices or compliance programs as a result of regulatory scrutiny. Additionally, our payment processors require us to comply with payment card network operating rules, which are set and interpreted by the payment card networks. The payment card networks could adopt new operating rules or interpret or reinterpret existing rules in ways that might prohibit us from providing certain offerings to some customers, be costly to implement or difficult to follow. We have agreed to reimburse our payment processors for fines they are assessed by payment card networks if we or the customers on our Platform violate these rules. Any of the foregoing risks could adversely affect our regulatory licensure, business, financial condition, results of operations and prospects. Additionally, outages in our connectivity with our payment processors or their connectivity with downstream processors and networks might inhibit our ability to successfully process deposits and withdrawals on behalf of our customers. Errors in any of these systems may cause transactions to be processed multiple times or not at all, which may in turn result in customers being overcharged, overpaid or not paying us. Overcharging customers might result in representations, returns or chargebacks which might in turn jeopardize our relationships with our payment processors and potentially lead to fines and additional transaction costs or even the termination of our relationships with our payment processors. If we do not detect these errors timely then we might over-credit to or under-deduct from our customers casino accounts which might in turn result in customers being inadvertently given risk-free opportunities to play and thereby potentially win even larger amounts. We cannot guarantee that we will detect such outages or errors timeously nor that we will be able to recover any resulting losses from customers or third-party providers. Any attempts by us to recover such losses from our customers may cause our customers to have a negative experience and our brand or reputation may be negatively affected, and our customers may be less inclined to continue or resume utilizing our products or recommend our Platform to other potential customers. As such, any such outages or errors could harm our reputation, business, financial condition, results of operations, cash flows and prospects. Furthermore, if any of our payment processors terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we might need to find an alternate provider. Given the occasionally unique benefits and features of different payment options, exact replacement might not be possible, and we may not be able to secure similar terms or benefits or features or replace such payment processors in an acceptable time frame. Any of these risks could increase our costs and adversely affect our business, financial condition, results of operations or prospects. Further, any negative publicity related to any of our payment processors, including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure. We rely on third-party service providers for components of our marketing and customer communications processes and systems. Failures or outages in these systems may inhibit our ability to acquire new customers or retain existing customers. The nature of these processes means that certain customer personal information may be transmitted through these systems. If these systems are compromised in any way, then customer personal data might be compromised and in turn our customers perception of our reliability and security might be impacted. Any of the foregoing risks could adversely affect our business, financial condition, results of operations and prospects. We rely on third-party providers for nearly all of our casino games. These third parties are responsible for the design, development and maintenance of these games. In the past there have been outages during which time one or more games have been unavailable. There have also been incidents where errors in the design or development or maintenance of these games has result in erroneous payouts to customers, including instances where games have erroneously produced positive expected returns to customers and hence losses for the casino. We cannot be certain that we will always detect such outages and errors timeously nor that we will be able to recover any losses resulting from errors either from customers or third-party providers. Any outages or attempts by us to recover such losses from errors from our customers may cause our customers to have a negative experience and our brand or reputation may be negatively affected, and our customers may be less inclined to continue or resume utilizing our products or recommend our Platform to other potential customers. As such, any such outages and errors could harm our reputation, business and operating results. Furthermore, if any of our casino game suppliers terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we might need to find an alternate provider. Given the unique design of each casino game, exact replacement would not be possible, and we may not be able to secure similar terms or product features or extent of product range or replace such providers in an acceptable time frame. Any of these risks could increase our costs and adversely affect our business, financial condition, results of operations or prospects. Further, any negative publicity related to any of our third-party casino game supplier partners, including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure. We may have difficulty accessing the services of banks, credit card issuers and payment processing services providers due to the nature of our business, which may make it difficult for players to effect transactions with financial institutions when making deposits or withdrawals from our platform. Although financial institutions and payment processors are permitted to provide services to us and others in our industry, banks, credit card issuers and payment processing service providers may be hesitant to offer banking and payment processing services to real money gaming. Consequently, businesses involved in our industry, including our own, may encounter difficulties in establishing and maintaining banking and payment processing relationships with a full scope of services and generating market rate interest. Similarly, our customers banks and/or credit card providers might decline to allow our customers to effect transactions with online gaming or might block such attempted transactions. If we are unable to maintain our bank accounts or our customers are unable to use their credit cards, bank accounts or e-wallets to make deposits and withdrawals from our platforms, it would be difficult for us to operate our business and increase our operating costs, and would pose additional operational, logistical and security challenges which could result in an inability to implement our business plan and harm our business, financial condition, results of operations and prospects. Our growth prospects may suffer if we are unable to develop successful game offerings or if we fail to pursue new and exciting additional game offerings. In addition, if we fail to make the right investment decisions in our offerings and technology platform, we may not attract and retain players and our revenue and results of operations may decline. Ellmount Entertainment Ltd, was founded over a decade ago, under the laws of Malta, and was primarily focused on iGaming product offerings. We have repurposed Ellmount Entertainment into a marketing company during the first quarter 2022, and since then have transitioned existing customers to our HighRoller.com domain. We are focused on expanding the user base and we anticipate expanding further as new product offerings mature and as we pursue our growth strategies. The iGaming industry is characterized by continuous technological change, evolving regulatory and industry standards, frequent new product offerings and changes in customer expectations. To keep pace with the technological developments, achieve product acceptance and remain relevant to users, we will need to continue introducing new products and services as well as enhanced functionality on our existing suite of products and services. We must continually adapt to changing business environments and competing technologies and products. To the extent we are not able to adapt to new technologies and/or standards, experience delays in implementing such technologies or fail to accurately predict emerging technological trends, we may lose customers. The requirements of being a public company may strain our resources and divert management s attention, and the increases in legal, accounting, cyber security, insurance and compliance expenses may be greater than we had anticipated. As a public company (and particularly after we are no longer an "emerging growth company"), we will incur significant legal, accounting and other expenses that the Company did not incur as a private company. We are subject to the reporting requirements of the Exchange Act and will be required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd- Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC and the listing standards of, including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls. Compliance with these rules and regulations can be complex and burdensome. Our management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations increase our historical legal and financial compliance costs and make some activities more time-consuming and costly. For example, becoming a public company has made it more difficult and more expensive for us to obtain director and officer liability insurance, and could also make it more difficult for us to attract and retain qualified members of the board of directors of the Company (the "Board") as compared to High Roller as a private company. In particular, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which will increase when we are no longer an "emerging growth company." We have hired, and may need to continue to hire, additional accounting and financial staff, and engage outside consultants, all with appropriate public company experience and technical accounting knowledge, and maintain an internal audit function, which will increase our operating expenses. Moreover, we could incur additional compensation costs in the event that we decide to pay cash compensation closer to that of other public companies, which would increase our general and administrative expenses and could materially and adversely affect our profitability. We continue to evaluate these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. The lack of public company experience of our management team could adversely impact our ability to comply with the reporting requirements of U.S. securities laws, which could have a materially adverse effect on our business. Our officers have limited public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act. These responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Any of these deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Exchange Act, which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our Company. As a private company, we were not subject to the SEC s requirements regarding our internal controls over financial reporting. Our failure to implement adequate financial, information technology and management processes and controls has resulted in material weaknesses that could lead to errors in our financial reporting, which in turn could adversely affect our publicly issued financial statements and our business. As a private company, we were not required to document and test our internal controls over financial reporting, our management was not required to certify the effectiveness of our internal controls and our independent registered public accounting firm was not required to opine on the effectiveness of our internal control over financial reporting. As an "emerging growth company," we continue to be, exempt from certain of the SEC s internal control reporting requirements. However, we will lose our emerging growth company status and become subject to certain additional internal control over financial reporting management and auditor attestation requirements in the year in which we are deemed to be a large accelerated filer, which would occur once we are subject to Exchange Act reporting requirements for 12 months, have filed at least one SEC annual report and the market value of our common equity held by non-affiliates exceeds $700 million as of the end of the prior fiscal year s second fiscal quarter. In such event, we may not be able to complete our evaluation, testing and any required remediation in a timely fashion. In order to seek an initial public offering and related listing on a national stock exchange, the Company, which until December 2021 was domiciled and had operated exclusively outside of the United States, effected a recapitalization into a Delaware corporation as its parent holding company as of December 21, 2021, and in February and March 2022 completed the branding and launching of its online casino platform. In 2021 and prior, the Company s business, operations, assets, banking, accounting, legal, financial, and tax compliance were not subject to the securities and tax laws and regulations of the United States. As such, the Company s accounting, financial and tax compliance systems had not been designed to be compliant with the securities and tax laws and regulations of the United States. In conjunction with the Company s efforts to complete an initial public offering, the Company initiated efforts to prepare, for the first time, audited consolidated financial statements for the years ended December 31, 2022 and 2021 in accordance with U.S. GAAP and SEC reporting standards, as a result of which certain issues were identified that indicated the existence of deficiencies in the Company s internal ability to prepare such consolidated financial statements, reflecting material weakness in the Company s internal control over financial reporting. During 2023, the Company expanded its financial and accounting staff, which included adding a Chief Financial Officer, a Controller, a Director of Accounting and Financial Reporting, as well as requisite supporting staff. As a result, the Company believes that it has adequate staff resources to address accounting and reporting requirements under U.S. GAAP and SEC reporting standards, and to implement internal controls. The Company has also retained the services of qualified outside consultants with expertise to perform specific accounting and finance tasks or functions, and to assist in the design and installation of accounting and internal control systems. The Company has not yet completed the process to establish adequate internal controls over financial reporting, and it expects that this process will continue through the remainder of 2024, and possibly longer. No assurance can be given that these efforts will be sufficient to fully develop and implement adequate disclosure controls and procedures and internal controls over financial reporting. In addition, our current internal controls and any new internal controls that we develop may become inadequate because of design-related issues and changes in our business, including increased complexity resulting from any revenue sharing arrangements and international expansion. Any failure to implement and maintain effective internal controls over financial reporting could adversely affect the results of assessments by our independent registered public accounting firm and their attestation reports, as well as impact their reviews and audits of our consolidated financial statements. If we are unable to certify the effectiveness of our internal controls or remedy the identified material weakness, or if our internal controls have any additional material weaknesses, we may not detect errors timely, our consolidated financial statements could be misstated, and we could be subject to regulatory scrutiny and a loss of confidence by stakeholders, which could harm our business and adversely affect the market price of our securities. Recruitment and retention of our employees, including certain key employees, are vital to growing our business and meeting our business plans. The loss of any of our key executives or other key employees could harm our business. We depend on a limited number of key personnel to manage and operate our business. The leadership of our current executive officers has been a critical element of our success and the departure, death or disability of any one of our executive officers or other extended or permanent loss of any of their services, or any negative market or industry perception with respect to any of them or their loss, could have a material adverse effect on our business. We cannot provide assurance that we will be able to attract or retain such highly qualified, and experienced personnel in the future. In addition, the loss of employees or the inability to hire necessary skilled employees could result in significant disruptions to our business, and the integration of replacement personnel could be time-consuming and expensive and cause additional disruptions to our business. If we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, we may be unable to grow effectively and our business, financial condition, results of operations and prospects could be adversely affected. Due to the nature of our business, we are subject to taxation in a number of jurisdictions and changes in, or new interpretation of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our business, financial condition, results of operations and prospects. Our tax obligations are varied and include United States federal, state and international taxes due to the nature of our business. The tax laws that are applicable to our business are subject to interpretation, and significant judgment is required in determining our worldwide provision for income taxes. In the course of our business, there will be many transactions and calculations where the ultimate tax determination is uncertain. For example, compliance with the 2017 United States Tax Cuts and Jobs Act ("TCJA") may require the collection of information not regularly produced within our Company, the use of estimates in our consolidated financial statements, and the exercise of significant judgment in accounting for its provisions. As regulations and guidance evolve with respect to the TCJA, and as we gather more information and perform more analysis, our results may differ from previous estimates and may materially affect our consolidated financial statements. The gaming industry represents a significant source of tax revenue to the jurisdictions in which we operate. Gaming companies and B2B providers in the gaming industry (directly and/or indirectly by way of their commercial relationships with operators) are currently subject to significant taxes and fees in addition to normal corporate income taxes, and such taxes and fees are subject to increase at any time. From time to time, various legislators and other government officials have proposed and adopted changes in tax laws, or in the administration or interpretation of such laws, affecting the gaming industry. In addition, any worsening of economic conditions and the large number of jurisdictions with significant current or projected budget deficits, many of which have been made worse due to COVID-19, could intensify the efforts of governments to raise revenues through increases in gaming taxes and/or other taxes. It is not possible to determine with certainty the likelihood of changes in tax laws or in the administration or interpretation or enforcement of such laws. Any material increase, or the adoption of additional taxes or fees, could have a material adverse effect on our business, financial condition, results of operations and prospects. Additionally, tax authorities may impose indirect taxes on Internet-related commercial activity based on existing statutes and regulations which, in some cases, were established prior to the advent of the Internet. Tax authorities may interpret laws originally enacted for mature industries and apply it to newer industries, such as ours. The application of such laws may be inconsistent from jurisdiction to jurisdiction. Our in-jurisdiction activities may vary from period to period which could result in differences in nexus from period to period. We are subject to periodic review and audit by domestic and foreign tax authorities. Tax authorities may disagree with certain positions we have taken or that we will take, and any adverse outcome of such a review or audit could have a negative effect on our business, financial condition, results of operations and prospects. Although we believe that our tax provisions, positions and estimates are reasonable and appropriate, tax authorities may disagree with certain positions we have taken. In addition, economic and political pressures to increase tax revenue in various jurisdictions may make resolving tax disputes favorably more difficult. We have business operations located outside of the United States, which subjects us to additional costs and risks that could adversely affect our operating results. Our operations are located in multiple jurisdictions and we may in the future pursue to expand into other additional markets. Compliance with international and local laws and regulations that apply to our operations increases our cost of doing business. As a result of our operations, we are subject to a variety of risks and challenges in managing an organization operating in various countries, including those related to: challenges caused by distance as well as language and cultural differences; general economic downturns; regulatory changes; political unrest, terrorism and the potential for other hostilities; public health risks, particularly in areas in which we have significant operations; overlapping or changes in tax regimes; difficulties in transferring funds from certain countries and managing foreign exchange rate fluctuations and risks; laws such as the United States Foreign Corrupt Practices Act, and local laws which also prohibit corrupt payments to governmental officials; local laws which prohibit money-laundering and financing of terrorist and other unlawful financial activities; and reduced protection for intellectual property rights in some countries. If we are unable to expand or adequately staff and manage our existing development operations, we may not realize, in whole or in part, the anticipated benefits from these initiatives (including lower development expenses), which in turn could materially adversely affect our business, financial condition, results of operations and prospects. Our business includes significant international operations, and we are likely to be exposed to foreign currency transaction and translation risks. As a result, changes in the valuation of any major currency with which we conduct business in relation to other currencies could have positive or negative effects on our profitability and financial position. Our global operations are likely to expose us to foreign currency transaction and translation risks. Currency transaction risk occurs in conjunction with purchases and sales of products and services that are made in currencies other than the local currency of the subsidiary involved, for example if the parent company pays, or transfers euro to a subsidiary in order to fund its expenses in local currencies. Currency translation risks occurs when the income statement and balance sheet of a foreign subsidiary is converted into currencies other than the local currency of the company involved, for example when the results of these subsidiaries are consolidated in the results of a parent company with a different reporting currency. Due to our international operations, a significant portion of our business is denominated in foreign currencies. As a result, fluctuations in foreign currency and exchange rates may have an impact on our business, results of operations and financial position. Foreign currency exchange rates have fluctuated and may continue to fluctuate. Significant foreign currency exchange rate fluctuations may negatively impact our international revenue, which in turn affects our consolidated revenue. Currencies may be affected by internal factors, general economic conditions and external developments in other countries, all of which can have an adverse impact on a country s currency. Currently, we are not party to any hedging transactions intended to reduce our exposure to exchange rate fluctuations. We may seek to enter into hedging transaction in the future, but we may be unable to enter into these transactions successfully, on acceptable terms or at all. We cannot predict whether we will incur foreign exchange losses in the future. Further, significant foreign exchange fluctuations resulting in a decline in the respective local currency may decrease the value of our foreign assets, as well as decrease our revenues and earnings from our foreign subsidiaries, which would reduce our profitability and adversely affect our financial position. We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine and Israel and Hamas. In February 2022, Russia launched a full-scale military invasion of Ukraine. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine and Middle East could lead to market disruptions, including significant volatility in commodity prices, and credit and capital markets. These military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds. Any of the abovementioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this prospectus. We have been dependent on Happy Hour Entertainment Holdings Ltd. and on Spike Up Media and certain of its subsidiaries or affiliates to provide us with certain services. These arrangements may change and may not be sufficient to meet our needs, and we may have difficulty finding replacement services or be required to pay increased costs to replace these services to the extent that our arrangements with either of them is terminated. Certain games on our websites are provided by a range of third parties through nominee agreement with Happy Hour Solutions Ltd., a wholly owned subsidiary of Happy Hour Entertainment Holdings Ltd., formerly one of our principal shareholders. See "Principal Shareholders." Lead generation for the High Roller platform is supplied to us in part by Spike Up Media. Spike Up Media is a wholly-owned subsidiary of Ellmount Interactive A.B., which is beneficially owned by OEH and Cascadia, two of our principal shareholders. Daniel Bradtke, a principal of Happy Hour Entertainment, is one of our directors. Spike Up Media owns an approximate 8% interest in Happy Hour Entertainment. For the duration that these services are being provided to us by Happy Hour Entertainment and by Spike Up Media, we will be dependent on them for services that are critical to our operations, and our ability to negotiate the rates we pay with respect to such services is limited. Should the services agreement with either of them terminate, we may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost and quality of service, comparable to those that we receive from them under the services agreements and our operating arrangements. Although we may in the future reduce or lose and attempt to replace portions of the services that are currently provided by affiliates, we may encounter difficulties replacing certain services or be unable to negotiate pricing or other terms as favorable as those we currently have in effect, which would reduce our rate of growth, lower profitability and materially impact our financial position. Negative publicity of us or an adverse shift in public opinion regarding online casino wagering may adversely impact our business and user retention. We operate in a public-facing industry where negative publicity, including from our customers, whether or not justified, can spread rapidly through, among other things, social media. To the extent that we are unable to respond timeously and appropriately to negative publicity or to the extent our responses to negative publicity are not fairly published or not positively received, our reputation and brands could be harmed. Moreover, even if we are able to respond in a timely and appropriate manner, we cannot predict how negative publicity may affect our reputation and business. A negative change in the public s opinion of online casino, or how politicians and other governmental authorities view online casino wagering could result in future legislation or new regulations restricting or prohibiting certain (or all) online casino wagering activities in certain jurisdictions, the result of which may negatively impact our business, financial condition, results of operations and prospects. Further, negative publicity of us or our product offerings, Platform or user experience in online casino wagering industry generally could lead to new restrictions and limitations on us and online casino wagering generally, which may have a negative impact on our business, financial condition, results of operations and prospects. We and our employees also use social media to communicate externally. There is risk that the use of social media by us or our employees to communicate about our business or for any other purpose even in a personal capacity may give rise to negative publicity or liability or result in public exposure of personal information of our employees or customers, each of which could affect our reputation, revenue, business, results of operations and financial condition. We rely on several different marketing channels to acquire and retain customers and to promote our iCasino brands and our products. If we are not able to effectively acquire and retain customers via such channels then our business and operating results may be harmed. In addition to our relationship with Spike Up Media, we utilize a variety of marketing initiatives, which may include traditional marketing channels (such as print), digital marketing (such as online display advertising, search engine marketing, social media and "affiliates" marketing) and retention marketing (including via email, text messages and social media). Traditional marketing channels are by their nature difficult to measure. Digital marketing is typically more measurable but somewhat more complex to undertake. Retention marketing is subject to customer consent which is not always granted or may be revoked. Our ability to execute on our marketing plans is subject to regulatory constraints in each market and it is not unusual for marketing-related regulations to change from time to time. If our ability to monitor and measure performance of any of these channels is compromised or if our ability to execute our plans in any of these channels is in any way inhibited then our ability to acquire and retain customers could be harmed and our business, financial condition, results of operations, cash flows and prospects may suffer. In some regions and for some of our initiatives we may rely extensively on independent third-party marketers, known as "affiliates". "Affiliates" is an industry term that describes independent third-parties which assist the Company to acquire new customers and which are generally paid on a revenue-share or cost-per-acquisition basis. Despite the word "affiliates", these are independent parties that are not otherwise affiliated with the Company in the ordinary sense of the word. Notwithstanding that in some jurisdictions for license purposes we are deemed to control these "affiliates" marketers, their actions in the marketing of our brands are not directly within our control and hence actions, errors, omissions or intentional malfeasance on their part may cause damage to our brands, our business, our prospects and our financial results before we are able to detect such actions, errors, omissions or intentional malfeasance and/or do anything to mitigate the effects thereof. In particular, we can be held accountable by regulatory authorities for actions by such third parties in contravention of our license in a given jurisdiction, which in turn may lead to fines, license suspension, loss of license or other censure, which may in turn harm our business, our prospects and/or our financial performance. Our agreements with such marketers sometimes make us obliged to pay them an ongoing share of revenues derived from customers that they introduce to us, or sometimes such that we are required to pay them a "cost per acquisition" capitation fee for each customer introduced, or sometimes a combination of both. Such third-party "affiliates" are under no obligation to continue introducing customers to us, but we may be obliged to continue to pay them future revenue shares, where applicable, nonetheless. In some regions we may make use of search engine marketing (SEM, which is the purchase of advertising against keywords on search engines) and search engine optimization (SEO, which is the adaptation of our websites and employment of other techniques in order to achieve more favorable rankings when customers search for gaming-related keywords on search engines). Search engines such as Google regularly change their internal proprietary and confidential algorithms by which SEM and SEO operate and typically do so in ways that are not predictable as to timing or effect. If we fail to adapt our marketing methods to these changes or if our competitors do so better than we do then our business, financial condition, results of operations, cash flows and prospects may suffer. Several of our marketing channels rely on being able to successfully track customers across different websites and apps and/or to augment our own data with additional marketing data for purposes of measuring and monitoring the effectiveness of our marketing campaigns and/or effectively adapting or executing on our marketing campaigns. The ability to do this is under threat of restrictive legislation in some jurisdictions and technology platform providers such as Google and Apple have taken steps to restrict such tracking and augmentation and we expect that further restrictions may be added in future. Such restrictions may hamper our ability to acquire or retain customers and thereby cause our business, financial condition, results of operations, cash flows and prospects to suffer. Risks Related to Government Regulation Our business is subject to a variety of United States and foreign laws, many of which are unsettled and still developing. Any change in regulations or their interpretation, or the regulatory climate applicable to our products and services, or changes in tax rules and regulations or interpretation thereof related to our products and services, could adversely impact our ability to operate our business, which could have a material adverse effect on our business, financial condition, results of operations and prospects. We are subject to laws and regulations relating to real-money online casino wagering in the jurisdictions in which we conduct our business or in some circumstances, of those jurisdictions in which we offer our product offerings. We are also subject to the general laws and regulations that apply to all e-commerce businesses, such as those related to privacy and personal information, tax and consumer protection. These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results. In particular, some jurisdictions have introduced regulations attempting to restrict or prohibit online gaming, while others have taken the position that online gaming should be licensed and regulated and have adopted or are in the process of considering legislation and regulations to enable that to happen. Additionally, some jurisdictions in which we may operate could presently be unregulated or partially regulated and therefore more susceptible to the enactment or change of laws and regulations. Future legislative and regulatory action, and court decisions or other governmental action, may have a material impact on our operations and financial results. Governmental authorities could view us as having violated local laws, despite our efforts to obtain all applicable licenses or approvals. Further, there is risk that governmental authorities or courts could determine that our casino offerings constitute unauthorized gambling or that legislation is enacted in jurisdictions in which we operate casino offerings that makes our casino offerings unauthorized gambling, which could negatively impact our operations and business results. There is also a risk that civil and criminal proceedings, including class actions brought by or on behalf of prosecutors or public entities or incumbent monopoly providers, or private individuals, could be initiated against us, Internet service providers, credit card and other payment processors, financial institutions, advertisers and others involved in the online casino and gaming industries. Such potential proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions being imposed upon us or our licensees or other business partners, while diverting the attention of key executives. Such proceedings could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as impact our reputation. There can be no assurance that legally enforceable legislation will not be proposed and passed in jurisdictions relevant or potentially relevant to our business to prohibit, legislate or regulate various aspects of the online casino and retail and online gaming industries (or that existing laws in those jurisdictions will not be interpreted negatively). Compliance with any such legislation may have a material adverse effect on our business, financial condition, results of operations and prospects, either as a result of our determination that a jurisdiction should be blocked, or because a local license or approval may be costly for us or our business partners to obtain and/or such licenses or approvals may contain other commercially undesirable conditions. In the United States, the Unlawful Internet Gambling Enforcement Act of 2006 ("UIGEA") prohibits among other things, the acceptance by a business of a wager by means of the Internet where such wager is prohibited by any federal or state law where initiated, received or otherwise made. Under UIGEA severe criminal and civil sanctions may be imposed on the owners and operators of such systems and on financial institutions that process wagering transactions. The law contains a safe harbor for wagers placed within a single state (disregarding intermediate routing of the transmission) where the method of placing the wager and receiving the wager is authorized by that state s law, provided the underlying regulations establish appropriate age and location verification. The Illegal Gambling Business Act ("IGBA") makes it a crime to conduct, finance, manage, supervise, direct or own all or part of an "illegal gambling business" and the Travel Act makes it a crime to use the mail or any facility in interstate commerce with the intent to "distribute the proceeds of any unlawful activity," or "otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity." For there to be a violation of either the IGBA or the Travel Act there must be a violation of underlying state law. Until 2011, there was uncertainty as to whether the Federal Wire Act of 1961 (the "Wire Act") prohibited states from conducting intrastate lottery transactions via the Internet if such transactions crossed state lines. In late 2011, the Office of Legal Counsel (the "OLC") of the United States Department of Justice ("DOJ") issued an opinion which concluded that the prohibitions of the Wire Act were limited to sports gambling and thus did not apply to state lotteries at all (the "2011 DOJ opinion"). Following the issuance of the 2011 DOJ opinion, within the past few years, state-authorized Internet casino gaming has been launched in Delaware, New Jersey and Pennsylvania and has been approved in Michigan and state authorized online poker has been launched in Nevada. In 2018, at the request of the Criminal Division, the OLC reconsidered the 2011 DOJ opinion s conclusion that the Wire Act was limited to sports gambling. On January 14, 2019, the OLC published a legal opinion dated November 2, 2018 (the "2018 DOJ opinion"), which concluded that the 2011 DOJ opinion had incorrectly interpreted the Wire Act. In the 2018 DOJ opinion, the OLC concluded that the restrictions on the transmission in interstate or foreign commerce of bets and wagers in the Wire Act were not limited to sports gambling but instead applied to all bets and wagers. The OLC also found that the enactment of the UIGEA described above did not modify the scope of the Wire Act. The OLC acknowledged that its conclusion in the 2018 DOJ opinion, which was contrary to the 2011 DOJ opinion, will make it more likely that the executive branch s view of the law will be tested in the courts. At this time, we are unable to determine whether the 2018 DOJ opinion will be upheld by the courts, or what impact it will have on us or our customers. Our growth prospects depend on the legal status of real-money online casino gaming in various jurisdictions, and legalization may not occur in as many jurisdictions as we expect or may occur at a slower pace than we anticipate or may be accompanied by legislative or regulatory restrictions or taxes that make it impracticable or less attractive to operate, which could adversely affect our future results of operations and make it more difficult to meet our expectations for financial performance. A number of jurisdictions do not prohibit, have legalized, or are currently considering legalizing, real-money gaming, and our growth, business, financial condition, results of operations and prospects are significantly dependent upon the legalization of real-money gaming expanding to new jurisdictions. Our business plan is partially based upon real-money gaming becoming legal for a specific percent of the population on a yearly basis; however, this may not occur as we have anticipated. Additionally, if a large number of additional jurisdictions enact real-money gaming legislation and we are unable to obtain or are otherwise delayed in obtaining the necessary licenses to operate online gaming websites in such jurisdictions where such games are legalized, our future growth in online gaming could be materially impaired. As we enter into new jurisdictions, local authorities may legalize real-money online gaming in a manner that is unfavorable to us. As a result, we may encounter legal, regulatory and political challenges that are difficult or impossible to foresee and which could result in an unforeseen adverse impact on planned revenues or costs associated with the new opportunity. Jurisdictions that have established state-run monopolies may limit opportunities for private sector participants like us. Jurisdictions may also impose substantial tax rates on online gaming revenue. Such taxes would make it more costly and less desirable for us to launch in a given jurisdiction, while tax increases in any of our existing jurisdictions may adversely impact our profitability. Therefore, even in cases in which a jurisdiction purports to license and regulate online gaming, the licensing and regulatory regimes can vary considerably in terms of their business-friendliness and at times may be intended to provide incumbent operators with advantages over new licensees. Therefore, some "liberalized" regulatory regimes are considerably more commercially attractive than others. Failure to comply with regulatory requirements or to successfully obtain a license or permit applied for could adversely impact our ability to comply with licensing and regulatory requirements or to obtain or maintain licenses in other jurisdictions, or could cause financial institutions, online and mobile platforms and distributors to stop providing services to us. Compliance with the various regulations applicable to real-money wagering is costly and time-consuming. Regulatory authorities at the non-United States, United States federal, state and local levels have broad powers with respect to the regulation and licensing of real-money gaming operations and may revoke, suspend, condition or limit our real-money gaming licenses, impose substantial fines on us and take other actions, any one of which could have a material adverse effect on our business, financial condition, results of operations and prospects. These laws and regulations are dynamic and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current laws or regulations or enact new laws and regulations regarding these matters. We will strive to comply with all applicable laws and regulations relating to our business. It is possible, however, that these requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules. Non-compliance with any such law or regulations could expose us to claims, proceedings, litigation and investigations by private parties and regulatory authorities, as well as substantial fines and negative publicity, each of which may materially and adversely affect our business, financial condition, results of operations and prospects. Any real-money gaming license could be revoked, suspended or conditioned at any time. The loss of a license in one jurisdiction could trigger the loss of a license or affect our eligibility for such a license in another jurisdiction, and any of such losses, or potential for such loss, could cause us to cease offering some or all of our offerings in the impacted jurisdictions. We may be unable to obtain or maintain all necessary registrations, licenses, permits or approvals, and could incur fines or experience delays related to the licensing process, which could adversely affect our operations. Our delay or failure to obtain or maintain licenses in any jurisdiction may prevent us from distributing our offerings, increasing our customer base and/or generating revenues. We cannot assure you that we will be able to obtain and maintain the licenses and related approvals necessary to conduct our online casino wagering operations. Any failure to maintain or renew our existing licenses, registrations, permits or approvals could have a material adverse effect on our business, financial condition, results of operations and prospects. Additionally, a gaming regulatory body may refuse to issue or renew a gaming license or restrict or condition the same, based on our past or present activities or our current or former directors, officers, employees, stockholders or third parties with whom we have relationships, which could adversely affect our business, financial condition, results of operations and prospects. If additional gaming regulations are adopted in a jurisdiction in which we operate, such regulations could impose restrictions or costs that could have a significant adverse effect on us. From time to time, various proposals are introduced in the legislatures of some of the jurisdictions in which we have existing or planned operations that, if enacted, could adversely affect our directors, officers, key employees, or other aspects of the company s operations. To date, we believe we have obtained all governmental licenses, findings of suitability, registrations, permits and approvals necessary for our operations. However, we can give no assurance that any additional licenses, permits and approvals that may be required will be given or that existing ones will be renewed or will not be revoked. Renewal is subject to, among other things, continued satisfaction of suitability requirements of our directors, officers, key employees and stockholders. Any failure to renew or maintain our licenses or to receive new licenses when required would have a material adverse effect on our business, financial condition, results of operations and prospects. Our inability to continue to conduct gaming operations under license from the Government of Curacao could adversely impact our online gaming operations in various jurisdictions and adversely affect our financial condition and operating cash flows. The Government of Curacao has been in the process of modernizing its gambling legislation and has created a new independent licensing and supervisory authority for all games of chance. Gaming operators that wish to acquire an online gaming license in Curacao must apply directly to the Curacao Gaming Control Board. This process replaces the prior master license and sublicense system, as the Curacao Gaming Control Board will issue and maintain all licenses directly. With regard to our gaming activities based on our prior Curacao sublicense, the Government of Curacao had previously approved four master license holders, based on National Decrees, and all operators and prospective operators interested in Curacao online gaming licenses were required to apply for a sublicense from one of those master license holders. We previously obtained our gaming sublicense with Gaming Services Provider N.V., holder of a Master License granted by the Central Government of Cura ao. This sublicense provided us with the ability to operate iCasino games, as well as poker, betting, lottery and other games of chance, and had been extended through July 30, 2024. As part of this change in gambling legislation, the Curacao Gaming Control Board has mandated that in order to receive a license under the new system, the applying entity must be domiciled in Curacao. In March 2024 we applied through our Interstellar Entertainment NV subsidiary, an entity incorporated in Curacao, to obtain a license directly from the government of Curacao and we received a license in July 2024. The loss of our Curacao license could significantly interfere with our online gaming operations, and could have a material adverse impact on our financial condition and operating cash flows. Furthermore, in such event, we could be unable to conduct online gaming operations for an indeterminate period of time, and there can be no assurances that we would be able to identify legally sufficient alternatives to be able to conduct our gaming operations at their current levels. In some jurisdictions, our key executives, certain employees or other individuals related to the business will be subject to licensing or compliance requirements. Failure by such individuals to obtain the necessary licenses or comply with individual regulatory obligations could cause the business to be non-compliant with its obligations, or imperil its ability to obtain or maintain licenses necessary for the conduct of the business. As part of obtaining real-money gaming licenses, the responsible gaming authority will generally determine suitability of certain directors, officers and employees and, in some instances, significant stockholders. The criteria used by gaming authorities to make determinations as to who requires a finding of suitability or the suitability of an applicant to conduct gaming operations varies among jurisdictions, but generally requires extensive and detailed application disclosures followed by a thorough investigation. Gaming authorities typically have broad discretion in determining whether an applicant should be found suitable to conduct operations within a given jurisdiction. If any gaming authority with jurisdiction over our business were to find an applicable officer, director, employee or significant stockholder of ours unsuitable for licensing or unsuitable to continue having a relationship with us, we would be required to sever our relationship with that person. Furthermore, such gaming authorities may require us to terminate the employment of any person who refuses to file required applications. Either result could have a material adverse effect on our business, financial condition, results of operations and prospects. Risks Related to Intellectual Property and Data Security We rely on information technology and other systems and platforms, and failures, errors, defects or disruptions therein could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results and growth prospects. Our product offerings and other software applications and systems, and certain third-party platforms that we use could contain undetected errors. Our technology infrastructure is critical to the performance of our Platform and product offerings and to user satisfaction. We devote significant resources to network and data security to protect our systems and data. However, our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business. We cannot assure you that absolute security will be provided by the measures we take to: prevent or hinder cyber-attacks and protect our systems, data and user information; to prevent outages, data or information loss, and fraud; and to prevent or detect security breaches. Such measures include a disaster recovery strategy for server and equipment failure, back-office systems and the use of third parties for certain cybersecurity services. We have experienced, and we may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. To date, such disruptions, individually and in the aggregate, have not had a material impact us; however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects. At this stage of our development, our board of directors, as a group, will actively oversee cybersecurity risks and will be committed to the prevention, timely detection and mitigation of the effects of any such incidents on our company s operations. While our board of directors will oversee cybersecurity risk management, our management will be responsible for day-to-day risk management processes. Our board of directors has tasked our Chief Technology Officer and other management with the responsibility to manage our cybersecurity initiatives including with respect to our customer data and game suppliers databases. Our board of directors will receive regular reports from management, including our Chief Technology Officer, on material cybersecurity risks and the degree of our company s exposure to those risks. Management will also work with third-party service providers to maintain appropriate controls. While we believe this approach is the most effective approach for addressing our cybersecurity risks at this time we cannot assure that it will be adequate to our evolving growth needs. Additionally, our product offerings may contain errors, bugs, flaws or corrupted data, and these defects may become apparent only after their launch and could result in a vulnerability that could compromise the security of our systems. If a particular product offering is unavailable when users attempt to access it or navigation through our platforms is slower than they expect, users may be unable to use our product offerings as desired and may be less likely to return to our platforms as often, if at all. Furthermore, programming errors, defects and data corruption could disrupt our operations, adversely affect the experience of our users, harm our reputation, cause our users to stop utilizing our platforms, divert our resources or delay market acceptance of our product offerings, any of which could result in legal liability to us or harm our business, financial condition, results of operations and prospects. Insufficient business continuity management could diminish our brand and reputation, subject us to liability, disrupt our business and adversely affect our operating results and growth prospects, and failure of planned availability and continuity solutions and disaster recovery when activated in response to an incident could result in system interruptions and degradation of service. If our user base and engagement continue to grow, and the amount and types of product offerings continue to grow and evolve, we will need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy our users needs. Such infrastructure expansion may be complex, and unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or interruptions in the delivery or degradation of the quality of our product offerings. In addition, there may be issues related to this infrastructure that are not identified during the testing phases of design and implementation, which may become evident only after we have started to fully use the underlying equipment or software, that could further degrade the user experience or increase our costs. As such, we could fail to continue to effectively scale and grow our technical infrastructure to accommodate increased demands. In addition, a lack of resources (e.g., hardware, software, personnel and service providers) could result in an inability to scale our services to meet business needs, system interruptions, degradation of service or operational mistakes. Our business also may be subject to interruptions, delays or failures resulting from adverse weather conditions, other natural disasters, power loss, terrorism, cyber-attacks, public health emergencies (such as COVID-19) or other catastrophic events. We believe that if our users have a negative experience with our product offerings, or if our brand or reputation is negatively affected, users may be less inclined to continue or resume utilizing our product offerings or to recommend our Platform to other potential users. As such, a failure or significant interruption in our service could harm our reputation, our business, financial condition, results of operations and prospects. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure, other loss or theft of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disruption of our operations and the services we provide to users, damage to our reputation, and a loss of confidence in our products and services, each of which could adversely affect our business, financial condition, results of operations and prospects. The secure maintenance and transmission of user information is a critical element of our operations. Our information technology and other systems that maintain and transmit user information, or the systems of third-party service providers and business partners, may be compromised by a malicious third-party penetration of our network security, or the network security of a third-party service provider or business partner, or impacted by intentional or unintentional actions or inactions by our employees, or the actions or inactions of a third-party service provider or business partner. As a result, our users information may be lost, disclosed, accessed or taken without such users consent. We have experienced attempts to breach our systems and other similar incidents in the past. For example, we have been and expect that we will continue to be subject to attempts to gain unauthorized access to or through our information systems or those we develop for our customers, whether by our employees or third parties, including phishing attacks by computer programmers and hackers who may develop and deploy viruses, worms or other malicious software programs. To date these attacks have not had a material impact on our operations or financial results, but we cannot provide assurance that they will not have a material impact in the future, including by overloading our systems and network and preventing our product offering from being accessed by legitimate users. We rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information. Advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect transaction data or other confidential and sensitive information from being breached or compromised. In addition, websites are often attacked through compromised credentials, including those obtained through phishing and credential stuffing. Our security measures, and those of our third-party service providers, may not detect or prevent all attempts to breach our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by our websites, networks and systems or that we or such third parties otherwise maintain, including payment card systems, which may subject us to fines or higher transaction fees or limit or terminate our access to certain payment methods. We and such third parties may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers. In addition, security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by third parties. These risks may increase over time as the complexity and number of technical systems and applications we use also increases. Breaches of our security measures or those of our third-party service providers or cybersecurity incidents could result in: unauthorized access to our sites, networks and systems; unauthorized access to and misappropriation of user information, including users personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware or other malware being served from our sites, networks or systems; deletion or modification of content or the display of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or litigation, regulatory action and other potential liabilities. In the past, the online gaming industry has experienced social engineering, phishing, malware and similar attacks and threats of denial-of-service attacks, none of which to date have been material to our business; however, such attacks could in the future have a material adverse effect on our operations. If any of these breaches of security should occur and be material, our reputation and brand could be damaged, our business may suffer, we could be required to expend significant capital and other resources to alleviate problems caused by such breaches, and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. We cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. In addition, any party who is able illicitly to obtain a user s password could access the user s transaction data or personal information, resulting in the perception that our systems are insecure. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data protection, data security, network and information systems security and other laws and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition, results of operations and prospects. We continue to devote significant resources to protect against security breaches or we may need to in the future to address problems caused by breaches, including notifying affected users and responding to any resulting litigation, which in turn, diverts resources from the growth and expansion of our business. Failure to protect or enforce our intellectual property rights, the confidentiality of our trade secrets and confidential information, or the costs involved in such enforcement could harm our business, financial condition, results of operations and prospects. We rely on trademark, copyright, trade secret and domain-name-protection laws to protect our rights in intellectual property. However, third parties may knowingly or unknowingly infringe our rights in intellectual property, third parties may challenge intellectual property rights held by us, and pending and future trademark may not be approved. In any of these cases, we may be required to expend significant time and expense to prevent infringement of or to enforce our rights. Notwithstanding our intellectual property rights, there can be no assurance that others will not offer products or services that are substantially similar to ours and compete with our business. Circumstances outside our control could pose a threat to our intellectual property rights. For example, effective intellectual property protection may not be available in the United States or other countries in which we operate or intend to operate our business. Also, the efforts we have taken to protect our intellectual property rights may not be sufficient or effective, and any significant impairment of our intellectual property rights could harm our business or our ability to compete. If we are unable to protect our proprietary offerings and features, competitors may reverse engineer and/or copy them. Additionally, protecting our intellectual property rights is costly and time-consuming. Any unauthorized use of our intellectual property or disclosure of our confidential information or trade secrets could make it more expensive to do business, thereby harming our operating results. Furthermore, if we are unable to protect our intellectual property rights or prevent unauthorized use or appropriation by third parties, the value of our brands and other intangible assets may be diminished, and competitors may be able to more effectively mimic our product offerings and services. Any of these events could seriously harm our business, financial condition, results of operations and prospects. Our collection, storage and use, including sharing and international transfers, of personal data are subject to applicable data protection and privacy laws, and any actual or perceived failure to comply with such laws may harm our reputation and business or expose us to fines, civil claims (including class actions), and other enforcement action. The protection of personal information is becoming increasingly regulated and changes in applicable laws may require changes to our policies, practices, procedures and personnel which may require material expenditures and harm our financial condition and results of operations. We are, and will increasingly become as we seek to expand our business, subject to numerous domestic and foreign laws, regulations, rules and standards, as well as associated industry standards, policies and contractual or other obligations, relating to the collection, use, storage, safeguarding, retention, security, destruction, disclosure, transfer, and/or other processing of personal data (collectively, "Processing") in the jurisdictions in which we operate (collectively, "Data Protection Requirements"). These Data Protection Requirements often vary significantly by jurisdiction. While we have taken steps to comply with Data Protection Requirements, we cannot assure you that our efforts to achieve and remain in compliance have been and/or will continue to be, fully successful. If we fail, or are perceived to have failed, to address or comply with any such Data Protection Requirements, this could result in enforcement actions against us that could include investigations, fines, penalties, audits and inspections, additional reporting requirements and/or oversight, temporary or permanent bans on all or some Processing of personal data or orders to destroy or not use personal data. Further, individuals or other relevant stakeholders could bring a variety of claims against us for our actual or perceived failure to comply with the Data Protection Requirements. Any of these events could have a material adverse effect on our reputation, business, or financial condition, and could lead to a loss of actual or prospective customers, collaborators or partners; result in an inability to Process personal data or to operate in certain jurisdictions; limit our ability to develop or commercialize current or prospective offerings or services; or require us to revise or restructure our operations. For example, the European Union s General Data Protection Regulation ("GDPR") applies to any Processing operations carried out in the context of the activities of an establishment in the EEA, as well as to any other Processing operations relating to the offering of goods or services to individuals in the EEA and/or the monitoring of individuals behavior in the EEA. Also, notwithstanding the United Kingdom s withdrawal from the EU, by operation of the so called , ' ': UK GDPR (i.e., the GDPR as it continues to form part of the law of the United Kingdom by virtue of section 3 of the EU (Withdrawal) Act 2018 and as subsequently amended) ("UK GDPR") the GDPR continues to apply in substantially equivalent form to Processing operations carried out in the context of the activities of an establishment in the United Kingdom and any other Processing relating to the offering of goods or services to individuals in the United Kingdom and/or monitoring of individuals behavior in the United Kingdom. Consequently, any reference we make to the GDPR also refers to the UK GDPR in the context of the United Kingdom, unless the context indicates otherwise. The GDPR further provides that EEA Member States may introduce specific, supplementary requirements related to the Processing of "special categories of personal data"; as well as personal data related to criminal offences or convictions. In the United Kingdom, the UK Data Protection Act 2018 complements the UK GDPR in this regard. This fact may lead to greater divergence on the law that applies to the Processing of such personal data across the EEA and/or United Kingdom, which may increase our costs and overall compliance risk. The GDPR and such supplementary requirements impose stringent data privacy and security requirements. In particular, the GDPR imposes several requirements relating to ensuring there is a lawful basis for Processing personal data, extends the rights of individuals to whom the personal data relates, materially expands the definition of what is expressly noted to constitute personal data, requires additional disclosures about how personal data is to be used, imposes limitations on retention of personal data, imposes strict rules on the transfer of personal data out of the EEA/UK to most third countries, creates mandatory data breach notification requirements in certain circumstances and establishes onerous new obligations on service providers, or processors, who Process personal data simply on behalf of others. It also significantly increased penalties for noncompliance. Additionally, following the United Kingdom s withdrawal from the European Union on January 31, 2020 and end of the post-Brexit transition period on December 31, 2020, as noted above, the United Kingdom has introduced the UK GDPR which currently makes the privacy regimes of the EEA and United Kingdom similar, though it is possible that either the European Union, and consequently those further states that make up the remainder of the EEA, or United Kingdom could elect to change their approach and create differences in legal requirements and regulation in this area. On June 28, 2021, the European Commission issued an adequacy decision under the GDPR which allows transfers (other than those carried out for the purposes of United Kingdom immigration control) of personal data from the EEA to the United Kingdom to continue without restriction for a period of four years ending June 27, 2025. After that period, the adequacy decision may be renewed, however, only if the United Kingdom continues to ensure an adequate level of data protection. During these four years, the European Commission will continue to monitor the legal situation in the United Kingdom and could intervene at any point if the United Kingdom deviates from the level of data protection in place at the time of issuance of the adequacy decision. If the adequacy decision is withdrawn or not renewed, transfers of personal data from the EEA to the United Kingdom will require a valid , ' ': transfer mechanism and we may be required to implement new processes and put new agreements in place (such as the then-current form of the European Commission-issued Standard Contractual Clauses), to enable transfers of personal data from the EEA to the United Kingdom to continue. We are also subject to the Data Protection (Bailiwick of Guernsey) Law, 2017 (as amended) (the "Guernsey DP Law"), which largely follows GDPR and requires us to control and process personal data only for proper purposes and in accordance with statutory data protection principles, and the Data Protection Law of Colombia, which requires the consent of the customer to their data being transmitted outside of Colombia. Because our products and services rely on the movement of data across national boundaries, global privacy and data security concerns could result in additional costs and liabilities to us or inhibit sales of our products and/ or services globally. In particular, European data protection laws, such as the GDPR, generally prohibit the transfer of personal data from the EEA, United Kingdom and Switzerland to the United States, and most other countries, known as , ' ': third countries , in respect of which the European Commission or other relevant regulatory body has not issued a so-called , ' ': adequacy decision , unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data. One of the primary safeguards used for transfers of personal data to the United States was the E.U.-U.S. Privacy Shield framework administered by the U.S. Department of Commerce. On July 16, 2020, the Court of Justice of the European Union, or CJEU, in a decision known as Schrems II , invalidated the EU-U.S. Privacy Shield, under which personal data could be transferred from the EEA and the United Kingdom to U.S. entities that had self-certified under the Privacy Shield. To align with the CJEU s decision in respect of the E.U.-U.S. Privacy Shield, on September 8, 2020, the UK government similarly invalidated the use of the EU-U.S. Privacy Shield as a mechanism for lawful personal data transfers from the United Kingdom to the United States under the UK GDPR and the Swiss Federal Data Protection and Information Commissioner announced that the Swiss-U.S. Privacy Shield regime was also inadequate for the purposes of personal data transfers from Switzerland to the U.S. entities who had self-certified under the Swiss Privacy Shield. The CJEU Schrems II decision mentioned above also cast doubt on the ability to use one of the primary alternatives to the E.U.-U.S. Privacy Shield and Swiss-U.S. Privacy Shield, namely, the European Commission s Standard Contractual Clauses, lawfully to transfer personal data to the United States and most other third countries. On June 4, 2021, the European Commission published new versions of the Standard Contractual Clauses. These must be used for all new transfers of personal data from the EEA to third countries starting September 27, 2021, and all existing transfers of personal data from the EEA to third countries relying on the existing versions of the Standard Contractual Clauses must be replaced by December 27, 2022. A transition period set for the adoption of the updated standard clauses ended on December 27, 2022. The implementation of the new Standard Contractual Clauses will necessitate significant contractual overhaul of our data transfer arrangements with partners, sub-processors and vendors. Use of both the existing and the new Standard Contractual Clauses must, following the Schrems II decision, now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals, and additional supplementary technical, organizational and/or contractual measures and/or contractual provisions may need to be put in place; however, the nature of these additional measures is currently uncertain. At present, there are few if any viable alternatives to the Privacy Shield and the Standard Contractual Clauses and there remains some uncertainty with respect to the nature and efficacy of such supplementary measures in ensuring an adequate level of protection of personal data. As such, our transfers of personal data to third countries may not comply with European data protection laws and may increase our exposure to the GDPR s heightened sanctions for breaching of its cross-border data protection rule, including fines of up to 4% of annual global revenue or 20,000,000 ($21,188,000), or 4% of annual global revenue of the preceding year, whichever is higher, and injunctions against transfers. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the Standard Contractual Clauses can and cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate and/or engage providers and/or otherwise transfer personal data, it could affect the manner in which we receive and/or provide services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results and generally increase compliance risk. Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of operating our business. In recent years, U.S. and European lawmakers and regulators have expressed concern over electronic marketing and the use of third-party cookies, web beacons and similar technology for online behavioral advertising. On June 20, 2019, the U.K. s Information Commissioner (the "ICO") published a report setting out its views on advertising technology, specifically the use of personal data in "real time bidding", and the key privacy compliance challenges arising from it. In its report, which is a status update rather than formal guidance, several key deficiencies were noted and marked for formal regulatory action. However, in May 2020, the ICO paused its investigation into real time bidding and the advertising technology industry, as it sought to prioritize activities responding to the COVID-19 pandemic. The ICO s investigation resumed in January 2021. We are likely to be required to expend further capital and other resources to ensure compliance with the findings of the ICO s report on advertising technology, and any relevant changing laws and regulations. While we have numerous mitigation controls in place, advertisements produced by us may be erroneously served on websites that are not suitable for the advertising content of a casino (e.g., websites predominantly aimed at children). There is also a risk that such advertisements are viewed by people who do not want to view them, or who have taken measures not to receive them (for example, individuals on "self-exclusion" lists). In each case this may have adverse legal and reputational effects on our business. In the EU, rules relating to electronic direct marketing are currently set out in the ePrivacy Directive, which is likely to be replaced by a new ePrivacy Regulation. While no official time frame has been given for the ePrivacy Regulation, there will be a transition period after the ePrivacy Regulation is agreed for compliance. As of the date of this prospectus it is still undergoing legislative processes and has not been officially adopted by the EU. The ePrivacy Regulation will be directly implemented into the laws of each of the EU Member States, without the need for further enactment. When implemented, the ePrivacy Regulation is expected to alter rules on third-party cookies, web beacons and similar technology for online behavioral advertising and to impose stricter requirements on companies using these tools. Regulation of cookies and web beacons may lead to broader restrictions on our online activities, including efforts to understand followers Internet usage and promote ourselves to them. The current draft of the ePrivacy Regulation significantly increases fining powers to the same levels as the GDPR. Given the delay in finalizing the ePrivacy Regulation, certain regulators have issued guidance (including ICO and French data protection regulators) on the requirement to seek strict opt-in, unbundled consent to use all nonessential cookies and similar technologies and the requirement to increase the standard of transparency relating to use of cookies and similar technologies. Our cookie consent management functionality and cookies notices may not meet the standards outlined in such guidance. In the United States, the federal government, including Congress, the Federal Trade Commission and the Department of Commerce, has announced that it is reviewing the need for greater regulation for the collection of information concerning consumer behavior on the internet, including regulation aimed at restricting certain targeted advertising practices. Furthermore, the Federal Trade Commission and many state attorneys general continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination, and security practices that appear to be unfair or deceptive. Numerous states have enacted or are in the process of enacting state level data privacy laws and regulations governing the collection, use, and processing of state residents personal data. For example, the California Consumer Privacy Act ("CCPA") took effect on January 1, 2020. The CCPA establishes a new privacy framework for covered businesses such as ours and may require us to modify our data processing practices and policies and incur compliance related costs and expenses. The CCPA provides new and enhanced data privacy rights to California residents, such as affording consumers the right to access and delete their information and to opt out of certain sharing and sales of personal information. The law also prohibits covered businesses from discriminating against consumers (for example, charging more for services) for exercising any of their CCPA rights. The CCPA imposes severe statutory penalties for certain violations of the law as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action is expected to increase the likelihood of, and risks associated with, data breach litigation. It remains unclear how various provisions of the CCPA will be interpreted and enforced. In November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020 ("CPRA"). The CPRA further expands the CCPA with additional data privacy compliance requirements that may impact our business, and establishes a regulatory agency dedicated to enforcing those requirements. The Stop Hacks and Improve Electronic Data Security Act, otherwise known as the SHIELD Act, is a New York State bill, the data protection portions of which became effective on March 23, 2020. The SHIELD Act requires companies to adopt reasonable safeguards to protect the security, confidentiality, and integrity of private information. A company should implement a data security program containing specific measures, including risk assessments, employee training, vendor contracts, and timely data disposal. Laws like the SHIELD Act, the CPRA and the CCPA may lead other states to pass comparable legislation, with potentially greater penalties, and more rigorous compliance requirements relevant to our business. For example, Virginia has enacted the Consumer Data Protection Act and Colorado has enacted the Colorado Privacy Act, each of which may impose obligations similar to or more stringent than those we may face under other data protection laws. Compliance with any newly enacted privacy and data security laws or regulations may be challenging and cost and time-intensive, and we may be required to put in place additional mechanisms to comply with applicable legal requirements. Although we have implemented certain policies and procedures, and continue to review and improve such policies and procedures, that are designed to ensure compliance with applicable laws, rules and regulations, if our privacy or data security measures fail, or are perceived to have failed, to comply with applicable current or future laws and regulations, we may be subject to fines, litigation, regulatory investigations and penalties (including potential suspension or loss of licensure), enforcement notices requiring us to change the way we use personal data or our marketing practices or other liabilities such as compensation claims by individuals affected by a personal data breach, as well as negative publicity and a potential loss of business. Fines are significant in some countries (e.g., the GDPR introduced fines of up to 20,000,000 or up to 4% of the total worldwide annual revenue of the preceding financial year, whichever is higher) as well as litigation, compensation claims by affected individuals (including class action type litigation where individuals suffer harm), regulatory investigations and enforcement notices that could require us to change the way we use personal data. Our processing of cardholder data is subject, in addition to data protection and privacy laws, to strict industry standards and security procedures. Compliance with the requirements to process cardholder data can be onerous and may require the implementation of new procedures, policies and security measures or the amendment of existing ones which may require material expenditures and harm our financial condition and results of operations. Any actual or perceived failure to comply may result in the inability to process payments, monetary penalties and reputational damages which may require material expenditures and harm our financial condition and results of operations. The Payment Card Industry Data Security Standard ("PCI DSS") applies to the processing of cardholder data. PCI DSS consists of a set of policies and procedures intended to enhance the security of cardholder data during card transactions. PCI DSS was implemented by the five largest credit card brands—Visa, Mastercard, Discover, American Express, JCB. Compliance in this regard is important as we do process cardholder data. Where there is actual or perceived non-compliance with PCI DSS, this may result in our inability to process payments, monetary penalties and reputational damage. As part of PCI DSS compliance, we are required to undertake internal and external network vulnerability scans at least quarterly and after any significant change in the network and to carry out a formal risk assessment process at least annually and upon significant changes to the environment that identifies critical assets, threats, and vulnerabilities. Where such scans reveal any lack of compliance, the Company will take appropriate steps to ensure compliance in accordance with the relevant and applicable policies and procedures. We will rely on licenses and service agreements to use the intellectual property rights of third parties which are incorporated into or used in our products and services. Failure to renew or expand existing licenses or service agreements may require us to modify, limit or discontinue certain product offerings, which could materially affect our business, financial condition, results of operations and prospects. We rely on products, technologies and intellectual property that we license or that are made available to us through service agreements from third parties, for use in our B2B, B2B2C and B2C offerings. Substantially all of our product offerings and services use intellectual property licensed or made available to us through service agreements from third parties. The future success of our business may depend, in part, on our ability to obtain, retain and/or expand licenses or service agreements for certain technologies. We cannot assure that these third-party licenses and services agreements, or support for the technologies licensed or provided to us thereunder, will continue to be available to us on commercially reasonable terms, if at all. In the event that we cannot renew and/or expand existing licenses or services agreements, we may be required to discontinue or limit our use of the product offerings that include or incorporate the licensed or provided technology. Some of our license agreements contain minimum guaranteed royalty payments to the third party. Individually and in the aggregate, these minimum guaranteed royalty payments are immaterial to our operations. Our license agreements generally allow for transferability in the event of a strategic transaction but contain some limited termination rights related to the transfer. Certain of our license agreements grant the licensor rights to audit our use of their intellectual property. Disputes with licensors over uses or terms could result in the payment of additional royalties or penalties by us, cancellation or non-renewal of the underlying license or litigation. The regulatory review process and licensing requirements also may preclude us from using technologies owned or developed by third parties if those parties are unwilling to subject themselves to regulatory review or do not meet regulatory requirements. Some gaming authorities require gaming manufacturers to obtain approval before engaging in certain transactions, such as acquisitions, mergers, reorganizations, financings, stock offerings and share repurchases. Obtaining such approvals can be costly and time consuming, and we cannot assure that such approvals will be granted or that the approval process will not result in delays or disruptions to our strategic objectives. Risks Related to our Third-Party Vendor Relationships We rely on third-party providers to validate the identity and location of our users, and if such providers fail to perform adequately or provide accurate information or we do not maintain business relationships with them, our business, financial condition, results of operations and prospects could be adversely affected. There is no guarantee that the third-party geolocation and identity verification systems that we rely on perform adequately or will be effective. We rely on our geolocation and identity verification systems to ensure we are in compliance with certain laws and regulations, and any service disruption to those systems would prohibit us from operating our Platform and would adversely affect our business. Additionally, incorrect or misleading geolocation and identity verification data with respect to current or potential users received from third-party service providers may result in us inadvertently allowing access to our product offerings to individuals who should not be permitted to access them, or otherwise inadvertently deny access to individuals who should be able to access our product offerings, in each case based on inaccurate identity or geographic location determination. Our third-party geolocation services provider relies on its ability to obtain information necessary to determine geolocation from mobile devices, operating systems and other sources. Changes, disruptions or temporary or permanent failure to access such sources by our third-party services providers may result in their inability to accurately determine the location of our users. Moreover, our inability to maintain our existing contracts with third-party services providers, or to replace them with equivalent third parties, may result in our inability to access geolocation and identity verification data necessary for our day-to-day operations. If any of these risks materializes, we may be subject to disciplinary action, fines, lawsuits, and our business, financial condition, results of operations and prospects could be adversely affected. We rely on other third-party service and content providers (including online slot and other game providers) and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition, results of operations and prospects could be adversely affected. Our success depends in part on our relationships with third-party service providers. We also rely on third parties for content delivery (such as online slots), load balancing and protection against distributed denial-of-service attacks. If those providers do not perform adequately, our users may experience issues or interruptions with their experiences, and we may be held responsible by gaming regulators for the errors of third-party content providers. Furthermore, if any of our third-party service or data providers terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider, and as consolidation in the industries in which we operate continues to occur, if any of our third-party service providers is acquired by a competitor, we may need to find an alternate provider, and in each case we may not be able to secure similar terms or replace such providers in an acceptable time frame. We also rely on other software and services supplied by third parties, such as communications and internal software, and our business may be adversely affected to the extent such software and services do not meet our expectations, contain errors or vulnerabilities, are compromised or experience outages. Any of these risks could increase our costs and adversely affect our business, financial condition, results of operations and prospects. Further, any negative publicity related to any of our third-party service providers, including any publicity related to regulatory concerns or allegations of bad or unethical actions undertaken by any of our third-party service providers, could adversely affect our reputation and brand, result in us severing our relationship with such third-party service provider and could potentially lead to increased regulatory or litigation exposure. We incorporate technology from third-party vendors into our platform. We cannot be certain that these vendors are not infringing the intellectual property rights of others or that they have sufficient rights to such technology in all jurisdictions in which we may operate. Some of our material license and services agreements with third party vendors allow the vendor to terminate for convenience. If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our vendors or against us, if our third party vendors terminate any license or services agreements, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our Platform or product offerings containing that technology could be severely limited and our business could be harmed. Additionally, if we are unable to obtain necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time, effort and skillsets that we currently do not have, and may be of lower quality or performance standards. This would limit and delay our ability to provide new or competitive product offerings and increase our costs. If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our product offerings, which could adversely affect our business, financial condition, results of operations and prospects. If Internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired and our business, financial condition, results of operations and prospects could be adversely affected. A substantial portion of our network infrastructure is provided by third parties, including Internet service providers and other technology-based service providers. We use technology-based service providers such as CloudFlare to mitigate any distributed denial-of-service attacks. However, if Internet service providers experience service interruptions, including because of cyber- attacks, or due to an event causing an unusually high volume of Internet use (such as a pandemic or public health emergency like COVID-19), communications over the Internet may be interrupted and impair our ability to conduct our business. Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may not be successful and thus may impact the ability of our users to access our Platform or product offerings in a timely fashion or at all. In addition, our ability to process e-commerce transactions depends on bank processing and credit card systems. To prepare for system problems, we continuously seek to strengthen and enhance our current facilities and the capabilities of our system infrastructure and support. Nevertheless, there can be no assurance that the Internet infrastructure or our own network systems will continue to be able to meet the demand placed on us by the continued growth of the Internet, the overall online gaming industry and our users. Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. Any system failure as a result of reliance on third parties, such as network, software or hardware failure, including as a result of cyber-attacks, which causes a loss of our users property or personal information or a delay or interruption in our online services and products and e-commerce services, including our ability to handle existing or increased traffic, could result in a loss of anticipated revenue, interruptions to our Platform and product offerings, cause us to incur significant legal, remediation and notification costs, degrade the customer experience and cause users to lose confidence in our product offerings, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects. We have relied on the customer lead generation services provided to us by Spike Up Media, an affiliate. The loss of those services or changes in terms by which those services are provided to us could result in slower growth, reduced gross profit margins or operating losses any of which could have a material adverse effect on our operations. Approximately 78% of our leads were generated by Spike Up Media during 2022. During 2023, approximately 29% of our leads were generated by Spike Up Media. We plan to continue mitigating this dependency through internal staffing and by working with other lead generators. Our initial payment arrangements with Spike Up Media for lead generation were at favorable rates to us resulting in more rapid payback of customer acquisition costs than we might otherwise expect from leads generated by other unaffiliated providers. Since March 2023, our arrangement for lead generation with Spike Up has changed to market rates which results in our having lower gross operating margins. Our current agreement with Spike Up Media allows for termination by either party at any time without penalty. If we were currently to lose the relationship with Spike Up our iCasino operations could suffer and we could experience a material negative impact on revenue and gross profit. Our growth will depend, in part, on the success of our strategic relationships with third parties. Overreliance on certain third parties, or our inability to extend existing relationships or agree to new relationships may cause unanticipated costs for us and impact our financial performance in the future. We rely, and we expect to continue to rely, on relationships with third parties in order to attract users to our platform which is common practice in our industry. These relationships along with providers of online services, search engines, social media, directories and other websites and ecommerce businesses direct consumers to our online platform. While we believe there are other third parties that could drive users to our platform, adding or transitioning to them may disrupt our business and increase our costs. In the event that any of our existing relationships or our future relationships fails to provide services to us in accordance with the terms of our arrangement, or at all, and we are not able to find suitable alternatives, this could impact our ability to attract consumers cost effectively and harm our business, financial condition, results of operations and prospects. Risks Related to Our Affiliate Arrangements We have arrangements with our affiliates that impact our operations. We have engaged, and may in the future engage, in transactions with affiliates, such as Happy Hour, Spike Up Media, Ellmount Interactive and other related parties, to operate online gaming. While an effort has been made and will continue to be made to obtain services from affiliated persons and other related parties at rates and on terms that are at least as favorable as would be charged by others, if that were not to be achieved in the future that could have a negative impact on our operations. If we engage in related party transactions on unfavorable terms, our operating results will be negatively impacted. Risks Related to our Liquidity and Capital Resources We may require additional capital to support our growth plans, and that capital may not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business. We intend to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new product offerings and features or enhance our existing platform, improve our operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. Our ability to obtain additional capital, if and when required, will depend on our business plans, investor demand, our operating performance, capital markets conditions and other factors. If we raise additional funds by issuing equity, equity-linked or debt securities, such as preferred stock as authorized by our Charter, those securities may have rights, preferences or privileges senior to the rights of our currently issued and outstanding equity or debt, and our existing stockholders may experience dilution. If we are unable to obtain additional capital when required, or on satisfactory terms, our ability to continue to support our business growth or to respond to business opportunities, challenges or unforeseen circumstances could be adversely affected, and our business, financial condition, results of operations and prospects may be harmed. We may invest in or acquire other businesses, and our business may suffer if we are unable successfully to integrate acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions. As part of our business strategy, we may make acquisitions as opportunities arise to add new or complementary businesses, products, brands or technologies. In some cases, the costs of such acquisitions may be substantial, including as a result of professional fees and due diligence efforts. There is no assurance that the time and resources expended on pursuing a particular acquisition will result in a completed transaction, or that any completed transaction will ultimately be successful. In addition, we may be unable to identify suitable acquisition or strategic investment opportunities or may be unable to obtain any required financing or regulatory approvals, and therefore may be unable to complete such acquisitions or strategic investments on favorable terms, if at all. We may decide to pursue acquisitions with which our investors may not agree and we cannot assure investors that any acquisition or investment will be successful or otherwise provide a favorable return on investment. In addition, acquisitions and the integration thereof require significant time and resources and place significant demands on our management, as well as on our operational and financial infrastructure. In addition, if we fail to successfully close transactions or integrate new teams, or integrate the products and technologies associated with these acquisitions into our company, our business could be seriously harmed. Acquisitions may expose us to operational challenges and risks, including: the ability to profitably manage acquired businesses or successfully integrate the acquired businesses operations, personnel, financial reporting, accounting and internal controls, technologies and products into our business; increased indebtedness and the expense of integrating acquired businesses, including significant administrative, operational, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations; entry into jurisdictions or acquisition of products or technologies with which we have limited or no prior experience, and the potential of increased competition with new or existing competitors as a result of such acquisitions; diversion of management s attention and the over-extension of our operating infrastructure and our management systems, information technology systems, and internal controls and procedures, which may be inadequate to support growth; the ability to fund our capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; and the ability to retain or hire qualified personnel required for expanded operations. Our acquisition strategy may not succeed if we are unable to remain attractive to target companies or expeditiously close transactions. Issuing shares of our stock to fund an acquisition would cause economic dilution to existing stockholders. If we develop a reputation for being a difficult acquirer or having an unfavorable work environment, or target companies view our shares of capital stock unfavorably, we may be unable to consummate key acquisition transactions essential to our corporate strategy and our business, financial condition, results of operations and prospects may be seriously harmed. If we raise capital in the future by issuing shares of common or preferred stock or other equity or equity-linked securities, convertible debt or other hybrid equity securities, then-existing stockholders may experience dilution, such new securities may have rights senior to those of the Company s common stock, and the market price of the Company s common stock may be adversely affected. If the Company raises capital in the future, then existing stockholders may experience dilution. Our Certificate of Incorporation provides that preferred stock may be issued from time to time in one or more series. The Board is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Board may, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the shares of common stock and could have anti-takeover effects. The ability of the Board to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. The issuance of any such securities may have the impact of adversely affecting the market price of the Company s common stock. High Roller Technologies, Inc. is a holding company that has no material assets other than the ownership of its operating subsidiaries. We depend on distributions from these subsidiaries. If these distributions are inadequate, we may be unable to pay our taxes and other expenses. We are a holding company that has no material assets other than its ownership interests in Interstellar Entertainment, Lunar Ventures, and Ellmount Entertainment Ltd. The Company is not expected to have independent means of generating revenue or cash flow, and its ability to pay its taxes, operating expenses, and pay any dividends in the future, if any, will be dependent upon the financial results and cash flows of its High Roller, Fruta, Casino Room, and other domain operations. There can be no assurance that these operations will generate sufficient cash flow to distribute funds to the Company or that applicable state law and contractual restrictions, including negative covenants under debt instruments will permit such distributions. If these operations do not distribute sufficient funds to the Company to pay its taxes or other liabilities, the Company may default on contractual obligations or have to borrow funds. In the event that the Company is required to borrow funds, our liquidity may be adversely affected which could subject us to additional restrictions imposed by lenders. Increases in the Company s income tax rates, changes in income tax laws or disagreements with U.S. and foreign tax authorities can adversely affect the Company s business, financial condition or results of operations. Increases in the Company s income tax rates or other changes in income tax laws in the United States or any particular jurisdiction in which the Company operates could reduce its after-tax income from such jurisdiction and adversely affect its business, financial condition or results of operations. Existing tax laws in the United States have been and could in the future be subject to significant change. For example, in December 2017, the TCJA was signed into law in the United States which provided for significant changes to then-existing tax laws and additional guidance issued by the IRS pursuant to the TCJA may continue to impact the Company in future periods. Additional changes in the United States tax regime, including changes in how existing tax laws are interpreted or enforced, can adversely affect the Company s business, financial condition or results of operations. The Company will also be subject to regular reviews, examinations and audits by the IRS and other taxing authorities with respect to income and non-income-based taxes. Economic and political pressures to increase tax revenues in jurisdictions in which the Company operates, or the adoption of new or reformed tax legislation or regulation, may make resolving tax disputes more difficult and the final resolution of tax audits and any related litigation can differ from the Company s historical provisions and accruals, resulting in an adverse impact on the Company s business, financial condition or results of operations. If the revenue generated by our iCasino operations does not meet the expectations of investors or securities analysts, the market price of our securities may decline. Fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to this offering, there was no public market for the securities of High Roller. Accordingly, the valuation ascribed to the Company may not be indicative of the price that will ultimately prevail in the trading market and, even if an active market for the Company s securities develops and continues, the trading price of its securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond the Company s control. Any of the factors listed below could have a material adverse effect on your investment in the Company s securities and the Company s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of the Company s securities may not recover and may experience a further decline. Factors affecting the trading price of our securities may include: actual or anticipated fluctuations in our quarterly financial results or quarterly financial results of companies perceived to be similar to us; fluctuations and volatility in the currencies in which we conduct our operations as compared to the U.S. dollar, our reporting currency; changes in the market s expectations about our operating results; success of competitors; our operating results failing to meet the expectation of securities analysts or investors in a particular period; changes in financial estimates and recommendations by securities analysts concerning the Company or the industries in which we operate in general; operating and stock price performance of other companies that investors deem comparable to us; our ability to market new and enhanced products on a timely basis; changes in laws and regulations affecting our business; commencement of, or involvement in, litigation involving the Company; changes in our capital structure, such as future issuances of securities or the incurrence of debt; the volume of shares of our common stock available for public sale; any major change in our Board or management; sales of substantial amounts of our common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism. Broad market and industry factors may materially harm the market price of the Company s securities irrespective of our operating performance. The stock market in general, and NYSE American in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of the Company s securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies that investors perceive to be similar to the Company could depress the Company s stock price regardless of its business, prospects, financial conditions, or results of operations. A decline in the market price of the Company s securities also could adversely affect our ability to issue additional securities and its ability to obtain additional financing in the future. A significant portion of our total outstanding securities are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well. Sales of a substantial number of shares of the common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of the common stock. While members of our management and certain shareholders have agreed to be subject to certain restrictions regarding the transfer of the common stock, these shares may be sold after the expiration of the applicable lock-up restrictions. We may file one or more registration statements to provide for the resale of such shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of the common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them. Provisions in our Restated Certificate of Incorporation, as amended, may inhibit a takeover of the Company, which could limit the price investors might be willing to pay in the future for our securities and could entrench management. Our Restated Certificate of Incorporation, as amended, contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include the ability of the Board to designate the terms of, and issue new series of, preferred stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. General Risk Factors Economic downturns and political and market conditions beyond our control, including a reduction in consumer discretionary spending, could adversely affect our business, financial condition, results of operations and prospects. Our financial performance is subject to global and United States economic conditions and their impact on levels of spending by users. Economic recessions have had, and may continue to have, far reaching adverse consequences across many industries, including the global entertainment and gaming industries, which may adversely affect our business, financial condition, results of operations and prospects. We are currently experiencing cost of living increases, inflationary pressures and reduced economic growth in certain countries. If recovery is slow or stalls, or if we experience a further downturn as a result of market conditions, we may experience a material adverse effect on our business, financial condition, results of operations or prospects. We cannot predict future global economic developments and effect that they may have on our end markets and our operations; however, the effect on our business, financial condition, results of operations and prospects could be material and adverse. Consumer discretionary spending or consumer preferences are driven by socioeconomic factors beyond our control, and our business is sensitive to reductions from time to time in discretionary consumer spending. Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce our users disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as online casino wagering. As a result, we cannot ensure that demand for our offerings will remain constant. Adverse developments affecting economies throughout the world, including a general tightening of availability of credit, decreased liquidity in certain financial markets, increased interest rates, foreign exchange fluctuations, increased energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases such as COVID-19, could lead to a further reduction in discretionary spending on leisure activities, such as online casino wagering. Continued inflation may harm our business and financial condition. If our costs become subject to significant inflationary pressures, we may not be able to offset these higher costs through price increases or other pricing adjustments to our business operations. Our inability or failure to do so could harm our business, financial condition, and operating results. We may be subject to litigation in the operation of our business. An adverse outcome in one or more proceedings could adversely affect our business. As a growing company with expanding operations, we may in the future increasingly face the risk of claims, lawsuits and other proceedings involving competition and antitrust, intellectual property, privacy, consumer protection, accessibility claims, securities, tax, labor and employment, regulatory and compliance, commercial disputes, services and other matters. Litigation to defend us against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition, results of operations and prospects. Any litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal, or in payments of substantial monetary damages or fines, the posting of bonds requiring significant collateral, letters of credit or similar instruments, or we may decide to settle lawsuits on similarly unfavorable terms. These proceedings could also result in reputational harm, criminal sanctions, consent decrees or orders preventing us from offering certain products or requiring a change in its business practices in costly ways or requiring development of non-infringing or otherwise altered products or technologies. Litigation and other claims and regulatory proceedings against us could result in unexpected disciplinary actions, expenses and liabilities, which could have a material adverse effect on its business, financial condition, results of operations and prospects. Our Restated Certificate of Incorporation, as amended, provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders and federal district courts will be the sole and exclusive forum for Securities Act claims, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees. Our Restated Certificate of Incorporation, as amended, provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of fiduciary duty owed by any of our current or former directors, officers, or other employees to us or to our stockholders; (iii) any action asserting a claim arising pursuant to the Delaware General Corporation Law (the "DGCL"), the Certificate of Incorporation or our Bylaws or as to which the DGCL confers exclusive jurisdiction on the Court of Chancery of the State of Delaware; (iv) any action to interpret, apply, enforce or determine the validity of the Certificate of Incorporation; or (v) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware, provided that the exclusive forum provisions will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our Restated Certificate of Incorporation, as amended, further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts are the sole and exclusive forum for the resolution of any complaint asserting a right under the Securities Act. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. The choice of forum provisions may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Further, the choice of forum provisions may result in increased costs for a stockholder to bring a claim. Alternatively, if a court were to find the choice of forum provisions contained in our Restated Certificate of Incorporation, as amended, to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. Any person purchasing or otherwise acquiring any interest in any shares of our common stock shall be deemed to have notice of and to have consented to these provisions of our amended and restated certificate of incorporation, as amended. We could be subject to future governmental investigations and inquiries, legal proceedings and enforcement actions. Any such investigation, inquiry, proceeding or action, could adversely affect our business. We have received formal and informal inquiries from time to time, from government authorities and regulators, and gaming regulators, regarding compliance with laws and other matters, and we may receive such inquiries in the future, particularly as we grow and expand our operations. Violation of existing or future regulations, regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could adversely affect our business, financial condition, results of operations and prospects. In addition, it is possible that future orders issued by, or inquiries or enforcement actions initiated by, government or regulatory authorities could cause us to incur substantial costs, expose us to unanticipated liability or penalties, or require us to change our business practices in a manner materially adverse to our business, financial condition, results of operations and prospects. Our insurance may not provide adequate levels of coverage against claims. We intend to maintain insurance that we believe is customary for businesses of our size and type. However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Moreover, any loss incurred could exceed policy limits or not exceed our applicable deductible, and policy payments made to us may not be made on a timely basis. Such losses could adversely affect our business, financial condition, results of operations and prospects. Our growth prospects and market potential will depend on our ability to obtain licenses to operate in a number of jurisdictions and if we fail to obtain such licenses our business, financial condition, results of operations and prospects could be impaired. Our ability to grow our business will depend on our ability to obtain and maintain licenses to offer our product offerings in a large number of jurisdictions or in heavily populated jurisdictions. If we fail to obtain and maintain licenses in large jurisdictions or in a greater number of mid-market jurisdictions, this may prevent us from expanding the footprint of our product offerings, increasing our user base and/or generating revenues. We cannot be certain that we will be able to obtain and maintain licenses and related approvals necessary to conduct our online casino wagering operations. Any failure to obtain and maintain licenses, registrations, permits or approvals could have a material adverse effect on our business, financial condition, results of operations and prospects. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS We make forward-looking statements in this prospectus that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," "could," "will," "would," "ongoing," "future" or the negative of these terms or other similar expressions. Forward-looking statements include, but are not limited to, such matters as: our ability to manage expansion into the U.S. markets and other markets; our ability to compete in our industry; our expectations regarding our financial performance, including our revenues, costs, and other reporting metrics; the sufficiency of our cash, cash equivalents, and investments to meet our liquidity needs; our ability to mitigate and address unanticipated performance problems on our websites, or platforms; our ability to attract, retain, and maintain good relations with our customers; our ability to anticipate market needs or develop new or enhanced offerings and services to meet those needs as well as our expectations about how market trends will affect our business, our ability to stay in compliance with laws and regulations, including tax laws, that currently apply or may become applicable to our business both in the U.S. and internationally and our expectations regarding various laws and restrictions that relate to our business; our ability to anticipate the effects of existing and developing laws and regulations, including with respect to taxation, and privacy and data protection that relate to our business; our ability to obtain and maintain licenses or approvals with gaming authorities; our ability to effectively manage our growth and maintain our corporate culture; our ability to identify, recruit, and retain skilled personnel, including key members of senior management; our ability to successfully identify, manage, consummate and integrate any existing and potential acquisitions; our ability to maintain, protect, and enhance our intellectual property; our expectations regarding use of proceeds from this offering; the volatility of the trading price of our common stock; the volatility of the U.S. dollar as compared to the euro and possibly other currencies; our ability to manage the increased expenses associated and compliance demands with being a public company; and other factors detailed herein under "Risk Factors." The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and forecasts about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the risks provided under "Risk Factors" in this prospectus. These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Furthermore, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Each forward-looking statement speaks only as of the date of the particular statement. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus, to conform these statements to actual results or to changes in our expectations. USE OF PROCEEDS We estimate that the net proceeds from this offering will be $8,120,000 (or $9,500,000 if the underwriters exercise their option in full to purchase additional shares), based on an assumed public offering price of $8.00 per share each after deducting the estimated underwriting discounts and commissions, approximately $800,000 ($920,000 if the underwriters exercise their overallotment in full), and estimated offering expenses payable by us, approximately $1,080,000. We currently intend to use net proceeds from this offering approximately as follows: $3.0 million for marketing, promotion and advertising focused on new user acquisition; $3.5 million to finance expansion to one or more regulated markets; $1.0 million to launch one or more new brands or verticals; and the balance of proceeds for general working capital. Regulated market entry costs can consist of, but may not be limited to market access fees, additional personnel recruitment, office lease, legal and guaranteed minimum annual fees for each license. Marketing and advertising costs will be extended across all markets in which High Roller operates over the next 12 to 18 months. We are implementing a multi-brand strategy that allows us to scale our business by duplicating our Platform strengths across multiple domains with individualized branding and different target markets. We believe that this multi-brand strategy allows us to compete for increased market share in an industry where fresh and compelling branding often attracts additional players. We soft launched our second brand, Fruta.com, in December 2023 for live acceptance testing and fully launched Fruta.com in February 2024 alongside our planned marketing strategy to directly acquire new players to Fruta.com. We are exploring opportunities for future brand launches to align with our multi brand strategy. We expect to launch at least one new iCasino brand over approximately the next twelve months to expand market share in existing markets and reduce customer acquisition cost and attrition rates. See "Business – Strength of HighRoller.com and Our Multi-Brand Strategy". Based on our current plans, we believe our existing cash, revenue together with the net proceeds from this offering, will be sufficient to fund our operations and capital expenditure requirements for the next 18-24 months. This expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, our entry into U.S. and other geographical markets, as well as any collaborations that we may enter into with third parties for our current or future product candidates or strategic opportunities that become available to us, and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. Pending our use of proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities. DIVIDEND POLICY We have never declared or paid any cash dividends on our capital stock. We currently intend to retain earnings, if any, to finance the growth and development of our business. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems relevant. CAPITALIZATION The following table sets forth our cash and cash equivalents, and restricted cash, and total capitalization as of June 30, 2024: on an actual basis; on a pro forma basis to give effect, in addition, to the issuance and sale by us of 1,250,000 shares of our common stock in this offering at an assumed public offering price of $8.00 per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The as adjusted information below is illustrative only, and our capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this capitalization table together with "Use of Proceeds," "Management s Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. Actual Pro Forma (unaudited) (unaudited) Cash and cash equivalents, and restricted cash $ 3,221,520 $ 12,069,591 Stockholders equity: Preferred stock, $0.001 par value; 10,000,000 authorized, 0 shares issued and outstanding — — Common stock, $0.001 par value; 60,000,000 shares authorized, 7,012,808 shares issued and outstanding, actual; 8,262,808 shares issued and outstanding, pro forma 7,013 8,263 Additional paid-in capital 22,724,858 30,843,608 Accumulated deficit (24,572,792 ) (24,572,792 ) Accumulated other comprehensive income 1,337,831 1,337,831 Total stockholders equity (deficit) (503,090 ) 7,616,910 Total capitalization $ (503,090 ) $ 7,616,910 The number of shares of common stock to be outstanding after this offering is based on 7,012,808 shares outstanding as of June 30, 2024, and does not give effect to: 39,172 shares issuable upon exercise of outstanding warrants at an exercise price of $2.37 per share; 258,454 shares of common stock underlying outstanding options with a weighted average exercise price of $6.93 per share; 48,071 time-based restricted stock units issued to employees subject to various vesting schedules; 97,878 performance-based restricted stock units issued to employees subject to the completion of various performance milestones; 1,700,000 shares available for future issuance under the 2024 High Roller Technologies, Inc. Equity Incentive Plan; and 62,500 shares of common stock issuable upon exercise of warrants to be issued to the underwriters in connection with this offering. The information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. DILUTION Purchasers of our common stock in this offering will experience an immediate dilution of net tangible book value per share from the initial public offering price. Dilution in net tangible book value per share represents the difference between the amount per share paid by the purchasers of shares of common stock and the net tangible book value per share immediately after this offering. As of June 30, 2024, our deficit in net tangible book value was $(6,248,856), or $(0.89) per share of common stock. Net tangible book value per share represents our total tangible assets, less our total liabilities, divided by the number of outstanding shares of our common stock. Dilution represents the difference between the amount per share paid by purchasers in this offering and the pro forma net tangible book value per share of common stock after the offering. After giving effect to the sale of shares of common stock in this offering at the assumed offering price of $8.00 per share and after deducting underwriting commissions and estimated offering expenses payable by us, but without adjusting for any other change in our net tangible book value subsequent to June 30, 2024, our pro forma net tangible book value would have been $0.23 per share. This represents an immediate increase in pro forma net tangible book value of $1.12 per share to our existing stockholders and immediate dilution of $7.77 per share to new investors purchasing shares at the proposed public offering price. The following table illustrates the dilution in pro forma net tangible book value per share to new investors as of June 30, 2024: Assumed initial public offering price per share $ 8.00 Deficit in net tangible book value per share at June 30, 2024 $ (0.89 ) Increase in net tangible book value per share to the existing stockholders attributable to this offering $ 1.12 Adjusted net tangible book value per share after this offering $ 0.23 Dilution in net tangible book value per share to new investors $ 7.77 The following table sets forth, as of June 30, 2024, the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by the existing holders of our common stock (giving retrospective effect to the Reverse Split) and the price to be paid by new investors at the public offering price. Shares Purchased Total Consideration Average Price Number Percent Amount Percent Per Share Existing stockholders 7,012,808 84.87 % $ 22,731,871 69.45 % $ 3.24 Investors purchasing shares in this offering 1,250,000 15.13 % 10,000,000 30.55 % $ 8.00 Total 8,262,808 100.00 % $ 32,731,871 100.00 % The number of shares of common stock to be outstanding after this offering is based on 7,012,808 shares outstanding as of June 30, 2024, and does not give effect to: 39,172 shares issuable upon exercise of outstanding warrants at an exercise price of $2.37 per share; 258,454 shares of common stock underlying outstanding options with a weighted average exercise price of $6.93 per share; 48,071 time-based restricted stock units issued to employees subject to various vesting schedules; 97,878 performance-based restricted stock units issued to employees subject to the completion of various performance milestones; 1,700,000 shares available for future issuance under the 2024 High Roller Technologies, Inc. Equity Incentive Plan; and 62,500 shares of common stock issuable upon exercise of warrants to be issued to the underwriters in connection with this offering. The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes thereto and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Special Note Regarding Forward-Looking Statements" and "Risk Factors" sections of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Unless the context requires otherwise, all references in this MD&A to the "Company," "we," "us," or "our" refer to the company, High Roller Technologies, Inc. and its subsidiaries. Our Business We are an evolving and growth-oriented iCasino and entertainment company that focuses primarily on online casino betting in Europe and other markets. Our mission is to offer consistently superior customer experience by (i) providing fast onboarding, easy log-in and re-log-in, (ii) assuring efficient and secure payment processing, (iii) providing prompt payouts on player winnings, (iv) offering generous bonuses, bonus play and free spins on popular games, (v) utilizing an interactive environment for player engagement leading to longer stays online and more play, (vi) maintaining 24/7/365 customer service to assure customer satisfaction and (vii) providing an array of responsible gaming tools and AI models to ensure a safe gaming experience. High Roller Technologies, Inc. was incorporated in Delaware in 2021 as a holding company, with the intent to seek an initial public offering on a United States securities exchange. In January 2022 we launched HighRoller.com to deliver more immersive real money gaming experiences for the iCasino market. Prior to our transition to the HighRoller.com Platform we operated our online iCasino activities under the casinoroom.com domain name. We operate an online gaming business offering casino games to customers in various jurisdictions worldwide under the HighRoller.com and fruta.com domain names principally utilizing our Curacao license, and under our Happy Hour Solutions Agreements accessing revenue generated under the Estonian license. Unless further extended, the Happy Hour Solutions Agreements terminate on the earlier of our receipt of an Estonian license or December 31, 2025. Through our Platform we provide iCasino, or online casino, consisting of the full suite of games available in land-based casinos, such as blackjack, roulette, baccarat, poker, and slot machines. We generate revenue through hold, or gross winnings, as users play against the house. We believe iCasino provides lower volatility versus land-based casinos due to easier advance-based predictions on gaming rules and statistics. We currently are present and active in several markets around the world. Our focus will primarily be to enter regulated markets in Europe, North and South America. We intend to seek entry into one or more regulated North American markets utilizing proceeds from this offering but have not identified any target or budgeted any amount for such entries. We currently expect that initial entry into any of these regulated North American markets to occur in approximately twelve months from the receipt of proceeds from this initial public offering. No assurance can be given that these efforts will prove successful. Our business may suffer if we are unable to open new geographical markets or if we are unable to continue expanding within existing markets. We are implementing a multi-brand strategy to launch new brands utilizing our current licenses and using our existing resources. The scalability of our Platform allows the Company to use existing resources to launch new brands that provide access to new target demographics and generate new revenues through existing player acquisition channels while maintaining the current cost structure with nominal incremental costs. The conversion of marketing spend into new player acquisition or existing player reactivation on our current and future portfolio of brands will ultimately determine where player acquisition funds are spent on a market-to-market basis. While no assurances can be given that these efforts will be successful, and management s time as well as nominal incremental costs may be spent with limited financial results, management believes that this strategy mitigates any material negative impact on operations or financial position by leveraging scalable processes and technologies within our Platform. If market reception is successful, a new brand may generate material revenue. We soft launched our second active brand, Fruta.com, in December 2023, allowing select players to test the website prior to going live in February 2024. We are currently exploring opportunities for other future brand launches. We expect to launch at least one new brand over the next twelve months to expand our market share in existing markets and reduce customer acquisition costs and attrition rates through cross-selling and brand diversification. See "Business -Strength of HighRoller.com and Our Multi Brand Strategy." We obtain our iCasino game offerings from over 70 suppliers such as Pragmatic Play, Push Gaming, Evolution Gaming for Live Dealer Services, Big Time Gaming, Red Tiger Gaming, Play n Go, Netent, Quickspin and others. These content and gaming licenses are subject to standard revenue-share agreements, whereby suppliers receive a percentage of the net gaming revenue generated from their respective casino games and payment combinations, including agreed upon fixed costs. Our plan is to excite the iCasino industry by focusing on streaming and social experiences based on real money gaming experiences for the customer. Our Business Model During the first half of 2022, we rebranded our iCasino operations from CasinoRoom.com to HighRoller.com and concurrently commenced to reposition our legacy gaming operator "CasinoRoom.com" into an online casino ratings and reviews portal that would generate high-value leads and targeted search engine traffic (SEO) for HighRoller.com and customer leads for other casinos particularly in markets that we do not serve. We believe that our new CasinoRoom.com affiliate model site may further enable us to support future brands which we may launch or acquire with targeted traffic. Spike Up Media, an affiliate of our founders, is one of a handful of globally foremost providers of lead generation and we believe that our association with Spike Up Media provides high-quality, cost-effective lead generation converting into active customers which together with our favorable customer acquisition costs and customer retention will result in favorable gross operating margins. The Restructuring Prior to the Restructuring (as defined below), Interactive owned 100% of Entertainment and 100% of Spike Up. As part of a two-step transaction completed on December 30, 2021, High Roller was formed and became the direct parent of Entertainment. The first step of the Restructuring formed High Roller as a direct subsidiary of Interactive, with Interactive selling its interests in Entertainment to High Roller for nominal consideration of 1.00. The second step of the Restructuring resulted in Interactive executing a spin-off of High Roller by transferring all of its interest in High Roller to the Holding Entities on a pro rata basis in accordance with their respective ownership interests in Interactive by way of an equity distribution. After this two-step transaction, Interactive was no longer the parent company of Entertainment (the two-step transaction described herein being referred to as the "Restructuring"). On December 31, 2021, HR Entertainment purchased the HighRoller.com domain name from Spike Up for 3,000,000 ($3,178,200) which the company pays in arrears each quarter in an amount representing 2% of the net revenue of HR Entertainment. There is no prepayment penalty if the balance due is prepaid. The quarterly payments commenced April 1, 2022. Pursuant to a Securities Acquisition Agreement (the "Acquisition Agreement") dated February 25, 2022 (the "Closing Date"), the Company acquired 3,500 shares of capital stock, constituting 35% of the outstanding shares, of HR Entertainment from Happy Hour in exchange for (i) 505,447 shares of common stock and (ii) a further earn-out consideration of 505,447 shares of common stock, provided that and subject to the Company s online gaming brands and casino operations achieving the equivalent of $1,530,000 of net gaming revenue with operating profitability for at least three consecutive months prior to the one-year anniversary of the Closing Date. On March 3, 2022, Interactive transferred its 65% ownership interest in HR Entertainment, consisting of 6,500 ordinary shares, to the Company for $6,500. Accordingly, effective on that date the Company owned 100% of HR Entertainment. Subsidiaries of Entertainment Entertainment had two wholly-owned subsidiaries both before and after the Restructuring, Wowly NV ("Wowly", formerly known as "Ellmount NV") and Ellmount Support SA ("Support"). Wowly, which is organized in Curacao, manages certain internet related advertising services on behalf of Entertainment. Support, which was based in Costa Rica, and Entertainment are parties to a certain Customer Support Services agreement effective January 1, 2019, pursuant to which Support provided customer support services to Entertainment. The services provided by Support included, but were not limited to, customer support, activation and retention, risk management, payments, and fraud management, Facebook maintenance and telemarketing, and monthly reporting on support transactions. In November 2023, the Company elected to wind down Support, and to provide all services that were previously provided as a subsidiary of Entertainment, through a newly formed subsidiary, Lunar Ventures Limited, . Subsidiaries of High Roller As described above, on February 25, 2022 we entered into an Acquisition Agreement with Happy Hour, in which Happy Hour agreed to transfer 3,500 shares of capital stock of HR Entertainment to us. The 3,500 shares represented 35% of outstanding shares of HR Entertainment, which holds a worldwide license to operate the HighRoller.com domain. In exchange for the transfer of shares, we delivered 505,447 shares of common stock to Happy Hour. Further consideration, in the form of an earn-out for an additional 505,447 shares of common stock, were issuable to Happy Hour if our online gaming brands and casino operations achieved the equivalent of approximately $1,600,000 ( 1,500,000 translated as of December 31, 2022) of net gaming revenue, with operating profitability for at least three consecutive months prior to the one-year anniversary of the Closing Date. As a result of this transaction, HR Entertainment became a wholly-owned subsidiary of ours. The Acquisition Agreement was subsequently amended to increase the number of shares of common stock issued related to the earn-out by an additional 252,725 shares of common stock. As of December 31, 2022, our online gaming brands and operations had achieved the equivalent of approximately $1,600,000 ( 1,500,000 translated as of December 31, 2022) net gaming revenue, translated as of that date, with operating profitability for three months. Accordingly, we issued 758,172 additional shares of common stock to Happy Hour in satisfaction of the earn-out. On May 30, 2023, Lunar Ventures Limited was incorporated in Malta. In November 2023, we elected to wind down Support, and to provide all services that were previously provided by Support through Lunar Ventures. The services provided by Lunar Ventures principally include customer support, activation, and retention, risk management, payments, and fraud management, Facebook maintenance and telemarketing, and monthly reporting on support transactions. On February 15, 2024, Interstellar Entertainment NV was incorporated in Curacao for the primary purpose of extending our current Curacao sublicense previously held by our wholly owned subsidiary HR Entertainment, and to apply for a gaming license directly with the government of Curacao. The Curacao Gaming Control Board has mandated that in order to receive a license the applying entity must be domiciled in Curacao. In March 2024 the Company applied, through its Interstellar Entertainment NV subsidiary, an entity incorporated in Curacao, to obtain a license directly from the government of Curacao. The Curacao Gaming Control Board issued that license to Interstellar in July 2024. Reverse Stock Split On January 16, 2024, our Board of Directors approved and our shareholders ratified a 1-for-3.95689 reverse stock split of our outstanding shares of common stock, which became effective on that date. All share and per share amounts have been retroactively restated. Going Concern We had a net working capital deficiency of $7,386,676, an accumulated deficit of $24,572,792, and unrestricted cash resources of $1,361,422 at June 30, 2024. During the years ended December 31, 2023, and 2022, the Company incurred a net loss of $2,817,851 and $3,058,327, respectively, and during the six months ended June 30, 2024 and 2023, the Company incurred a net loss of $3,352,833 and $887,982, respectively. Our unaudited condensed consolidated financial statements have been presented on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have financed our working capital requirements historically through the continuing financial support of affiliates and related parties. Our ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its continuing obligations and repay its liabilities arising from normal business operations when they come due, to fund the development and expansion of its business activities, and to generate sustainable profitable operations and cash flows in the future. Management s plan is to provide for our capital requirements by raising equity capital in the United States capital market. No assurances can be given that we will be able to secure sufficient additional financing as and when necessary, on acceptable terms, or at all, to sustain and improve operating results and cash flows under the business model resulting from the Restructuring. As a result of these factors, management has concluded that there is substantial doubt about our ability to continue as a going concern one year from the date of this filing. Our unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Quantitative and Qualitative Disclosures About Market Risks We operate primarily in Europe and other countries outside the United States. As such, we have been exposed in the past and may in the future be exposed to certain market risks, including interest rate, foreign currency exchange and financial instrument risks, in the ordinary course of our business. Interest Rate Risk As of June 30, 2024, we had cash, cash equivalents and restricted cash of $3,221,520, which consisted primarily of bank deposits and money market funds. Such interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations of interest income have not been significant. The primary objectives of our investment activities are to preserve principal and provide liquidity without significantly increasing risk. A 10% increase or decrease in the interest rates of these interest-earning instruments would not have a material effect on our unaudited condensed consolidated financial statements for the period ended June 30, 2024. Foreign Currency and Foreign Exchange Risk The unaudited condensed consolidated financial statements are presented in United States Dollars ($), which is the Company s reporting currency. Foreign currency exchange risk is the risk that our results of operations and/or financial condition could be impacted by unfavorable changes in exchange rates. We have transactions denominated in currencies other than the U.S. Dollar, principally the Euro but also other foreign currencies, that expose the Company s operations to risk from the effects of exchange rate movements. Such movements may impact future revenues, expenses, and cash flows. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining other comprehensive income. Changes in the value of our cash balance due to fluctuations in foreign exchange rate are presented on the unaudited condensed consolidated statements of cash flows as effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash. As of June 30, 2024 and December 31, 2023, 95% and 97%, respectively, of our cash, cash equivalents and restricted cash reside in bank accounts located outside of the United States. Our primary foreign currency exchange risk occurs between the time when other foreign currencies are exchanged for wagering on our Platform, and when those funds are settled to us in the Euro. In addition, gains (losses) related to translating certain cash balances from the Euro to the U.S. Dollar, as well as payable balances also impact net income. As our foreign operations expand, results may be impacted further by fluctuations in the exchange rates of the currencies in which the Company does business. The Company has not used any derivative financial instruments to manage its foreign currency exchange risk exposure. In most of our operations, we transact primarily in the Euro, including wagered amounts, net revenue, revenue share, and employee-related compensation costs. Operating arrangements with payment service providers who convert player funds to the Euro from other currencies, for example the Canadian Dollar, could further negatively impact foreign currency exchange risk if the exchange spot rates used are unfavorable as compared to European Central Bank exchange rates. Foreign currency (gains) and losses arising from transactions denominated in currencies other than the functional currency are included in net (loss) income and are included within general and administrative expenses. For the six months ended June 30, 2024 and 2023, we incurred foreign currency transaction losses of $714,634 and $1,188,839, respectively. For the years ended December 31, 2023 and 2022, we incurred foreign currency transaction losses of $2,030,248 and $552,278, respectively. While we expect these transaction losses to persist into 2024, we continue to manage and negotiate contracts with payment providers. We expect that these losses, as a percentage of revenue, should begin to decline during the second half of 2024. The effects of foreign currency translation adjustments are included in stockholders equity (deficit) as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. Foreign currency fluctuations between the functional and reporting currency can significantly impact the currency translation adjustment component of accumulated other comprehensive income. Credit Risk Our credit risk arises from cash and cash equivalents and restricted cash and deposits with banks and other financial institutions. We maintain balances in banks in the United States and outside of the United States, primarily within the European Union. For funds held within the United States, the Federal Deposit Insurance Corporation insures $250,000 per depositor, per FDIC-insured bank. For funds held within the European Union, the European Deposit Insurance Scheme insures 100,000 per depositor per bank. We have funds in Finland, Cyprus, Lithuania, and Malta that are protected under this scheme. We mitigate potential cash risk by diversifying our bank accounts with insured banking institutions within the United States and European Union. Furthermore, we maintain cash in payment service provider accounts and other such financial institutions that may or may not be protected under the previously mentioned insurance schemes. We mitigate this potential risk by drawing down funds to our insured bank accounts on a regular basis. Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated. We have derived this data from our consolidated financial statements included elsewhere in this prospectus. This information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus. The results of historical periods are not necessarily indicative of the results of operations for any future period. Six Months Ended June 30, Years Ended December 31, 2024 2023 2023 2022 (unaudited) Revenue $12,309,895 $14,914,559 $29,674,690 $18,491,548 Operating expenses Direct operating costs: Related party 1,422,444 1,249,957 4,289,120 2,741,903 Other 5,068,931 5,645,413 9,358,991 4,800,895 General and administrative: Related party 24,759 250,287 492,591 2,055,342 Other 4,606,983 4,775,716 10,036,542 5,176,914 Advertising and promotions: Related party 354,549 347,810 1,648,866 2,265,248 Other 3,522,773 3,156,725 5,954,843 2,385,579 Product and software development: Related party 146,660 99,197 242,342 91,513 Other 466,974 161,563 342,105 997,977 Loss on impairment of intangible assets — — — 935,263 Total operating expenses 15,614,073 15,686,668 32,365,400 21,450,634 Loss from operations (3,304,178) (772,109) (2,690,710) (2,959,086) Interest expense, net (50,215) (61,581) (114,208) (106,552) Other income (expense) 1,560 (54,292) — — Loss before income taxes (3,352,833) (887,982) (2,804,918) (3,065,638) Income tax expense (benefit) — — 12,933 (7,311) Net loss $(3,352,833) $(887,982) (2,817,851) $(3,058,327) Other comprehensive loss Foreign currency translation adjustments (127,847) 1,850 54,413 (9,430) Comprehensive loss $(3,480,680) $(886,132) $(2,763,438) $(3,067,757) Net loss per common share Net loss per common share – basic and diluted $(0.48) $(0.14) $(0.42) $(0.55) Weighted average common shares outstanding – basic and diluted 7,001,102 6,318,094 6,641,774 5,591,007 Revenue Revenue decreased by $2,604,664 or 17%, to $12,309,895 for the six months ended June 30, 2024, as compared to $14,914,559 for the six months ended June 30, 2023. The decrease in revenue was primarily due to our exit during the second half of 2023 from the iCasino market in Hungary in response to a change in that country s regulatory environment, and was further impacted by decreases in revenue from the Canada, Norway and New Zealand markets. These decreases in revenue were partially offset by an increase in revenue from Finland, which was due to our reallocating available marketing resources to increase spend in what has been one of our best performing markets. Subject to receipt of the proceeds from this offering and their allocation as described elsewhere in this prospectus, we believe that we will be able to increase revenue beginning in the fourth quarter of 2024 in Canada, Norway and New Zealand to increase marketing efforts in these jurisdictions. The amount of real money bets during the six months ended June 30, 2024 and 2023 was approximately $347 million and $363 million, respectively. Although total real money bets decreased by approximately 4% during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, the decrease in revenue of approximately 17% during the same periods was the result of a higher return to players. Subject to the receipt of the proceeds from this offering and their allocation as described elsewhere in this prospectus, we expect to see further increases in revenue from Finland beginning in the second half of 2024, offsetting, at least in part, the decrease in revenue resulting from our exit from Hungary. Revenue increased by $11,183,142, or 60%, to $29,674,690 during the year ended December 31, 2023, as compared to $18,491,548 during the year ended December 31, 2022. The increase was primarily due to increased marketing efforts driving revenue in our top existing markets, as shown in the table below, and a full year of contribution from HighRoller.com, which was acquired in February 2022 and was ramped up in the second half of 2022. Revenues were relatively stable on a quarter-by-quarter basis during the year ended December 31, 2023. In 2024, subject to completion of and receipt of the proceeds from this offering, the Company anticipates implementing its business plan to increase revenues and expand operations in new and existing markets. The Company s revenue by country for those with significant revenue for the periods indicated are as follows: Six months ended June 30, 2024 2023 Finland $4,813,462 $3,631,703 New Zealand 3,096,129 4,032,263 Norway 1,877,562 2,866,547 Canada 1,776,022 2,262,824 Rest of world 746,720 2,121,222 Total revenue $12,309,895 $14,914,559 Years ended December 31, 2023 2022 Finland $ 8,208,245 $ 3,590,227 New Zealand 7,725,424 4,040,817 Norway 6,075,865 4,391,063 Canada 4,606,636 3,340,293 Rest of world 3,058,520 3,129,148 Total revenue $ 29,674,690 $ 18,491,548 Direct operating costs Direct operating costs (related party) increased by $172,487 or 14%, to $1,422,444 during the six months ended June 30, 2024, as compared to $1,249,957 for the six months ended June 30, 2023, which is primarily related to an increase in user acquisition related revenue share paid to an affiliated company. Direct operating costs (other) decreased by $576,482 or 10%, to $5,068,931 for the six months ended June 30, 2024 as compared to $5,645,413 for the six months ended June 30, 2023, which is primarily related to reduced revenues across the comparative periods. Of the total direct operating costs of $6,491,375 and $6,895,370 for the six months ended June 30, 2024, and 2023, respectively, $2,836,995 and $3,101,941 was related to revenue share paid to marketing partners for the successful acquisition of revenue generating players through their marketing channels. Direct operating costs (related party) increased by $1,547,217 or 76% to $4,289,120 for the year ended December 31, 2023, as compared to $2,741,903 for the year ended December 31, 2022, which is primarily related to user acquisition costs through an affiliated company. Direct operating costs (other) increased by $4,558,096, or 95%, to $9,358,991 in 2023 as compared to $4,800,895 in 2022. The increases are a result of increased revenue, as revenue share, game provider fees, and payment provider fees are directly correlated to revenue. Of the total direct operating costs of $13,648,111 and $7,542,798 for the years ended December 31, 2023, and 2022, respectively, $6,306,345 and $3,702,231 was related to revenue share paid to marketing partners for the successful acquisition of revenue generating players through their marketing channels. General and administrative General and administrative (related party) decreased by $225,528, or 90%, to $24,759 for the six months ended June 30, 2024, as compared to $250,287 for the six months ended June 30, 2023. The decrease was primarily driven by our decreased reliance on an affiliated company for administrative services. General and administrative expenses (other) decreased by $168,733 or 4%, to $4,606,983 for the six months ended June 30, 2024, as compared to $4,775,716 for the six months ended June 30, 2023. The decrease was primarily driven by a decrease in employee costs and professional services. Also included in general and administrative expenses (other) are foreign currency transaction losses, which decreased by $474,205 to $714,634 for the six months ended June 30, 2024, as compared to $1,188,839 for the six months ended June 30, 2023. General and administrative (related party) decreased by $1,562,751, or 56%, to $492,591 in 2023 as compared to $2,055,342 in 2022. The decrease was primarily driven by our decreased reliance on an affiliated company for administrative services. General and administrative expenses (other) increased by $4,859,628, or 94%, to $10,036,542 for the year ended December 31, 2023, as compared to $5,176,914 for the year ended December 31, 2022. The increase was primarily driven by our decreased reliance on an affiliated company, and the buildout of in-house personnel and administrative services. Also included in general and administrative expenses (other) are foreign currency transaction losses, which increased by $1,477,970 to $2,030,248 for the year ended December 31, 2023, as compared to $552,278 in the prior period. Advertising and promotions Advertising and promotions (related party) expenses increased by $6,739 or 2%, to $354,549 for the six months ended June 30, 2024, as compared to $347,810 for the six months ended June 30, 2023. The increase was primarily driven by our reliance on an affiliated company for user acquisition. Advertising and promotions expenses (other) increased by $366,048 or 12%, to $3,522,773 for six months ended June 30, 2024, as compared to $3,156,725 for six months ended June 30, 2023. The increase is primarily attributable to an increase in people related costs, including stock compensation expense; and increases in customer retention and other marketing services Advertising and promotions (related party) expenses decreased by $616,382 or 27%, to $1,648,866 for the year ended December 31, 2023, as compared to $2,265,248 for the year ended December 31, 2022. The decrease was primarily related to reduced operating costs from casinoroom.com as it ceased operations as an online casino in May 2022, and did not operate as a casino in 2023. Advertising and promotions expenses (other) increased by $3,569,264, or 150%, to $5,954,843 for the year ended December 31, 2023, as compared to $2,385,579 for the year ended December 31, 2022. The increase is attributable to higher marketing costs due to efforts by management to grow the business. Product and software development Product and software development (related party) expenses increased by $47,463 or 48%, to $146,660 for the six months ended June 30, 2024, as compared to $99,197 for the six months ended June 30, 2023. The increase is primarily driven by an increase in product development activity utilizing development resources from a related party. Product and software development (other) expenses increased by $305,411 or 189%, to $466,974 for the six months ended June 30, 2024, as compared to $161,563 for the six months ended June 30, 2023. The increase is primarily driven by an increase in product development activity utilizing development resources from third parties as well as internal development resources. Product and software development (related party) was $242,342 for the year ended December 31, 2023 as compared to $91,513 for the year ended December 31, 2022 , due to the development of our new platform. Product and software development (other) decreased by $655,872, or 66%, to $342,105 for the year ended December 31, 2023 as compared to $997,977 for the year ended December 31, 2022. The decrease was primarily related to the termination of a consulting services agreement as a result of our legacy gaming operator CasinoRoom.com repositioning to an affiliate marketing website. Loss from operations Loss from operations was $3,304,178 for the six months ended June 30, 2024, as compared to $772,109 for the six months ended June 30, 2023, primarily due to the decreases in revenue due primarily to the exit of a market in the second half of 2023, while the loss is partially offset by a reduction in operating expenses over the same period. Loss from operations was $2,690,710 for the year ended December 31, 2023, as compared to $2,959,086 for the year ended December 31, 2022, due to increased revenue on the new platform partially offset by higher operating costs. Interest expense, net Interest expense, net was $50,215 for the six months ended June 30, 2024, as compared to $61,581 for the six months ended June 30, 2023, and consisted primarily of non-cash interest expense related to the amortization of the present value discount of the domain name purchase liability (a related party liability). Interest expense, net was $114,208 for the year ended December 31, 2023, as compared to $106,552 for the year ended December 31, 2022, and consisted primarily of non-cash interest expense related to the amortization of the present value discount of the domain name purchase liability (a related party liability). Loss before income taxes Loss before income taxes was $3,352,833 for the six months ended June 30, 2024, as compared to $887,982 for the six months ended June 30, 2023. Loss before income taxes was $2,804,918 for the year ended December 31, 2023, as compared to income before income taxes of $3,065,638 for the year ended December 31, 2022. Income tax expense (benefit) Income tax expense (benefit) was $0 for the six months ended June 30, 2024 and 2023. Income tax expense was $12,933 for the year ended December 31, 2023 as compared to an income tax benefit of $7,311 for the year ended December 31, 2022. Net loss Net loss was $3,352,833, for the six months ended June 30, 2024, as compared to net loss of $887,982 for the six months ended June 30, 2023. Net loss was $2,817,851 for the year ended December 31, 2023, as compared to net loss of $3,058,327 for the year ended December 31, 2022. Other Trends Impacting Our Business Our results of operations can and generally do fluctuate due to other factors such as level of customer engagement, online casino results and other factors that are outside of our control or that we cannot reasonably predict. Our quarterly financial performance depends on our ability to attract and retain customers. Customer engagement in our online offerings may vary due to, among other things, customer satisfaction with our platform, our offerings and those of our competitors, our marketing efforts, public sentiment or an economic downturn. As customer engagement varies, so may our quarterly financial performance. Our quarterly and annual financial results may also be impacted by the number and amount of betting losses and jackpot payouts we experience. Although our losses are limited per stake to a maximum payout in our online casino offering, when looking at bets across a period of time, these losses can be significant. As part of our online casino offerings, we offer local progressive jackpot games that are operated by us and larger progressive jackpots which are "global," operating across multiple operators and guaranteed by our game suppliers, generally Games Global or Netent. Each time a customer plays one of our local progressive jackpot games, we contribute a portion of the amount bet to the jackpot for that game or group of games. When a progressive jackpot is won, the jackpot is paid out and is reset to a predetermined base amount. As winning the jackpot is determined by a random mechanism, we cannot foresee when a jackpot will be won and we do not insure against jackpot payouts. Paying the local progressive jackpot decreases our cash position and, depending upon the size of the jackpot, payouts may have a significant negative affect on our cash flow and financial condition. Global progressive jackpots are guaranteed and paid by the game suppliers and are not a liability directly affecting us. We operate within the global gaming and entertainment industry, which is comprised of diverse products and offerings that compete for consumers time and disposable income. We face and expect to continue to face significant competition from other industry players both within existing and new markets including from competitors with access to more resources or experience. Customer demands for new and innovative offerings and features require us to continue to invest in new technologies and content to improve the customer experience. Many jurisdictions in which we operate or intend to operate in the future have unique regulatory and/or technological requirements, which require us to have robust, scalable networks and infrastructure, and agile engineering and software development capabilities. The global gaming and entertainment industry has seen significant consolidation, regulatory change and technological development over the last few years, and we expect this trend to continue into the foreseeable future, which may create opportunities for us but may also create competitive and margin pressures. Liquidity and Capital Resources We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital and capital expenditure needs, contractual obligations and other commitments, with cash flows from operations. Our current working capital needs relate mainly to supporting our existing businesses, the growth of these businesses in their existing markets and their expansion into other geographic regions, as well as our employees compensation and benefits. Historically, we have relied on affiliates and related party relationships to support our working capital needs for operations. We had $2,087,004 in cash and cash equivalents as of December 31, 2023 (excluding customer cash deposits, which we segregate from our operating cash balances on behalf of our real-money customers for all jurisdictions and products, and restricted cash). For the year ended December 31, 2023 we had net loss of $2,817,851, had net cash provided by operations of $763,020, an accumulated deficit of $21,219,959, and negative working capital of $4,576,857. We had $1,361,422 in cash and cash equivalents as of June 30, 2024 (excluding customer cash deposits, which we segregate from our operating cash balances on behalf of our real-money customers for all jurisdictions and products, and restricted cash). For the six months ended June 30, 2024 we had net loss of $3,352,833, had net cash used in operations of $1,130,717, an accumulated deficit of $24,572,792 and negative working capital of $7,386,676. On June 6, 2024, the Company entered into interest free short-term unsecured loans with existing shareholders for $500,000. The loans are due and payable on or before December 31, 2024. If not paid on or before maturity the notes will accrue interest at a rate of 10% per year from the date of funds receipt. The loans are expected to be repaid substantially from operations. We believe that our existing cash resources and the expected revenue and cash flows from operations together with net proceeds from this offering will be sufficient to fund our operating and capital expenditure requirements for the next 18 to 24 months. In June 2023 we entered into a debt conversion agreement with Ellmount Interactive A.B. and Spike Up Media A.B. pursuant to which we issued 631,809 shares of common stock, valued at $7.91 per share, to Spike Up in exchange for $5,000,000 that we owed to Spike Up through June 30, 2023 for services provided to our subsidiary, HR Entertainment Ltd. Following this stock issuance, we owed Spike Up a balance of approximately $421,000, for such services, that was paid in the ordinary course of business. Our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet continuing obligations and repay our liabilities arising from normal business operations when they come due, to fund the development and expansion of its business activities, and to generate sustainable profitable operations and cash flows in the future. Management s plan is to provide for our capital requirements by raising equity capital. No assurance can be given that we will be able to secure sufficient additional financing as and when necessary and on acceptable terms, or at all, to sustain and improve operating results and cash flows under the new business model. As a result of these factors, management has concluded that there is substantial doubt about the Company s ability to continue as a going concern. The Company s unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. At June 30, 2024 and December 31, 2023, we did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements. Cash Flows The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods: Six Months Ended June 30, Years Ended December 31, 2024 2023 2023 2022 Net cash (used in) provided by operating activities $(1,130,717) $672,946 $763,019 $1,802,934 Net cash (used in) provided by investing activities (241,514) (222,024) (629,432) 222,550 Net cash (used in) provided by financing activities 337,471 (185,948) (336,042) 400,000 Effect of exchange rate changes on cash 211,056 74,065 98,031 67,003 Net change in cash and cash equivalents, and restricted cash $(823,704) $339,039 $(104,424) $2,492,487 Net cash used by operations during the six months ended June 30, 2024, increased by $1,803,663 to $(1,130,717) as compared to net cash provided by operations of $672,946 during the six months ended June 30, 2023. The increase during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, is primarily due to a a net increase in the various operating asset and liability accounts, particularly the net increase in due from/due to affiliates, as well as an increase in stock based compensation expense. Net cash provided by operations during the year ended December 31, 2023, decreased by $1,039,915 to $763,019, as compared to $1,802,934 during the year ended December 31, 2022. The decrease in 2023 as compared to 2022 was due in part to a decrease in various non-cash charges to operations, including the non-cash impairment charge related to intangible assets of $935,263 in 2022. There were no non-cash impairments related to intangible assets in 2023. In addition, cash generated by the net decrease in the various operating asset and liability accounts, particularly the net reduction in due from/due to affiliates of $3,831,063 in 2023, was lower in 2023 as compared to 2022. Net cash used in investing activities during the six months ended June 30, 2024, was $241,514 as compared to net cash used by investing activities of $222,024 during the six months ended June 30, 2023. The change is due to an increase in capitalized internal-use software costs and the purchase of property and equipment during the period. Net cash used in investing activities during the year ended December 31, 2023 was $629,432 as compared to net cash provided by investing activities of $222,550 during the year ended December 31, 2022. The change is due to an increase in capitalized internal-use software costs and the purchase of property and equipment during the year ended December 31, 2023. In addition, during the year ended December 31, 2022, we acquired $322,382 in cash through the purchase of HR Entertainment Ltd. Net cash provided by financing activities for the six months ended June 30, 2024 was $337,471 as compared to net cash used in financing activities of $185,948 for the six months ended June 30, 2023, and is related to the payment of deferred offering costs and a loan made by existing shareholders. Net cash used in financing activities during the year ended December 31, 2023 was $336,042 and is related to the payment of deferred offering costs. There were no such payments during the year ended December 31, 2022. Net cash provided by financing activities during the year ended December 31, 2022 represents proceeds received from the issuance of common stock. There were no such proceeds for the year ended December 31, 2023. Restricted cash (current) was $1,860,098 and $1,958,220 at June 30, 2024 and 2023, respectively. Restricted cash (current) decreased by $861,758 during the year ended December 31, 2023, from $2,819,978 at December 31, 2022, to $1,958,220 at December 31, 2023. The decrease in restricted cash at December 31, 2023 as compared to December 31, 2022 is primarily related to a reduction in amounts held by payment providers as a result of the Company negotiating more favorable commercial contracts and the release, and thus reclassification of certain funds from restricted to unrestricted status. Critical Accounting Estimates The preparation of the audited consolidated financial statements and the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in accruals for potential legal and other liabilities, recovery of amounts held in escrow, realization of intangible assets, share-based compensation, accrued jackpots and the realization of deferred tax assets. The following critical accounting estimates affect the more significant judgements and estimates used in the preparation of our audited consolidated financial statements and the unaudited condensed consolidated financial statements. Impairment of Long-Lived Assets Our long-lived assets consist of property and equipment, operating lease-right of use assets and indefinite lived assets (i.e. trademarks and domain names). We evaluate long-lived assets for indicators of impairment at least annually or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The factors that would be considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the long-lived asset is used and the effects of obsolescence, demand, competition and other economic factors. If indicators of impairment are identified, we perform an undiscounted cash flow analysis of the long-lived assets. Asset groups are written down only to the extent that their carrying value is lower than their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. Indefinite-lived intangible assets consist of trademarks and domain names. Indefinite-lived intangible assets are not amortized; rather they are tested for impairment at least annually, or more frequently if adverse events or changes in circumstances indicate that the carrying value may not be recoverable. In addition, management evaluates whether events and circumstances continue to support an indefinite useful life. Impairment tests are performed, at a minimum, in the fourth quarter of each year. To test indefinite-lived intangible assets for impairment, we first assess the qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative impairment test. If we determine that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, then the quantitative impairment test is performed. The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions, and changes in projected future cash flows. The quantitative assessment compares the fair value of an indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized for the excess. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows. We conducted an impairment analysis with respect to the Casino Room trademarks indefinite-lived asset at December 31, 2022 which concluded that the fair value, determined using a discounted cash flow analysis, did not exceed their carrying value, and thus they were partially impaired. Projected cash flows included an estimated commission fee for referring a player who opens an account with a deposit to an online gaming site, as well as future revenue sharing agreements for those customers based upon net gaming revenue over an estimated gaming period ranging from approximately 5 months to 12 months. Accordingly, we recorded an impairment of $935,263 for the year ended December 31, 2023. We evaluated qualitative factors at December 31, 2023 related to the HighRoller domain name and concluded that it is not more likely than not that the fair value of the indefinite lived intangible asset is less than its carrying amount. Therefore, no further impairment considerations were deemed necessary on the HighRoller domain name as of December 31, 2023. We did not have any impairment of indefinite-lived intangible assets for the year ended December 31, 2023 or the period ended June 30, 2024. Share-Based Compensation We record share-based compensation in accordance with ASC 718, Compensation-Stock Compensation ("ASC 718") and recognize share-based compensation expense in the period in which a grantee is required to provide service, which is generally over the vesting period of the individual share-based payment award. Compensation expense for awards with performance conditions is not recognized until it is probable that the performance target will be achieved. Compensation expense for awards is recognized over the requisite service period on a straight-line basis. Forfeitures are accounted for as they occur. Unit awards are classified as either an equity award or a liability award depending on whether the award contains certain repurchase provisions. Equity-classified awards are valued as of the grant date based upon the price of the underlying unit or share and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. Liability-classified awards are valued at fair value at each reporting date. Income Taxes We comply with the accounting and reporting requirements of ASC 740, Income Taxes ("ASC 740"), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances in respect of deferred tax assets are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. Recently Adopted Accounting Pronouncements Recently issued and adopted accounting pronouncements are described in Note 2 to our audited consolidated financial statements and Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus. Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on our financial statement presentation or disclosures. Emerging Growth Company Accounting Election Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 ("JOBS Act") exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. We are an "emerging growth company" as defined in Section 2(a) of the Securities Act of 1933, as amended, and has elected to take advantage of the benefits of this extended transition period. The Company remains an emerging growth company and is expected to continue to take advantage of the benefits of the extended transition period. This may make it difficult or impossible to compare the Company financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions for emerging growth companies because of the potential differences in accounting standards used. BUSINESS High Roller Technologies, Inc., is a Delaware holding company, that through its wholly owned subsidiaries controls and operates an online gaming operator. We offer diverse and dynamic real money iCasino entertainment products to players worldwide through our Platform. We currently maintain a license from Malta, a license in Curacao and access additional revenues through the Happy Hour Solutions Agreements utilizing an Estonian license which as extended terminates on the earlier of our receipt of an Estonian license or December 31, 2025. We have not operated under our Malta license since June 2022, and have since initiated the process with the Maltese Gaming Authority to terminate the license. Through our Platform we provide a large selection of exciting games, personalized experiences and a community, in a safe, secure environment, built on trust and customer service. iGaming, or online casino, offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette, baccarat, poker and slot machines. For these offerings, we function similarly to land-based casinos, generating revenue through hold, or gross winnings, as users play against the house. During the first half of 2022, we rebranded our iCasino operations from CasinoRoom.com to HighRoller.com and concurrently commenced to reposition our legacy gaming operator "CasinoRoom.com" into an online casino ratings and reviews portal that would generate high-value leads and targeted search engine traffic (SEO) for HighRoller.com and customer leads for other casinos particularly in markets that we do not serve. We believe that our new CasinoRoom.com affiliate model site may further enable us to support any future brands which we may launch or acquire with targeted traffic. We currently are present and active in several markets around the world. Our focus primarily will be to enter regulated markets in Europe, North and South America. Applications for licenses and fee payments for licenses can be costly. We intend to seek entry into one or more regulated North American markets utilizing proceeds from this offering but have not identified any target or budgeted any amount for such entries. We currently expect that initial entry into any of these regulated North American markets to occur in approximately twelve months from the receipt of proceeds from this offering. No assurance can be given that these efforts will prove successful. Our business may suffer if we are unable to open new geographical markets or if we are unable to continue expanding within existing markets. We obtain our more than 4,400 iCasino game offerings from over 70 suppliers such as Pragmatic Play, Push Gaming, Evolution Gaming for Live Dealer services, Play n Go, Big Time Gaming, Red Tiger Gaming, Netent, Quickspin and others. These content and gaming licenses are subject to standard revenue-sharing agreements specific to each supplier, whereby suppliers receive a percentage of the net gaming revenue generated from their respective casino games as well as in a payment combination including agreed upon fixed costs. Our vision is: , ' ': To excite the world with the most immersive real money online casino gaming experiences on the planet. Our founders, board and management collectively have over 100 years of iGaming and ecommerce experience. Because we handle, collect, store, receive, transmit and otherwise process certain personal information of our users and employees, we are also subject to federal, state and foreign laws related to the privacy and protection of such data. With our operations in Europe, we may also face particular privacy, data security and data protection risks in connection with requirements of the General Data Protection Regulation of the European Union (EU) 2016/679 (the "GDPR") and other data protection regulations. Any failure to comply with these rules may result in regulatory fines or penalties including orders that require us to change the way we process data. In the event of a data breach, we are also subject to breach notification laws in the jurisdictions in which we operate, including the GDPR, and the risk of litigation and regulatory enforcement actions. See "Risk Factors." Our aim is to grow market share in the international online casino markets. We believe that locally regulated North American markets have the potential to become the largest locally regulated online gaming markets in terms of net gaming revenue in the world. Our goal is to gain access to these markets using proceeds from this offering under acceptable market conditions. No assurance can be given that these efforts will prove successful. We expect that our growth will be driven by attracting and acquiring new users, engaging our existing users, by entering new geographical markets, and implementing a multi-brand strategy. We believe that one of our main competitive advantages stems from a durable record of digital performance marketing and operational excellence from the founding team, which we are utilizing to create rapid gross and net revenue growth and margin. We believe that online digital entertainment, such as online casino and online wagering will continue to open up new opportunities for experienced operators who have the ability to participate in these high growth markets. We strive to differentiate our products from other online legacy casinos by focusing on streaming and social experiences. At High Roller casino enthusiasts can play together, form communities, find and follow each other, creating a more engaging, entertaining and meaningful gaming experience, in line with trends and expectations from other e-commerce verticals. Below is a quarterly breakdown for the periods indicated of the non-financial key performance indicators of quarterly active users, defined as the number of users who placed at least one bet during a respective quarter; quarterly unique depositing customers ("UDCs"), defined as the number of unique users who made at least one deposit during a respective quarter; and quarterly wagers, defined as the total amount of real money bets placed by our users. Quarterly Active Users Quarterly UDCs Quarterly Wagers Q1 2022 3,325 3,258 $54,033,1931 Q2 2022 10,859 10,415 $74,689,426 Q3 2022 12,186 11,678 $124,770,135 Q4 2022 12,729 12,178 $146,604,397 Q1 2023 15,421 14,854 $187,476,981 Q2 2023 17,106 16,137 $175,821,305 Q3 2023 19,400 17,762 $172,001,919 Q4 2023 24,289 22,432 $176,387,500 Q1 2024 22,366 20,805 $187,426,401 Q2 2024 22,505 21,170 $159,785,739 1 Includes revenues from CasinoRoom.com We believe that ours is an attractive proposition which extends beyond a dynamic base product offering to one that has a broad selection of entertaining and exciting content having more than 4,400 slot and other iCasino games, with a number of our most popular games being available to play with a live dealer, such as blackjack, video poker, roulette, baccarat, and craps sourced from over 70 content providers. We provide loyalty program offers with generous cash back, inviting hospitality experiences, other welcoming introductory services and longer play incentives. All our players are treated with an attractive welcome package of bonuses and free spins on popular slots. Each time a player levels up to a next tier of play, the player is instantly rewarded with free spins at the slots they prefer at their then stake levels of play. We focus on a rapid registration process and allow players one tap search to discover and select their games of choice. Our players also appreciate rapid payment processing through our automated cashier. We currently accept wagers in multiple currencies, and we generated more than $250 million in customer-paid real money bets during 2021 utilizing our Casino Room domain name. We generated more than $400 million in customer-paid real money bets during 2022 and approximately $714 million in customer-paid real money bets during the year ended December 31, 2023 utilizing our HighRoller.com domain name. During the six months ended June 30, 2024, we generated $347 million in customer-paid real money bets utilizing our HighRoller.com and Fruta.com domain names as compared to $363 million during the six months ended June 30, 2023 utilizing our HighRoller.com domain name. During the six months ended June 30, 2024, the average revenue per user was $349 as compared to approximately $578 per user for the same period in 2023. User deposits were over $42 million during the six months ended June 30, 2024 as compared to deposits of almost $37 million during the same period in 2023. During the six months ended June 30, 2024, we had approximately 36,065 active users as compared to approximately 25,661 active users for the same period in 2023, representing period over period growth of approximately 41%. Furthermore, during the six months ended June 30, 2024, we had approximately 24,178 first time depositors and approximately 34,457 unique depositors as compared to approximately 17,953 first time depositors and approximately 24,920 unique depositors for the same period in 2023, representing period over period growth of approximately 35% and 38%, respectively. During the year ended December 31, 2023, the average revenue per user was $575 as compared to approximately $520 per user for the same period in 2022. User deposits were approximately $75 million during year ended December 31, 2023 as compared to deposits of approximately $35 million during the same period in 2022. During the year ended December 31, 2022, we had approximately 29,100 active users as compared to 51,400 active users for the same period in 2023, representing period over period growth of approximately 77%. Furthermore, during the year ended December 31, 2022, we had approximately 28,008 first time depositors and 28,000 unique depositors as compared to 41,500 first time depositors and 49,800 unique depositors for the same period in 2023, representing period over period growth of approximately 44% and 73%, respectively. Our net gaming revenue was $12,020,256 and $14,404,542 for the six months ended June 30, 2024 and 2023, respectively. Our net gaming revenue was $28,576,631 and $17,460,426 for the years ended December 31, 2023 and 2022, respectively. Our gaming operations extend across international markets by arrangements that utilize third party licenses authorized by other local and remote authorities. We expect that new geographical markets will be material additional drivers of our revenue growth and profit in subsequent years. Through our relationship with Spike Up Media we are able to outsource parts of our marketing department, resulting in access to broader industry knowledge than would otherwise be readily available to us, as well as give us the ability to scale much quicker and more effectively than many of our competitors. By way of illustration, when entering a new market we will need to hire additional staff, familiarize ourselves with such matters as demographics, language, favorable selling points, pitfalls to avoid, competitor presentations and operations, and other market specific facts through expensive and time-consuming testing and data gathering. Our access to Spike Up s extensive experience and market data provide us immediate market intelligence and allows us to drive viable leads in most active casino markets from the time that we access those markets. We anticipate that this accelerated new market entry will reduce costs and allow for earlier market acceptance than that which we might be able to achieve on a standalone basis. We believe that the most efficient allocation of our resources does not currently allow us to build, design and deploy proprietary games and as a result we focus our resources on aggregating and curating iCasino games from over 70 dedicated game development studios. We believe that the combination of our in-house proprietary front end, and out-sourcing of resource demanding components, yields a highly competitive cost model, which allows us to differentiate our brand and provides favorable consumer experience while maintaining operating efficiencies. In January 2022 we refocused our operations to launch and fast track a highly competitive premium brand HighRoller.com. The combination furnished High Roller with licenses, staff and market access, while repositioning Casino Room as a casino review and price comparison website that would lead customers to the HighRoller.com Platform. Licenses Happy Hour Solutions Ltd. is licensed in Estonia under license number HKT000063. Pending receipt of an Estonian gaming license for which we intend to apply following the closing of this Offering, we entered into the Happy Hour Solutions Agreements that include: a Domain License Agreement, dated January 1, 2022 (which we refer to as the "Effective Date"), that gives Happy Hour Solutions the right to use our domain; a Nominee Agreement, dated the Effective Date, which allows Happy Hour Solutions to, among other business solutions, process payments made on the aforementioned domain and allows us to host, manage, administer, operate and support, and enter into contracts in the ordinary course of business in the name of Happy Hour Solutions, and in March 2024 an Online Gaming Operations Agreement, by which, as further described therein, we continue to supply Happy Hour Solutions with services that commenced as of the Effective Date, related to the operation of an online casino primarily through our existing personnel, technical solutions, and commercial relationships while utilizing the Happy Hour Solutions Estonian gaming license, and to recognize the revenues generated thereof as agreed upon by the parties. The Happy Hour Solutions Agreements, as extended, terminate on the earlier of our receipt of an Estonian License or December 31, 2025. The Happy Hour Solutions Agreements as described above are qualified in their entirety by reference to the agreements filed as exhibits to the registration statement of which this prospectus is a part. According to article 16.1 of the Estonia Gambling Act regulating the gambling activities in the jurisdiction, an activity license for the organization of gambling (which we refer to as an activity license) entitles a person to apply for an operating permit to organize gambling. The activity license is indefinite and non-transferable. In furtherance thereof, an operating permit to organize online gambling is issued for a period of five years. The cost of acquiring the license is set by a state fee structure for review of applications for the activity license: 47,940 for games of chance and 3,200 for review of applications for the operating permit for gambling games. The Gambling Tax Act imposes a five percent tax on the total amount of bets, less the winnings, for organizing games of chance or online games of skill generated under the Estonian License. The Income Tax Act states that gambling winnings are, in general, taxed at 21 percent. However, according to Section 19(3)(7) of the Income Tax Act, winnings received from gambling with licensed operators are not subject to income tax. Ellmount Entertainment Ltd is the holder of an inactive B2C license (Type 1 Gaming Services) issued by the Malta Gaming Authority. Currently, Ellmount Entertainment Ltd is withdrawing from any Malta licensed activities and has not operated under its Malta license since June 2022. In March 2024 we applied, through our InterStellar Entertainment N.V. subsidiary, an entity incorporated in Curacao, and obtained a license, number OGL/2024/1042/0564, in July 2024 from the Curacao Gaming Control Board to operate the following domains under our license: highroller.com and fruta.com. Remote gambling is the organization of a gambling game in a manner where the result of the game is explained on an electronic device and the player can participate in the game via an electronic means of communication, including telephone, Internet and media services. In many national markets, gaming is regulated by local law and, in principle, to be able to conduct such operations in these markets, a license is required. Political decisions, new interpretations of laws and new regulations can significantly impact our earnings and financial position since operations are either subject to licenses or can become subject to licenses. Currently, our primary market is Europe, where most countries have regulated the business of online gaming, especially following pressure from the EU institutions to launch regulatory frameworks which are compliant with EU regulation principles. Since the primary purpose behind most of the local gaming legislation is to fund state finances, the resulting limitations on the free movement of services created by EU Member States through their local monopolies are not possible to defend in terms of compliance with applicable EU legal principles. The Court of Justice of the European Union has established in many rulings that Member States must demonstrate the suitability, proportionality, and necessity of the limiting measure in question, in particular the existence of a problem linked to the public interest objective at stake and the consistency of the regulatory system. Despite this, several Member States historically have maintained these types of restrictions while others have introduced new and compliant frameworks for gaming regulation or announced that they are working on new legislation in line with EU requirements. Whenever new legislation is adopted, it is unclear whether there will be requirements or restrictions in relation to receiving a license or in general at the time of regulating or re-regulating of markets, demanding the settlement of any form of historical obligation (including the size of the same) or assessment of reliability etc. The Company will continue to have a dialogue with regulators and other relevant stakeholders, both on the EU and national level, with the aim of achieving sustainable regulations ensuring the right to be regulated, so that consumers can access compliant online gaming services. Depending on the circumstances, we may also use other legal remedies available to protect the rights afforded to us, e.g. as a digital company within the European Union. Since the decision of the European Commission in 2017, not to further pursue open infringement procedures against the Member States concerning online gaming, no infringement proceedings in online gaming matters have been commenced to date. Gaming regulation developments Europe Norway. On March 1, 2022, the Norwegian Parliament voted through the new law on gaming, meant to replace the existing acts on lottery, gaming and totalizator. The new law reinforced the country s position on a monopoly model for gaming and proposed a ban on credit card gaming, new marketing restrictions as well as granted the local gaming regulator additional means for protecting the monopoly model (e.g. by imposing infringement fines). The new law came into force in 2023. During 2023, some larger operators received formal cease and desist order from the Norwegian regulator together with a notification of undetermined future fines, should the order not be complied with. These companies largely appealed the cease-and-desist orders as part of an administrative review process, deeming the orders to be unlawful and any fines issued unenforceable. However, in the course of these legal actions a few large operators withdrew from the Norwegian market. Our Company has not received any communication or cease-and desist order to date. We also maintain that our online gaming services are offered pursuant to the freedom to provide services under the EU/EEA law. Our websites do not target Norwegian players. The government in Norway has proposed legislation that will seek to make it possible to DNS block websites that offer unlicensed gambling in Norway. The legislative move, if adopted, will take the form of an amendment to the Gambling Act. Finland. In April 2023, a general election in Finland resulted in a more conservative majority within the Finnish parliament. The new Finnish government has since announced plans to introduce a new licensing model for online casino games and betting. This would see an end to the state monopoly operated by Veikkaus Oy, the government owned betting agency. According to the government s program, there will be an overhaul of the gambling regulation and it seeks to introduce a licensing system for online casino games and betting no later than January 1, 2026. The scope of the license system would include online casino games and betting. No details are known yet nor is it known if the government will seek to introduce a "cooldown period" before the new license system comes into force or whether it will allow for a transition period. Our Company has not received any communication or cease-and desist order to date. We also maintain that our online gaming services are offered pursuant to the freedom to provide services under the EU/EEA law. Our websites do not target Finnish players. Latin America Chile. In 2021, the Chilean government introduced a bill to regulate online gambling. Historically, physical casinos have been regulated under The Casino Law, however the online gambling sector is not regulated under this law and has operated under a pre-regulatory environment, meaning no explicit prohibition has been in place. The proposed law aims to create a comprehensive licensing framework for operators and include taxation on gambling revenues. By late 2024, Chile is expected to have a formalized structure for regulating the online gambling market, including consumer protection mechanisms, anti-money laundering (AML) provisions, and responsible gaming requirements. Once the law is passed, Chile will become a locally regulated market with compliance requirements, similar to European standards. Peru. In August of 2022, The Peruvian Congress passed legislation to regulate online gaming and sports betting. This new framework requires operators to obtain a license and establishes a 12% tax on net revenues from online gambling. The Directorate of Casino Games and Slot Machines, part of the Ministry of Foreign Trade and Tourism, provides regulatory oversight for both physical and online gambling activities. The new law gives this body the authority to enforce the licensing and regulatory standards for online casinos. Key provisions include that operators must have a license to operate in Peru, a local representative, measures to prevent underage gambling, and controls that promote responsible gambling. Mexico. Online gambling in Mexico is regulated under the Federal Gaming and Raffles Law (1947), which was updated to accommodate online operations. The regulatory authority overseeing this sector is the General Directorate of Games and Lotteries (DGJS) under the Ministry of the Interior. Operators must obtain a permit from the DGJS to operate legally in Mexico. However, due to the ambiguity of the law, many international operators target the Mexican market via remote licenses. The government is expected to tighten regulations and improve enforcement in the coming years. Online gambling operators are subject to various taxes, including a 30% income tax and additional state-level taxes, such as a 6-10% tax on gross gaming revenue in some states. iGaming Industry iGaming Market Size Total addressable worldwide gambling market (TAM) in 2023 was estimated to be $540 billion of which iGaming is estimated to exceed $135 billion or about 25% of TAM. The market is expected to grow to $681 billion by 2027, of which online gaming is expected to account for $210 billion or about 31% of TAM. This estimated growth in the iGaming market represents a compound annual growth rate, or CAGR, of 9%1. Key historical drivers to iGaming are technological and regulatory. Through internet and handheld devices the worldwide population can access gaming services anywhere, at any time. In order to control and tax the market, regulation has emerged across a number of markets. The friction of rapid technological and regulatory change, and following change in user trends and behavior, has allowed new entrants to challenge, and take significant market share from, historically land based incumbents. Whilst the first wave of regulation happened in Europe throughout the 2000s and 2010s, the United States Supreme Court repealed the federal ban on sports betting in the U.S. in 2018, leading to a number of states introducing localized regulatory frameworks for sports betting and online casino, allowing private entrants to form a large and high growth iGaming industry, causing the land-based business, as well as mainstream companies and brands, to enter the industry. iGaming is growing worldwide and beyond, and the opportunities in Europe, United States and Asia, are following similar growth trajectories albeit being in various states of regulatory and technological development. 1 https://h2gc.com iGaming Sector and Value Chain iGaming is a common term for current and future services involving real money online gaming. Verticals are in descending market size Casino, Sports betting, Horse Racing, Bingo, Poker, as well as new and emerging categories such as virtual sports, esports, and crypto gaming. The iGaming value chain can be classified in large measure to include operators, content providers, media and marketing companies as well as technology and auxiliary services. Operators Operators are licensed to offer B2C gaming services. They take registrations, service banking and accept bets and pay out wins. They offer games developed in-house as proprietary or sourced from third party content providers. Content Providers Content providers develop games such as odds, slot machines and live dealer games, that are typically sold or licensed to operators on a revenue share, or in combination with fixed costs. Marketing and Media Companies Marketing and media companies provide exposure and lead generation to operators on various revenue models such as Cost Per view, Cost Per Click, Cost Per Acquisition, Fixed Fees/Placement Fees, or on a Revenue share. Technology and Auxiliary Service Providers These companies include but are not limited to infrastructure and/or platform backend (PAM) solutions, CRM Systems, Customer Support Systems, AI/ML, Data platforms and Managed Services and operational support. Strategic Positioning We have for over a decade operated our online casino brand of iGaming operations under the Casino Room brand. Effective January 2022 we commenced to refocus our operations under the High Roller brand, and have moved our players over to High Roller from Casino Room. We have transitioned our Casino Room brand into an affiliate marketing entity that can generate customer traffic to the HighRoller.com website and to any future brands that we may develop and launch as well as monetizing players in all markets by forwarding traffic to high paying casinos around the world. We provide our customers with a wide array of attractive and exciting online casino game offerings from over 70 leading developers. Our mission is to offer a reliably superior customer experience by providing fast onboarding, easy log-in and re-log-in; assuring efficient payment processing; offering a wide variety of popular games from an array of over 70 third party leading developers; effecting fast payouts on player winnings; offering generous bonuses, attractive and inviting bonus play and free spins on popular slots; fostering community and interactive player involvement leading to longer active stays online and more play; and maintaining 24/7/365 customer service to assure customer satisfaction. Spike Up Media, an affiliate of our founders, is one of a handful of globally foremost providers of high quality, effective lead generation. We believe that our association with Spike Up provides high quality, effective lead generation converting into growing and active corps of customers, which, together with our favorable customer acquisition costs and competitive customer retention, results for us in higher revenue and favorable gross operating margins. High Roller is an online operator of B2C brands leveraging operational and marketing expertise and assets to create a highly competitive growth model. We operate in a mix of remote or Pre-regulated licensed markets where we can legally engage in iCasino using international licenses, as well as locally licensed, or Regulated, markets which mandate a local license. Pre-regulated markets often have lower thresholds to enter and tend to provide higher margins as l locally licensed regulations typically entail increased compliance requirements and higher taxation, however those offshore markets generally carry more long-term uncertainty, as emerging regulation is often unclear. Our business plan entails our applying revenue derived from offshore markets to be invested into onshore markets that we expect will deliver long-term sustainable gross profits. We are currently present and active in several markets around the world. Our focus, after receipt of proceeds from this offering will primarily be to enter regulated markets in Europe and North America. Applications for licenses and fee payments for licenses can be costly. The license fee for an online casino in Pennsylvania for example is $1,000,000 and is valid for five years, while New Jersey has a $400,000 licensing fee, annual renewal fees of $250,000. Both Pennsylvania and New Jersey have a further legal requirement that an online casino operator team up with an in state land based casino. We intend to seek entry into one or more regulated markets utilizing proceeds from this offering but have not identified a specific target or budgeted any amount for such entries. We currently expect that initial entry into any of these regulated markets to occur in approximately twelve months from the receipt of proceeds from this initial public offering. No assurance can be given that these efforts will prove successful. Our business may suffer if we are unable to open new geographical markets or if we are unable to continue expanding within existing markets. We compete for customers by having optimized the HighRoller.com product for social media, live streaming and for, we believe, into positioning us to deliver more exciting and entertaining immersive experiences for our customers. We believe that our in-house technology is dynamic and highly capable of serving our growth needs in that its proprietary front-end platform is built on a services and event based architecture. We believe that these features will allow us to be able to react in real time according to almost any player event that occurs. We utilize these capabilities in areas such as campaigning, content, player protection and customer service, creating an attractive and favorable user experience. Our frontend platform uses a container-based architecture. This containerization allows us to package our frontend code and dependencies into containers that can be easily deployed and scaled across many users, languages, geographic locations, deposits and betting amounts. We believe these features also facilitate our ability to acquire and retain customers, with a high operational and marketing efficiency, allowing us to deploy and invest resources towards continued innovation and value for our end-user customers. In November 2022 we introduced LiveSpin games which are effectively streamed through video, meaning that they launch much quicker than downloading static content files to a user s local device. We save the streamed video content and make highlights available for High Roller, or potentially for users, to share through linking in real time. Although no outside players or viewers can view a user playing a traditional single player game, through this LiveSpin technology any player can invite anyone else to view the session in real time. Furthermore this product is collectivistic in that users are , ' ': betting behind together, while chatting with other players and interacting with one another. We believe that this social nature of the product enhances its attraction for social media audiences and that users are likely to share both real time sessions, and replays in these channels. The LiveSpins products on High Roller have gained popularity since their introduction and have ascended to be among the top 20 on our list of most played games. We continue to explore how we can add and expand interactive social features as a unique selling point, or USP, involving the iCasino community of players. We believe our in-house technology features and USPs also facilitate our ability to acquire and retain customers, with a high operational and marketing efficiency, allowing us to deploy and invest resources towards continued innovation and value for our end-user customers. Our core unique selling propositions, USPs that make our business stand out from the competition, are within social, community and streaming based product features that lend well to viral, affiliate and social marketing. Business Model High Roller derives its profits from a house edge in the games where registered users place bets on the websites. In casino this edge is typically 2-8% on online slot games, and 2-3% on table games such as Blackjack, Roulette, Video Poker and Live streamed dealer games. Games are supplied by third party content studios who collect royalties in the typical range of 5-15% of the net gaming revenues (defined as total amounts of all bets placed by players, less the sum of all payments made to players, less all bonuses received by players plus Jackpot wins less Jackpot contributions) or NGR. To incentivize user sign up, and retention, we offer promotions such as deposit bonuses, which is typically a percentage match of a deposit, free spins and cash back, subject to posted terms and conditions, collectively referred to as , ' ': bonuses . Gaming regulators typically collect a tax on either Gross Gaming Revenues, which includes lost bonuses, or NGR where NGR does not include lost bonuses. These taxes vary from our applicable jurisdictions however are typically in the range of 5%-20% of NGR. Competitive Strengths We believe that our competitive strengths include: Strong association and awareness of the HighRoller.com brand as an iCasino site for online high value wagering; Our focus on targeting and attracting high value, high roller customers; Favorable customer acquisition costs; Providing over 4,400 games from over 70 leading game design studio providers; Competitive customer retention; Market-leading innovation and content residing on a dynamic, entertaining platform; Easy customer on-boarding, simplified customer deposits to allow immediate play, and rapid, dependable payments to customers of their winnings; Experienced management team of iCasino experts with a history of managing growth; and Among best-in-class iCasino sites for personalization of customer VIP experience and support. Strength of HighRoller.com and Our Multi Brand Strategy We believe that the HighRoller.com brand provides immediate and positive brand recognition as an iCasino online gaming site that appeals to industry high rollers and to those customers who want to be treated with that level of high quality, personalized VIP experience. We believe that focusing on the delivery of this experience will continue to attract new customers, retain a greater percentage of our existing ones and be an important factor in our future growth. We are implementing a multi-brand strategy that allows us to scale our business by duplicating our Platform strengths across multiple domains with individualized branding and different target markets. We believe that this multi-brand strategy allows us to compete for increased market share in an industry where fresh and compelling branding often attracts additional players. We soft launched our second active iCasino brand, Fruta.com, in December 2023, and are exploring opportunities for future brand launches. We expect to launch at least one new iCasino brand over the next twelve months to expand market share in existing markets and reduce customer acquisition cost and attrition rates. Our Fruta.com brand was formally launched in February 2024 using our existing resources and gaming licenses. Our Platform is structured to be scalable to support multiple brands. The scalability of the Platform allows the Company to use existing resources to launch new brands that provide access to new target demographics and generate new revenues through existing player acquisition channels while maintaining the current cost structure with nominal incremental costs. If market reception is successful, the new brand may generate material new revenue. Conversion of marketing spend on our portfolio of brands will ultimately determine where player acquisition funds are spent on a market-to-market basis. Management believes that this launch and future planned launches will have no material negative impact on our financial condition, operations, liquidity, or capital position. iCasino Focus Targeting High Roller Customers As an online iGaming company, we believe that we are well positioned to continue to attract and acquire high value customers in the iGaming market. Our management believes that the combination of higher lifetime player value, which we refer to as "LTV", and player demographics of iGaming players creates a superior value proposition for iCasino. High Roller believes that the average iGaming player plays longer, reinvests his or her winnings more quickly and has a higher disposable income than the average player (excluding super VIP players) at land-based casinos, all of which in our view contributes to a higher total engagement per active month than land-based casino players. We expect iCasino to continue growing at a rate that is higher on average than the growth rate of land-based casinos and that our pure focus on iCasino, along with our competitive strengths, will make us a preferred choice for online players. Since launching our HighRoller.com brand in January 2022, we have generally grown quarterly active users and quarterly aggregate wagers, from approximately 3,300 and approximately $18 million, exclusive of CasinoRoom revenues, in the first quarter of 2022 to approximately 22,500 and $150 million in the second quarter of 2024. No assurance can be given that we will be able continuously to achieve this quarterly or annual growth. Favorable Customer Acquisition Costs (CPA) and Industry Competitive Customer Retention Another component of our competitive strength is our ability to attract and on-board new high value customers through our Spike Up Media lead generation relationship. Spike Up Media, a company beneficially owned by our founders, is believed to be one of the five largest lead generation companies globally. Market-Leading Innovation and Content We offer customers a dynamic and immersive iCasino platform. At June 30, 2024, we offered over 4,400 iCasino slots and table games licensed from over 70 leading studio providers representing largely the entire range of iCasino games that the Company believes are most attractive to its customer base including slots, craps, blackjack, roulette, baccarat, video poker and live dealer games. The HighRoller.com Platform offered with this broad range of games incorporates desirable graphics, with play inducing bonuses, interactive social media, as well as secure rapid onboarding and payouts. We provide an easy to use search function that provides our customers a speedy, user friendly search ability to find their desired games, but also allows them to search and rapidly to find favorite game providers, or to search filter games by styles of play. By way of illustration, our customers can select whether to search for grid games or ones that provide for a free spins bonus round, We believe that our ability to curate a wider array of iCasino gaming products than do many others, always attempting to show players the most relevant and highest quality games, is an important factor in reducing player churn and by delivering varied, superior product offering catering to a broader range of customer preferences. As compared to many of our competitors, we believe that we provide our customers with one of the more enjoyable, realistic and exciting real money online gaming experiences in the market. Growth Strategy Our proprietary online gaming Platform has been developed and is operated by an experienced management team with global online/mobile iCasino experience. We believe our online gaming Platform and technology stack give us the ability to provide a personalized, data-driven gaming experience for the entertainment and player satisfaction of our customers. We believe that the ability to customize the playing experience for each user is a key feature of our online gaming platform. Our current and new markets continue to evolve and to grow and we need to build upon our increasing brand awareness and the existing competencies of our online gaming Platform and technology stack to stake out our business expansion and revenue growth. We intend to continue investing in our core competitive strengths and improve the user experiences for our players with the aim of becoming a leading competitor in online Casino. Our growth strategy includes launching multiple brands. We soft launched Fruta.com, our second iCasino brand, in December 2023 and formally launched it in February 2024. Please see "Strength of HighRoller.com and our Multi Brand Strategy" above. Broaden penetration of existing markets We intend to increase investments in digital media, search engine optimization, use of influencers for live play games, as well as well as other marketing and advertising further to broaden awareness of our brand within existing markets, to drive new players to the HighRoller.com website and to achieve greater share of the iCasino wallet. Enter New Geographic Markets As part of our long-term strategy, we aim to leverage our existing markets operational experience, combined with attention to local needs, to enter into new geographic markets in North America, LATAM as well as Southeast Asia. In entering these markets, we may conduct business as an online operator marketing to users (B2C), as an online operator marketing to users in conjunction with a land-based casino partner (B2B2C), as a platform provider to a third-party operator (B2B), or any combination of these new market penetrating efforts. We expect to position ourselves to be ready to enter jurisdictions that provide for legal online casino wagering where we believe conditions may enable us to achieve favorable growth on our invested capital. Continue investments in Platform and Markets and Cybersecurity Oversight We have established a set of competitive strengths and competencies that in our view position us as a leader in the evolving online casino wagering industry. We will continue building on our core user experiences while bolstering the data-driven, marketing and technological infrastructure that allows us to continue to scale our product offerings and personalized player experiences. We plan to continue to invest in our users and product offerings as we remain driven to keep users engaged while expanding the capabilities of the Platform that will enable us to rapidly reach new geographic markets and attract new high roller players. Our company faces a number of risks, including cybersecurity risks and those other risks described under the section titled "Risk Factors" included in this prospectus. At this stage of our development, our board of directors, as a group, will actively oversee cybersecurity risks and will be committed to the prevention, timely detection and mitigation of the effects of any such incidents on our company s operations. While our board of directors will oversee cybersecurity risk management, our management will be responsible for day-to-day risk management processes. Our board of directors has tasked our Chief Technology Officer and other management with the responsibility to manage our cybersecurity initiatives including with respect to our customer data and game suppliers databases. Our board of directors will receive regular reports from management, including our Chief Technology Officer, on material cybersecurity risks and the degree of our exposure to those risks. Management will also work with third-party service providers to maintain appropriate controls. Our board of directors may in the future delegate some or all of this responsibility to an appropriate committee of the board of directors. We believe this approach is currently the most effective approach for addressing our cybersecurity risks at this time. Continue to invest in personnel In support of accessing additional geographic markets and achieving greater penetration and growth within existing online markets, we plan to grow operational and technology personnel teams to broaden product development capabilities, deliver innovation, and enhance efficiency, reduce reliance on third parties and scale digital user capabilities. Human Capital Our Employees. As of June 30, 2024, we employed 47 persons working across offices in North America and Europe. Of these, two were employed in the United States and 45 were employed in Malta. Our qualified and experienced team includes six persons in senior management and the balance engaged in operations, accounting, social media and marketing, customer service, technological support and the balance in other administrative responsibilities. We also utilize a number of consultants for financial reporting, regulatory and other operational matters. We believe that we maintain a satisfactory working relationship with our employees, and we have experienced no significant labor disputes or any difficulty in recruiting staff for our operations. None of our employees are represented by a labor union. Employee Engagement, Talent Development and Benefits. We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees. We provide our employees with competitive salaries and bonuses, and opportunities for equity ownership. Legal Proceedings In the normal course of business, the Company may be subject to claims and litigation. The Company reviews its legal proceedings and claims, regulatory reviews and inspections, and other legal matters on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions are required. If necessary, the Company establishes accruals for those contingencies when the incurrence of a loss is probable and can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued if such disclosure is necessary for our financial statements to not be misleading. The Company does not record an accrual when the likelihood of loss being incurred is probable, but the amount cannot be reasonably estimated, or when the loss is believed to be only reasonably possible or remote, although disclosures will be made for material matters as required by ASC 450-20, Contingencies. The Company had certain pending or threatened legal claims or actions in which there was a probable outcome. Ellmount Entertainment, Ltd., a subsidiary of the Company, has litigation pending in Austria and Germany regarding player claims and related legal fees. The Company currently is not targeting these markets and does not anticipate further claims of a similar nature that may be material in these markets. The Company is also currently subject to administrative claims initiated by the Czech Ministry of Finance regarding the operation of gaming activities in 2018 without a license and has been ordered to pay a fine of approximately $216,000, which is under appeal. The Company is not currently aware of any other material regulatory or tax claims. The Company has provided appropriate provision for these claims in accrued expenses in its consolidated balance sheets at June 30, 2024, December 31, 2023 and 2022 to the extent that such claims can be reasonably estimated. MANAGEMENT Executive Officers, Directors and Director Nominees The following table sets forth the name, age and position of each of our executive officers, directors and director nominees as of the date of this prospectus: NAME AGE POSITION Executive officers Ben Clemes* 47 Chief Executive Officer* Matthew Teinert 42 Chief Financial Officer Reuben Borg Caruana 48 Chief Operations Officer (subsidiaries) Sven Kaltenegger 43 Chief Commercial Officer (subsidiaries) Directors and Director Nominees Michael Cribari* 39 Chairman of the Board of Directors Brandon Eachus* 38 Director Daniel Bradtke 41 Director Jonas Martensson (1) 47 Director Kristen Britt (2) 41 Director David Weild IV (3) 67 Director Nominee * Effective January 1, 2024, Mr. Clemes succeeded Mr. Cribari as Chief Executive Officer and Mr. Eachus as President (1) Chair of the nominating and governance committee (2) Chair of the compensation committee (3) Chair designate of the audit committee Michael Cribari was our Chief Executive Officer until January 1, 2024 and a co-founder of our company. He has for more than 16 years focused his attention on investing in a wide range of European based iGaming businesses. During the last five years he has been a director of Spike Up Media, a leading global iGaming affiliate and has also been Chairman of its parent, Ellmount Interactive AB, a Swedish iGaming technology company. We believe that Mr. Cribari s experience and knowledge gained as an investor in a wide range of European iGaming businesses and his leadership in co-founding our company make him well qualified to be our Chairman of the Board and Chief Executive Officer. In connection with Mr. Clemes joining the Company, effective January 1, 2024 Mr. Cribari resigned as Chief Executive Officer. Ben Clemes has been our Chief Executive Officer effective January 1, 2024. From May 2023 through December 2023 he was Investment and Portfolio Partner at Happy Hour Entertainment Holdings and following January 1, 2024 will continue to consult with Happy Hour Entertainment Holdings on a part time basis. From October 2022 to May 2023 he was General Manager for North America of the Platform Unit, at Gaming Innovation Group (www.gig.com). From December 2017 to October 2022 he was Chief Commercial Officer and Managing Director of the Platform Unit, and from December 2015 to December 2017 he was Managing Director of the Platform Unit, at Gaming Innovation Group Inc. or GIG, a leading B2B supplier in the online gaming industry. GIG, operating out of Malta, Spain and Denmark and listed on the Oslo Stock Exchange and Swedish Nasdaq, provides cloud-based product and platform services and performance marketing solutions, products and services to iGaming Operators. From April 2013 to December 2016 he was Co-Founder and Head of Casino Operations at Guts.com, a website offering casino games, sports betting and poker. Mr. Clemes received a BCM, Marketing, Computer Science from Lincoln University, New Zealand in 2000. Brandon Eachus is the former President and a co-founder of our company. Since 2015 he has been a director of Spike Up Media, a leading iGaming affiliate worldwide. Prior to that for more than 17 years Mr. Eachus had co-founded and operated four internet-based businesses where he served in senior management roles. Since 2014 he has been an active shareholder in Ellmount Interactive AB, a Swedish iGaming company, with responsibilities for corporate communications, marketing, finance. Mr. Eachus attended business school at California State University Fresno and since 2019 has served on the board for the Ronald McDonald House charities. We believe that Mr. Eachus s experience in senior management roles at internet-based businesses, his knowledge of internet lead generation, and his leadership in co-founding our company make him well qualified to be our President and a member of our board of directors. In connection with Mr. Clemes joining the Company, effective upon January 1, 2024 Mr. Eachus resigned as President. Matt Teinert has been our Chief Financial Officer since May 2023. He has over a decade of experience serving both private and publicly traded global companies in various accounting and financial planning roles. From April 2017 until April 2023 he was Director of Accounting and Financial Reporting at Digital Turbine Inc.. From 2015 to 2017 he was SEC Reporting Analyst at Summit Hotel Properties and from 2011 to 2015 he was a senior associate at BDO USA, LLP. He received a Bachelor of Business Administration in Accounting from University of Houston-Victoria. Reuben Borg Caruana joined the Company as Chief Operations Officer (subsidiaries) in August 2022. Mr. Borg Caruana has extensive operations, risk, fraud and payments, product, and compliance experience in online gaming. Previously, as Director of Operations at kwiff, a sports betting app, from October 2021 until April 2022, Mr. Borg Caruana was responsible for all operational aspects of the business, including restructuring and leading of RPF, CS, VIP, CRM and Casino departments and also responsible for the Payments strategy and commercials to help the business in international markets expansion. From April 2017 until September 2021, Mr. Borg Caruana was Head of Risk, Fraud & Payments at Genesis Global Ltd where he was responsible for setting up and leading the risk, fraud and payments department from scratch, including Compliance Operations. Initially to handle UKGC & MGA Regulations and two brands, to further lead the department to handle 14 new brands and two new regulations, SGA and DGOJ. He was also responsible for the Cashier/Payments Product, including strategy and commercials. During his career, Mr. Borg Caruana has worked in Operational Leadership Roles at Betclic, a French online gaming company based in Malta and Betsson AB an online sports betting and iCasino operator headquartered in Sweden Sven Kaltenegger assumed the role of Chief Commercial Officer (subsidiaries) at High Roller in August 2023, bringing with him over 25 years of experience in Sales & Marketing and iGaming. With nearly a decade of expertise specifically in the iGaming realm, he held various key positions in the industry. Before joining HighRoller, he served as Chief Commercial Officer at Casimba Gaming from January 2022 to July 2023 overseeing both B2B and B2C operations and managing a portfolio of 20+ casino brands. Prior to his role at Casimba Gaming, Mr. Kaltenegger held significant leadership positions at LeoVegas AB from December 2018 to January 2022, a publicly listed company, now a subsidiary of MGM Resorts. Between 2015 and October 2018, Mr. Kaltenegger primarily worked as an Affiliate & Country Marketing Manager for various iGaming brands across Casino, Live Casino, and Sportsbook. Mr. Kaltenegger holds a Bachelor of Arts with Honors in European Studies, along with diplomas in Marketing and Psychology. He has been twice recognized as an award-winning Affiliate Manager in the industry. Directors Kristen Britt has served as one of our directors since May 2022. She has since 2022 been Vice President of People and Culture at Aristocrat Technologies, Inc. and was Vice President of Human Resources at Hard Rock Digital from July 2021 to November 2021. She has been employed at Churchill Downs Incorporated and related or affiliated companies in various management positions since 2005, most recently as Vice President of Human Resources from 2018 to 2021 and Senior Director of Human Resources from 2016 to 2018. She received her MBA from Indiana University and a Bachelor of Science - Business Management from Western Kentucky University. We believe that Ms. Britt s extensive experience in senior human resources management roles in the gaming industry and managing direct employees make her a valuable member of our board of directors. Daniel Bradtke has been one of our directors since April 2023 and since 2020 has been a co-founder and officer of Happy Hour Entertainment Holdings Ltd., a seed fund and early-stage accelerator for iGaming. We believe that Mr. Bradtke s extensive experience in senior management roles at iGaming companies, his broad knowledge of all aspects of iCasino operations, marketing, finance and industry trends, make him well qualified to be a member of our board of directors. Jonas Martensson has been one of our directors since June 2023. Mr. Martensson has substantial board level experience in a number of important verticals for XLMedia in addition to both corporate and capital markets exposure across the Nordics. He is currently CEO of Mojang AB, a Swedish video game developer and publisher acquired by Microsoft in 2014. Mojang is best known for creating the popular independent game, Minecraft and continues to update and support the game across multiple platforms. Previously, Mr. Martensson founded betting operator Mobilbet.com, which was sold in 2016. Prior to this, Mr. Martensson held senior roles at Betsson, latterly in Betsson Technologies AB, as Head of Mobile responsible for strategy and execution of all mobile activities across the 28 group brands. We believe that Mr. Martensson s extensive experience as an entrepreneur and in senior management roles at gaming companies, his broad knowledge of all aspects of mobile, betting and other iGaming operations, marketing, finance and industry trends, make him well qualified to be a member of our board of directors. David Weild IV has served as an adviser to the Company since September 2022 and has agreed to serve on our board of directors as an independent director following completion of this offering. He is the founder, chairman and chief executive officer of Weild & Co., Inc., founded in 2012, and parent company of the investment banking firm Weild Capital, LLC. Prior to Weild & Co., Mr. Weild was vice chairman at Nasdaq, president of PrudentialFinancial.com and head of corporate finance and equity capital markets at Prudential Securities, Inc. Mr. Weild holds an M.B.A. from the Stern School of Business and a B.A. from Wesleyan University. Mr. Weild currently serves on the boards of Scopus BioPharma, INX, LTD and recently joined the board of the charity Dignity Beyond Borders which creates safe and inclusive global communities for survivors of traumatic loss. Mr. Weild has served as a director of BioSig Technologies, Inc. from May 2015 until February 2024 and previously served on the board of PAVmed. From September 2010 to June 2011, Mr. Weild served on the board of Helium.com, until it was acquired by R.R. Donnelly & Sons Co. Since 2003, Mr. Weild was a director and then chairman of the board of the 9-11 charity Tuesday s Children. He became chairman emeritus in late 2016. Mr. Weild brings extensive financial, economic, stock exchange, capital markets, regulatory, legislative and small company expertise to our Board gained throughout his career on Wall Street. He is a recognized expert in capital markets and has spoken at the White House, Congress, the SEC, the Organization for Economic Co-operation and Development and the G-20 on how market structure can be bettered to improve capital formation and economic growth. He is referred to as the "father" of the Jumpstart Our Business Startups Act (JOBS) based on the role he played in drafting the legislation. The Act served as the foundation for securities crowdfunding, generally solicited private placements, emerging growth company IPOs, Reg. A+ offerings, Testing the Waters, and a host of other improvements to U.S. capital markets that contribute to the growth in ecosystems that spur access to capital and drive innovation. Mr. Weild s service at Nasdaq, his recognized expertise in capital markets including extensive experience in aiding private and public company financing, his knowledge of corporate governance and service on boards of directors, including service as an audit committee chair for a Nasdaq-listed company, will make him a well-qualified member of our board of directors. Election of Officers and Family Relationships Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers. Code of Business Conduct and Ethics Our board of directors has adopted a code of business conduct and ethics that will apply to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our code of business conduct and ethics will be available on the investor relations page of our corporate website, which we intend to launch at or prior to the closing of this offering. We intend to post any amendments to our code of business conduct and ethics, or any waivers thereto, on our corporate website, or in filings under the Exchange Act. Board of Directors Director Independence In connection with this offering, we have applied to list our common stock on NYSE American. We will qualify as a smaller reporting company under Rule 12b-2 of the Exchange Act and under the rules of NYSE American, independent directors must comprise at least 50% of a listed company s board of directors within a specified period of time after the completion of an initial public offering. In addition, the rules of NYSE American require that, subject to specified exceptions, each member of a listed company s audit, compensation and nominating and corporate governance committees be independent. Under the rules of NYSE American, a director will only qualify as an "independent director" if, in the opinion of that company s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries. Our board of directors has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise or impair such director s ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our board of directors has determined that each of Kristen Britt and Jonas Martensson are, and that David Weild, upon becoming a member of our board of directors, will be "independent directors" as defined under the applicable rules and regulations of the Securities and Exchange Commission, or SEC, and the listing requirements and rules of NYSE American. Committees of the Board of Directors Our board of directors has established an audit committee, a compensation committee and a nominating and governance committee, each of which will have the composition and responsibilities described below. Our board of directors will appoint a chair of each committee upon its establishment. Members will serve on these committees until their resignation or as otherwise determined by our board of directors. Audit Committee David Weild, Kristen Britt and Jonas Martensson, each of whom is or on becoming a member of our board of directors, will be a non-employee member of our board of directors, have been designated to serve on our audit committee. Our board of directors has determined that each of these persons satisfies the requirements for independence and financial literacy under the rules and regulations of NYSE American and the SEC. Our board of directors has also determined that David Weild qualifies as an "audit committee financial expert," as defined in the SEC rules, and satisfies the financial sophistication requirements of NYSE American. The audit committee will be responsible for, among other things: appointing, overseeing, and if need be, terminating any independent registered public accounting firm; assessing the qualification, performance and independence of our independent registered public accounting firm; reviewing the audit plan and pre-approving all audit and non-audit services to be performed by our independent registered public accounting firm; reviewing our financial statements and related disclosures; reviewing the adequacy and effectiveness of our accounting and financial reporting processes, systems of internal control and disclosure controls and procedures; reviewing our overall risk management framework; overseeing procedures for the treatment of complaints on accounting, internal accounting controls, or audit matters; reviewing and discussing with management and the independent auditor the results of our annual audit, reviews of our quarterly financial statements and our publicly filed reports; reviewing and approving related person transactions; and preparing the audit committee report that the SEC requires in our annual proxy statement. Our audit committee operates under a written charter, adopted by our board of directors, which satisfies the applicable rules and regulations of the SEC and the applicable listing standards of NYSE American. Compensation Committee Kristen Britt, Jonas Martensson and David Weild, each of whom is, or on becoming a member of our board of directors, will be a non-employee member of our board of directors, will comprise our compensation committee. Our board of directors has determined that each of these non-employee directors meets the requirements for independence under the rules of NYSE American and the SEC. The compensation committee will be responsible for, among other things: reviewing the elements and amount of total compensation for all officers; formulating and recommending any proposed changes in the compensation of our Chief Executive Officer for approval by the board; reviewing and approving any changes in the compensation for officers, other than our Chief Executive Officer; administering our equity compensation plans; reviewing annually our overall compensation philosophy and objectives, including compensation program objectives, target pay positioning and equity compensation; and preparing the compensation committee report that the SEC will require in our annual proxy statement. Our compensation committee operates under a written charter, adopted by our board of directors, which satisfies the applicable rules and regulations of the SEC and the applicable listing standards of NYSE American. Nominating and Governance Committee Kristen Britt, Jonas Martensson and David Weild, each of whom is, or on becoming a member of our board of directors, will be a non-employee member of our board of directors, will comprise our nominating and governance committee. Our board of directors has determined that each of these non-employee directors meets the requirements for independence under the rules of NYSE American for service on this committee. The nominating and governance committee will be responsible for, among other things: evaluating and making recommendations regarding the composition, organization and governance of our board of directors and its committees, identifying, recruiting and nominating director candidates to the board if and when necessary; evaluating and making recommendations regarding the creation of additional committees or the change in mandate or dissolution of committees, reviewing and making recommendations with regard to our corporate governance guidelines and compliance with laws and regulations, and reviewing and approving conflicts of interest of our directors and corporate officers, other than related person transactions reviewed by the audit committee. Our nominating and governance committee operates under a written charter adopted by our board of directors, which satisfies the applicable listing standards of NYSE American. Compensation Committee Interlocks and Insider Participation None of the prospective members of our compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of the compensation committee or director (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has one or more executive officers who will serve on our compensation committee or our board of directors. Non-Officer Director Compensation At June 30, 2024, we have accrued an aggregate of $114,000 for the services of certain non-officer members of our board of directors which was charged to general and administrative expenses during the year ended December 31, 2023 and the six months ended June 30, 2024, and which has not yet been paid. Beginning July 1, 2024, each of our non-officer directors are entitled to receive an annual retainer of $36,000 for their services on the board of directors. The chairman of our board will receive an additional annual retainer of $35,000. In addition to the annual retainer, the compensation of each non-officer board member will consist of committee service payments (payable quarterly in arrears) as follows: Audit Committee Chair $15,000 Audit Committee Member $ 7,500 Compensation Committee Chair $10,000 Compensation Committee Member $ 5,000 Nominating and Governance Chair $ 7,500 Nominating and Governance Member $ 4,000 In addition to cash compensation, the Company has provided each of its non-officer directors options to acquire 10,000 shares of common stock exercisable at $6.33 per share and having a ten-year term vesting on May 1, 2024. The Company intends to establish an equity-based compensation program for its non-employee independent directors in the future. Directors Service Contracts There are no arrangements or understandings between us, on the one hand, and any of our directors, on the other hand, providing for benefits upon termination of their employment or service as directors of our Company. Limitation on Liability and Indemnification Matters Our amended and restated Certificate of Incorporation contains provisions that limit the liability of our directors for damages to the fullest extent permitted by Delaware law. Consequently, none of our directors will be personally liable to us or our stockholders for damages as a result of an act or failure to act in his or her capacity as a director, unless: the presumption that directors are acting in good faith, on an informed basis, and with a view to the interests of the corporation has been rebutted; and it is proven that the director s act or failure to act constituted a breach of his or her fiduciary duties as a director and such breach involved intentional misconduct, fraud or a knowing violation of law. We have entered into indemnification agreements with each of our directors and executive officers. Each indemnification agreement provides for indemnification and advancements by High Roller of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to High Roller or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law. Insofar as indemnification for liabilities arising under the Securities Act 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 Securities Act and is therefore unenforceable. EXECUTIVE COMPENSATION Our principal executive officers, named in the table below, did not receive any employment compensation during 2021. Following this offering we expect that the Compensation Committee will determine compensation for our two most highly compensated executive officers based on published industry norms. We intend to enter into an employment agreement or offer letter with each of our named executive officers. Regardless of the manner in which a named executive officer s service terminates, our employment agreements will provide that each named executive officer will be entitled to receive amounts earned during his or her term of service, including unpaid salary and unused vacation. From time to time, we may grant equity awards to, or enter into employment or consulting agreements with, certain key employees, including our named executive officers, that provide for accelerated vesting of equity awards as may be appropriate in the judgment of the Compensation Committee. All of our current named executive officers will be eligible to participate in our employee benefit and insurance plans when adopted, in each case on the same basis as all of our other employees. Summary Compensation Table The following table provides information regarding the compensation of our named executive officers during the periods indicated. Name and Principal Positions Year Salary ($) Bonus ($) Stock Awards (3) All Other Compensation ($) (4) Total ($) Michael Cribari Chief Executive Officer (1) 2023 — — — — — 2022 — — — — — Idan Levy Chief Executive Officer, Ellmount Entertainment Ltd (2) 2023 350,949 85,407 992,986 — 1,429,342 2022 133,883 — — — 133,883 Matt Teinert Chief Financial Officer (4) 2023 120,513 12,143 — 12,000 144,656 (1) Mr. Cribari was succeeded by Ben Clemes as Chief Executive Officer effective January 2024. (2) Idan Levy was appointed Chief Executive Officer of Ellmount Entertainment Ltd effective May 2022 and resigned effective April 2, 2024. (3) Amounts reported represent the aggregate grant date fair value of all equity awards made in the applicable year as computed in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions and these amounts do not necessarily correspond to the actual value that may be recognized by the executives from these awards. The Company amended Mr. Levy s stock option agreement on March 8, 2023, to provide for restricted stock units in lieu of the stock options awarded in 2022. See "Employment Agreements." (4) Matt Teinert was appointed our Chief Financial Officer effective May 2023. All other compensation includes reimbursement of health insurance costs to Mr. Teinert. Compensation Clawback Policy In March 2024 our board of directors adopted a Compensation Clawback Policy in accordance with applicable NYSE American rules (the "Clawback Policy"). The Clawback Policy provides that we will recover reasonably promptly the amount of erroneously awarded incentive-based compensation to any current or former executive officers in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period Employment Agreements In May 2022 we entered into an employment agreement with Idan Levy by which Mr. Levy was appointed Chief Executive Officer of our operating subsidiaries, effective September 1, 2022, at a base gross salary of 320,000 euros per year with a guaranteed annual bonus of 30,000 euros. Mr. Levy is entitled to a performance bonus of up to 30% of his annual salary subject to our achieving 10% revenue growth and EBITDA per calendar quarter. Mr. Levy is entitled to participate in regular health insurance and other employee benefit plans as established by us. Effective September 1, 2022 we also granted Idan Levy a non-qualified stock option to: purchase up to 55,599 shares of common stock at the initial public offering price which shall vest in twelve installments of three months each commencing on the one-year anniversary of the grant date; and purchase up to an additional 55,599 shares of common stock at the Exercise Price, with vesting subject to the Company s accomplishing the following annual milestones; (i) 18,533 options shall vest upon our reporting net revenue of at least $50 million for the year ending December 31, 2023, (ii) 18,533 options shall vest upon reporting net revenue of at least $100 million for the rear ending December 31, 2024 and (iii) 18,533 options shall vest upon our reporting net revenue of at least $150 million for the year ending December 31, 2025. To the extent that an annual milestone is not met in either the year ending December 31, 2023 or the year ending December 31, 2024, the annual milestone options shall also vest if the annual milestones are met on a cumulative basis in the subsequent year or years. In March 2023, we amended Mr. Levy s stock option agreement to provide him with 55,559 restricted stock units, or RSUs, in lieu of options, of which 17,375 RSUs vested as of December 31, 2023. Thereafter, commencing January 2024 his remaining 38,184 RSUs shall vest in equal monthly installments over the successive 33 months. An additional 55,599 RSUs shall vest as follows: (i) 18,533 RSUs upon Company generating net gaming revenue, or NGR, of at least 31 million euro for the fiscal year ended December 31, 2023, (ii) 18,533 upon Company generating NGR of at least 91 million Euro for the fiscal year ended December 31, 2024 and (iii) 18,533 upon Company generating NGR of at least 150 million Euro for the fiscal year ended December 31, 2025. To the extent that an annual NGR milestone was not met in either the fiscal year ended December 31, 2023 or the fiscal year ended December 31, 2024, these milestone-based RSUs would nevertheless vest if the annual NGR milestones are met on a cumulative basis in any subsequent year or years provided that these RSUs which have not met the milestone vesting criteria as of December 31, 2025 shall expire and have no further validity. We have defined "net gaming revenue" to mean customer derived revenue from all of our online sites after customer wins, bonuses, promotions as determined by generally accepted accounting principles in the United States. Effective April 2, 2024 Mr. Levy resigned from all positions with our operating subsidiaries. As part of our separation agreements, we agreed to pay Mr. Levy 87,500 Euros, inclusive of accrued bonus, plus accrued vacation leave and to affirm the vesting of a total additional 2,316 RSUs for the months of April and May 2024. All remaining unvested RSUs under his agreements with us terminate and have no further validity. See "Principal Shareholders." Effective August 1, 2022, we entered into an employment agreement with Reuben Borg Caruana by which he was appointed Chief Operating Officer of Ellmount Entertainment Ltd., our wholly owned subsidiary, at a base gross salary of $131,300 per year with a performance bonus of up to $30,300 against certain key performance indicators to be set and approved. Mr. Caruana is entitled to participate in regular health insurance and other employee benefit plans as established by us. Effective May 18, 2023, we entered into an offer letter with Matt Teinert by which he was appointed our Chief Financial Officer at a base salary of $200,000 with an annual cash bonus of $20,000 and an additional quarterly cash bonus of $5,000 based on certain performance indicators. Mr. Teinert was also granted a stock option to purchase 30,000 shares of our common stock at a strike price of $6.33 and 10,000 time-based restricted stock units, subject to continued service. One third of the options and units shall vest May 1, 2024 and the remainder vests ratably quarterly over the two years following the initial vest. Mr. Teinert is entitled to participate in regular health insurance and other employee benefit plans as established by us and pending our establishment of a group health plan we have agreed to provide him with a health insurance allowance of up to $1,500 per month. Mr. Teinert s employment is not for a specific term, is "at will" and either we or he may terminate the employment relationship with or without cause at any time. Effective December 5, 2023, we entered into an offer letter with Ben Clemes by which he was appointed our Chief Executive Officer at a base salary of $246,000, payment of which has been deferred until June 30, 2024. Mr. Clemes will also be eligible to receive awards in an annual cash bonus program the terms of which will be determined by the Board of Directors in its sole discretion. Effective January 1, 2024, the Company hired Ben Clemes to serve as its Chief Executive Officer. In connection with his employment, the Company issued 121,623 RSUs vesting as follows: (i) 15,203 on January 1, 2024, (ii) 15,203 on February 12, 2024, (iii) 10,135 in equal annual installments on each of January 1, 2025, 2026 and 2027, respectively, (iv) 30,406 upon the Company generating specified net gaming revenue targets for the year ending December 31, 2024, and (v) 30,406 upon the Company generating specified net gaming revenue targets for the year ending December 31, 2025. All of Mr. Clemes unvested RSUs shall vest on earlier of (i) a change of control of the Company or (ii) if, in connection with our closing of an acquisition of a gaming license, domain name, iGaming assets such as those related to lotteries, sports betting, and other similar operations, whether in the nature of B2B or B2C, the parties mutually agree that Mr. Clemes shall step down as Chief Executive Officer in favor of a successor. Except as explicitly noted his offer letter, unvested RSUs shall expire and be of no further validity upon Mr. Clemes ceasing to be our Chief Executive Officer. Moreover, we have agreed that the Company shall retain the right to repurchase Mr. Clemes vested RSUs for $50,000 if the Company has not completed this offering within 60 days after he has ceased to be our Chief Executive Officer. For the purpose of Mr. Clemes offer letter "change of control" shall mean any "person" (as the term is used in Rule 13d-5 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or "group" (as defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than current principal shareholders of the Company, persons or entities affiliated with them, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting securities of Company, representing 50% or more of Company s outstanding voting securities entitled to vote generally in the election of directors of the Company. Mr. Clemes is entitled to participate in regular health insurance and other employee benefit plans as established by us and pending our establishment of a group health plan we have agreed to provide him with a health insurance allowance of up to $1,500 per month. Mr. Clemes employment is not for a specific term, is "at will" and either we or he may terminate the employment relationship with or without cause at any time. Pension Benefits and Nonqualified Deferred Compensation We do not provide a defined benefit pension plan for our employees, and none of our named executive officers participated in a nonqualified deferred compensation plan in 2022, 2023 or 2024. Non-Equity Incentive Plan Compensation We do not provide a non-equity compensation plan for our employees. Employee Benefit and Stock Plan Our board of directors adopted a 2024 Equity Incentive Plan referred to herein as our "Plan" which is summarized below. Our Plan provides for the grant of incentive stock options, or ISOs, within the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended, or the Code, to employees, including employees of any parent or subsidiary, and for the grant of non-statutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of our affiliates. Authorized Shares. Initially, the maximum number of shares of our common stock that may be issued under our Plan after it becomes effective will not exceed 1,700,000 shares of our common stock. Plan administration. Our board of directors, or a duly authorized committee of our board of directors, will administer our Plan and is referred to as the "plan administrator" in this prospectus. Our board of directors may also delegate to one or more of our officers the authority to (i) designate employees (other than officers) to receive specified stock awards and (ii) determine the number of shares subject to such stock awards. Under our Plan, our board of directors will have the authority to determine award recipients, grant dates, the numbers and types of stock awards to be granted, the applicable fair market value, and the provisions of each stock award, including the period of exercisability and the vesting schedule applicable to a stock award. Stock options. ISOs and NSOs are granted under stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the Plan vest at the rate specified in the stock option agreement as determined by the plan administrator. The plan administrator will determine the term of stock options granted under the Plan, up to a maximum of 10 years. Unless the terms of an option holder s stock option agreement, or other written agreement between us and the recipient approved by the plan administrator, provide otherwise, if an option holder s service relationship with us or any of our affiliates ceases for any reason other than disability, death or cause, the option holder may generally exercise any vested options for a period of three months following the cessation of service. This period may be extended in the event that exercise of the option is prohibited by applicable securities laws. If an option holder s service relationship with us or any of our affiliates ceases due to death, or an option holder dies within a certain period following cessation of service, the option holder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death. If an option holder s service relationship with us or any of our affiliates ceases due to disability, the option holder may generally exercise any vested options for a period of 12 months following the cessation of service. In the event of a termination for cause, options generally terminate upon the termination date. In no event may an option be exercised beyond the expiration of its term. Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (i) cash, check, bank draft or money order, (ii) a broker-assisted cashless exercise, (iii) the tender of shares of our common stock previously owned by the option holder, (iv) a net exercise of the option if it is an NSO or (v) other legal consideration approved by the plan administrator. After the termination of service of an employee, director or consultant, he or she may exercise his or her option for the period of time stated in his or her option agreement. Generally, if termination is due to death or disability, the option will remain exercisable for 12 months. In all other cases, the option will generally remain exercisable for thirty days following the termination of service (subject to extension upon approval of the Plan administrator). However, in no event may an option be exercised later than the expiration of its term. Subject to the provisions of our Plan, the plan administrator determines the other terms of options. Non-transferability of awards. Unless the plan administrator provides otherwise, our Plan generally will not allow for the transfer of awards except by will or the laws of descent and distribution. Subject to approval of the plan administrator or a duly authorized officer, an option may be transferred pursuant to a domestic relations order, official marital settlement agreement or other divorce or separation instrument. Tax Limitations on ISOs. The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an award holder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our parent or subsidiary corporations unless (i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and (ii) the term of the ISO does not exceed five years from the date of grant. Restricted Stock Unit Awards. Restricted stock unit awards will be granted under restricted stock unit award agreements adopted by the plan administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, or other written agreement between us and the recipient approved by the plan administrator, restricted stock unit awards that have not vested will be forfeited once the participant s continuous service ends for any reason. Restricted Stock Awards. Restricted stock awards will be granted under restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past or future services to us or any other form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant s service relationship with us ends for any reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of the date the participant terminates service with us through a forfeiture condition or a repurchase right. Stock Appreciation Rights. Stock appreciation rights will be granted under stock appreciation right agreements adopted by the plan administrator. The plan administrator determines the purchase price or strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date of grant. A stock appreciation right granted under the Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator. Stock appreciation rights may be settled in cash or shares of common stock or in any other form of payment as determined by the Board and specified in the stock appreciation right agreement. The plan administrator will determine the term of stock appreciation rights granted under the Plan, up to a maximum of 10 years. If a participant s service relationship with us or any of our affiliates ceases for any reason other than cause, disability or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. This period may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws. If a participant s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the termination of the individual for cause. In no event may a stock appreciation right be exercised beyond the expiration of its term. Performance Awards. The Plan will permit the grant of performance awards that may be settled in stock, cash or other property. Performance awards may be structured so that the stock or cash will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period. Performance awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, the common stock. The performance goals may be based on any measure of performance selected by the board of directors. The performance goals may be based on company-wide performance or performance of one or more business units, divisions, affiliates or business segments, and may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the board of directors at the time the performance award is granted, the board will appropriately make adjustments in the method of calculating the attainment of performance goals as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects; (iii) to exclude the effects of changes to generally accepted accounting principles; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; (v) to exclude the effects of items that are "unusual" in nature or occur "infrequently" as determined under generally accepted accounting principles; (vi) to exclude the dilutive effects of acquisitions or joint ventures; (vii) to assume that any portion of our business which is divested achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (viii) to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change or any distributions to common stockholders other than regular cash dividends; (ix) to exclude the effects of stock based compensation and the award of bonuses under our bonus plans; (x) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (xi) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. Other Stock Awards. The plan administrator may grant other awards based in whole or in part by reference to our common stock. The plan administrator will set the number of shares under the stock award (or cash equivalent) and all other terms and conditions of such awards. Certain adjustments. In the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits available under our Plan, the plan administrator will adjust the number and class of shares that may be delivered under our Plan and/or the number, class and price of shares covered by each outstanding award and the numerical share limits set forth in our Plan. In the event of our proposed liquidation or dissolution, the plan administrator will notify participants as soon as practicable and all awards will terminate immediately prior to the consummation of such proposed transaction. Merger or change in control. Awards granted under the Plan may be subject to acceleration of vesting and exercisability upon or after a change in control (as defined in the Plan) as may be provided in the applicable stock award agreement or in any other written agreement between us or any affiliate and the participant, but in the absence of such provision, no such acceleration will automatically occur. Amendment, termination. Our board of directors has the authority to amend, suspend or terminate our Plan, provided that such action does not materially impair the existing rights of any participant without such participant s written consent. Certain material amendments also require the approval of our stockholders. No ISOs may be granted after the tenth anniversary of the date our board of directors adopts our Plan. No stock awards may be granted under our Plan while it is suspended or after it is terminated. PRINCIPAL SHAREHOLDERS The following table sets forth information with respect to the beneficial ownership of our shares as of the date of this prospectus and after this offering by (i) each person or entity known by us to own beneficially more than 5% of our outstanding shares; (ii) each of our directors and executive officers individually; and (iii) all of our executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares of common stock. For purposes of the table below, we deem shares subject to options that are currently exercisable or exercisable within 60 days of September 16, 2024, to be outstanding and to be beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. The percentage of shares beneficially owned prior to the offering is based on 7,012,808 shares of common stock outstanding as of September 16, 2024 after giving effect to the Reverse Split. The number of shares of common stock deemed outstanding after this offering includes the shares of common stock being offered for sale in this offering but assumes no exercise by the representative of the underwriters of the over-allotment option. All of our shareholders, including the shareholders listed below, have the same voting rights attached to their shares of common stock. See "Description of Securities-Common Stock," Following the closing of this offering, neither our principal shareholders nor our directors and executive officers have different or special voting rights with respect to their shares of common stock. Unless otherwise noted below, each director s, officer s and shareholder s address is care of High Roller Technologies, Inc., 400 South 4th Street, Suite 500-#390, Las Vegas, Nevada 89101. Number of Shares Beneficially Owned Prior to this Offering Percentage Owned Before this Offering Percentage Owned After this Offering Holders of more than 5% of our voting securities: Cascadia Holdings Limited (1) 2,588,395 36.89 % 31.16 % OEH Invest AB (2) 1,960,631 27.94 % 23.72 % Spike Up Media A.B. (3) 771,560 10.94 % 9.33 % Legendman Investments Limited (4) 503,731 7.18 % 6.09 % Directors and Executive Officers who are not 5% holders: Michael Cribari (1) (3) (10 (1) (3) (10) (1) (3) (10) Brandon Eachus (1) (3) (10) (1) (3) (10) (1) (3) (10) Ben Clemes (5) 55,103 * * Matt Teinert (6) 20,000 * * Kristin Britt (7) 16,318 * * Daniel Bradtke(8) 126,805 1.80 % 1.53 Jonas Martensson (9) 10,000 * * All directors and executive officers as a group (7 persons) (10) 3,588,181 51.14 % 43.41 % * Less than 1% (1) Cascadia is owned by Michael Cribari and Brandon Eachus who are directors of the Company, and by Jeffrey Smith, who may be deemed to have joint voting and joint dispositive power over the shares held by Cascadia. (2) Oskar Hornell, an individual residing in Sweden, is the sole beneficial owner of OEH Invest AB and has ultimate voting and dispositive control over the shares of common stock held by OEH Invest AB. OEH sold 454,903 shares of common stock to Cascadia effective June 2022 and received a pledge of those securities as security for the balance owing on that purchase. (3) Includes 731,388 shares of common stock, after giving effect to 100,579 shares received as part of the Happy Hour Distributions (defined in note 4 below) and 39,172 shares of common stock issuable upon exercise of warrants. See "Certain Relationships and Related Party Transactions." Spike Up Media A.B. is a subsidiary of Ellmount Interactive A.B. which is owned by Cascadia and OEH. Michael Cribari, Brandon Eachus, and Jeffrey Smith as owners of Cascadia and Oskar Hornell as owner of OEH, may be deemed to have joint voting and joint dispositive power over the shares of common stock of the Company held by Spike Up Media. (4) Robin Reed, a former director of the Company, is the sole beneficial owner of Legendman Investments Limited ("Legendman") and has sole voting and dispositive power over the shares held by Legendman. In August 2024 Happy Hour Entertainment Holdings Ltd distributed to its equity holders, including Legendman, all shares of the Company owned by Happy Hour (the "Happy Hour Distributions"). Legendman s shares listed in this table were received as part of the Happy Hour Distributions. (5) Includes 24,697 shares received as part of the Happy Hour Distributions and 30,406 RSUs that vested as of April 5, 2024. See "Executive Compensation-Employment Agreements". (6) Includes an option to purchase 12,500 shares of common stock of the Company and 4,167 RSUs that are currently vested and exercisable; and an option to purchase 2,500 shares of common stock of the Company and 833 RSU's vesting within 60 days of the date of this prospectus.. (7) Includes an option to purchase 16,318 shares of common stock of the Company. (8) Includes 116,805 shares received as part of the Happy Hour Distributions and an option to purchase 10,000 shares of common stock of the Company. (9) Includes an option to purchase 10,000 shares of common stock of the Company. (10) Number of shares includes joint beneficial ownership by Michael Cribari and Brandon Eachus, directors of the Company, of shares of common stock of the Company held by Cascadia and indirect joint beneficial ownership of shares of common stock of the Company held by Spike Up Media. See footnotes (1) and (3) above. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS The following is a description of transactions or series of transactions since January 1, 2022 or any currently proposed transaction, to which we were or are to be a participant and in which the amount involved in the transaction or series of transactions exceeds $120,000, and in which any of our directors, executive officers or persons whom we know hold more than five percent of any class of our capital stock, including their immediate family members, had or will have a direct or indirect material interest, other than compensation arrangements with our directors and executive officers. As of October 21, 2021 Happy Hour Solutions Ltd., a company registered in Cyprus, the holder of an Estonian gaming license and a subsidiary of Happy Hour Entertainment Ltd., one of our principal shareholders, entered into a Services Agreement with HR Entertainment Ltd., a company registered in the British Virgin Islands, whereby Happy Hour Solutions would provide gaming and technical and solutions, as well as hosting and cloud services, customer services, management information systems and other operational services for HR Entertainment. Pending receipt of an Estonian gaming license for which we intend to apply following the closing of this Offering, we entered into several agreements with Happy Hour Solutions Ltd., including: a Domain License Agreement, dated January 1, 2022 (which we refer to as the "Effective Date"), that gives Happy Hour Solutions the right to use our domain; a Nominee Agreement, dated as of the Effective Date, which allows Happy Hour Solutions to, among other business solutions, process payments made on the aforementioned domain and allows us to host, manage, administer, operate and support, and enter into contracts in the ordinary course of business in the name of Happy Hour Solutions; and in March 2024 an Online Gaming Operations Agreement, by which as further described therein we continue to supply Happy Hour Solutions, with services that commenced as of the Effective Date, related to the operation of an online casino primarily through our existing personnel, technical solutions, and commercial relationships while utilizing the Happy Hour Solutions Estonian gaming license and to recognize the revenues generated thereof as agreed upon by the parties. The Happy Hour Solutions Agreements as described above are qualified in their entirety by reference the agreements filed as exhibits to the registration statement of which this prospectus is a part. We were formed as a Delaware corporation in December 2021 and issued 4,549,026 shares of our common stock to Ellmount Interactive AB, a corporation organized in Sweden ("Ellmount Interactive"). Ellmount Interactive assigned to us, for a nominal consideration, 100% of the shares of its wholly owned subsidiary, Ellmount Entertainment Ltd, a corporation registered in Malta, which owned and operated our legacy iGaming operations under the Casino Room domain name. Ellmount Interactive effective December 30, 2021 assigned these 4,549,026 shares to its shareholders, OEH Invest A.B, a corporation organized in Sweden, and Cascadia Holdings Ltd., a corporation registered in Malta. OEH Invest is beneficially owned by Oskar Hornell and Cascadia Holdings is beneficially owned by our founders, Brandon Eachus, Michael Cribari and Jeffrey Smith. See "Principal Shareholders." In 2021 Spike Up Media AB, a Swedish corporation wholly owned by Ellmount Interactive, our former parent, entered into a domain license agreement by which Spike Up Media was the licensor and HR Entertainment, Ltd, a BVI corporation, was licensee of the domain name "HighRoller.com." HR Entertainment agreed to purchase the domain name for 3,000,000 ($3,178,200), which shall be paid in arrears each calendar quarter in an amount equaling 2% of the licensee s net revenue. Licensee may pay the balance owing on the purchase price in cash at any time. Quarterly payments commenced as of April 1, 2022 with respect to revenue generated in the calendar quarter ended March 31, 2022. As of December 31, 2023 and 2022, the total amount due to Spike Up includes $2,068,455 and $3,041,547, respectively, related to the HighRoller.com domain name purchase. For the six months ended June 30, 2024 and 2023, recognized direct operating costs of $1,367,068 and $1,476,307 respectively, related to the services performed for Interactive and Spike Up for the Company, which was included in direct operating costs (related party) in the unaudited condensed consolidated statements of operations. For the years ended December 31, 2023 and 2022, we recognized direct operating costs of $1,098,059 and $1,031,122, respectively, related to the services performed by Interactive and Spike Up for the Company, which was included in direct operating costs (related party) in the condensed consolidated statements of operations. For the six months ended June 30, 2024 and 2023, we recognized $272,366 and $275,246, respectively, for marketing and other operating costs performed by Spike Up on behalf of the Company, which was included in advertising and promotions (related party) in the unaudited condensed consolidated statements of operations. For the years ended December 31, 2023 and 2022, we recognized $1,648,866 and $2,265,248, respectively, for marketing and other operating costs performed by Spike Up on behalf of us, which was included in advertising and promotions (related party) in the consolidated statements of operations. For the six months ended June 30, 2023, we recognized $7,030, for services performed by Interactive for us which was included in general and administrative (related party) expenses in the unaudited condensed consolidated statements of operations. There were no such costs incurred during the six months ended June 30, 2024. For the years ended December 31, 2023 and 2022, we recognized $10,687 and $1,529,132, respectively, for services performed by Interactive for us which was included in general and administrative expenses (related party) in the consolidated statements of operations. By Securities Acquisition Agreement dated February 25, 2022 we acquired 3,500 shares of capital stock constituting 35% of the outstanding shares of HR Entertainment from Happy Hour in exchange for (i) 505,447 shares of our common stock and (ii) a further earnout consideration of 505,447 shares of our common stock provided that and subject to our online gaming brands and casino operations shall have achieved the equivalent of 1.5 million ($1.62 million) net gaming revenue with profitability generated for at least three consecutive months prior to the one year anniversary of the closing date that was to occur no later than five business days after the date of the agreement. The agreement defined "net gaming revenue" to mean customer derived revenue from all online sites after customer wins, bonuses, promotions as determined by U.S. GAAP. The Company has determined that the terms of the earnout requirements have been met as of September 30, 2022. By further agreement of the parties Happy Hour and the Company have adjusted the earnout consideration retroactively to 758,172 shares of common stock to reflect the original intent of the parties to provide Happy Hour with a 20% interest in High Roller upon achievement of the earnout terms. Spike Up Media LLC is a wholly owned subsidiary of Spike Up Media AB, which is a wholly owned subsidiary of Ellmount Interactive AB. Cascadia Holdings LTD and OEH Invest AB own 66.9% and 33.1% of Ellmount Interactive AB respectively. Jeffrey Smith, Brandon Eachus and Michael Cribari own 30.43%, 30.43% and 39.14% of Cascadia Holdings LTD respectively. OEH Invest AB is a wholly owned subsidiary of OEH Forvaltning AB whose sole equity holder is Oskar Hornell. WKND is a wholly owned subsidiary of Happy Hour Entertainment Holdings Ltd. Daniel Bradtke, one of our directors, is a chief financial officer and a shareholder of Happy Hour Entertainment Holdings. Spike-Up Media owns less than 10% of Happy Hour Entertainment Holdings. Please see the Group Ownership Structure chart on page 5 for additional information. In or about early March 2022 Spike Up Media transferred 6,500 shares of HR Entertainment to Ellmount Interactive which later that month assigned and transferred to us, for a nominal consideration of $6,500, all its right title and interest in 6,500 shares of capital stock constituting 65% of the of the outstanding shares of HR Entertainment. As a result of our acquiring these shares from Ellmount Interactive and Happy Hour we own 100% of HR Entertainment. Prior to completion of the March 2022 transfer of shares, during January and February 2022, Spike Up Media paid approximately 600,000 ($635,640), to HR Entertainment Ltd. as an investment. Effective June 30, 2022, we granted Spike Up Media warrants to purchase 39,172 shares of common stock at a strike price of $2.37 per share. Spike Up Media may exercise these warrants at any time through 5:00 p.m. Pacific time on June 30, 2027. In June 2023 we entered into a debt conversion agreement with Ellmount Interactive A.B. and Spike Up Media A.B. pursuant to which we issued 631,809 shares of common stock, at $7.91 per share, to Spike Up in exchange for $5,000,000 that we owed to Spike Up through June 30, 2023 for services provided to our subsidiary, HR Entertainment Ltd. Following this issuance, we owed Spike Up a balance of approximately $421,000 that was paid in the ordinary course of business. In June 2024, the Company entered into interest free short-term unsecured loans with existing shareholders for $500,000 provided that if these unsecured loans are not paid on or before maturity they shall accrue interest at the rate of 10% per year from their respective issuance dates until paid. The bulk of the loans are due and payable on or before December 31, 2024. The loans are expected to be repaid substantially from operations. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions with affiliated parties described above were on terms which were no less favorable than those we could have obtained from parties not related to us. Prior to the consummation of this offering, our board of directors will adopt a written related person transaction policy, to be effective upon the consummation of this offering, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy will cover, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including without limitation purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including but not limited to whether the transaction is on terms comparable to those that could be obtained in an arm s length transaction with an unrelated third party and the extent of the related person s interest in the transaction. All of the transactions described in this section occurred prior to the adoption of this policy. DESCRIPTION OF SECURITIES The following descriptions are summaries of the material terms of our securities and are not complete. You should also refer to the High Roller Technologies, Inc. Certificate of Incorporation and bylaws, which are included as exhibits to the registration statement of which this prospectus forms a part, and the applicable provisions of the Delaware General Corporate Law. Authorized Capital Stock Our amended and restated Certificate of Incorporation, as amended, authorizes us to issue up to 60,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share, all of which shares of preferred will be undesignated. As of September 16, 2024, 7,015,017 shares of our common stock, after giving effect to the Reverse Split, were deemed issued and outstanding. No shares of preferred stock are issued and outstanding. Common Stock Shares of our common stock have the following rights, preferences and privileges: Voting Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Any action at a meeting at which a quorum is present will be decided by a majority of the voting power present in person or represented by proxy, except in the case of any election of directors, which will be decided by a plurality of votes cast. Shareholders do not have cumulative voting rights. Dividends Holders of our common stock are entitled to receive dividends when, as and if declared by our board of directors out of funds legally available for payment, subject to the rights of holders, if any, of any class of stock having preference over the common stock. Any decision to pay dividends on our common stock will be at the discretion of our board of directors. Our board of directors may or may not determine to declare dividends in the future. See "Dividend Policy." The board s determination to issue dividends will depend upon our profitability and financial condition any contractual restrictions, restrictions imposed by applicable law and the SEC, and other factors that our board of directors deems relevant. Liquidation Rights In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of our common stock will be entitled to share ratably on the basis of the number of shares held in any of the assets available for distribution after we have paid in full, or provided for payment of, all of our debts and after the holders of all outstanding series of any class of stock have preference over the common stock, if any, have received their liquidation preferences in full. Other Our issued and outstanding shares of common stock are fully paid and nonassessable. Holders of shares of our common stock are not entitled to preemptive rights. Shares of our common stock are not convertible into shares of any other class of capital stock, nor are they subject to any redemption or sinking fund provisions. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock. Preferred Stock We are authorized to issue up to 10,000,000 shares of preferred stock. Our Certificate of Incorporation authorizes the board to issue these shares without stockholder approval in one or more series, to determine the designations and the rights, powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series, any or all of which may be greater than the rights of common stock. The issuance of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon our liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of our company or other corporate action. Immediately after consummation of this offering, no shares of preferred stock will be outstanding, and we have no present plan to issue any shares of preferred stock. Anti-Takeover Effects of Delaware and of Our Certificate of Incorporation and Bylaws Section 203 of the Delaware General Corporation Law Upon completion of this offering, we will be subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions: before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholder, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. Section 203 defines a business combination to include: any merger or consolidation involving the corporation and the interested stockholder; any sale, transfer, lease, pledge exchange, mortgage or other disposition involving the interested stockholder of 10% or more of the assets of the corporation; subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation. In general, Section 203 defines an "interested stockholder" as an entity or person who, together with the person s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation. Certificate of Incorporation and Bylaws Our Certificate of Incorporation and Bylaws provide for: No Cumulative Voting Under Delaware law, the right to vote cumulatively does not exist unless the certificate of incorporation specifically authorizes cumulative voting. Our Certificate of Incorporation will not authorize cumulative voting. Therefore, stockholders holding a majority in voting power of the shares of our stock entitled to vote generally in the election of directors will be able to elect all our directors. Undesignated Preferred Stock The ability to authorize and issue undesignated preferred stock may enable our board of directors to render more difficult or discourage an attempt to change control of us by means of a merger, tender offer, proxy contest or otherwise. Choice of Forum Our Certificate of Incorporation, as amended, provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of fiduciary duty owed by any of our current or former directors, officers, or other employees to us or to our stockholders; (iii) any action asserting a claim arising pursuant to the Delaware General Corporation Law (the "DGCL"), the Certificate of Incorporation or our Bylaws or as to which the DGCL confers exclusive jurisdiction on the Court of Chancery of the State of Delaware; (iv) any action to interpret, apply, enforce or determine the validity of the Certificate of Incorporation; or (v) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware, provided that the exclusive forum provisions will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our Certificate of Incorporation further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts are the sole and exclusive forum for the resolution of any complaint asserting a right under the Securities Act. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. The forum selection clause in our Certificate of Incorporation may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the forum selection clause in our Certificate of Incorporation may limit our stockholders ability to bring a claim in a forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders. The Court of Chancery of the State of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. Alternatively, if a court were to find the choice of forum provisions contained in our Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition. Any person purchasing or otherwise acquiring any interest in any shares of our common stock shall be deemed to have notice of and have consented to these exclusive forum provisions of our Certificate of Incorporation. Potential Effects of Authorized but Unissued Stock We have shares of common stock and preferred stock available for future issuance without stockholder approval. We may utilize these additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate corporate acquisitions or payment as a dividend on the capital stock. The existence of unissued and unreserved common stock and preferred stock may enable our board of directors to issue shares to persons friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management. In addition, the board of directors has the discretion to determine designations, rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock, all to the fullest extent permissible under the Delaware General Corporation Law and subject to any limitations set forth in our Certificate of Incorporation. The purpose of authorizing the board of directors to issue preferred stock and to determine the rights and preferences applicable to such preferred stock is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible financings, acquisitions and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage a third-party from acquiring, a majority of our outstanding voting stock. Transfer Agent and Registrar The transfer agent and registrar for our common stock upon the closing of this offering will be VStock Transfer LLC. The transfer agent and registrar s address is 18 Lafayette Place, Woodmere, New York 11598. NYSE American Listing We have applied to list our common shares on NYSE American under the proposed trading symbol "ROLR". SHARES ELIGIBLE FOR FUTURE SALE Prior to this offering, there was no public market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of substantial amounts of our common stock in the public market, including shares issued upon exercise of outstanding options, or the anticipation of these sales, could materially and adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of equity or equity-related securities. Upon the consummation of this offering, we will have 8,262,808 shares of common stock outstanding, assuming no exercise of the underwriters over-allotment option to purchase additional shares. Of the outstanding shares, the shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except any shares purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act, may be sold only in compliance with the limitations described below. The remaining outstanding common shares will be deemed restricted securities, as defined under Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144 or 701 under the Securities Act, which we summarize below. Approximately of these shares will be subject to lock-up agreements described below. Lock-Up Agreements Pursuant to certain "lock-up" agreements, we, our executive officers and directors and our stockholders, have agreed not to, without the prior written consent of the representative, offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of or announce the intention to otherwise dispose of, or enter into any swap, hedge or similar agreement or arrangement that transfers, in whole or in part, the economic risk of ownership of, directly or indirectly, engage in any short selling of any common stock or securities convertible into or exchangeable or exercisable for any common stock, whether currently owned or subsequently acquired, for a period of twelve months from the date of effectiveness of this offering in the case of our executive officers, directors and principal shareholders, and for a period of six months from the date of effectiveness of this offering for holders of our common stock and securities exercisable for or convertible into our common stock. See "Underwriting — Lock-Up Agreements" Rule 144 In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, an eligible stockholder is entitled to sell such shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. To be an eligible stockholder under Rule 144, such stockholder must not be deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and must have beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then such person is entitled to sell such shares without complying with any of the requirements of Rule 144, subject to the expiration of the lock-up agreements described above. Approximately shares of our common stock that are not subject to the lock-up agreements described below will be eligible for sale under Rule 144 immediately upon the consummation of this offering. In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell shares on expiration of the lock-up agreements described above. Beginning 90 days after the date of this prospectus, our affiliates who have beneficially owned our common shares for at least six months, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell within any three-month period a number of shares that does not exceed the greater of: 1% of the number of our common shares then outstanding, which will equal approximately shares immediately after this offering; and the average weekly trading volume in our common shares on NYSE American during the four calendar weeks preceding the date of filing of a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the sale. Sales under Rule 144 by our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us. Notwithstanding the availability of Rule 144, the holders of substantially all of our restricted securities have entered into lock-up agreements as referenced above and their restricted securities will become eligible for sale (subject to the above limitations under Rule 144) upon the expiration of the restrictions set forth in those agreements. Rule 701 In general, under Rule 701, any of an issuer s employees, directors, officers, consultants or advisors who purchases shares from an issuer in connection with a compensatory stock or option plan or other written agreement before the effective date of a registration statement under the Securities Act is entitled to sell such shares 90 days after such effective date in reliance on Rule 144. An affiliate of the issuer can resell shares in reliance on Rule 144 without having to comply with the holding period requirement, and non-affiliates of the issuer can resell shares in reliance on Rule 144 without having to comply with the current public information and holding period requirements. The Securities and Exchange Commission has indicated that Rule 701 will apply to typical stock options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after an issuer becomes subject to the reporting requirements of the Exchange Act. Registration Statements on Form S-8 Promptly following the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of our common shares issued or reserved for future issuance under our equity incentive plans. Shares registered under the registration statement will generally be available for sale in the open market after the 180-day lock-up period immediately following the date of this prospectus. UNDERWRITING ThinkEquity LLC is acting as the representative of the underwriters of the offering. We have entered into an underwriting agreement dated , 2024 with the representative. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to each underwriter named below, and each underwriter named below has severally agreed to purchase, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number of shares of common stock at the initial public offering price, less the underwriting discounts and commissions, as set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table: Underwriter Number of Shares ThinkEquity LLC Total The underwriters are committed to purchase all shares of common stock offered by the Company, other than those covered by the over-allotment option. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, the underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the shares offered by us in this prospectus are subject to various representations and warranties and other customary conditions specified in the underwriting agreement, such as receipt by the underwriters of officers certificates and legal opinions. We have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect thereof. The underwriters are offering the shares of common stock subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. We have granted a 45-day option to the underwriters to purchase up to 187,500 additional shares of common stock from us (15% of the shares sold in this offering) solely to cover over-allotments, if any, at the public offering price less underwriting discounts and commissions. If the underwriters exercise this option in whole or in part, then the underwriters will be severally committed, subject to the conditions described in the underwriting agreement, to purchase the additional shares of common stock in proportion to their respective commitments set forth in the prior table. Discounts, Commissions and Reimbursement The representative has advised us that the underwriters propose to offer the shares of common stock to the public at the initial public offering price per share set forth on the cover page of this prospectus. The underwriters may offer shares to securities dealers at that price less a concession of not more than $ per share of which up to $ per share may be reallowed to other dealers. After the initial offering to the public, the public offering price and other selling terms may be changed by the representative. The following table summarizes the underwriting discounts and commissions and proceeds, before expenses, to us assuming both no exercise and full exercise by the underwriters of their over-allotment option: Total Per Share Without Over- allotment Option With Over- allotment Option Public offering price Underwriting discounts and commissions (7%) Non-accountable expense allowance (1%) Proceeds, before expenses, to us We have paid a $50,000 advance to the Representative, which will be applied against the Representative s actual out-of-pocket accountable expenses (in compliance with FINRA Rule 5110(f)(2)(C)) that are payable by us in connection with this offering. We have agreed to reimburse the Representative for the fees and expenses of its legal counsel in connection with the offering in an amount not to exceed $125,000, the fees and expenses related to the use of book building, prospectus tracking and compliance software for the offering in the amount of $29,500, up to $15,000 for background checks of our officers and directors, up to $10,000 for actual accountable data services and communications expenses, up to $10,000 for actual accountable "road show" expenses, up to $30,000 for actual accountable market making and trading, and clearing firm settlement expenses for the Offering and up to $3,000 of the costs associated with preparing bound volumes of the public offering materials and any commemorative mementos or lucite tombstones for the offering. We estimate the expenses of this offering payable by us, not including underwriting discounts and commissions, will be approximately $1,080,000. Representative Warrants Upon the closing of this offering, we have agreed to issue to the representative warrants, or the Representative s Warrants, to purchase a number of shares of common stock equal to 5% of the total number of shares sold in this public offering. The Representative s Warrants will be exercisable at a per share exercise price equal to 125% of the public offering price per share of common stock sold in this offering. The Representative s Warrants are exercisable at any time and from time to time, in whole or in part, during the four and one-half year period commencing six months from the effective date of the registration statement related to this offering. The Representative s Warrants also provide for one demand registration right of the shares underlying the Representative s Warrants, and unlimited "piggyback" registration rights with respect to the registration of the shares of common stock underlying the Representative s Warrants and customary antidilution provisions. The demand registration right provided will not be greater than five years from the effective date of the registration statement related to this offering in compliance with FINRA Rule 5110(g)(8)(C). The piggyback registration right provided will not be greater than seven years from the effective date of the registration statement related to this offering in compliance with FINRA Rule 5110(g)(8)(D). The Representative s Warrants and the shares of common stock underlying the Representative s Warrants have been deemed compensation by the Financial Industry Regulatory Authority, or FINRA, and are therefore subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA. The representative, or permitted assignees under such rule, may not sell, transfer, assign, pledge, or hypothecate the Representative s Warrants or the securities underlying the Representative s Warrants, nor will the representative engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the Representative s Warrants or the underlying shares for a period of 180 days from the effective date of the registration statement. Additionally, the Representative s Warrants may not be sold transferred, assigned, pledged or hypothecated for a 180-day period following the effective date of the registration statement except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. The Representative s Warrants will provide for adjustment in the number and price of the Representative s Warrants and the shares of common stock underlying such Representative s Warrants in the event of recapitalization, merger, stock split, stock dividend or consolidation. Discretionary Accounts The underwriters do not intend to confirm sales of the securities offered hereby to any accounts over which they have discretionary authority. Right of First Refusal Until , 2025, eighteen (18) months from the effective date of the registration statement of which this prospectus is a part, the representative shall have an irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the representative sole discretion, for each and every future public and private equity and debt offerings for the Company, or any successor to or any subsidiary of the Company, including all equity linked financings, on terms customary to the representative. The representative shall have the sole right to determine whether or not any other broker-dealer shall have the right to participate in any such offering and the economic terms of any such participation. The representative will not have more than one opportunity to waive or terminate the right of first refusal in consideration of any payment or fee. Lock-Up Agreements Pursuant to certain "lock-up" agreements, we and our executive officers, directors and the holders of all of the outstanding shares prior to the offering, have agreed, subject to limited exceptions, without the prior written consent of the Representative, not to directly or indirectly, offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, our common stock or any securities convertible into or exercisable or exchangeable for our common stock (the "Lock-Up Securities"), enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any Lock-Up Securities, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities, subject to customary exceptions, or publicly disclose the intention to do any of the foregoing, for a period of 12 months from the date of this prospectus in the case of our directors, officers and principal shareholders, and six months, in the case of us or any other holder of outstanding shares. Electronic Offer, Sale and Distribution of Securities A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling group members. The representative may agree to allocate a number of securities to underwriters and selling group members for sale to its online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us, and should not be relied upon by investors. Price Stabilization, Short Positions and Penalty Bids The underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our securities. In connection with the offering, the underwriters may purchase and sell our securities in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares of securities than they are required to purchase in the offering. "Covered" short sales are sales made in an amount not greater than the underwriters option to purchase additional shares of securities in the offering. The underwriters may close out any covered short position by either exercising the over-allotment option to purchase shares or purchasing shares in the open market. In determining the source of shares of securities to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option to purchase shares. "Naked" short sales are sales in excess of the over-allotment option to purchase shares. The underwriters must close out any naked short position by purchasing securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our securities in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of securities made by the underwriters in the open market before the completion of the offering. Similar to other purchase transactions, the underwriters purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our securities or preventing or retarding a decline in the market price of our securities. As a result, the price of our securities may be higher than the price that might otherwise exist in the open market. The underwriters make no representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our securities. In addition, neither we nor the underwriters make any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice. Other Relationships Certain of the underwriters and their affiliates may in the future provide various advisory, investment banking, commercial banking and other financial services for us and our affiliates for which they may in the future receive customary fees and commissions. Pricing of the Offering Prior to this offering, there was no established public market for our common stock. The initial public offering price will be determined by negotiations among us and the representative of the underwriters. In addition to prevailing market conditions, among the factors to be considered in determining the initial public offering price of our common stock will be: our historical performance; estimates of our business potential and our earnings prospects; an assessment of our management; and the consideration of the above factors in relation to market valuation of companies in related businesses. The estimated initial public offering price range set forth on the cover page of this prospectus is subject to change as a result of market conditions and other factors. Neither we nor the underwriters can assure investors that an active trading market for the shares will develop or that, after the offering, the shares will trade in the public market at or above the public offering price. Offer restrictions outside the United States Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful. Australia This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus. China The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People s Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to "qualified domestic institutional investors." European Economic Area—Belgium, Germany, Luxembourg and Netherlands The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Directive"), as implemented in Member States of the European Economic Area (each, a "Relevant Member State"), from the requirement to produce a prospectus for offers of securities. An offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State: to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than 43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than 50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements); to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of the Company or any underwriter for any such offer; or in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. France This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code Mon taire et Financier) and Articles 211-1 et seq. of the General Regulation of the French Autorit des march s financiers ("AMF"). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France. Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifi s) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2 and D.411-1 to D.411-3, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2 and D.411-4, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation. Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code. Ireland The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the "Prospectus Regulations"). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors. Israel The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or ISA, nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations. Italy The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Societa e la Borsa, "CONSOB" pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 ("Decree No. 58"), other than: to Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 ("Regulation no. 11971") as amended ("Qualified Investors"); and in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended. Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be: made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors. Japan The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the "FIEL") pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect. Portugal This document is not being distributed in the context of a public offer of financial securities (oferta p blica de valores mobili rios) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (C digo dos Valores Mobili rios). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comiss o do Mercado de Valores Mobili rios) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are "qualified investors" (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person. Sweden This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are "qualified investors" (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person. Switzerland The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland. Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA). This document is personal to the recipient only and not for general circulation in Switzerland. United Arab Emirates Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the securities, including the receipt of applications and/or the allotment or redemption of such shares, may be rendered within the United Arab Emirates by the Company. No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre. United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA") has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company. In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Canada The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser s province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI33-105 regarding underwriter conflicts of interest in connection with this offering. LEGAL MATTERS The validity of the common stock offered by this prospectus will be passed upon for us by Law Offices of Aaron A. Grunfeld & Associates, Beverly Hills, California. Loeb & Loeb LLP, New York, New York is acting as counsel to the underwriters. EXPERTS The consolidated financial statements of High Roller Technologies, Inc. and Subsidiaries as of December 31, 2023 and 2022 and for the years then ended, have been audited by WithumSmith+Brown, PC, independent registered public accounting firm, as stated in their report, which includes an explanatory paragraph as to the Company s ability to continue as a going concern, appearing herein. Such consolidated financial statements have been included herein in reliance on the report of such firm given upon their authority as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information about us and the common stock offered hereby, we refer you to the registration statement and the exhibits and schedules filed thereto. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. Upon completion of this offering, we will be required to file periodic reports, proxy statements, and other information with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. Securities and Exchange Commission also maintains an Internet website that contains reports, proxy statements and other information about registrants, like us, that file electronically with the Securities and Exchange Commission. The address of that site is www.sec.gov. As a result of this offering, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection at the website of the SEC referred to above. We also intend to launch a corporate website at or prior to the closing of this offering where, upon closing of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information on or that can be accessed through our corporate website is not a part of this prospectus and the inclusion of our corporate website in this prospectus is an inactive textual reference only. 1,250,000 Shares of Common Stock High Roller Technologies, Inc. PRELIMINARY PROSPECTUS ThinkEquity , 2024 Through and including , 2024 (the 25th day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. Other Expenses of Issuance and Distribution. The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the offer and sale of the common stock being registered. The SEC registration fee, Financial Industry Regulatory Authority, Inc ("FINRA") filing fee and NYSE American listing fee are based on actual fees. All other amounts shown are current fee estimates. Amount SEC registration fee $1,803 FINRA filing fee 3,249 NYSE American listing fee 75,000 Accounting fees and expenses 240,000 Legal fees and expenses 690,000 Transfer agent fees and expenses 5,000 Printing and mailing expenses 20,000 Miscellaneous fees and expenses 44,948 Total expenses $1,080,000 ITEM 14. Indemnification of Directors and Officers. Section 102 of the DGCL permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our Certificate of Incorporation provides that no director of the Company shall be personally liable to it or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty. Section 145 of the DGCL provides in general that a Delaware corporation indemnify a director, officer, employee, or agent of the corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. The Company s Certificate of Incorporation eliminates the personal liability of directors to the fullest extent permitted by the Delaware General Corporation Law and, together with the Company s bylaws, provides that the Company shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it may be amended or supplemented, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person, or a person for whom such person is the legal representative, is or was a director or officer of the Company or, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys fees) reasonably incurred by such person. II-1 Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to 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. We have entered into separate indemnification agreements with each of our directors and executive officers. Each indemnification agreement provides, among other things, for indemnification to the fullest extent permitted by law and our Certificate of Incorporation and Bylaws against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements provide for the advancement or payment of all expenses to the indemnitee and for the reimbursement to us if it is found that such indemnitee is not entitled to such indemnification. In addition, we also intend to obtain and maintain customary directors and officers liability insurance upon consummation of this offering. In any underwriting agreement we enter into in connection with the sale of common stock being registered hereby, the underwriters will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning of the Securities Act against certain liabilities. ITEM 15. Recent Sales of Unregistered Securities. The Company has sold the following securities within the past three years which were not registered under the Securities Act of 1933, as amended. All of the sales were made pursuant to an exemption from registration afforded by Section 4(a)(2) of the Securities Act. December 2021 On December 30, 2021, the Company issued 4,549,026 shares to Ellmount Interactive AB ("Interactive") in connection with the formation and organization of the Company and thereafter in a nonissuer transaction Interactive distributed those shares to its two principal stockholders as follows: 2,133,494 shares of common stock to Cascadia Holdings Ltd., a company organized under the laws of Malta, and 2,415,532 shares of common stock to OEH Invest AB, a company organized under the laws of Sweden. January 2022 On January 14, 2022, the Company entered into an agreement to sell 505,449 shares of common stock (the "Shares") at $0.79 per share to three purchasers for an aggregate purchase price of $400,000, which was subsequently completed in April 2022. The Company granted the purchasers an option to require the Company to re-purchase all the Shares for $0.79 per share or an aggregate price of $400,000 exercisable only in the event the Company does not file a registration statement on Form S-1 for an initial public offering of its securities or does not list or cause the listing of its equity securities for trading on an exchange or other public market (a "Going Public Transaction") by March 31, 2023 (the "Termination Date"). The purchasers granted the Company an option to re-purchase all of the Shares for $0.79 per share or an aggregate of $400,000, exercisable only in the event the Company fails to effect a Going Public Transaction before the Termination Date. February 2022 By Securities Acquisition Agreement dated February 25, 2022 (the "Acquisition Agreement") we acquired 35% of HR Entertainment from Happy Hour in exchange for (i) 505,447 shares of our common stock and (ii) a further earnout consideration of 505,447 shares of our common stock (the "Earnout Shares") provided that and subject to our online gaming brands and casino operations shall have achieved the equivalent of 1.5 million euro/$1.53 million net gaming revenue with profitability generated for at least three consecutive months prior to the one year anniversary of the closing date. The Company has determined that the earnout requirements under the terms of the Acquisition Agreement have been met as of September 30, 2022, and that 505,447 earnout shares were issued to Happy Hour as of that date. By further agreement of the parties Happy Hour and the Company have adjusted the earnout consideration retroactively to 758,172 shares of common stock to reflect the original intent of the parties to provide Happy Hour with a 20% interest in High Roller upon achievement of the earnout terms. Options In September 2022, the Company granted options, subject to board approval, to purchase a total of 111,198 shares of common stock at the initial public offering price per share. In January 2024, the Company granted options to purchase 180,000 shares of common stock to certain members of management and board of directors with an exercise price of $6.33. Restricted Stock Units In March 2023, the Company amended the September 2022 option agreement to issue 111,198 restricted stock units ("RSUs") in lieu of the 111,198 stock options. Half of the RSUs vest over three years and half of the RSUs vest upon the completion of certain performance milestones. The Company issued 121,623 RSUs vesting as follows (i) 15,203 on January 1, 2024, (ii) 15,203 on February 12, 2024, (iii) 10,135 in equal annual installments on each of January 1, 2025, 2026, 2027, respectively, (iv) 30,406 vest upon the Company generating specified net gaming revenue targets for the year ending December 31, 2024, and (v) 30,406 vest upon the Company generating specified net gaming revenue targets for the year ending December 31, 2025. In January 2024, the Company granted 28,000 time-based RSUs to certain members of management, which vest one-third on May 1, 2024 and the remainder vest quarterly over the next two successive years. Warrants Effective June 30, 2022 the Company granted Spike Up Media LLC five year warrants to purchase 39,172 shares of common stock. The exercise price of the warrants is $2.37 per share. II-2 June 2023 In June 2023 the Company entered into a Debt Conversion agreement with Ellmount Interactive A.B. and Spike Up Media A.B. pursuant to which we issued 631,809 shares of common stock, valued at $7.91 per share, to Spike Up in exchange for $5,000,000 that we owed to Spike Up through June 30, 2023 for services provided to our subsidiary, HR Entertainment Ltd. None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. The Company believes the offers, sales and issuances of the above securities were exempt from registration under the Securities Act (or Regulation D promulgated thereunder) by virtue of Section 4(a)(2) of the Securities Act because the issuance of securities to the recipients did not involve a public offering. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. The sales of these securities were made without any general solicitation or advertising. ITEM 16. Exhibits and Financial Statement Schedules. (a) Exhibits. The following exhibits are being filed herewith: Exhibit Number Description 1.1# Form of Underwriting Agreement by and between Registrant and ThinkEquity LLC (including form of Lock Up Agreement) 3.1(i)# Amended and Restated Certificate of Incorporation 3.1(ii)# Certificate of Amendment to Amended and Restated Certificate of Incorporation 3.2# Bylaws of the Registrant 4.1# Form of Common Stock Certificate of the Registrant 4.2# Form of Warrant issued to ThinkEquity LLC (included within Exhibit 1.1) 5.1# Opinion of Law Offices of Aaron A. Grunfeld & Associates 10.1# Form of High Roller Technologies, Inc. 2024 Equity Incentive Plan 10.2# Form of Indemnification Agreement for Officers and Directors 10.3# Services Agreement Between Happy Hour and HR Entertainment Ltd 10.4 RESERVED 10.5# Domain Name License Agreement Between Spike Up Media AB and HR Entertainment Ltd 10.6# Independent Contractor Agreement between Ellmount Entertainment Ltd. and Kristen Britt 10.7+# Employment Agreement between Ellmount Entertainment Ltd. and Idan Levy 10.8+# Employment Agreement between Ellmount Entertainment Ltd. and Reuben Borg Caruana 10.9+# Employment Agreement between Ellmount Entertainment Ltd. and Andrew Micallef 10.10# Assignment of HR Entertainment Ltd. to the Registrant by Ellmount Interactive AB 10.11# Curacao Gaming Sublicense between HR Entertainment Ltd. and Gaming Services Provider N.V dated January 3, 2024 10.12# Estonia Gambling License issued to Happy Hour Solutions Limited dated November 8, 2021 10.13# iGaming Platform Agreement between HR Entertainment Ltd. and Pragmatic Solutions (IOM) Limited 10.14# Domain License Agreement between HR Entertainment Ltd. and Happy Hour Solutions Ltd. 10.15# Nominee Agreement between HR Entertainment Ltd. and Happy Hour Solutions Ltd. 10.16# Securities Acquisition Agreement between Registrant and Happy Hour Entertainment Holdings Ltd. 10.17# Services Agreement between HR Entertainment Ltd. and Ellmount Entertainment Ltd. 10.18# Support Services Agreement between HR Entertainment Ltd. and Ellmount Support SA 10.19# Stock Option Agreement between Registrant and Aaron A. Grunfeld 10.20+# Stock Option Agreement between Registrant and Idan Levy 10.21+# Stock Option Agreement between Registrant and Robert Weingarten 10.22# Warrant issued by Registrant to Spike Up Media LLC 10.23+# Employment Agreement between Ellmount Entertainment Ltd. and Isaac Sant 10.24+# Amendment No. 1 to Stock Option Agreement between Registrant and Idan Levy (RSUs) 10.25+# Offer Letter dated May 18, 2023 between Registrant and Matt Teinert 10.26# Debt Conversion Agreement dated June 30, 2023 between Registrant, Ellmount Interactive A.B. and Spike Up Media A.B 10.27+# Offer Letter dated December 5, 2023 between Registrant and Ben Clemes 10.28# Amendment to Securities Acquisition Agreement between Registrant and Happy Hour Entertainment Holdings Ltd. 10.29# Addendum to Domain License Agreement between HR Entertainment Ltd. and Happy Hour Solutions Ltd. 10.30# Online Gaming Operations Agreement between HR Entertainment Ltd. And Happy Hour Solutions Ltd. 10.31# Curacao Gaming Sub-License between Interstellar Entertainment N.V. and Gaming Services Provider N.V dated March 20, 2024 10.32# Curacao Gaming License issued to Interstellar Entertainment N.V, dated July 16, 2024 14.1# Code of Ethics 21.1# List of Subsidiaries of Registrant 23.1# Consent of Law Offices of Aaron A. Grunfeld & Associates (included as part of Exhibit 5.1) 23.2 Consent of WithumSmith+Brown, PC 24.1# Power of Attorney (included on signature page to the initial filing of this Registration Statement) 99.1# Form of Consent of David Weild to be named as a Director Nominee 107# Filing Fee Table # Previously filed * To be filed by amendment. + Indicates management contract or compensatory plan (b) Financial Statements. See page F-1 for an index to the financial statements and schedules included in the registration statement. II-3 ITEM 17. Undertakings. (a) 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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (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; 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. That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: (A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and (B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. II-4 5. That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (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. (b)The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (i) The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, State of Nevada, on October 7, 2024. HIGH ROLLER TECHNOLOGIES, INC. By: /s/ Ben Clemes Ben Clemes Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 8 to the registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Michael Cribari Chairman of the Board of Directors October 7, 2024 Michael Cribari /s/ Ben Clemes Chief Executive Officer October 7, 2024 Ben Clemes (Principal Executive Officer) /s/ Matt Teinert Chief Financial Officer October 7, 2024 Matt Teinert (Principal Financial and Accounting Officer) /s/ Brandon Eachus Director October 7, 2024 Brandon Eachus /s/ Daniel Bradtke Director October 7, 2024 Daniel Bradtke /s/ Kristen Britt Director October 7, 2024 Kristen Britt /s/ Jonas Martensson Director October 7, 2024 Jonas Martensson *By: /s/ Brandon Eachus Brandon Eachus Attorney-In-Fact TABLE OF CONTENTS Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2024/RR_richtech_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/RR_richtech_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2024/SER_serina_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/SER_serina_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ee94a6f6c35e0ec223652487ab509363ca236e01
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1 RISK FACTORS 5 USE OF PROCEEDS 50 DETERMINATION OF OFFERING PRICE 51 MARKET INFORMATION FOR COMMON STOCK AND DIVIDEND POLICY 52 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 53 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 63 BUSINESS 77 MANAGEMENT 134 EXECUTIVE COMPENSATION 141 RELATED PERSON TRANSACTIONS 149 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 156 LEGAL PROCEEDINGS 158 SELLING SECURITYHOLDERS 159 DESCRIPTION OF SECURITIES 160 PLAN OF DISTRIBUTION 165 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS 168 LEGAL MATTERS 173 EXPERTS 173 CHANGE IN AUDITOR 173 WHERE YOU CAN FIND MORE INFORMATION 174 INDEX TO FINANCIAL STATEMENTS F-1 You should rely only on the information provided in this prospectus, as well as the information incorporated by reference into this prospectus and any applicable prospectus supplement. Neither we nor the selling securityholders have authorized anyone to provide you with different information. Neither we nor the selling securityholders are making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus, any applicable prospectus supplement or any documents incorporated by reference is accurate as of any date other than the date of the applicable document. Since the date of this prospectus and the documents incorporated by reference into this prospectus, our business, financial condition, results of operations and prospects may have changed. i ABOUT THIS PROSPECTUS This prospectus is part of a registration statement on Form S-1 that we filed with the Securities and Exchange Commission (the SEC ) using the shelf registration process. Under this shelf registration process, the selling securityholders may, from time to time, sell the securities offered by them described in this prospectus. We will not receive any proceeds from the sale by such selling securityholders of the securities offered by them described in this prospectus. This prospectus also relates to the issuance by us of the shares of common stock issuable upon the exercise of any Warrants. We will receive proceeds from any exercise of the Warrants for cash. Neither we nor the selling securityholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the selling securityholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the selling securityholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus. You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statement together with the additional information to which we refer you in the sections of this prospectus entitled Where You Can Find More Information. Unless the context indicates otherwise, references in this prospectus to the Company, Serina, we, us, our and similar terms refer to Serina Therapeutics, Inc. (f/k/a AgeX Therapeutics, Inc.) and our consolidated subsidiaries. References to AgeX refer to our predecessor company prior to the consummation of the Merger. ii CERTAIN DEFINED TERMS Unless the context indicates otherwise, the following terms have the following meanings when used in this prospectus: Board or Board of Directors means our board of directors. Legacy Serina common stock means the shares of common stock, par value $0.01 per share, of Legacy Serina. Legacy Serina Stock Options means the options to purchase Legacy Serina common stock granted pursuant to the Legacy Serina 2017 Stock Option Plan. Legacy Serina Warrants means the warrants to purchase Legacy Serina common stock outstanding prior to the Merger. Legacy Serina 2017 Stock Option Plan means the Serina 2017 Stock Option Plan, previously administered by Legacy Serina. Rollover Options means the options to acquire common stock resulting from the automatic conversion at the Effective Time of each Legacy Serina Stock Option that was outstanding and unexercised as of immediately prior to the Effective Time into an option to acquire an adjusted number of shares of common stock at an adjusted exercise price per share, subject to the terms and conditions as were applicable to the corresponding Legacy Serina Stock Option immediately prior to the Effective Time, including applicable vesting conditions, except to the extent such terms or conditions are rendered inoperative by the Merger. Rollover Warrants means the warrants to acquire common stock resulting from the automatic conversion at the Effective Time of each Legacy Serina Warrant that was outstanding and unexercised as of immediately prior to the Effective Time into a warrant to acquire an adjusted number of shares of common stock at an adjusted exercise price per share, subject to the terms and conditions as were applicable to the corresponding Legacy Serina Warrant immediately prior to the Effective Time, except to the extent such terms or conditions are rendered inoperative by the Merger. selling securityholders means the persons listed in the table in the selling securityholders section of this prospectus, and the pledgees, donees, transferees, assignees, successors and others who later come to hold any of the selling securityholders interest in common stock or Warrants in accordance with the terms of the Registration Rights Agreement or the terms of certain lock-up agreements entered into by the selling securityholders, in each case other than through a public sale. Warrant Agreement means that certain Warrant Agreement, by and between AgeX and Equiniti Trust Company, LLC as warrant agent, dated as of March 19, 2024. iii CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus and any accompanying prospectus supplement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act ), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act ), that are forward-looking and as such are not historical facts. These forward-looking statements include, without limitation, statements regarding our or our management team s expectations, hopes, beliefs, intentions or strategies regarding the future, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, and are not guarantees of future performance. The words may, will, anticipate, believe, expect, continue, could, estimate, future, expect, intends, may, might, plan, possible, potential, aim, strive, predict, project, should, would and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about: the benefits of the Merger; our financial performance following the Merger; our strategies, prospects, plans, expectations and objectives of management for future operations and projected capital resources and financial position; statements concerning proposed products or product candidates; the benefits that may be derived from, or the commercial or market opportunity of, our product candidates; statements regarding future economic conditions or performance; and statements of belief and any statement of assumptions underlying any of the foregoing. For a discussion of the factors that may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied in such forward-looking statements, and for a discussion of risk associated with us, see Risk Factors beginning on page 5 of this prospectus. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in reports we filed with the SEC. See Where You Can Find More Information beginning on page 174 of this prospectus. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, our results could differ materially from the forward-looking statements. All forward-looking statements in this prospectus are current only as of the date on which the statements were made. We do not undertake any obligation (and expressly disclaim any such obligation) to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events, except as required by applicable law. In addition, statements that we believe and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus and any accompanying prospectus supplement, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that such party has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. iv PROSPECTUS SUMMARY The following summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes included in this prospectus and the information set forth under the headings Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations. The Company We are a clinical-stage biotechnology company developing a pipeline of wholly-owned drug product candidates to treat neurological diseases and pain. Our POZ PlatformTM ( POZ ) drug delivery technology is designed to enable certain existing drugs and novel drug candidates to be modified in a way that may provide an increase in efficacy and safety of the resulting polymeric drug conjugate. Our proprietary POZ technology is based on a synthetic, water soluble, low viscosity polymer called poly(2-oxazoline). Our POZ technology is engineered to provide greater control in drug loading and more precision in the rate of release of attached drugs delivered via subcutaneous injection. The therapeutic agents in our product candidates are typically well-understood and marketed drugs that are effective but are limited by pharmacokinetic profiles that can include toxicity, side effects and short half-life. We believe that by using POZ technology, drugs with narrow therapeutic windows can be designed to maintain more desirable and stable levels in the blood. We believe that POZ technology can be applied to small molecules, proteins, antibody drug conjugates ( ADCs ), and other classes of molecules. Our business is largely focused on the development of a wholly-owned pipeline of POZ-enabled drug candidates for central nervous system ( CNS ) indications, including Parkinson s disease, epilepsy, and pain. Our lead product candidate, SER 252 (POZ-apomorphine), is a POZ conjugate of the potent dopamine agonist apomorphine being developed for the treatment of Parkinson s disease and is in preclinical development. SER 252 is designed to provide continuous dopaminergic stimulation ( CDS ) via a subcutaneous injection delivered one to two times per week. CDS is a long-sought clinical strategy for Parkinson s disease that currently approved therapies fall short of delivering. Other POZ-conjugate candidates, including SER 227 (POZ-buprenorphine) for long-acting pain relief and SER 228 (POZ-cannabidiol) for epilepsy, are in preclinical development. We intend to develop other potential applications of the POZ technology, such as therapeutics delivered through ADCs and lipid-nanoparticle ( LNP ), through partnerships. Our SER 214, a POZ conjugate of rotigotine for the treatment of early Parkinson s and Restless Leg Syndrome, was our first product candidate advanced into human study and has completed a Phase Ia study in 19 subjects. We have not internally advanced SER 214 beyond the Phase Ia study and will seek to partner on any further development of this product candidate. We have not received approval from the U.S. Food and Drug Administration (the FDA ) for any of our product candidates and our lead product candidate remains in preclinical development. Corporate Information On March 26, 2024, the Delaware corporation incorporated on January 6, 2017, and formerly known as AgeX Therapeutics, Inc. completed our previously announced merger transaction in accordance with the terms and conditions of the Agreement and Plan of Merger and Reorganization, dated as of August 29, 2023 (the Merger Agreement ), by and among AgeX Therapeutics, Inc., a Delaware corporation ( AgeX ), Canaria Transaction Corporation, an Alabama corporation and a wholly owned subsidiary of AgeX ( Merger Sub ), and Serina Therapeutics, Inc., an Alabama corporation ( Legacy Serina ), pursuant to which Merger Sub merged with and into Legacy Serina, with Legacy Serina surviving the merger as a wholly owned subsidiary of AgeX (the Merger ). Immediately following the consummation of the Merger, AgeX changed our name from AgeX Therapeutics, Inc. to Serina Therapeutics, Inc. (the Company ) and the Company s common stock, par value $0.0001 per share ( common stock ), began trading on the NYSE American under the symbol SER. Our principal executive offices are located at 601 Genome Way, Suite 2001, Huntsville, Alabama 35806, and our telephone number is (256) 327-9630. Our website address is https://serinatherapeutics.com/. The information on, or that can be accessed through, our website is not part of this prospectus, and you should not consider information contained on our website in deciding whether to purchase shares of our common stock. We have included our website address in this prospectus solely as an inactive textual reference. 1 We use our logo and other marks as trademarks in the United States and other countries. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without a trademark symbol, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity. Emerging Growth Company We are an emerging growth company under the Jumpstart our Business Startups Act of 2012 (the JOBS Act ). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not emerging growth companies. These provisions include: reduced disclosure about our executive compensation arrangements; no non-binding stockholder advisory votes on executive compensation or golden parachute arrangements; and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting. We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the Securities Exchange Act of 1934, as amended (the Exchange Act ). The JOBS Act permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. However, we have elected to comply with newly adopted or revised accounting standards when they become applicable to public companies because the financial statements of AgeX were previously consolidated with those of AgeX s former parent company which was not an emerging growth company under the JOBS Act and was therefore not permitted to delay the adoption of new or revised accounting standards that become applicable to public companies. This election under the JOBS Act to not delay the adoption of new or revised accounting standards is irrevocable. 2 The Offering Issuer Serina Therapeutics, Inc. (f/k/a AgeX Therapeutics, Inc.) Issuance of common stock Shares of common stock offered by us 3,000,568 shares of common stock issuable upon exercise of the Warrants, consisting of (i) up to 1,500,284 shares of common stock that are issuable upon the exercise of the Post-Merger Warrants and (ii) up to 1,500,284 shares of common stock that are issuable upon the exercise of the Incentive Warrants. Shares of common stock outstanding prior to exercise of all Warrants 8,413,889 shares of common stock as of July 1, 2024 (excluding 377,865 shares of common stock issued upon the exercise of 377,865 Post-Merger Warrants on June 6, 2024) Shares of common stock outstanding assuming cash exercise of all Warrants 11,414,457 shares of common stock as of July 1, 2024 Exercise Price of Post-Merger Warrants $13.20 per share, subject to adjustments as described herein. Exercise Price of Incentive Warrants $18.00 per share, subject to adjustments as described herein. Use of proceeds We will receive up to an aggregate of approximately $46.8 million from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. We expect to use the net proceeds from the exercise of the Warrants for general corporate purposes. See Use of Proceeds. Resale of common stock Securities offered by the selling securityholders 2,267,188 shares of common stock outstanding as of the date hereof. Terms of the offering The selling securityholders will determine when and how they will dispose of the shares of common stock registered under this prospectus for resale. Use of proceeds We will not receive any proceeds from the sale of shares of common stock by the selling securityholders. Lock-up restrictions Certain of our stockholders are subject to certain restrictions on transfer until the termination of applicable lock-up periods. See Certain Relationships and Related Transactions Lock-Up Agreements for further discussion. Risk factors See
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diff --git a/parsed_sections/prospectus_summary/2024/SPEV_shorepower_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/SPEV_shorepower_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..4eec5df5d67239b60c373925af364e728bc116aa
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@@ -0,0 +1,1127 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+The
+following summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information
+that may be important to you. You should read this entire prospectus carefully, including the sections entitled Risk Factors 
+and Management s Discussion and Analysis of Financial Condition and Results of Operations and our historical financial
+statements and related notes included elsewhere in this prospectus. In this prospectus, unless otherwise noted, the terms the
+Company, Shorepower Technologies , United States Basketball League, USBL, we, 
+ us, and our refer to Shorepower Technologies, Inc.
+
+ 
+
+The
+Company
+
+ 
+
+Overview
+
+ 
+
+We
+are a transportation electrification company that builds, deploys and operates plug-in stations that allow electric vehicles, trucks
+and refrigerated trailers to conveniently access electric power while parked or staged, resulting in cost savings for fleets and drivers
+that will not have to use petroleum fuel thus significantly reducing associated toxic emissions and greenhouse gases by replacing diesel
+fuel with electric power. To date we have raised approximately $16 million through grants and contracts from the federal and state Governments
+and have received $453,954 in loans through Jeff Kim, our President and CEO.
+
+ 
+
+We
+currently operate one of the largest heavy-duty focused network of electrified parking spaces (EPS) in North America. This network
+includes 60 facilities conveniently located at travel centers with approximately 1,800 electrified parking spaces. Most of these facilities
+are focused on truck stop electrification (TSE) and electric standby transport refrigeration units (eTRU), but several sites already
+include electric vehicle charging stations. The following is our anticipated schedule to upgrade our facilities to include electric
+vehicle charging stations:
+
+ 
+
+ 
+ Site
+ Name
+ 
+ City
+ & State
+ 
+ State
+ 
+ Number
+ of EV Connection Points
+ 
+ Target
+ 
+
+ Completion
+
+ Date
+
+ 
+ Love s
+ Travel Stops
+ 
+ Madera
+ 
+ CA
+ 
+ 3
+ 
+ Completed
+
+ 
+ Flying
+ J Travel center
+ 
+ Bakersfield
+ 
+ CA
+ 
+ 5
+ 
+ Mar-2023
+
+ 
+ Flying
+ J Travel center
+ 
+ Lodi
+ 
+ CA
+ 
+ 5
+ 
+ Mar-2024
+
+ 
+ Flying
+ J Travel center
+ 
+ Lebec
+ (Fraisier Park) 
+ 
+ CA
+ 
+ 4
+ 
+ Apr-2024
+
+ 
+ Pilot
+ Travel Center
+ 
+ Dunnigan
+ 
+ CA
+ 
+ 4
+ 
+ Apr-2024
+
+ 
+ Love s
+ Travel Stops
+ 
+ Boron
+ 
+ CA
+ 
+ 3
+ 
+ Apr-2024
+
+ 
+ Pilot
+ Travel Center
+ 
+ Weed
+ 
+ CA
+ 
+ 2
+ 
+ May-2024
+
+ 
+ Big
+ Boys Travel Stop
+ 
+ Kenly
+ 
+ NC
+ 
+ 4
+ 
+ Jun-2024
+
+ 
+ Arrowhead
+ Travel Plaza
+ 
+ Pendleton
+ 
+ OR
+ 
+ 4
+ 
+ Jul-2024
+
+ 
+ Jubitz
+ Travel Center
+ 
+ Portland
+ 
+ OR
+ 
+ 4
+ 
+ Aug-2024
+
+ 
+ Eco
+ Travel Center
+ 
+ Crossville
+ 
+ TN
+ 
+ 4
+ 
+ Sep-2024
+
+ 
+ Tennessean
+ Travel Stop
+ 
+ Cornersville
+ 
+ TN
+ 
+ 4
+ 
+ Oct-2024
+
+ 
+ Shoemaker
+ Travel Center
+ 
+ Lincoln
+ 
+ NE
+ 
+ 4
+ 
+ Nov20-24
+
+ 
+ 
+
+Shorepower
+originally started business as a TSE provider. TSE provides power for hotel loads at commercial parking facilities. Trucks are required
+to take a rest period for a minimum of 10 hours per day. Trucks typically run their engines to provide heating and cooling to the cab
+and power accessories. Shorepower allows drivers to shut down their main engine and plug into outlets that provide power for household
+type devices such as heaters, air-conditioning units, coffee pots, microwaves, TVs, computers and other accessories. On average, this
+saves drivers and fleets one gallon of diesel per hour. Idling (running) the engine 10 hours per day, 300 days per year could cost in
+excess of $10,000 per year in wasted diesel fuel. By using Shorepower, drivers can save over $10,000 annually.
+
+ 
+
+Additionally,
+we have over 300 electric vehicle charging station connection points (plugs), sold or controlled that could be upgraded to include our
+latest cellular-based control module, to make these stations revenue producing stations. Combined with upgrading the TSE stations, we
+have the potential to expand to over 2,000 connection points. However, for our first phase of upgrades, we expect to convert up to five
+stations per facility to level 2 and add one or more DC fast chargers to select locations.
+
+ 
+
+We
+believe that the key value of the existing travel center facilities is the electric infrastructure and utility service that could easily
+be upgraded to include electric vehicle supply equipment (EVSE) for heavy-duty trucks and buses. Most of these sites could also accommodate
+light-duty(automobile) electric vehicle charging.
+
+ 
+
+Organizational
+History
+
+ 
+
+We
+were incorporated in Delaware on May 29, 1984, as a wholly owned subsidiary of Meisenheimer Capital, Inc. ( MCI ) for the
+purpose of developing and managing a professional basketball league, the United States Basketball League (the League ).
+Since the inception of the League, we were primarily engaged in selling franchises and managing the League. From 1985 to April 2021,
+we sold a total of approximately forty active franchises (teams), a vast majority of which were terminated for non-payment of their respective
+franchise obligations. We cancelled seasons 2008 through 2021.
+
+ 
+
+On
+April 7, 2021, through a series of Stock Purchase Agreements (the Purchase Agreements ), the majority owners of the Company,
+Richard C. Meisenheimer, Daniel T. Meisenheimer, III, James Meisenheimer, Meisenheimer Capital, Inc. and Spectrum Associates, Inc. (the
+ Meisenheimers ) sold 2,704,007 shares of common stock which it held, to a new investor group. The Meisenheimers also sold
+1,105,644 shares of our preferred stock at a per share price of $.057 per share to EROP Enterprises, LLC. As a result of the sale by
+the Meisenheimers of our common and preferred stock that they held, we experienced a change in control.
+
+ 
+
+ 4
+
+ 
+
+ 
+
+ 
+
+Effective
+April 7, 2021, our Board of Directors accepted the resignation of Daniel T. Meisenheimer, III as Chairman of the Board of Directors and
+President of the Company. Effective April 7, 2021, Saeb Jannoun was appointed to fill the vacancy following the resignation of Daniel
+T. Meisenheimer, III as Chairman of the Board of Directors and President of the Company. Mr. Michael Pruitt also joined the Board of
+Directors.
+
+ 
+
+After
+April 7, 2021, we became a holding company with our principal purpose being to evaluate and assess new business opportunities.
+
+ 
+
+On
+November 23, 2022, we entered into an Agreement and Plan of Merger (the Merger Agreement ) with Shurepower, LLC d/b/a Shorepower
+Technologies ( Shorepower ) under which Shorepower was merged with and into us (the Merger ) following the satisfaction
+of several closing conditions, including satisfactory completion of due diligence reviews by each party to the Merger Agreement, Shorepower
+providing us with the most recent two years of audited financial statements by a PCAOB auditor, our authorizing a new class of Series
+B preferred stock with each Series B preferred share having the voting power of 40 shares of our common stock, our completing a stock
+and warrant financing to have a minimum of $480,000 in cash at closing (the USBL Pre-Merger Financing ) and our eliminating
+any debt or contingent liabilities of any kind at the time of the closing of the merger between us and Shorepower (the Closing ).
+The Closing occurred on March 22, 2023. The pro forma unaudited condensed combined financial statements reflecting the Merger is set
+forth in Exhibit 99.2.
+
+ 
+
+Under
+the terms of the Merger Agreement, Mr. Kim now owns 55% of our issued and outstanding shares of common stock that includes the
+sale of 14,817,272 shares of USBL common stock sold under the USBL Pre-Merger Financing that raised $660,000. Shorepower has received
+2,000,000 shares of our Series B Preferred stock.
+
+ 
+
+Under
+the terms of the Merger Agreement, Saeb Jannoun and Michael Pruitt resigned their respective officer and director positions with the
+Company and Jeff Kim was appointed as our sole officer and director.
+
+ 
+
+Name
+Change 
+
+ 
+
+On
+April 13, 2023, we merged with Shorepower and on April 21, 2023, we filed an amendment to our certificate of incorporation with the Delaware
+Secretary of State to change our name to Shorepower Technologies, Inc. The Amendment became effective on June 20, 2023.
+
+ 
+
+Growth
+Strategies
+
+ 
+
+Our
+growth strategies to continue to play a leadership role in EV charging are as follows:
+
+ 
+
+Accelerate
+new product offerings.
+
+ 
+
+We
+intend to have a leadership position with continued efficient investment in product development.
+
+ 
+
+Invest
+incrementally in marketing and sales.
+
+ 
+
+We
+intend to continue to attract new customers and pursue a business model which attracts new customers to our charging stations and encourages
+existing customers to increase their charging footprint over time as EV penetration increases.
+
+ 
+
+Pursue
+Strategic Acquisitions.
+
+ 
+
+We
+intend to explore potential high-quality acquisition opportunities in this dynamic marketplace both domestically and overseas.
+
+ 
+
+Implications
+of Being an Emerging Growth Company
+
+ 
+
+As
+a company with less than $1.0 billion in revenue during our most recently completed fiscal year, we qualify as an emerging growth
+company as defined in Section 2(a) of the Securities Act of 1933, as amended, which we refer to as the Securities Act, as modified
+by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of specified
+reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not emerging growth
+companies. These provisions include:
+
+ 
+
+ 
+ 
+ 
+ Reduced
+ disclosure about our executive compensation arrangements;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ No
+ non-binding shareholder advisory votes on executive compensation or golden parachute arrangements;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Exemption
+ from the auditor attestation requirement in the assessment of our internal control over financial reporting; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Reduced
+ disclosure of financial information in this prospectus, limited to two years of audited financial information and two years of selected
+ financial information.
+
+ 
+ 
+
+ 5
+
+ 
+
+ 
+
+ 
+
+As
+a smaller reporting company, each of the foregoing exemptions is currently available to us. We may take advantage of these exemptions
+for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company
+if we have more than $1.0 billion in annual revenues as of the end of a fiscal year, if we are deemed to be a large-accelerated filer
+under the rules of the Securities and Exchange Commission, or if we issue more than $1.0 billion of non- convertible debt over a three-year-period.
+
+ 
+
+The
+JOBS Act permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting
+standards applicable to public companies. We have elected the extended transition period for complying with new or revised accounting
+standards pursuant to Section 107(b) of the Act until the earlier of the date we (i) are no longer an emerging growth company or (ii)
+affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements
+may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
+
+ 
+
+Corporate
+Information
+
+ 
+
+We
+were incorporated in Delaware on May 29, 1984, as a wholly owned subsidiary of Meisenheimer Capital, Inc. ( MCI ) for the
+purpose of developing and managing a professional basketball league, the United States Basketball League (the League ).
+On April 7, 2021, we sold a majority of our voting power through the sale of shares of our common stock and preferred stock to EROP Enterprises,
+LLC and its group of purchasers. On November 23, 2022, we entered into an Agreement and Plan of Merger (the Merger Agreement )
+with Shurepower, LLC d/b/a Shorepower Technologies ( Shorepower ) under which Shorepower was merged with and into us.
+
+ 
+
+Under
+the terms of the Merger Agreement, Jeff Kim, as the sole shareholder of Shurepower, LLC, now owns 55% of our issued and outstanding
+shares of common stock that includes the sale of 14,817,272 shares of our common stock sold on a private placement basis to satisfy a
+condition of closing that we had a minimum of $480,000 in cash available for Shorepower. We raised $660,000 through this pre-merger financing
+discussed below. Shorepower also received 2,000,000 shares of a Series B preferred stock and the right to receive the following additional
+shares of Shorepower common stock upon achieving the following milestones: (i) an additional 2.5% of our issued and outstanding common
+stock upon the completion of either (a) the conversion of 75 existing connection points to Level 2 or greater or the (b) installation
+of 75 new connection points to revenue producing stations in the first 12 months or some combination of the two yielding 75 units, (ii)
+an additional 2.5% of the of our issued and outstanding common stock upon (a) the application for $10M in grants and/or the (b) the award
+of $1.0 million in grants in the first 18 months; (iii) an additional 2.5% of our issued and outstanding common stock upon the completion
+of acquisitions in the first 24 months generating no less than $3.0 million in gross revenues and (iv) an additional 500,000 shares of
+our common stock upon acquiring or hiring the following key personnel in the first six months after the effective date of the merger:
+(a) three or more qualified Board members and (b) at least three of the following four individuals having the following qualifications:
+one sales/marketing person, one grant writer/Government relations person, one technician/maintenance person and one software programmer/engineer.
+
+ 
+
+Following
+the closing of the merger, Shorepower transferred its current debt obligations of $1,400,000 to us. Shorepower agreed that in assuming
+its management of the Company that it would not pay more than $2,000 per month from the proceeds of the pre-merger financing towards
+reduction of such debt obligations for the first 12 months and that Jeff Kim, our new CEO, will not receive compensation in excess of
+$10,000 per month for the first nine months after the merger is effective. The merger was effective on April 13, 2023,
+with the filing of the Certificate of Merger between us and Shorepower with the Delaware Secretary of State.
+
+ 
+
+On
+December 1, 2022, we sold to a number of purchasers through a Stock and Warrant Purchase Agreement an aggregate of 11,000,000 shares
+of our common stock (the PIPE Shares ), through the purchase of units at a price of $0.04 per unit, each unit consisting
+of one share of our common stock and one warrant to purchase a share of our common stock exercisable for two years at an exercise price
+of $0.25 per share of warrant stock that is callable by us if our shares of common stock trades at $0.75 for at least 20 trading days
+and at a volume of not less than 30,000 shares per day. Pursuant to the Stock and Warrant Purchase Agreement, we agreed to use our best
+commercial efforts to register on this Form S-1 the PIPE Shares within 60 days of the closing on March 22, 2023.
+
+ 
+
+Our
+principal executive office is located at 5291 NE Elam Young Pkwy., Suite 160, Hillsboro, OR 97124, and our telephone number is (503)
+892-7345. Our internet website is www.shorepower,com. The information on, or that can be accessed through, our website is not
+part of this prospectus, and you should not rely on any such information in making the decision whether to purchase our common stock.
+
+ 
+
+Changes
+in Registrant s Certifying Accountant.
+
+ 
+
+On
+January 21, 2023, the Board of Directors of Shorepower approved the engagement of Olayinka Oyebola & Co. ( OO & Co )
+as its independent registered public accounting firm to audit its consolidated financial statements for the years ending December 31,
+2020 and 2021. Prior to the merger of Shorepower and USBL, Shorepower was a private company and did not have audited financial statements.
+Upon consummation of the reverse merger between Shorepower and USBL on March 22, 2023, Shorepower has kept USBL s current independent
+registered public accounting firm prior to the merger, Qi CPA LLC ( Qi CPA ) and informed OO & Co that it would not serve
+as the Company s independent registered public accounting firm following the consummation of the merger.
+
+ 
+
+OO&
+Co s report on Shorepower s consolidated balance sheets as of December 31, 2021 and 2020, the related statements of operations,
+stockholders equity and cash flows for the year ended December 31, 2021 and 2020 (collectively, the financial statements )
+did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting
+principles other than to state that the negative working capital and accumulated deficits raised substantial doubt about Shorepower s
+ability to continue as a going concern .
+
+ 
+
+During
+the period from December 31, 2020 to December 31, 2022, and the subsequent period through March 22, 2023, upon the closing of the merger
+of Shorepower and USBL, there were no: (i) disagreements with OO &o Co on any matter of accounting principles or practices, financial
+statement disclosures or audited scope or procedures, which disagreements if not resolved to OO & CO s satisfaction would have
+caused OO & CO to make reference to the subject matter of the disagreement in connection with its report or (ii) reportable events
+as defined in Item 304(a)(1)(v) of Regulation S-K.
+
+ 
+
+During
+Shorepower s two most recent fiscal years prior to the closing of the merger with USBL and the period ended March 22, 2023, upon
+the closing of the merger with USBL, Shorepower did not consult Qi CPA with respect to either (i) the application of accounting principles
+to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on Shorepower s financial
+statements, and no written report or oral advice was provided to the Company by Qi CPA that Qi CPA concluded was an important factor
+considered by Shorepower in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that
+was either the subject of a disagreement, as that term is described in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act and
+the related instructions to Item 304 of Regulation S-K under the Exchange Act, or a reportable event, as that term is defined in Item
+304(a)(1)(v) of Regulation S-K under the Exchange Act.
+
+ 
+
+Shorepower
+has provided OO & Co with a copy of the disclosures made by the Company in response to this Item 3.04 of Regulation S-K and has requested
+that OO & Co furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements made by the registrant
+in response to this Item 304(a) and, if not, stating the respects in which it does not agree. A letter from OO & Co is attached hereto
+as Exhibit 16.1.
+
+ 
+
+ 6
+
+ 
+
+ 
+
+ 
+
+The
+Offering
+
+ 
+
+ 
+ Common
+ Stock to be Sold
+ 
+ Up
+ to 25,817,272 shares of our common stock including (i) 14,817,272 shares of our common stock currently outstanding and (ii) 11,000,000
+ shares of our common stock underlying warrants we have issued to various persons. We will not receive any proceeds from the sale
+ of common stock by the Selling Stockholders but will receive up to $2,750,000 upon exercise of warrants by the Selling Stockholders.
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ Common
+ Stock Outstanding
+ 
+ 50,478,678
+ as of March 29, 2024, that excludes the 10,000,000 shares reserved for future issuance under our 2023 Stock Incentive Plan
+ (the Plan ).
+
+ 
+ 
+ 
+ 
+
+ 
+ Voting
+ Control by Management
+ 
+ Our
+ President and CEO, Jeff Kim, has voting control over all matters submitted to our common stockholders, including amendments to our
+ certificate of incorporation, election of members of our Board of Directors and major corporate transactions, principally through
+ his ownership of shares of our common stock and 2,000,000 shares of our Series B preferred stock.
+
+ 
+ 
+ 
+ 
+
+ 
+ Use
+ of Proceeds
+ 
+ This
+ is a resale prospectus to register shares of the Selling Stockholders, but we may receive up to approximately $2,750,000 in gross
+ proceeds upon the cash exercise of the warrants by the Selling Stockholders. 
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ We
+ intend to use the net proceeds from the exercise of warrants by the Selling Stockholders for (i) potential mergers and acquisitions,
+ (ii) technology costs, (iii) general working capital and (iv) debt repayment. The expected uses of the net proceeds from the sale
+ of the offered shares represent our intentions based upon our current plans and business conditions. The precise uses, amounts and
+ timing of the application of proceeds have yet to be determined by our management and may differ, in some or all respects, from those
+ enumerated above. The amounts used for each purpose and the timing of our actual expenditures may also vary significantly depending
+ on numerous factors. See Use of Proceeds. We will not receive any of the proceeds from the sale or other disposition
+ of the securities by the Selling Stockholders other than a potential cash exercise of the warrants. See Use of Proceeds .
+
+ 
+ 
+ 
+ 
+
+ 
+ Dividend
+ Policy
+ 
+ We
+ have never declared any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings
+ for use in financing the growth of our business and do not anticipate paying any cash dividends for the foreseeable future. See Dividend
+ Policy .
+
+ 
+ 
+ 
+ 
+
+ 
+ OTC
+ PINK Symbol
+ 
+ SPEV
+
+ 
+ 
+ 
+ 
+
+ 
+ Risk
+ Factors
+ 
+ You
+ should carefully consider the information set forth in this prospectus and, in particular, the specific factors set forth in the
+ Risk Factors section beginning on page 10 of this prospectus before deciding whether or not to invest in our common
+ stock.
+
+ 
+ 
+
+ 7
+
+ 
+
+ 
+
+ 
+
+Summary
+of Risk Factors
+
+ 
+
+An
+investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in
+the section titled Risk Factors, alone or in combination with other events or circumstances, may materially adversely affect
+our business, financial condition and operating results. In that event, the trading price of our securities could decline, and you could
+lose all or part of your investment. Such risks include, but are not limited to:
+
+ 
+
+ 
+ 
+ We
+ are an early stage company with a history of operating losses, and expect to incur significant expenses and continuing losses at
+ least for the near- and medium-term.
+
+ 
+ 
+ 
+
+ 
+ 
+ Our
+ growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of and demand for EVs.
+
+ 
+ 
+ 
+
+ 
+ 
+ We
+ currently face competition from a number of companies and expect to face significant competition in the future as the market for
+ EV charging develops.
+
+ 
+ 
+ 
+
+ 
+ 
+ We
+ rely on a limited number of vendors for our charging equipment and related support services. A loss of any of these partners would
+ negatively affect our business.
+
+ 
+ 
+ 
+
+ 
+ 
+ Our
+ business is subject to risks associated with construction, cost overruns and delays, and other contingencies that may arise in the
+ course of completing installations, and such risks may increase in the future as we expand the scope of such services with other
+ parties.
+
+ 
+ 
+ 
+
+ 
+ 
+ If
+ we are unable to attract and retain key employees and hire qualified management, technical, engineering and sales and business development
+ personnel, our ability to compete and successfully grow our business would be harmed.
+
+ 
+ 
+ 
+
+ 
+ 
+ Computer
+ malware, viruses, ransomware, hacking, phishing attacks and other network disruptions could result in security and privacy breaches,
+ loss of proprietary information and interruption in service, which would harm our business.
+
+ 
+ 
+ 
+
+ 
+ 
+ The
+ EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities
+ and others to offset the purchase or operating cost of EVs and EV charging stations. The reduction, modification or elimination of
+ such benefits could adversely affect our financial results.
+
+ 
+ 
+ 
+
+ 
+ 
+ Failure
+ to effectively expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader
+ market acceptance of our solutions.
+
+ 
+ 
+ 
+
+ 
+ 
+ Many
+ of our facilities are located in active earthquake zones or in areas susceptible to hurricanes, wildfires and other severe weather
+ events. An earthquake, a wildfire, a major hurricane or other types of disasters or resource shortages, including public safety power
+ shut offs that have occurred and will continue to occur in California or other states, could disrupt and harm our operations and
+ those of our customers.
+
+ 
+ 
+ 
+
+ 
+ 
+ We
+ are dependent upon the availability of electricity at our current and future charging stations. Cost increases, delays and/or other
+ restrictions on the availability of electricity would adversely affect our business and results of operations.
+
+ 
+ 
+ 
+
+ 
+ 
+ Our
+ revenue growth will depend in significant part on our ability to increase sales of our products and services to fleet operators including
+ medium- and heavy-duty vehicle fleets and rideshare operators.
+
+ 
+ 
+ 
+
+ 
+ 
+ If
+ we fail to offer high-quality support to host sites and drivers or fail to maintain high charger availability and strong user experience,
+ our business and reputation will suffer.
+
+ 
+ 
+ 
+
+ 
+ 
+ Computer
+ malware, viruses, ransomware, hacking, phishing attacks and other network disruptions could result in security and privacy breaches,
+ loss of proprietary information and interruption in service, which would harm our business.
+
+ 
+ 
+ 
+
+ 
+ 
+ The
+ EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities
+ and others to offset the purchase or operating cost of EVs and EV charging stations. The reduction, modification or elimination of
+ such benefits could adversely affect our financial results.
+
+ 
+ 
+ 
+
+ 
+ 
+ We
+ may need to defend against intellectual property infringement or misappropriation claims, which may be time-consuming and expensive,
+ and our business could be adversely affected.
+
+ 
+ 
+ 
+
+ 
+ 
+ Our
+ technology could have undetected defects, errors or bugs in hardware or software which could reduce market adoption, damage our reputation
+ with current or prospective customers, and/or expose us to product liability and other claims that could materially and adversely
+ affect our business.
+
+ 
+ 
+ 
+
+ 
+ 
+ The
+ EV charging market is characterized by rapid technological change, which requires us to continue to develop new products and product
+ innovations. Any delays in such development could adversely affect market adoption of our products and financial results.
+
+ 
+ 
+ 
+
+ 
+ 
+ Existing
+ and future environmental health and safety laws and regulations could result in increased compliance costs or additional operating
+ costs or construction costs and restrictions. Failure to comply with such laws and regulations may result in substantial fines or
+ other limitations that may adversely impact our financial results or results of operation.
+
+ 
+ 
+ 
+
+ 
+ 
+ Concentration
+ of ownership among our existing executive officers, directors and their affiliates may prevent new investors from influencing significant
+ corporate decisions.
+
+ 
+ 
+ 
+
+ 
+ 
+ Some
+ provisions of our certificate of incorporation and bylaws may deter takeover attempts, which may inhibit a takeover that stockholders
+ consider favorable and limit the opportunity of our stockholders to sell their shares at a favorable price.
+
+ 
+ 
+ 
+
+ 
+ 
+ Our
+ stock price will be volatile, and you may not be able to sell shares at or above the price at which shares of our common stock in
+ this registration statement are purchased.
+
+ 
+ 
+ 
+
+ 
+ 
+ Our
+ indemnification of our officers and directors may cause us to use corporate resources to the detriment of our stockholders.
+
+ 
+ 
+
+ 8
+
+ 
+
+ 
+
+ 
+
+Summary
+Financial Information
+
+ 
+
+The
+summary financial information set forth below is derived from the more detailed audited consolidated financial statements of the Company
+appearing elsewhere in this prospectus. You should read the summary consolidated financial information below in conjunction with Management s
+Discussion and Analysis of Financial Condition and Results of Operations and our financial statements, including the notes to
+such financial statements.
+
+ 
+
+ 
+ Statement of Operations Data: 
+ Year Ended
+
+ February 28,
+
+ 2023 
+ Year Ended
+
+ February 28,
+
+ 2022 
+
+ 
+ 
+ 
+ 
+
+ 
+ Revenues - related party 
+ $ 
+ $5,000 
+
+ 
+ 
+ 
+ 
+
+ 
+ Total Operating Expenses 
+ 597,305 
+ 309,035 
+
+ 
+ Loss from Operations 
+ (597,305) 
+ (304,035)
+
+ 
+ Other expense 
+ 
+ (1,769,355)(1)
+
+ 
+ Net Loss 
+ $(597,305) 
+ $(2,073,390)
+
+ 
+ 
+ 
+ 
+
+ 
+ Net Loss Per Share, Basic and Diluted 
+ $(0.01) 
+ $(0.36)
+
+ 
+ Weighted Average Number of Shares Outstanding Basic and Diluted 
+ 47,133,596 
+ 5,752,866 
+
+ 
+
+ 
+
+(1)Includes
+ the following non-cash transactions: a gain of forgiveness of debt of $55,270, a loss on
+ conversion of debt of $127,480 and an expense of $1,699,145 related to the conversion of
+ preferred stock.
+
+ 
+
+ 
+ Balance Sheet Data: 
+ February 28,
+
+ 2023 
+ February 28,
+
+2022
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ Cash 
+ $77,086 
+ $180,756 
+
+ 
+ Funds held in escrow 
+ 553,000 
+ 
+
+ 
+ Prepaid stock for services 
+ 
+ 32,208 
+
+ 
+ Other prepaids 
+ 535 
+ 
+
+ 
+ Receivable related party 
+ 50,000 
+ 
+
+ 
+ Total Assets 
+ $680,621 
+ $212,964 
+
+ 
+ 
+ 
+ 
+
+ 
+ Accounts payable and accrued expenses 
+ 13,440 
+ 13,478 
+
+ 
+ Preferred stock 
+ 20,000 
+ 11,057 
+
+ 
+ Common stock 
+ 474,351 
+ 71,462 
+
+ 
+ Additional paid-in capital 
+ 8,005,803 
+ 5,653,489 
+
+ 
+ Common shares to be issued 
+ 
+ 1,699,146 
+
+ 
+ Treasury stock 
+ (42,454) 
+ (42,454)
+
+ 
+ Accumulated Deficit 
+ (7,790,519) 
+ (7,193,214)
+
+ 
+ Total Liabilities and Stockholders Equity 
+ $680,621 
+ $212,964 
+
+ 
+
+ 
+
+ 9
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/SYRE_spyre_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/SYRE_spyre_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..7c27cfdf7f3963b7989b367ba73684a909cb564a
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/SYRE_spyre_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary may not contain all the information that you should consider before investing in securities. You should read the entire prospectus carefully, including the sections titled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations, and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Company Overview On June 22, 2023, we completed the acquisition of Pre-Merger Spyre (the Asset Acquisition ) pursuant to the Acquisition Agreement (as defined under the section titled Recent Developments below). Pre-Merger Spyre was a pre-clinical stage biotechnology company that was incorporated on April 28, 2023 under the direction of Peter Harwin, a Managing Member of Fairmount Funds Management LLC ( Fairmount ), for the purpose of holding rights to certain intellectual property being developed by Paragon. Fairmount is a founder of Paragon. Through the Asset Acquisition, we received the option to license the intellectual property rights related to four research programs (collectively, the Option ) pursuant to the Paragon Agreement. On July 12, 2023, we exercised the Option with respect to one of these research programs to exclusively license intellectual property rights related to such research program directed to antibodies that selectively bind to 4 7 integrin and methods of using these antibodies, including methods of treating inflammatory bowel disease ( IBD ) using the SPY001 program. If this research program is pursued non-provisionally and matures into issued patents, we would expect those patents to expire no earlier than 2044, subject to any disclaimers or extensions. On December 14, 2023, we exercised the Option under the Paragon Agreement to be granted an exclusive license to all of Paragon s rights, title and interest in and to intellectual property rights, including inventions, patents, sequence information and results, under SPY002, Spyre s TL1A program, to develop and commercialize antibodies and products worldwide in all therapeutics disorders. If this research program is pursued non-provisionally and matures into issued patents, we would expect those patents to expire no earlier than 2044, subject to any disclaimers or extensions. The license agreements pertaining to such research programs are currently being finalized. Furthermore, as of the date of this registration statement, the Option remains unexercised with respect to the intellectual property rights related to the two remaining research programs under the Paragon Agreement. For more information on the Paragon Agreement, see discussion under the heading Paragon Agreement below. On July 27, 2023, we announced that we entered into an agreement to sell the global rights to pegzilarginase, an investigational treatment for the rare metabolic disease Arginase 1 Deficiency, to Immedica Pharma AB ( Immedica ) for $15.0 million in upfront cash proceeds and up to $100.0 million in contingent milestone payments (the Immedica APA ). The sale of pegzilarginase to Immedica supersedes and terminates the license agreement between us and Immedica dated March 2021. See the section titled Recent Developments below for more information regarding the Immedica APA. Following the Asset Acquisition and the entry into the Immedica APA, we have significantly reshaped the business into a preclinical stage biotechnology company focused on developing next generation therapeutics for patients living with IBD, including ulcerative colitis ( UC ) and Crohn s disease ( CD ). Through the Paragon Agreement, our portfolio of novel and proprietary monoclonal antibody product candidates has the potential to address unmet needs in IBD care by improving efficacy, safety, and/or dosing convenience relative to products currently available or product candidates in development. We have engineered our product candidates with the aim to bind potently and selectively to their target epitopes and to exhibit extended pharmacokinetic half-lives through modifications in the Fc domain, that increase affinity to human FcRn and increase antibody recycling. We anticipate that half-life extension will enable less frequent administration as compared to marketed or development-stage monoclonal antibodies ( mAbs ) that do not incorporate half-life extension modifications. Nonetheless, the drug and/or device development process is inherently uncertain, our development approach is unproven, the preclinical evidence that supports our proposed development program is preliminary and limited, Table of Contents and we have not yet tested any product candidate in humans. In addition to the development of our product candidates as potential monotherapies, we plan to investigate combinations of our proprietary antibodies in preclinical and clinical studies to evaluate whether combination therapy (co-administration or co-formulation of multiple monoclonal antibodies) can lead to greater efficacy, as compared to monotherapies in IBD. We also intend to examine patient selection strategies via complementary diagnostics utilized in our clinical studies to evaluate whether patients can be matched to the optimal therapy based on genetic background and/or other biomarker signatures. We intend to deliver our product candidates through convenient, infrequently dosed, self-administered, subcutaneous ( SC ) injection, although the specific delivery mechanism or technology has not been selected given our early stage. Notwithstanding our efforts to develop safe and effective monotherapies and combination therapies, there can be no guarantee that we will be able to develop product candidates that will be found to be safe and effective so as to obtain the necessary regulatory approvals to market our product candidates. Recent Developments On September 8, 2023, we effected the Reverse Split, which resulted in the reverse split of our Common Stock at a ratio of 1-for-25. Readers should note that, except as indicated otherwise, all share numbers related to our Common Stock disclosed in this Recent Developments section have been adjusted on a post-Reverse Split basis. On June 22, 2023, we acquired in accordance with the terms of the Agreement and Plan of Merger (the Acquisition Agreement ), by and among us, Aspen Merger Sub I, Inc., a Delaware corporation and our wholly owned subsidiary, Sequoia Merger Sub II, LLC, a Delaware limited liability company and our wholly owned subsidiary, and Pre-Merger Spyre, the assets of Pre-Merger Spyre, a privately held biotechnology company advancing a pipeline of antibody therapeutics through the Paragon Agreement. Pre-Merger Spyre was incorporated on April 28, 2023, for the purpose of holding rights to certain intellectual property being developed by Paragon. The Asset Acquisition was structured as a stock-for-stock transaction pursuant to which all of Pre-Merger Spyre s outstanding equity interests were exchanged based on a fixed exchange ratio of 0.5494488 to 1 for consideration from us of 517,809 shares of Common Stock and 364,887 shares of Series A Preferred Stock (convertible on a 40 to 1 basis) in addition to the assumption of outstanding and unexercised stock options to purchase 2,734 shares of Common Stock from the Amended and Restated Spyre 2023 Equity Incentive Plan. The Common Stock and the Series A Preferred Stock related to the Asset Acquisition were issued to Pre-Merger Spyre stockholders on July 7, 2023. Concurrently with the Asset Acquisition, we entered into a definitive agreement (the June 2023 SPA ) for a PIPE investment with existing and new investors (the June 2023 Investors ) to raise approximately $210 million in which the June 2023 Investors were issued 721,452 shares of Series A Preferred Stock at a price of $291.08 per share. The Asset Acquisition was approved by our board of directors and the board of directors and stockholders of Pre-Merger Spyre. The closings of the June 2023 Transactions were not subject to the approval of our stockholders. Following receipt of stockholder approval of the conversion of Series A Preferred Stock in November 2023, each share of Series A Preferred Stock automatically converted into 40 shares of Common Stock, subject to certain beneficial ownership limitations set by each holder. Except as otherwise required by law (e.g. voting on a change to the authorized shares of Preferred Stock or the rights of such shares as required by Delaware General Corporation Law (the DGCL )) and Spyre s Certificate of Designation of Series A Non-Voting Convertible Preferred Stock (the Series A Certificate of Designation ), the Series A Preferred Stock does not have voting rights. Table of Contents In connection with the execution of the Acquisition Agreement, Spyre and Pre-Merger Spyre entered into stockholder support agreements (the Support Agreements ) with certain of Spyre s officers and directors, which collectively own an aggregate of less than 1% of the outstanding shares of the Common Stock. The Support Agreements provide that, among other things, each of the parties thereto would vote or cause to be voted all of the shares of Common Stock owned by such stockholder in favor of the approval of the conversion of shares of the Series A Preferred Stock into shares of Common Stock in accordance with Nasdaq Stock Market Rules at Spyre s stockholders meeting held in connection therewith. Concurrently and in connection with the execution of the Acquisition Agreement, certain Pre-Merger Spyre stockholders as of immediately prior to the Asset Acquisition, and certain of the directors and officers of Spyre as of immediately prior to the Asset Acquisition entered into lock-up agreements with Spyre and Pre-Merger Spyre, pursuant to which each such stockholder was subject to a 180-day lockup on the sale or transfer of shares of Common Stock held by each such stockholder at the closing of the Asset Acquisition, including those shares received by such Pre-Merger Spyre stockholders in the Asset Acquisition. In connection with the Asset Acquisition, a non-transferrable contingent value right (a CVR ) was distributed to Spyre stockholders of record as of the close of business on July 3, 2023, but was not distributed to holders of shares of Common Stock or Series A Preferred Stock issued to the June 2023 Investors or former stockholders of Pre- Merger Spyre in connection with the June 2023 Transactions. Holders of the CVRs will be entitled to receive cash payments from proceeds received by Spyre for a three-year period, if any, related to the disposition or monetization of certain legacy assets owned by us prior to the Asset Acquisition (the Legacy Assets ) for a period of one year following the closing of the Asset Acquisition. On July 27, 2023, we announced that we entered the Immedica APA. The sale of pegzilarginase to Immedica supersedes and terminates the license agreement between us and Immedica dated March 2021. The milestone payments under the Immedica APA are contingent on formal reimbursement decisions by national authorities in key European markets and pegzilarginase approval by the United States Food and Drug Administration (the FDA ), among other events. The upfront payment has been paid and distributed and contingent milestone payments if paid, net of expenses and adjustments, will be distributed to holders of Spyre s CVR pursuant to the CVR Agreement that was entered into in connection with the Asset Acquisition. On December 7, 2023, we entered into a definitive agreement (the December 2023 SPA ) for a PIPE investment with existing and new investors (the December 2023 Investors ) to raise $180 million, in which transaction the December 2023 Investors were issued an aggregate of 6,000,000 shares of Common Stock at a price of $15.00 per share and 150,000 shares of Series B Preferred Stock at a price of $600.00 per share. The closing of the December 2023 PIPE was not subject to Spyre stockholder approval. Subject to Spyre stockholder approval and certain beneficial ownership limitations set by each holder, each share of Series B Preferred Stock will automatically convert into 40 shares of Common Stock. We have filed a definitive proxy statement with the SEC to solicit such stockholder approval, among other matters, at the 2024 annual meeting of stockholders. Except as otherwise required by law (e.g. voting on a change to the authorized shares of Preferred Stock or the rights of such shares as required by DGCL) and as specified in our Certificate of Designation of Series B Non-Voting Convertible Preferred Stock ( Series B Certificate of Designation ), the Series B Preferred Stock does not have voting rights. On March 18, 2024, we entered into a definitive agreement (the March 2024 SPA ) for a PIPE investment with existing and new investors (the March 2024 Investors ) to raise approximately $180 million, in which transaction the March 2024 Investors were issued an aggregate of 121,625 shares of Series B Preferred Stock at a price of $1,480.00 per share. The closing of the March 2024 PIPE was not subject to Spyre stockholder approval. Subject to Spyre stockholder approval and certain beneficial ownership limitations set by each holder, each share of Series B Preferred Stock will automatically convert into 40 shares of Common Stock. We have filed a Table of Contents definitive proxy statement with the SEC to solicit such stockholder approval, among other matters, at the 2024 annual meeting of stockholders to be held on May 13, 2024. Except as otherwise required by law (e.g. voting on a change to the authorized shares of Preferred Stock or the rights of such shares as required by DGCL) and as specified in our Series B Certificate of Designation, the Series B Preferred Stock does not have voting rights. Corporation Information We were formed as a limited liability company under the laws of the State of Delaware in December 2013 and converted to a Delaware corporation in March 2015. On June 22, 2023, we completed the Asset Acquisition, pursuant to which all of Pre-Merger Spyre s outstanding equity interests were exchanged based on a fixed exchange ratio of 0.5494488 to 1 for consideration from Spyre of 517,809 shares of Common Stock and 364,887 shares of Series A Preferred Stock in addition to the assumption of outstanding and unexercised stock options to purchase 2,734 shares of Common Stock from the Amended and Restated Spyre 2023 Equity Incentive Plan. On November 28, 2023, we changed our name from Aeglea Biotherapeutics, Inc. to Spyre Therapeutics, Inc. and our Nasdaq ticker symbol from AGLE to SYRE . Our principal executive offices are located at 221 Crescent Street, Building 23, Suite 105, Waltham, MA 02453, and our telephone number is (617) 651-5940. On September 8, 2023, we effected a reverse stock split of our Common Stock at a ratio of 1-for-25. Except as indicated otherwise, all share numbers related to our Common Stock disclosed in this prospectus have been adjusted on a post-Reverse Split basis. Implications of Being a Smaller Reporting Company We are a smaller reporting company, meaning that the market value of our Common Stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our Common Stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our Common Stock held by non-affiliates is less than $700.0 million. As a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and smaller reporting companies have reduced disclosure obligations regarding executive compensation. Table of Contents The Offering Shares Offered by the Selling Securityholders Up to (i) 22,496,402 shares of Common Stock and (ii) 10,865,000 shares of Common Stock issuable upon the conversion of 271,625 shares of Series B Preferred Stock. Terms of the Offering The selling securityholders will determine when and how they will dispose of the shares of Common Stock and shares of Common Stock issuable upon conversion of Series B Preferred Stock registered under this prospectus for resale. Shares Outstanding As of December 31, 2023, there were 36,057,109 shares of our Common Stock, 437,037 shares of our Series A Preferred Stock and 150,000 shares of our Series B Preferred Stock outstanding. Use of Proceeds We will not receive any proceeds from the sale of the Resale Shares offered by the Selling Stockholders under this prospectus. The net proceeds from the sale of the Resale Shares offered by this prospectus will be received by the Selling Stockholders. See the section titled Use of Proceeds. Risk Factors See the section titled Risk Factors and other information included in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in our securities. Trading Markets and Ticker Symbols Our Common Stock is listed on The Nasdaq Global Select Market under the symbol SYRE. Except as otherwise noted, the number of issued and outstanding shares of Common Stock does not include the following, as of December 31, 2023: 17,481,480 shares of Common Stock issuable upon the conversion of 437,037 shares of Series A Preferred Stock; 6,000,000 shares of Common Stock issuable upon the conversion of 150,000 shares of Series B Preferred Stock; 3,029 shares of Common Stock reserved for issuance under our 2015 Equity Incentive Plan; 4,931,476 shares of Common Stock reserved for issuance under our Amended and Restated 2016 Equity Incentive Plan (the 2016 Plan ); 6,044,000 shares of Common Stock reserved for issuance under our 2018 Equity Inducement Plan, as amended; 72,404 shares of Common Stock reserved for issuance pursuant to our 2016 Employee Stock Purchase Plan; 250,000 shares of Common Stock reserved for issuance upon the exercise of 250,000 pre-funded warrants to acquire shares of Common Stock; 684,407 shares of Common Stock reserved for issuance upon the exercise of 684,407 warrants to acquire shares of Common Stock; 121,871 shares of Common Stock reserved for issuance under the Spyre 2023 Equity Incentive Plan, as amended and assumed by us; and 4,865,000 shares of Common Stock issuable upon the conversion of 121,625 shares of Series B Preferred Stock issued subsequent to December 31, 2023 in the March 2024 PIPE. Table of Contents Except as indicated otherwise, all share numbers related to our Common Stock disclosed in this prospectus have been adjusted on a post-Reverse Split basis. For additional information concerning the offering, see the section titled Plan of Distribution Table of Contents
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/TCBWF_tc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/TCBWF_tc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..132e5ed42f8ed7162d42f210f968e823fac98b7a
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/TCBWF_tc_prospectus_summary.txt
@@ -0,0 +1,2585 @@
+PROSPECTUS
+SUMMARY
+
+ 
+
+This
+summary highlights information contained elsewhere, or incorporated by reference, in this prospectus and does not contain all the information
+that you should consider in making your investment decision. Before deciding to invest in our securities, you should read this entire
+prospectus carefully, including the sections of this prospectus entitled "Risk Factors" beginning on page 27 of this prospectus,
+the information included in any free writing prospectus that we have authorized for use in connection with this offering, and the documents
+incorporated by reference herein. Unless the context requires otherwise, in this prospectus TC BioPharm (Holdings) plc (formerly TC BioPharm
+(Holdings) Limited, which was re-registered as a public limited company on January 10, 2022) and its subsidiaries ( Subsidiar(y/ies) ),
+and TC BioPharm Limited (our principal trading subsidiary) shall collectively be referred to as TCB, the Company, 
+ the Group , we, us, and our unless otherwise noted. Unless otherwise indicated,
+all share amounts and prices reflect the consummation of the ADS Ratio Change.
+
+ 
+
+Corporate
+Overview
+
+ 
+
+TCB
+is based in Scotland and is a clinical-stage biopharmaceutical company focused on developing novel immunotherapy products
+based on our proprietary allogeneic gamma delta T (GD-T) cell platform. Harnessing the innate ability of GD-Ts has enabled us to develop
+a range of clinical-stage cell therapies designed to combat cancer and viral infection.
+
+ 
+
+In-house
+clinical studies have demonstrated that our unmodified allogeneic GD-T products are (i) well tolerated and (ii) show preliminary evidence
+of disease modification in patients with the late-stage blood cancer, known as acute myeloid leukemia (AML). Based on clinical data generated
+by us believe that unmodified GD-Ts have the potential to treat all blood cancers.
+
+ 
+
+TCB
+now is embarking on phase 2b-into-pivotal (phase 3) clinical studies with a view to launching its first oncology product for the treatment
+of AML. Clinical results generated thus far have enabled us to obtain FDA orphan drug status for treatment of AML.
+
+ 
+
+In
+addition to unmodified allogenic GD-Ts for treatment of blood cancers, we are also developing an innovative range of genetically-modified
+CAR-T products for treatment of solid cancers. We believe that solid cancers are more difficult to treat than blood cancers and may require
+the addition of a CAR "chimeric antigen receptor" (i) to help therapeutic cells to "navigate" into diseased cancerous
+tissue and (ii) to retain therapeutic cells in-situ at the lesion for maximal efficacy (increased persistence).
+
+ 
+
+In
+order to manufacture our portfolio of allogeneic products, TCB selects the highest quality GD-T cells from healthy donors, activate the
+cells and grow them in large numbers at our in-house GMP-compliant manufacturing facility before administration to a patient in order
+to target and then destroy malignant or virally-infected tissues. TCB believes that we have introduced a step-change to our manufacturing
+platform by implementing a freeze-thaw process that will allow product to be shipped from cleanroom to patient without any shelf-life
+issue. Resulting products, TCB believes, will be more cost-effective and straightforward to ship form cleanroom to clinic.
+
+ 
+
+At
+this stage, TCB does not have any approved products. Accordingly, TCB has not generated any revenue from the sale of products, and TCB
+does not expect to generate any such revenue unless and until it obtains regulatory approvals for, and commercialize any of, our product
+candidates. In the future, TCB will seek to generate revenue primarily from product sales and, potentially, regional or global collaborations
+with strategic partners, which may produce license fee income.
+
+ 
+
+See
+"Business - Overview" in 2023 Form 10-K incorporated by reference in this prospectus.
+
+ 
+
+Intellectual
+Property 
+
+ 
+
+We
+have a strong portfolio of patents covering manufacture and commercialization of GD-T cell products and their modification via CAR-T
+(summarized below). Our technology platform and clinical programs have enabled us to raise over $100 million in grant, equity and collaboration
+funding since becoming operational in 2017. This financing has allowed us to enhance and expand our clinical and preclinical programs
+as well as build our team of world-class scientists.
+
+ 
+
+ -5-
+
+ 
+
+ 
+
+ 
+
+The
+following table provides an overview of our core technology platforms, technology assets and competencies across the business. Additional
+details of our intellectual property portfolio are provided below.
+
+ 
+
+ 
+ ASSET
+ SUMMARY
+ 
+ ATTRIBUTES
+
+ 
+ 
+ 
+ 
+
+ 
+ GD-T
+ Vehicle
+ 
+ 
+ Readily
+ available and expanded to high numbers.
+
+ 
+ 
+ 
+ 
+ Not
+ MHC-restricted, therefore no graft vs host disease – an allogeneic platform.
+
+ 
+ 
+ 
+ 
+ Pre-programmed
+ tropism for infiltration of diseased tissue.
+
+ 
+ 
+ 
+ 
+ Multiple
+ modes of innate cytotoxicity and coordinating a wider immune response.
+
+ 
+ 
+ 
+ 
+ Clinical
+ tolerability of the allogeneic vehicle demonstrated at high dose level.
+
+ 
+ 
+ 
+ 
+ Naturally
+ arising in different subtypes offering a menu of vehicles with unique properties.
+
+ 
+ 
+ 
+ 
+
+ Allogeneic
+ Cell Banks
+ 
+ 
+ Donor
+ GD-Ts selection based on highest therapeutic quality.
+
+ 
+ 
+ 
+ 
+ Reproducible
+ product with low cost-of-goods compared with autologous (patient-bespoke) therapies, can be frozen-shipped, thawed at clinic.
+
+ 
+ 
+ 
+ 
+ Well
+ understood clinical and regulatory pathway to commercialization.
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Co-stimulatory
+ CAR-T
+ 
+ 
+ Elimination
+ of off-tumor toxicity.
+
+ 
+ 
+ 
+ 
+ Reduction
+ of cytokine release from killing healthy cells.
+
+ 
+ 
+ 
+ 
+ Reliance
+ on natural T cell activation and no tonic signaling
+
+ 
+ 
+ 
+ 
+ Antigen
+ expression on healthy tissue tolerated – greatly expanded range.
+
+ 
+ 
+ 
+ 
+ Ability
+ to use multiple co-stimulatory receptors to add functionality.
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Integrated
+ Business Model
+ 
+ 
+ Full
+ control of critical stages of development projects, which increases speed and reliability of development and production, optimizes
+ operations to our specialized products and materially reduces our cost base
+
+ 
+ 
+ 
+ 
+ No
+ pass-through or transaction costs form external service providers, which increases efficiency and speed of development and manufacturing
+ and materially reduces our cost base
+
+ 
+ 
+ 
+ 
+ In-house
+ clinical management ensures best chance of clinical success and avoids use of very expensive clinical management in early-stage trials,
+ materially reducing our cost base.
+
+ 
+ 
+
+The
+strength of our patents involves complex legal and scientific questions and can be uncertain.
+
+ 
+
+We
+actively seek to protect the intellectual property and proprietary technology that we believe is important to our business, including
+seeking, maintaining, enforcing and defending patent rights for our therapeutics and processes, whether developed internally or licensed
+from third parties. Our success will depend on our ability to obtain and maintain patent and other protection including data/market exclusivity
+for our therapeutic products and platform technology, preserve the confidentiality of our know-how and operate without infringing the
+valid and enforceable patents and proprietary rights of third parties.
+
+ 
+
+Our
+policy is to seek to protect our proprietary position generally by filing an initial priority filing at the U.K. Intellectual Property
+Office, or UKIPO. This is followed by the filing of a patent application under the Patent Co-operation Treaty claiming priority from
+the initial application(s) and then progressing to national applications in, for example, the United States, Europe, Japan, Australia,
+New Zealand, China and Canada. In each case, we determine the strategy and territories required after discussion with our patent professionals
+to ensure that we obtain relevant coverage in territories that are commercially important to us and our GD-T therapeutic candidates.
+We will additionally rely on data exclusivity, market exclusivity and patent term extensions when available, including as relevant exclusivity
+through orphan or pediatric drug designations. We also rely on trade secrets and know-how relating to our underlying platform technology
+and therapeutic products. Prior to making any decision on filing any patent application, we consider, with our patent professionals,
+whether patent protection is the most sensible strategy for protecting the invention concerned or whether the invention should be maintained
+as confidential.
+
+ 
+
+ -6-
+
+ 
+
+ 
+
+ 
+
+As
+of June 5, 2024, we own 16 granted patents and 11 patent applications in 3 families, and have an exclusive license to an additional 1
+family of 14 granted patents and 8 patent applications. Consistent with the filing strategy outlined above, all of our applications are
+either UK applications, PCT applications or national phase applications derived from a corresponding PCT application. These patents and
+patent applications include claims directed to our therapeutic products and platform technology or other manufacturing and process technology
+to further enable our therapeutic products and manufacturing methods.
+
+ 
+
+See
+"Business - Intellectual Property" in our 2023 Form 10-K incorporated by reference in this prospectus.
+
+ 
+
+Our
+Business Strategy
+
+ 
+
+We
+have taken a step-wise approach to clinical development and commercialization. To achieve this, we have made the clinical transition
+from autologous GD-Ts to allogeneic GD-Ts, improving our process for optimization of our product based on data and new technologies.
+The Company plans to maximize the value of TCB-008 and future iterations by expanding the use case for the product, effectively believing
+TCB-008 (and future such iterations) to be a "platform therapeutic" based upon its safety profile and the in-house knowledge
+of GD-Ts and TCB-008. Additionally, the Company plans to opportunistically add to the asset base of the Company around other cell therapy
+approaches and such technologies where we can leverage our expertise and facilities. Our commercialization strategy is to introduce
+products firstly in blood cancers (AML initially), and pending data, in other disease indications and in solid tumors as a combination
+therapeutic.
+
+ 
+
+Our
+strategic objective is to build a global therapeutic business with an extensive portfolio of GD-T cell-based products with the potential
+to significantly improve the outcomes of patients with cancer and infectious disease. In order to achieve our objective, we are focused
+on delivering success in the following areas:
+
+ 
+
+Progress
+unmodified GD-T2s into Phase 2/3 clinical trials for the treatment of blood cancers
+
+ 
+
+Having
+generated meaningful clinical data showing our product is well-tolerated in late-stage AML patients with no remaining treatment options,
+we commenced phase 2b-into pivotal (phase 3) clinical studies under the trial name , ' ': ACHIEVE , with OmnImmune during
+2022 in AML patients who have failed to respond adequately to induction therapy. The aim is to provide a form of salvage therapy which
+will either stabilize the patient, thereby preventing disease progression, or delay the requirement for human stem cell transplant. Our
+initial trial centers are in the UK and we are currently dosing patients in this trial. Working on the premise that other blood cancers
+should respond to GD-Ts in a similar manner to AML, TCB plans to conduct clinical studies for OmnImmune in other hematological malignancies
+in future.
+
+ 
+
+Unmodified
+GD-T2s for use in the treatment of fungal infections
+
+ 
+
+Gamma-delta
+T cells are dysfunctional in patients with many severe viral diseases and TCB anticipates that its unmodified gamma delta T cell therapy
+platform will be used in due course to treat viral infections as well as cancers under the name ImmuniStim . For example, during
+2022 TCB developed a clinical trial protocol to treat patients with COVID 19. Because of the progress of the disease and absence of appropriate
+trial patients this trial is not currently being progressed, although we expect to continue our infectious disease program in future.
+
+ 
+
+Grow
+our business operations to support the increasing number of clinical-phase products in development
+
+ 
+
+We
+believe that our existing cell and gene manufacturing facility in the UK has the capacity to support our committed clinical development
+plans. We plan to continue to build upon this to support expansion of our product pipelines to new assets and to grow our clinical team.
+We also will work closely with vendors to embrace emerging technologies in our manufacturing operations that are appropriate and optimized
+for our products to continually improve the quality and efficiency of our manufacturing systems. We believe that maintaining in-house
+control of these activities is critical to effective and efficient progression and we will continue to seek to build integrated business
+functions where possible.
+
+ 
+
+ -7-
+
+ 
+
+ 
+
+ 
+
+Apply
+our discovery engine to target further diseases and add additional functionality to our products
+
+ 
+
+As
+a platform technology, our co-stimulatory CAR-T GD-T cell system has a wealth of potential options to build added functionality into
+our cell-based platform. We plan to continue to innovate and partner in the field to augment our drug products and introduce next generation
+attributes. We also plan to continue to innovate our manufacturing and supply chains to efficiently scale our processes and simplify
+the interface with patients and healthcare professionals, whilst continually seeking to reduce manufacturing costs to improve patient
+access.
+
+ 
+
+Expand
+our intellectual property portfolio and acquire additional technologies to augment our strong IP position
+
+ 
+
+We
+intend to continue building on our technology platform, comprised of intellectual property, proprietary methods and know-how in the field
+of GD-T cells. These assets form the foundation for our ability, not only to strengthen our product pipeline, but also to successfully
+defend and expand our position as a leader in the field of GD-T based immune-oncology.
+
+ 
+
+See
+"Business - Business Strategy" in our 2023 Form 10-K incorporated by reference in this prospectus.
+
+ 
+
+TCB s
+Strengths
+
+ 
+
+Our
+clinical trials have provided very strong evidence of drug-toleration and some preliminary evidence of clinical benefit.
+
+ 
+
+Our
+clinical trial of TCB001 involved treatment of patients with autologous unmodified GD-Ts. In a phase 1b/2a dose-ranging safety study
+(maximum total dose 30x109 cells) we saw no evidence of drug-related severe adverse events. A total of eight patients were
+treated with escalating doses of TCB001, and no treatment-related toxicities were reported during the full six-week therapeutic course.
+Data from OmnImmune (TCB002) suggests an excellent tolerability, with no observed Host versus Graft Disease (HvGD) and some preliminary
+indication of clinical benefit. OmnImmune (TCB002) has been granted Orphan Drug Designation by the FDA.
+
+ 
+
+Our
+CAR-T platform is centered on development of safer and more widely applicable therapeutic candidates and associated process and manufacturing
+capabilities.
+
+ 
+
+Our
+proprietary co-stimulatory CAR-T technology platform covers identification of target cancer antigens, successful design and engineering
+of target sequences, preclinical safety testing and optimized manufacturing processes suitable for producing therapeutic candidates for
+use in clinical trials and commercialization. We believe the platform will enable development of additional GD-T cell therapeutic candidates
+targeting cancers that have previously been difficult to treat. We believe the products will be demonstrably safer than the current generation
+of AB T cell CAR-T products because they will not attack healthy non-cancerous cells and augment the natural biological process rather
+than bypassing it.
+
+ 
+
+We
+have identified a large and growing pool of cancer targets for which we can develop additional therapeutic candidates.
+
+ 
+
+We
+have identified over 20 antigens that are preferentially expressed in cancer cells and have established ongoing research programs to
+develop several of these into our GD-T platform. Within the terms of our agreement, bluebird bio, we have first right of refusal on a
+further three oncology targets. Each antigen target presents an opportunity to target many cancer types and therefore presents multiple
+potential represents a development, collaboration and/or an out-licensing opportunity as each target could be used to target specific
+cancer types. Growing the pipeline of products built on our co-stimulatory CAR-T and reaching patients is our priority.
+
+ 
+
+We
+have historically entered collaborative arrangements with partners (bluebird bio, Inc (now 2seventybio). (USA) and Nipro Corporation
+(Japan), which involve funded or partly funded preclinical collaboration. It is uncertain at this time whether TCB will receive any significant
+revenues from these collaborations.
+
+ 
+
+ -8-
+
+ 
+
+ 
+
+ 
+
+We
+retain control of key business elements, such as product manufacture and clinical research.
+
+ 
+
+Whilst
+many companies contract out product manufacture, quality systems and clinical trial management, we have elected to build these skills
+in-house. TC BioPharm has a GMP (Good Manufacturing Practice) cleanroom facility where our products are manufactured. We also retain
+all the quality support systems such as product testing and release of final product to the clinic. Keeping these systems in-house allows
+the Company to control all aspects of the manufacturing process whilst significantly reducing costs of goods (CoGs). Further saving on
+costs are accrued by in-house manufacture, as contract manufacturing organizations (CMOs) will typically charge several times more than
+the actual costs to maintain their profit margins. Rather than fully outsource our clinical trial management, data management and pharmacovigilance,
+we maintain an inhouse clinical team that partners with a contract clinical research organization (CRO) for data management and pharmacovigilance
+services. The inhouse clinical team conducts and manages our own clinical trials in-house. In addition to significant cost savings, this
+allows us to build a strong working relationship with physicians who are treating the cancer patients; we believe this is key to successful
+product development as the physicians participating in our clinical studies will also be our future customers. We believe that retaining
+control of key elements of our business such as GMP manufacture and clinical operations, has allowed TC BioPharm to move quickly and
+efficiently since incorporation.
+
+ 
+
+We
+continue to file new patent applications from new in-house product development, and have a strong growing intellectual property portfolio
+to protect our products and proprietary platform.
+
+ 
+
+We
+have a strong intellectual property portfolio covering the key aspects of our manufacturing processes and product platforms. Our in-house
+product development team are dedicated to developing new therapeutic candidates and optimizing current manufacturing processes. All of
+our patent families are currently in various stages of the patent approval process, and as leaders in the path towards the commercialization
+of GD-Ts we hold significant first-mover advantage captured by trade secrets and know-how.
+
+ 
+
+Our
+policy of developing strategic alliances has and will provide additional support for product development and commercialization.
+
+ 
+
+We
+believe that strategic alliances, both historic and potential future alliances, have and will provide extensive experience in scale-up
+and automation, culture media manufacture and post-authorization sales and marketing with regional expertise. Additionally, we expect
+to use knowledge gained from our collaborations to improve development pathways for our unpartnered CAR-T therapeutic candidate programs.
+
+ 
+
+We
+have a highly knowledgeable and experienced management team with extensive industry experience and expertise in the United States and
+in Europe.
+
+ 
+
+Mr.
+Kobel joined us as our Chief Executive Officer at the time of our IPO. Bryan brings a US presence to our executive team and over 15 years 
+experience in Healthcare and Life Sciences capital markets. Martin Thorp, our Chief Financial Officer has over 40 years experience
+in implementing capital strategies globally from seed investment to IPO. He was global CEO of Arthur Andersen Corporate Finance based
+in New York.
+
+ 
+
+Ability
+to treat patients under the , ' ': Specials regulatory framework.
+
+ 
+
+European
+regulations (Regulation 167 of the Human Medicines Regulations 2012) set out the exemption from the requirement for a medicinal product,
+placed on the market in the UK to hold a marketing authorization. This exemption flows from Article 5(1) of EU Directive 2001/83/EC,
+which states that a member of the EU may, in accordance with legislation in force and to fulfil special needs, excludes from the provisions
+of this Directive medicinal products supplied in response to a bona fide unsolicited order, formulated in accordance with the specifications
+of an authorized healthcare professional and for use by an individual patient under his or her direct personal responsibility. Such an
+unlicensed medicinal product may only be supplied in order to meet the special needs of an individual patient. An unlicensed medicinal
+product should not be supplied where an equivalent licensed medicinal product can meet the special needs of the patient. Responsibility
+for deciding whether an individual patient has "special needs" which a licensed product cannot meet should be a matter for
+the doctor, dentist, nurse independent prescriber, pharmacist independent prescriber or supplementary prescriber responsible for the
+patient s care.
+
+ 
+
+ -9-
+
+ 
+
+ 
+
+ 
+
+In
+terms of time and cost, the , ' ': Specials scheme is an attractive strategy. We believe that accumulating evidence by this route
+could lead to rapid and wider product uptake through , ' ': off-label use.
+
+ 
+
+TCB
+believes it has certain identified strengths. These include:
+
+ 
+
+ 
+ 
+ 
+ Clinical
+ trials that have provided strong evidence of safety and some preliminary indications of clinical benefit;
+
+ 
+ 
+ 
+ A
+ proprietary co-stimulatory CAR-T technology platform which we believe allows solid cancers to be treated without toxic side-effects;
+
+ 
+ 
+ 
+ Identification
+ of a large pool of cancer targets for which we believe we can develop therapeutic candidates;
+
+ 
+ 
+ 
+ Retention
+ of key business elements, especially in-house ability to manufacture cell-based product and conduct our own clinical research;
+
+ 
+ 
+ 
+ Robust,
+ and growing intellectual property portfolio protecting our products and proprietary platform;
+
+ 
+ 
+ 
+ Our
+ policy is to develop strategic collaborations with leading, international companies to work together with us to develop certain GD-T
+ CAR-T products into clinic. We believe that existing and future collaborations will provide us with experience in scale-up and automation,
+ and post-authorization sales and marketing;
+
+ 
+ 
+ 
+ A
+ highly knowledgeable and experienced management team with extensive industry experience and expertise in the United States and in
+ Europe; and
+
+ 
+ 
+ 
+ Ability
+ to treat patients under the , ' ': Specials regulatory framework in Europe.
+
+ 
+ 
+
+Our
+Pipeline
+
+ 
+
+What
+are gamma delta T cells?
+
+ 
+
+The
+immune system plays an important role in targeting and destroying cancer cells. One component has evolved to scan the body for diseased
+cells and eradicate them. In humans, GD-Ts arise as a number of different subtypes, defined by the sequence of the gamma and delta chains
+of the T-cell receptor (TCR) on the cell surface. The gammadelta2 (GD-T2) subtype typically is the most abundant of these cells in healthy
+humans, and its TCR- of anti-cancer immunity is GD-T cells – a type of white blood cell that express a variety of innate receptors,
+which mediated signaling has been fully characterized by researchers.
+
+ 
+
+Virally-infected
+or cancerous cells become stressed and accumulate cell surface phosphoantigens (isopentenyl pyrophosphate – IPP s) which
+are recognized by GD-T2 cells. Our proprietary technology platform includes the manufacturing of unmodified and genetically modified
+(CAR-T) GD-T cells as therapeutic candidates for use in clinical trials and commercialization. Almost all aspects of the value-chain
+from product manufacture, quality systems, clinical and regulatory are operated in-house by TC BioPharm. We believe this is one of our
+core competitive advantages, which we believe will contribute materially to our ability to overcome the challenging nature of developing
+new products.
+
+ 
+
+Human
+lymphocytes comprise two groups of cells, B cells that generate antibodies for humoral immunity, and T cells that are responsible for
+cellular immune responses. In healthy individuals, GD-T cells generally represent between 1% and 10% of peripheral blood T lymphocytes
+and present one of the first lines of defense against a wide range of bacterial and viral pathogens, as well as surveillance for cancerous
+cells. GD-T cells have the ability to regulate the initial immune response in several ways, including recruitment of other immune cells
+such as neutrophils, dendritic cells and macrophages through production of various chemokines (Kirby et al., 2007). Depletion
+of GD-T cells leads to impaired host defense to lung infections, for example (Moore et al., 2000; Lockhart et al., 2006).
+The predominant subset of GD-T cells in the blood is the GD-T2, which mediates a variety of immune responses by direct cytolysis of cancer
+cells and infected cells, development of memory phenotypes and modulation of other immune cells. The gammadelta1 (GD-T1) is a functionally
+distinct subset of GD-T cells, which are a predominantly tissue resident population. GD-T1s are less well characterized, but their cytotoxic
+function also has been described in different liquid and solid tumors (Siegers & Lamb, 2014).
+
+ 
+
+ -10-
+
+ 
+
+ 
+
+ 
+
+Both
+subsets of GD-T cells are thought to play a role in autoimmune disorders such as celiac disease, rheumatoid arthritis, autoimmune polyglandular
+syndrome and sarcoidosis where such lymphocytes are seen to accumulate in high numbers.
+
+ 
+
+ 
+ 
+ 
+ GD-T
+ cell killing a cancer cell.
+
+ 
+
+ (1)
+ A human GD-T (labelled , ' ': T ) identifies and scans (2) the surface of a cancer cell (labelled , ' ': C ). On contact
+ with the cancer cell (3) the GD-T releases perforin granules (stained red) into the cancer cell, rupturing its membrane (4) destroying
+ the cancer cell (adapted from – Enc Life Sci, Jul-2007).
+
+ 
+ 
+
+How
+can GD-Ts be used to treat disease?
+
+ 
+
+Cellular
+immunotherapy is a form of treatment that harnesses the cells of the immune system to combat disease and is one of the most actively
+pursued areas of research by biotechnology and pharmaceutical companies today. Interest in immunotherapy is largely driven by recent
+compelling efficacy data in cancers and by the potential to achieve a cure or functional cure for some patients. While the field of immunotherapy
+in cancer, in general, has achieved proof of concept and yielded significant durable responses in multiple tumor types, there remain
+major tumor types such as colon, breast, and prostate cancers as well as patient groups within responsive tumors, that do not respond
+to current immunotherapy treatments. One theory to explain this non-responsiveness is that certain tumors require direct immune stimulation.
+T cell-based technologies seek to deliver activated T cells towards malignancies to initiate an immune response. The primary challenges
+in the field have been to couple an acceptable efficacy and safety profile to successfully target solid tumors.
+
+ 
+
+Adoptive
+T cell transfer typically involves administration of autologous, allogeneic, or genetically-modified T cells (see footer below) into
+a recipient host with the specific goal of boosting or transferring enhanced immunologic functionality. One of the most advanced cell-based
+approaches – chimeric antigen receptor modified T cells (CAR-T) – has gained momentum. In a recent study, patients with refractory
+B cell acute lymphoblastic leukemia were treated with autologous genetically-modified T cells, with almost 90% of patients showing a
+marked improvement (Pan et al., 2017). Although the treatment is showing promise for specific tumor types, the safety profile
+remains a concern, as serious adverse events have previously been reported following CAR-T therapy (Grigor et al., 2017). As a
+consequence of safety issues related to this approach, regulatory approval may be more complex for this genetically modified T cell therapy
+which effectively has two , ' ': starting materials – (i) the cellular component, and (ii) a lentiviral vector. The therapeutic
+premise is well-established – T cells are transduced with a viral vector encoding a chimeric antigen receptor capable of recognizing
+cancer-specific antigens, for example, CD19 which is commonly expressed on several tumors such as myeloma and B cell lymphomas. Transduction
+is the process by which DNA is transferred from one cell to another by a virus; in this specific case DNA is introduced via a viral vector
+(a tool commonly used by molecular biologists to deliver genetic material).
+
+ 
+
+Following
+transduction, the T cells are genetically primed to recognize and kill specific tumor cells expressing the target antigen. The process
+involves extracting a patient s T cells (or growing an allogeneic T cell bank), transfecting the cells with a gene for a chimeric-antigen-receptor
+(CAR), and re-infusing transfected T cells into the patients. The use of cancer-specific cell therapies has gained momentum as several
+companies demonstrated that genetically modified CAR-T cells are efficacious when directed against blood tumors. These breakthrough findings
+have moved cell-based immunotherapy into the forefront of clinical oncology with two drugs now in the market.
+
+ 
+
+T
+lymphocytes have long been known to play an important role in cancer suppression and modulation of tumor growth and numerous experimental
+studies have demonstrated the anti-cancer potential of GD-T lymphocytes. Indeed, GD-T cells can recognize a number of specific tumor-associated
+molecules including non-peptidic antigens (IPP s – isopentenyl pyrophosphate) and immune surveillance stress signals (such
+as HSP60/70, MICA, MICB, and ULBP) present on the surface of transformed cells. The GD-T cell overexpresses IL-2 receptors and this cytokine
+is necessary to activate them (Kjeldsen-Kragh, 1993). On recognizing a tumor cell, GD-T cells exert their anti-cancer properties via
+release of both perforin and of granzyme, a serine protease which enters the target cell to trigger cell death (apoptosis). Our research
+efforts are focused entirely on targeting tumors in ways that may result in an improved therapeutic index and that have potential applications
+in solid tumors as well as hematological malignancies. In contrast to conventional AB CAR-T cells, our GD-T cell technology provides
+greater specificity in targeting tumors through recognition of IPP-expressing cells, whilst avoiding on-target, off-tumor effects on
+healthy tissue lacking in IPPs.
+
+ 
+
+ -11-
+
+ 
+
+ 
+
+ 
+
+Liquid
+cancers
+
+ 
+
+For
+cell therapies to be effective several parameters need to be addressed. These include (i) viability, (ii) homing to the tumor, (iii)
+persistence at the tumor, and (iv) target-specificity.
+
+ 
+
+Use
+of unmodified GD-Ts to treat blood cancers addresses all the above factors. We believe that (i) we have demonstrated therapeutic cells
+remain viable when injected into the bloodstream of cancer patients; (ii) our research shows GD-Ts injected into the bloodstream remain
+in-situ; and (iii) they persist for up to 100 days after administration. Moreover, we believe we have demonstrated that certain late-stage
+blood cancer patients treated with multiple GD-T doses have shown significantly positive responses. These findings lead TCB to believe
+that all patients with similar blood cancers may respond to GD-T cell therapy in a positive manner.
+
+ 
+
+Solid
+cancers
+
+ 
+
+We
+believe that it may be necessary to use CAR-T technology (i) to maximize therapeutic cell homing into the solid tumor site, and (ii)
+to increase GD-T cell persistence by , ' ': tethering the cell to antigens present on the cancer cell surface.
+
+ 
+
+In
+order to overcome toxicities seen with conventional CAR-T approaches, we believe that we have developed a , ' ': co-stimulatory 
+GD-T CAR which will only attack and kill cancerous cells whilst leaving healthy cells unharmed. This is important as many of the current
+conventional CAR-T therapies cannot distinguish target antigens expressed on healthy cells from those on cancerous cells, which results
+in various pathologies, including cytokine release syndrome, that in some cases had led to patient death. Such targeting of health cells
+with conventional CAR-T makes their use in solid cancers difficult, as too much healthy tissue is likely to be destroyed as , ' ': collateral 
+damage in the treatment process.
+
+ 
+
+The
+diagram below illustrates how TCB s approach works, using the innate receptors on the GD-T cell surface to act as a , ' ': safety
+switch – such receptors are generally not triggered by healthy cells, only by disease markers (IPP s) on the surface
+of cancerous or virally infected cells.
+
+ 
+
+ 
+ 
+ A
+ B
+ 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+
+ 
+ 
+
+Co-stimulatory
+CAR-T: A) No GD-T cell activation in healthy cell. B) GD-T activation and cell-killing in cancer cell.
+
+ 
+
+Autologous
+cells are derived from , ' ': self , using patients own cells to treat their specific disease
+
+ 
+
+ -12-
+
+ 
+
+ 
+
+ 
+
+Allogeneic
+cells are derived from donor material, giving rise to cell banks able to treat numerous patients
+
+ 
+
+Genetically-modified
+cells are typically engineered with a , ' ': chimeric receptor to target specific cancer antigens
+
+ 
+
+Commercialization
+of conventional CAR-T cell therapy has taken decades of high-quality research in academia and industry, and it has provided transformational
+results for a number of patients with B cell malignancies. However, as noted, there are numerous barriers to widespread adoption, including:
+
+ 
+
+ 
+ 
+ 
+ Severe
+ Toxicities. The significant risk of severe toxicities, especially cytokine release syndrome (CRS) and neurotoxicity occurring
+ up to 3 weeks from treatment. These toxicities have resulted in the need for implementing specific clinical pathways to certify staff
+ and facilities in the administration of the drugs and the management of the toxicities.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ On-target,
+ off tumor toxicities. Conventional CAR-T products have no mechanism for discriminating between diseased and healthy cells. Activation
+ is governed solely by the expression of the target antigen, which can lead to toxicity when the target antigen is expressed on healthy
+ cells. In marketed products targeting CD19 (present in the vast majority of B cells), this can be tolerated as B-cell aplasia, albeit
+ with the need for regular long-term immunoglobulin replacement therapy. However, in experimental CAR-T products targeting other antigens
+ this has been shown to cause serious side-effects, up to and including fatality.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Complex
+ supply chains associated with autologous treatments. By definition, autologous treatments require the source cells to have been
+ collected from the patient. It therefore requires a personalized supply chain with multiple touch points and the manufacturing process
+ can only ever be performed on a single-patient batch size. This adds complexity to each treatment and has required the introduction
+ of completely new processes and infrastructure in able to commercialize the products.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Inherent
+ variability of the drug product. Each patient has a different cell population and so the starting material of each manufacturing
+ batch is always variable, leading to variable final product. This can be minimized during pre-screening, which eliminates some patients
+ from treatment, but there are still significant challenges in manufacturing to provide consistent batches of drug products and in
+ understanding which variables are critical to product quality.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ High
+ list price of the products. The need for personalized manufacturing, new supply chain processes and management of acute and chronic
+ toxicities have all contributed to the high prices associated with the first CAR-T products reaching the market. In the USA, Kymriah 
+ has a list price of $475,000 for pediatric ALL, and Yescarta lists at $373,000 for DLBCL patients. The associated treatment
+ costs and ongoing management can increase this price significantly
+
+ 
+ 
+
+The
+combination of the co-stimulatory CAR, with GD-T cells, provides TCB with a proprietary platform which we believe addresses the problems
+with existing CAR-T products in the following ways:
+
+ 
+
+ 
+ 
+ 
+ Using
+ the natural T cell signaling of the GD-T cell will, we believe, result in less risk of hyperactivation and tonic signaling with an
+ overall reduction in the risk of CRS and less exhaustion of the cells.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ The
+ requirement on cell activation remains on the endogenous GD-T cell TCR signal, which detects stress signals associated with cancerous
+ cells, so healthy cells are not targeted for destruction even if the target antigen is expressed and the CAR binds, thus off-tumor
+ toxicity is avoided.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Manufacturing
+ in batches of high dose numbers, without the complex patient collection of personalized supply chain steps, we believe will result
+ in a dramatic reduction in cost of goods. This will be reflected in a list price which is in line with current biologicals. With
+ the reduced likelihood of associated toxicities, the treatment and management costs should also be significantly lower, and the products
+ can be made available to many more patients as a result.
+
+ 
+
+ -13-
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ The
+ combination of a well-tolerated product and simplified supply chain (by virtue of our proprietary CryoTC freeze-thaw process), we
+ believe, will make the therapy suitable for administration in local oncology centers without patients having to locate in centralized
+ specialist centers of excellence, further reducing financial and logistic barriers to treatment.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ The
+ tolerance of "off tumor" antigen binding without associated toxicity allows for a complete change in the current target
+ identification paradigm. Instead of identifying targets that are exclusively expressed on tumor cells, we believe our co-stimulatory
+ CAR-T approach confers an advantage to select targets that can be highly expressed on tumors and at low levels on healthy tissue.
+ We select targets based on their relative therapeutic index increase in expression, their homogeneity in tumors and the antigen density.
+ This allows us to target significantly more tumor associated antigens and to significantly expand the therapeutic index into higher
+ doses or repeat administration.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ GD-T
+ cells have multiple roles in humans, possessing both innate and adaptive functions. One role is a sentinel surveillance cell, and
+ they are biologically primed to travel through tissue searching for sites of cellular stress. This ability to penetrate tissue makes
+ them advantageous agents for treating solid tumors. We can add additional function to the GD-T cells by using one or more co-stimulatory
+ CAR-T constructs to add targeting to appropriate antigen(s) and to provide armor or strategies to overcome environmental and immune
+ suppression in the tumor microenvironment. Therefore, we believe that the platform offers a promising approach to target the full
+ spectrum of cancer diseases.
+
+ 
+ 
+
+Viral
+infections
+
+ 
+
+GD-Ts
+are natural killers of virally infected cells, as well as cancerous cells. We believe that our unmodified GD-T therapy offers substantial
+potential as a first line of attack against future viral pandemics. During the COVID-19 pandemic, we took the opportunity to develop
+a trial protocol to treat patients with COVID-19, which was approved by the MHRA. We are currently not progressing this trial because
+of the absence of available patients given the progression of the disease; however we would consider conducting a phase 1b/2a trial if
+more severe/pathogenic variants emerge and we believe that there is considerable opportunity to deploy our GD-T therapy in the treatment
+of viral infections, including rapid response treatment of future epidemics and pandemics and selected acute viral infections. Whilst
+our current focus is to prioritize cancer treatment we will seek opportunities to develop viral treatments either on our own or in partnership
+in future Numerous peer-reviewed publications have demonstrated that GD-T cells innate killers of cells which have become virally infected.
+Using Epstein-Barr virus infected cells as an exemplar, TCB has conducted pre-clinical studies to demonstrate that our GMP-compliant
+manufacturing process results in GD-T with potent anti-viral cytotoxicity
+
+ 
+
+Autologous
+versus allogeneic
+
+ 
+
+Commercially
+available cell therapies typically are either autologous or allogeneic. Autologous products are taken from one donor (the patient) and
+used to treat that same donor (self-to-self), whilst allogeneic products are usually taken from a single donor (not a patient) and used
+as the starting material to treat a large number of different individuals (patients). GD-T lymphocytes are known to exert their biological
+effect in a non-MHC restricted manner. This means the potential for graft-versus-host mediated rejection is significantly reduced if
+allogeneic (non-self) cells are used as a treatment compared with many other immune cell therapies. As many patients with late-stage
+cancer or severe viral infections are also immunosuppressed, potential for host-mediated rejection of allogeneic cells is also reduced.
+When compared with autologous variants, commercial benefits of allogenic treatment include the following:
+
+ 
+
+ 
+ 
+ 
+ significant
+ reduction in cost of goods;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ product
+ can be campaign manufactured and stockpiled frozen;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ increased
+ capacity to treat more patients;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ logistics
+ of shipping product are simplified;
+
+ 
+
+ -14-
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ higher
+ doses of (reproducible) product are possible; and
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ product
+ is immediately available for acute disorders
+
+ 
+ 
+
+Our
+strategy for developing an allogeneic solution for CAR-T is to select a pathway which will allow us to bring our products to patients
+as quickly as possible. These concepts build upon decades of previous development in allogeneic cell therapies and have clear understanding
+of development requirements in terms of manufacturing, clinical and regulatory execution.
+
+ 
+
+Although
+manufacture of allogeneic cell therapies allows product to be "pharmaceuticalized" by virtue of campaign manufacture and
+storage, the approach is however not without technical and logistic challenges. To manufacture allogeneic banks, donor cells need to
+be screened for numerous adventitious agents, including for example, HIV, hepatitis, CMV and syphilis. Additional tumorgenicity testing
+is required, and assays conducted to ensure the cell bank is free from karyotypic aberrations. In order to overcome any potential for
+rejection, TCB has developed allogeneic GD-T cell banks that are unlikely to elicit a graft-versus-host (GvH) or host-versus-graft (HvG)
+immune response.
+
+ 
+
+Donors
+are screened and selected based on clinically-relevant history and then based on the proliferative capacity and phenotypic character
+of their GD-Ts, based on a small volume blood draw and in-house assays. In this way, only good quality GD-T cells are selected for repeat
+apheresis and banking. The banks are HLA-typed and become the starting material for all of the allogeneic CAR-T products. These banks
+are cryopreserved in our facilities and can later be thawed, genetically engineered with the CAR, activated and expanded into final product,
+before being frozen again as multiple individual doses of drug product.
+
+ 
+
+Generation
+of Gamma Delta T cells from IPSC cells
+
+ 
+
+Identification
+of appropriate donors whilst possible is challenging as only a limited number of batches can be created from a single donation. GD-T
+cells can be routinely expanded from peripheral blood over 14 days. This provides a short window of opportunity for cell modification/engineering.
+
+ 
+
+Induced
+pluripotent stem cells (iPSCs) have the potential to overcome these issues because they are capable of unlimited proliferation and multidirectional
+differentiation. In 2013, several research groups from Japan reported the successful reprogramming of T-cells, followed
+by re-differentiation back to T cells (Vizcardo et al., 2013; Nishimura et al., 2013; Themeli et al.,
+2013). While re-differentiated T cells-maintained antigen specificity, they were also characterized by higher proliferation
+ability than an original T-cell clone.
+
+ 
+
+We
+hypothesized that GD-T derived iPSCs cells that carry the rearrangements at the TCRG and TCRD gene locus will be able to generate GD-T
+but not T cells. Furthermore, iPSC cells will provide a vast opportunity for the gene-editing without any time constraints
+of terminally differentiated cells.
+
+ 
+
+Reprogramming
+GD-T cells has proven to be a challenge, as these cells are not tolerant of cell sorting. Therefore, GD-T cells can be reprogrammed in
+a bulk culture with the rest of peripheral blood cells or at the end of 14 days expansion, when the purity of GD-T is highest. After
+several unsuccessful reprogramming attempts, we have optimized the conditions favoring GD-T cells reprogramming. In the last round of
+reprogramming >50 clones were created. After extensive analysis of DNA rearrangements in - and -locus of 5 pre-selected
+clones, it was confirmed that they are derived from GD-T cells with different TCR sequences.
+
+ 
+
+IPSC
+technology is an attractive approach for the limitless source of GD-T cells are successful progress in reprogramming has been demonstrated.
+Further work is now required for the establishment of a GMP compatible T-cell differentiation protocol. Generation of GDT cells from
+iPSC cells presents TCB with a vast opportunity for scaling without any time constraints of terminally differentiated cells.
+
+ 
+
+Fresh
+versus frozen product
+
+ 
+
+Commercial
+and clinical development of cellular therapy products will invariably require cryopreservation and frozen storage of cellular starting
+materials, intermediates and/or final product.
+
+ 
+
+ -15-
+
+ 
+
+ 
+
+ 
+
+Optimizing
+cryopreservation is important to obtaining maximum yield and a consistent end-product. Suboptimal cryopreservation can lead not only
+to batch-to-batch variation, lowered cellular functionality and reduced cell yield, but also to the potential selection of subpopulations
+with genetic or epigenetic characteristics divergent from the original cell line.
+
+ 
+
+Regulatory
+requirements also impact on cryopreservation, requiring a robust and reproducible approach to freezing, storage and thawing of the product.
+This requires attention to all aspects of the application of low temperatures; from the choice of freezing container and cryoprotectant,
+the cooling rate employed and its mode of delivery, correct handling of the frozen material during storage and transportation, to eventual
+thawing of the product by the end-user. Each of these elements influences all of the others to a greater or lesser extent and have been
+taken into consideration as TCB moves from fresh to cryopreserved cell-based product.
+
+ 
+
+In
+a submission to UK regulators, we provided batch manufacture and supporting data, and TCB was granted approval to commence treatment
+of cancer patients using frozen allogeneic product. This represents a significant milestone for TCB, as we pioneer use of cryopreserved-donated
+cells to treat cancer. Obvious benefits include increased product reproducibility, ability to ship product globally on request and significant
+economy of scale (through batch manufacture and storage).
+
+ 
+
+Clinical
+studies – unmodified GD-Ts in blood cancer
+
+ 
+
+Management
+of acute myeloid leukemia (AML) is based on intensive chemotherapy and/or stem cell transplant, but these therapies lead to high relapse
+rates amongst treated patients. Particularly for the relapsed/refractory AML population or those who are not eligible for alloHSCT or
+intensive chemotherapy, the therapy options are limited, and patients are often placed in experimental protocol therapies or palliative
+care. As a result, there is a need for additional therapies, particularly for these cohorts.
+
+ 
+
+GD-T
+cells have emerged as a promising therapy due to their ability to specifically target cancer cells. Nonclinical studies performed in
+AML cell lines suggest that GD-T cells specifically target AML tumor cells and lead to cell lysis in vitro (Kirk et al., 1993).
+Additionally, in xenotransplantation animal models, GD-T cells obtained from healthy volunteers specifically target AML cells and result
+in increased survival and diminished tumor burden in NOD mice (Gertner-Dardenne et al., 2012). Similarly, in vitro experiments
+conducted by TCB further support such findings whilst providing evidence that OmnImmune (TCB002) specifically targets stress induced
+cells and effectively kills AML cells lines.
+
+ 
+
+In
+the clinic, allogeneic treatment in AML patients in the phase 1b/2a trial OmnImmune (TCB002) has shown our product is well-tolerated
+with some preliminary evidence of anticancer activity. Firstly, there were no signs of graft vs. host disease (GvHD) following therapy
+and secondly, CR (complete response) and MLFS (morphologic leukemia free state) were observed. Earlier results with autologous product
+demonstrated good tolerability. For the allogeneic product, OmnImmune (TCB002), additional procedures were included to prevent GvHD
+(e.g. AB T cell depletion). Literature reports were also supportive of the use of OmnImmune (TCB002) in cancer patients. The phase
+1b/2a trial tested OmnImmune (TCB002) in active relapsed or refractory AML who were not eligible for or did not consent to high
+dose salvage chemotherapy and/or allogeneic hematopoietic stem cell transplantation (alloHSCT). The trial was conducted to identify a
+tolerable dose and better understand the safety of this therapy in the chosen indication as well as generate preliminary information
+on potential clinical benefit. The primary, secondary and exploratory endpoints were as follows:
+
+ 
+
+Primary
+endpoints:
+
+ 
+
+ 
+ 
+ 
+ Assessment
+ of adverse events (Aes) graded by Common Terminology Criteria for Adverse Events (CTCAE) v5.0, vital signs and evaluation of laboratory
+ parameters
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Incidence
+ of dose-limiting toxicities (DLTs) during the first 28 days after T cell administration.
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Establish
+ Maximum Tolerated Dose (MTD) of OmnImmune 
+
+ 
+ 
+
+ -16-
+
+ 
+
+ 
+
+ 
+
+Secondary
+endpoints:
+
+ 
+
+ 
+ 
+ 
+ Complete
+ Remission (CR) rate
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Overall
+ survival (OS)
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ Quality
+ of life determined by EORTC QLQ-C30 questionnaire
+
+ 
+ 
+
+Exploratory
+endpoints:
+
+ 
+
+ 
+ 
+ 
+ Changes
+ in T cell count and phenotype before and after OmnImmune infusion
+
+ 
+ 
+
+No
+formal statistical analysis was planned. The incidence of DLTs were to be summarized descriptively by T cells dose for
+evaluable patients. The recommended dose would be determined as the greatest with an incidence of DLTs no greater than 1/3. All other
+data including efficacy results were summarized descriptively by T cells dose.
+
+ 
+
+The
+trial enrolled 8 patients and healthy donors aged >18 years.
+
+ 
+
+Clinical
+outcome
+
+ 
+
+Seven
+patients were treated with OmnImmune (TCB002). The eighth patient could not be dosed because the study was terminated as a result
+of the COVID-19 pandemic, which prevented the importation of investigational product from Scotland to the Czech Republic. No safety concerns
+were raised during Safety Review Committee (SRC) meetings. No treatment related Serious Adverse Reactions (SARs) were reported in any
+of the patients who were enrolled in the trial. No grade 3 OmnImmune (TCB002) treatment related toxicities were noted in any
+of the treated patients. No dose-limiting toxicities were observed and no emergency safety measures have occurred for any subjects receiving
+OmnImmune (TCB002). Two patients at 28 days post-treatment achieved a CR (one patient) or MLFS (one patient); another patient was
+classified as attaining stable disease with > 50% reduction in bone marrow blast count; one additional patient exhibited reduction
+in blast levels at 14 days; and one patient had disease progression (see table below). One patient (PRA1-5003) died 21 days after TCB002
+due to bilateral pneumonia, determined unrelated to study medication. One patient (PRA1-5010) was withdrawn because of the COVD-19 pandemic
+before bone marrow aspiration on day 28 post-treatment. These preliminary indications of anticancer activity were not expected given
+the refractory profile of the enrolled patients.
+
+ 
+
+The
+EORTC QLQ-C30 questionnaire resulted in scoring from six of the seven patients dosed with OmnImmune (TCB002) for varying periods
+of time depending on their study duration. At 7 days post dosing, the average QoL score from six patients had decreased from 55.7 to
+47.2 out of a possible maximum of 100. This negative impact on QoL reflects the well characterized side effects of preconditioning therapy
+with cyclophosphamide and fludarabine given between 6 and 2 days prior to OmnImmune (TCB002) administration. The score remained
+lower in the four patients assessed at 28 days at a level of 50.0. In the two patients (one CR and one MLFS) who were assessed at the
+end of the study (week 24), both had recovered to an improved QoL score, each of 67.0.
+
+ 
+
+ 
+
+ -17-
+
+ 
+
+ 
+
+ 
+
+FDA
+Orphan Drug Designation
+
+ 
+
+About
+60 million people living in the European Union (EU) and USA suffer from a rare disease. The European Medicines Agency (EMA) and FDA play
+a central role in facilitating the development and authorization of medicines for rare diseases, which are termed , ' ': orphan medicines 
+in the medical world. Developing medicines intended for small numbers of patients has little commercial incentive under normal market
+conditions. Therefore, the EU and USA offer a range of incentives to encourage the development of designated orphan medicines.
+
+ 
+
+The
+general therapeutic strategy for the treatment of AML has not changed substantially over the past 30 years. Excluding APL (which should
+be treated with trans-retinoic acid), AML management is based primarily on induction, incorporating an anthracycline and cytarabine,
+and consolidation therapy, and/or allogeneic Hematopoietic Stem Cell Transplantation (alloHSCT). Induction/consolidation therapy leads
+to high CRs rates in those who are eligible for treatment and present a favorable risk profile.
+
+ 
+
+Several
+novel agents are in various stages of development for the treatment of AML. Novel approaches include antibody-based immunotherapy and
+adoptive cell therapy that aim to improve anti-leukemia T cell function, such as the therapies developed by TCB (OmnImmune ).
+
+ 
+
+OmnImmune 
+(TCB002) was initially studied in patients with active relapsed or refractory AML who are not eligible or do not consent to high dose
+salvage chemotherapy and/or alloHSCT. In July 2019, OmnImmune (TCB002) was granted , ' ': orphan medicine status from the
+FDA for Acute Myeloid Leukemia (AML). TCB intends to conduct a further clinical phase 2/3 study (OmnImmune (TCB008-001)) in 2021/2
+aimed at treating earlier stage AML patients.
+
+ 
+
+ 
+
+Summary
+of TCB s phase 1b/2a clinical trial in patients with fourth-line-of-treatment acute myeloid leukemia. Subsequent to the completion
+of this study TCB commenced phase 2b into 3 (pivotal) patient treatment during H1, 2022.
+
+ 
+
+ -18-
+
+ 
+
+ 
+
+ 
+
+Pipeline
+and plan
+
+ 
+
+Our
+future pipeline is focused on treating liquid cancers with our unmodified GD-T therapies and the treatment of solid cancers with next-generation
+allogeneic GD-T CAR-T therapies.
+
+ 
+
+Our
+unmodified cell therapy, used in the treatment of Acute Myeloid Leukemia, is supplied under the name OmnImmune.
+
+ 
+
+OmnImmune 
+is an allogeneic unmodified GD-T (GD-T2) cell product. Donor-derived GD-T cells for proliferative capacity, were activated and expanded
+in our manufacturing facility before being infused into the patient as part of our OmnImmune (TCB002) phase 1 trial. This trial
+was completed in H1 2020 at the Institute of Hematology and Blood Transfusion in Prague, Czech Republic. Having generated meaningful
+clinical data showing our product is well-tolerated in late-stage AML patients with no remaining treatment options, TCB commenced a phase
+2b-into pivotal (phase 3) clinical studies (with OmnImmune ) during 2022 in AML patients who have failed to respond adequately to
+induction therapy. The aim is to provide a form of salvage therapy which will either stabilize the patient, thereby preventing disease
+progression, or delay the requirement for human stem cell transplant. Our initial trial centers are in the UK. Working on the premise
+that other blood cancers should respond to GD-Ts in a similar manner to AML, TCB plans to conduct clinical studies for OmnImmune 
+in other hematological malignancies in future. The initial phase 1b/2a trials were undertaken using fresh cell-based product under the
+program number TCB002. For ease of reference, when discussing that specific trial, we refer the program as OmnImmune (TCB002). The
+subsequent planned phase 2b-into pivotal (phase 3) clinical studies uses a frozen cell-based product under the program number TCB008-001.
+When discussing that specific trial, we refer the program as OmnImmune .
+
+ 
+
+We
+plan to develop a range of allogeneic co-stimulatory GD-T CAR pre-clinical drug candidates which will target antigens expressed on a
+number of solid tumor types.
+
+ 
+
+TCB
+has generated in-vitro preclinical data as part of our CAR-T program which demonstrated that GD-Ts are very high purity and can be CAR-transduced
+with high efficiency (see diagram below). Gamma delta cell purity and transduction efficiency have been measured using flow cytometry.
+CAR positive cells were measured by a detection reagent labelled with the fluorophore Phycoerythrin (PE). Flow cytometry analysis used
+the parameters of side scatter height (SSC-H) and PE area (PE-A) to define the cell populations. This is demonstrated in the figure below
+comparing non-transduced (NTD) and transduction with a co-stimulatory CAR construct (co-stim CAR).
+
+ 
+
+ 
+
+ -19-
+
+ 
+
+ 
+
+ 
+
+We
+have also demonstrated that following transduction with different CAR constructs, GD-T s can be effectively and reproducibly expanded
+in-vitro whilst exhibiting increased cytotoxicity in a zoledronate-dependent manner (see diagrams below – zoledronate-dependency
+reflects TCB s proprietary process for commercial expansion of GD-T s). The CAR constructs contained different endodomains
+including DNAX-activating protein 10 (DAP-10) and the high affinity IgE receptor (FcR) with no endodomain (no-endo) and non-transduced
+(NTD) as controls. These data outline the key preclinical parameters investigated in advance of progressing our CAR-T products into clinical
+trials. TCB has engaged with UK regulators to discuss the design of GD-T CAR phase1b/2a clinical studies (specifically relating to patient
+dosing and quality systems).
+
+ 
+
+ 
+
+Peripheral
+blood mononuclear cells (PBMCs) were initiated into culture and GD-T cells expansion stimulated by zoledronic acid. On day 2 of expansion,
+cells were transduced with lentiviral vectors (LVV) to deliver the indicated CAR constructs. After routine feeding through the expansion
+process, cells were harvested on day 14 and the total cell number, fold expansion and viability of GD-T cells evaluated. Data present
+a compilation of experiments across multiple individual donors (N=9; n=1-5).
+
+ 
+
+Corporate
+Information
+
+ 
+
+Our
+principal executive offices are located in Scotland, United Kingdom, with a mailing address of Maxim 1, 2 Parklands Way, Holytown, Motherwell,
+ML1 4WR, United Kingdom and our telephone number at that location is +44 (0) 141 433 7557. Our website address is https://www.tcbiopharm.com.
+The information contained on, or that can be accessed through, our website is not part of this prospectus. We have included our website
+address in this prospectus solely as an inactive textual reference.
+
+ 
+
+Implications
+of Being an "Emerging Growth Company"
+
+ 
+
+We
+are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities
+Act. As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable
+to other public companies that are not "emerging growth companies" such as not being required to comply with the auditor
+attestation requirements in the assessment of our internal control over financial reporting of Section 404 of the Sarbanes-Oxley Act
+of 2002, or the Sarbanes-Oxley Act. We could remain an "emerging growth company" for up to five years, or until the earliest
+of (a) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion, (b) the date that we become a
+"large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange
+Act, which would occur if the market value of all our ordinary shares, including those represented by the ADSs, that are held by non-affiliates
+exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have
+issued more than $1 billion in nonconvertible debt during the preceding three-year period.
+
+ 
+
+Implications
+of being a "Foreign Private Issuer"
+
+ 
+
+As a company incorporated
+in Scotland that is listed on Nasdaq Capital Market ("Nasdaq"), the Company is subject to Nasdaq corporate governance listing
+standards. The Company determined it qualified as a foreign private issuer under federal securities laws as of June 28, 2024, the last
+business day of its most recently completed second fiscal quarter.
+
+ 
+
+We
+are subject to the information reporting requirements of the Securities and Exchange Act of 1934, as amended, the Exchange Act, that
+are applicable to "foreign private issuers," and under those requirements we file reports with the SEC. As a foreign private
+issuer, we are not subject to the same requirements of the SEC applicable to U.S. domestic issuers. Under the Exchange Act, we are subject
+to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies.
+For example, we are not required to issue quarterly reports, proxy statements that comply with the requirements applicable to U.S. domestic
+reporting companies, or individual executive compensation information that is as detailed as that required of U.S. domestic reporting
+companies. We also have four months after the end of each fiscal year to file our annual report with the SEC and are not required to
+file current reports as frequently or promptly as U.S. domestic reporting companies. Our officers, directors and principal shareholders
+are exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions
+contained in Section 16 of the Exchange Act. As a foreign private issuer, we are not subject to the requirements of Regulation FD (Fair
+Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer, we are permitted to follow certain home country
+corporate governance practices instead of those otherwise required under the Nasdaq Stock Market rules for domestic U.S. issuers and
+are not required to be compliant with all Nasdaq Stock Market rules as of the date of our initial listing on Nasdaq as would domestic
+U.S. issuers These exemptions and leniencies will reduce the frequency and scope of information and protections available to you in comparison
+to those applicable to a U.S. domestic reporting company. We intend to take advantage of the exemptions available to us as a foreign
+private issuer during and after the period we qualify as an "emerging growth company."
+
+ 
+
+ -20-
+
+ 
+
+ 
+
+ 
+
+Recent
+Developments
+
+ 
+
+Exercise
+of Pre-funded Warrants
+
+ 
+
+During
+January 2024, pre-funded warrants representing 139,800 ADSs were exercised in three separate tranches.
+
+ 
+
+Issuances
+of ADSs and grants of options to purchase ADSs
+
+ 
+
+On
+February 29, 2024, the Renumeration Committee of the Board of Directors approved a grant of options to purchase ADSs to the Company s
+executive officers and non-employee directors under the Company s 2021 Shares Option Scheme (the "Plan") and agreed
+to cancel all shares options previously issued to such persons. Each non-employee director received an option to purchase 4,176
+ADSs, or ADSs representing 835,200 Ordinary Shares at an exercise price of $10.90 per ADS, which is equal to the closing price
+of the Company s ADSs on the Nasdaq Capital Market on January 31, 2024. Martin Thorp, the Company s Chief Financial Officer,
+received an option to purchase 17,712 ADSs, or ADSs representing 3,542,440 Ordinary Shares at an exercise price of $10.90
+per ADS, which is equal to the closing price of the Company s ADSs on the Nasdaq Capital Market on January 31, 2024. Bryan Kobel,
+the Company s Chief Executive Officer received an option to purchase 38,161 ADSs, or ADSs representing 7,632,120 Ordinary
+Shares at an exercise price of $10.90 per ADS, which is equal to the closing price of the Company s ADSs on the Nasdaq Capital
+Market on January 31, 2024. All share options that were issued vest immediately upon issuance.
+
+ 
+
+On
+March 8, 2024, Bryan Kobel, the Chief Executive Officer of the Company agreed to (a) defer the payment of accrued but unpaid contractual
+pension benefits owed to him in the amount of $66,000 for a period of 9 months and (b) convert an aggregate amount of $24,760 of accrued
+but unpaid contractual pension benefits owed to him into 476,153 ordinary shares, par value 0.0001 per share of Company, based
+on a price per share equal to the closing price of the Company s ADSs on the Nasdaq Capital Market on March 7, 2024.
+
+ 
+
+In
+addition, the board of directors approved a grant of options to Mr. Kobel purchase 15,300 ADSs, or ADSs representing 3,060,000
+Ordinary Shares at an exercise price of $20.00 per ADS. The options granted to Mr. Kobel were issued under the Company s 2021 Plan. All share
+options that were issued vested immediately.
+
+ 
+
+Exercise
+of Series D Warrants
+
+ 
+
+On
+March 12, 2024, the Company issued 62,375 ADS representing 12,475,000 ordinary shares of the Company upon exercise of outstanding
+Series D warrants resulting in gross cash proceeds to the Company of 986,398 (approximately $1,263,000).
+
+ 
+
+April
+2024 LOI
+
+ 
+
+On
+April 1, 2024, we entered into a non-binding letter of intent (the "Asset LOI") with an unnamed cell therapy company. (the
+"Asset Seller"), regarding the potential acquisition (the "Proposed Asset Transaction") by the Company of the
+following assets of Asset Seller: a Solid Tumor tool kit, a NK Cell Manufacturing tool kit, and two CAR-NK programs (the "Assets").
+In exchange for the sale of the Assets to the Company, the Company will pay to the Asset Seller a combination of cash and equity at closing,
+as well as milestone payments based upon certain clinical achievements.
+
+ 
+
+The
+Asset LOI only represents a mutual indication of interest regarding the Proposed Asset Transaction and the terms of the Proposed Asset
+Transaction are subject to a number of contingencies, including the completion of customary due diligence and the negotiation and execution
+of definitive agreements. Upon execution of the definitive agreements, the completion of the transaction will be subject to, among other
+matters, satisfaction of the conditions negotiated therein, the Company having secured adequate financing, and receipt of all third party
+(including governmental) approvals, licenses, consents, and clearances, as and when applicable. There can be no assurance that the Proposed
+Asset Transaction will be completed on the terms contemplated in the Asset LOI or otherwise. In particular, the timing of closing of
+any such transaction and the aggregate consideration that we may pay may materially differ from that currently contemplated by the Asset
+LOI.
+
+ 
+
+ -21-
+
+ 
+
+ 
+
+ 
+
+May
+2024 LOI
+
+ 
+
+On
+May 1, 2024, we entered into a non-binding letter of intent (the "LOI") with a private company (the "Seller"),
+regarding a potential business combination (the "Proposed Transaction") whereby the Company or a subsidiary of the Company
+would acquire the Seller. In connection with the Proposed Transaction, the Company will pay to the Seller a cash purchase price equal
+to $20 million less any amounts payable on any Seller indebtedness and issue American Depository Shares (the "ADSs") representing
+a number of the Company s ordinary shares (the "Shares") where the issue price of such Shares is equal to the average
+price paid in a fundraising from new and existing shareholders in the Company raising in excess of US$50 million (the "Issue Price"),
+such that the total value attributable to the Shares at closing is equal to US$20 million. In addition, the Seller will be entitled to
+certain payments upon satisfaction of various development milestones.
+
+ 
+
+The
+LOI only represents a mutual indication of interest regarding the Proposed Transaction and the terms of the Proposed Transaction are
+subject to a number of contingencies, including the completion of customary due diligence and the negotiation and execution of definitive
+agreements. Upon execution of the definitive agreements, the completion of the transaction will be subject to, among other matters, satisfaction
+of the conditions negotiated therein, the Company having secured adequate financing, and receipt of all third party (including governmental)
+approvals, licenses, consents, and clearances, as and when applicable. There can be no assurance that the Proposed Transaction will be
+completed on the terms contemplated in the LOI or otherwise. In particular, the timing of closing of any such transaction and the aggregate
+consideration that we may pay may materially differ from that currently contemplated by the LOI.
+
+ 
+
+May
+2024 Warrant Inducement
+
+ 
+
+On
+May 6, 2024, the Company, entered into a letter agreement (the "Inducement Letter") with certain holders (the "Holders")
+of existing Series E warrants (the "Existing Warrants") to purchase ordinary shares represented by American depositary
+shares (the "ADSs") of the Company. The Existing Warrants were issued on December 21, 2023 and have an exercise price of
+ 15.81 per ADS. Each ADS represents twenty (200) ordinary shares of the Company.
+
+ 
+
+Pursuant
+to the Inducement Letter, the Holders agreed to exercise for cash their Existing Warrants to purchase an aggregate of 175,000
+ADSs of the Company for cash and the payment of 0.99625 (US$1.25) per new warrant in consideration for the Company s
+agreement to issue new Series F warrants to purchase ordinary shares represented by ADSs (the "New Warrants"), as described
+below, to purchase up to 70,000,000 of the Company s ordinary shares represented by 350,000 ADSs (the "New Warrant
+ADSs"). The Company received aggregate gross proceeds of approximately 3.1 million from the exercise of the Existing
+Warrants by the Holders, prior to deducting placement agent fees and estimated offering expenses.
+
+ 
+
+The
+Company engaged H.C. Wainwright & Co., LLC (the "Placement Agent") to act as its exclusive placement agent in connection
+with the transactions summarized above and paid the Placement Agent a cash fee equal to 7.5% of the gross proceeds received from
+the Holders exercise of their Existing Warrants and a management fee of 1% of the gross proceeds received from the Holders 
+exercise of their Existing Warrants. The Company also reimbursed the Placement Agent for its expenses in connection with the exercise
+of the Existing Warrants and the issuance of the New Warrants, $50,000 for fees and expenses of legal counsel and other out-of-pocket
+expenses, and paid the Placement Agent for non-accountable expenses in the amount of $35,000 and a clearing fee of $15,950. Upon
+any exercise for cash of any New Warrants, the Company has agreed to pay the Placement Agent
+a cash fee of 7.5% of the aggregate gross exercise price paid in cash with respect the exercise of the New Warrants. In addition,
+the Company granted warrants ("Placement Agent Warrants") to the Placement Agent, or its designees, to purchase up to an
+aggregate of 2,625,020 ordinary shares represented by 13,125 ADSs, which Placement Agent Warrants shall be substantially in the
+same form as the New Warrants except that the Placement Agent Warrants will have an exercise price of 22.31.
+
+ 
+
+ -22-
+
+ 
+
+ 
+
+ 
+
+The
+closing of the transactions contemplated pursuant to the Inducement Letter occurred on May 8, 2024. The Company intends to use the net
+proceeds from this offering to support its upcoming clinical trial focusing on relapse/refractory Acute Myeloid Leukemia, and for continuing
+operating expenses and working capital.
+
+ 
+
+The
+Company also agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then Form S-3 eligible)
+covering the resale of the New Warrant ADSs issued or issuable upon the exercise of the New Warrants (the "Resale Registration
+Statement"), within 30 days of the Closing Date, and to have such Resale Registration Statement declared effective by the SEC within
+90 days following the Closing Date. The registration statement was filed and declared effective
+on June 24, 2024 to fulfill our obligations under the Letter Agreement.
+
+ 
+
+In
+the Inducement Letter, the Company agreed not to issue any ADSs, ordinary shares or ordinary share equivalents or to file any other registration
+statement with the SEC (in each case, subject to certain exceptions) until 30 days after the Closing Date. The Company also agreed not
+to effect or agree to effect any variable rate transaction (as defined in the Inducement Letter) until one (1) year after the Closing
+Date (subject to an exception).
+
+ 
+
+August 2024 Public
+Offering
+
+ 
+
+On August 13, 2024, the
+Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with an investor (the "Investor")
+pursuant to which the Company agreed to issue and sell to the Investor in a best-efforts public offering 23,950 American Depositary Shares
+(the "ADSs") representing 4,790,000 ordinary shares, par value 0.0001 per share (the "Ordinary Shares"),
+pre-funded warrants to purchase up to 1,976,050 ADS representing 395,210,000 Ordinary Shares (the "Pre-Funded Warrants"),
+and series G purchase warrants to purchase up to 2,000,000 ADSs representing 400,000,000 Ordinary Shares (the "Warrants"
+and together with the Pre-Funded Warrants and the ADSs, the "Securities"). The purchase price for each ADS and associated
+Warrant is $1.00 and the purchase price per each Pre-Funded Warrant and associated Warrant is $0.999. The Warrants are immediately exercisable,
+will expire one (1) year from the date of issuance and have an exercise price of 0.78 (or $1.00, as translated for illustration
+to U.S. dollars at the rate of 1.00 to $1.277 as of August 12, 2024) per ADS, subject to adjustment as set forth therein. The
+Pre-Funded Warrants may be exercised at any time until all of the Pre-Funded Warrants are exercised in full at an exercise price of $0.001
+per ADS, subject to adjustment therein. The offering (the "Offering") closed on August 15, 2024.
+
+ 
+
+The Offering resulted
+in gross proceeds of $2.0 million before deducting related offering expenses. The Securities were offered by the Company pursuant to
+a registration statement on Form F-1 (File No. 333-280659), and each amendment thereto, which was declared effective by the Securities
+and Exchange Commission (the "Commission") on August 12, 2024.
+
+ 
+
+Nasdaq
+Compliance
+
+ 
+
+As
+previously reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on May
+20, 2024 (the "May 20 8-K ), on May 15, 2024, the Company filed its Form 10-Q for the quarter ended March 31, 2024 (the "Form
+10-Q"). As noted in the Form 10-Q, the Company was not in compliance with the minimum stockholders equity requirement under
+Nasdaq Listing Rule 5550(b)(1) for continued listing on The Nasdaq Capital Market because its stockholders equity was below the
+required minimum of $2.5 million (the "Minimum Stockholders Equity Requirement") at March 31, 2024. As previously
+reported in a Current Report on Form 8-K filed with the SEC on May 8, 2024, on May 6, 2024, the Company entered into a letter agreement
+(the "Inducement Letter") with certain holders (the "Holders") of existing Series E warrants (the "Existing
+Warrants") to purchase ordinary shares represented by ADSs of the Company. Pursuant to the Inducement Letter, the Holders agreed
+to exercise for cash their Existing Warrants to purchase an aggregate of 175,000 ADSs of the Company for cash and the payment
+of 0.99625 (US$1.25) per new warrant in consideration for the Company s agreement to issue new Series F warrants
+to purchase ordinary shares represented by ADSs (the "New Warrants") to purchase up to 70,000,000 of the Company s
+ordinary shares represented by 350,000 ADSs (the "New Warrant ADSs"). As noted above, on May 8, 2024, the Company
+received aggregate gross proceeds of approximately 3.1 million (circa $3.9 million) from the exercise of the Existing Warrants
+by the Holders, prior to deducting placement agent fees and estimated offering expenses. As a result, the
+Company believes that due to the exercise of the Existing Warrants it is now in compliance with the Minimum Stockholders Equity
+Requirement as at June 30, 2024.
+
+ 
+
+On
+May 24, 2024, the Company received written notification from the listing qualifications staff of the Nasdaq Stock Market, LLC ("Nasdaq")
+indicating that the Company was not in compliance with the Minimum Stockholders Equity Requirement, as of March 31, 2024. This
+letter indicated that while Nasdaq estimates the Company is currently in compliance with the Minimum Stockholders Equity Requirement
+it notes that based on the historical burn rate, without a significant transaction, the Company will not be in compliance as of the next
+period ending June 30, 2024.
+
+ 
+
+Since
+the Company was previously granted an exception to the Minimum Stockholders Equity Requirement by a Nasdaq Hearings Panel and subsequently
+regained compliance, it is subject to a Panel Monitor in accordance with Nasdaq Listing Rule 5815(d)(4)(A).
+
+ 
+
+The
+Company requested and was granted a hearing before a hearing panel on July 16, 2024 at which it requested continued listing
+on The Nasdaq Capital Market since it has returned to compliance and expects to continue to do so. On August 1, 2024, the Company
+received written notification from Nasdaq that the hearing panel granted the Company s request to continue its listing on Nasdaq
+subject to compliance with the Minimum Stockholders Equity Requirement on or before August 15, 2024.
+
+ 
+
+The
+Company received a written notification from the listing qualifications staff (the "Staff") of the Nasdaq. dated August
+1, 2024 indicating that the minimum closing bid price per share for its American Depositary Shares (the "ADSs") was below
+$1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq
+Listing Rule 5550(a)(2) (the "Bid Price Rule"). Normally, a company would be afforded a 180-calendar day period to
+demonstrate compliance with the Bid Price Rule. However, pursuant to Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible
+for any compliance period specified in Rule 5810(c)(3)(A) due to the fact that the Company effected one or more reverse stock splits
+over the prior two-year period with a cumulative ratio of 250 shares or more to one (the "Excessive Reverse Stock Splits Rule").
+Accordingly, this matter serves as an additional basis for delisting the Company s securities from Nasdaq. Nasdaq informed
+the Company that the hearing panel will consider this matter in their decision regarding the Company s continued listing on Nasdaq.
+As detailed below, the Company effected a change in the ratio of its ADSs to ordinary shares which had the effect to increase proportionally
+the ADS trading price, although the Company can give no assurance that the ADS trading price after the ADS ratio change will be proportionally
+equal to or greater than the previous ADS trading price prior to the change.
+
+ 
+
+ On
+August 21, 2024, the Company received a notice (the "Notice") from the Staff of the Nasdaq informing the
+Company that it has regained compliance with the Minimum Stockholders Equity Requirement and the Bid Price Rule. 
+
+ 
+
+ Normally,
+in application of Listing Rule 5815(d)(4)(B), companies that have regained equity and/or bid price compliance, where the company was
+ineligible for a second compliance period under the Excessive Reverse Stock Splits Rule, are imposed a Mandatory Panel Monitor. However,
+considering the Company regained compliance with the Bid Price Rule ahead of the panel granting it an exception to cure its bid price
+deficiency, the Notice stated that, pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a Discretionary Panel Monitor
+for a period of one year from the date of the Notice, to ensure that the Company maintains long-term compliance with the Equity Rule,
+the Bid Price Rule, and all of the Exchange s continued listing requirements. 
+
+ 
+
+ If,
+within that one-year monitoring period, the Staff finds the Company again out of compliance with any continued listing requirement, notwithstanding
+Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to any deficiency and
+the Staff will not be permitted to grant additional time for the Company to regain compliance with respect to any deficiency, nor will
+the Company be afforded an applicable cure or compliance period. Instead, the Staff will issue a Delist Determination Letter and the
+Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel
+is unavailable. 
+
+ 
+
+ADS
+Ratio Change
+
+ 
+
+On July 17, 2024, our Board of Directors approved the change in the ratio
+of ADSs evidencing ordinary shares from one (1) ADS representing twenty (20) ordinary share to one (1) ADS representing two hundred (200)
+ordinary shares, which will result in a one for 10 reverse split of the issued and outstanding ADSs (the "ADS Ratio Change").
+The ADS Ratio Change became effective on August 5, 2024. All ADS and related warrant information presented in this prospectus, including
+our financial statements and accompanying footnotes, has been retroactively adjusted to reflect the reduced number of ADSs resulting from
+the ADS ratio change.
+
+ 
+
+ -23-
+
+ 
+
+ 
+
+ 
+
+THE
+OFFERING
+
+ 
+
+ 
+ Securities,
+ offered by us
+ 
+ Up
+ to 1,162,790 ADSs representing 232,558,000 ordinary shares and together with accompanying Series H warrants to purchase
+ up to 1,162,790 ADSs representing 232,558,000 ordinary shares (the "Series H Warrants"). The ADSs or prefunded
+ warrants, respectively and Series H Warrants are immediately separable and will be issued separately in this offering but must initially
+ be purchased together in this offering. Each Series H Warrant has an assumed exercise price of 3.28 ($4.30 translated
+ to U.S. dollars at the rate of 1.00 to $1.3095 as of August 22, 2024) per ADS. See "Description of Securities".
+ We are also registering the ADSs issuable upon exercise of the pre-funded warrants and the Warrants.
+
+ 
+ 
+ 
+ 
+
+ 
+ ADSs
+ 
+ Each
+ ADS represents twenty (200) ordinary shares. As a holder of ADSs, we will not treat you as one of our shareholders. The depositary,
+ through its custodian, will be the holder of the ordinary shares underlying the ADSs, and you will have the rights of a holder of
+ ADSs or beneficial owner (as applicable) as provided in the deposit agreement among us, the depositary and owners and holders of
+ ADSs from time to time. To better understand the terms of the ADSs we encourage you to read the deposit agreement, the form of which
+ is filed as an exhibit to the registration statement of which this prospectus forms a part.
+
+ 
+ 
+ 
+ 
+
+ 
+ Series
+ H Warrants Offered
+ 
+ We
+ are also offering Series H Warrants to purchase 1,162,790 ADSs representing 232,558,000 ordinary shares. The Series
+ H Warrants will expire on the first anniversary of the initial issuance date. The Warrants will be immediately exercisable and the
+ assumed exercise price of each of the Warrants is 3.28 per ADS ($4.30 per ADS translated for illustration to
+ U.S. dollars at the rate of 1.00 to $1.3095 as of August 22, 2024).
+
+ 
+ 
+ 
+ 
+
+ 
+ Pre-Funded
+ Warrants Offered
+ 
+ We
+ are also offering to certain purchasers whose purchase of ADSs in this offering would otherwise result in the purchaser, together
+ with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%)
+ of our outstanding ADSs immediately following the closing of this offering, the opportunity to purchase, if such purchasers so choose,
+ pre-funded warrants to purchase ADSs, in lieu of ADSs that would otherwise result in any such purchaser s beneficial ownership
+ exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding ADSs. Each pre-funded warrant will be exercisable
+ for one ADS. The purchase price of each pre-funded warrant will be equal to the price at which an ADS and accompanying Ordinary Warrant
+ is being sold to the public in this offering, minus $0.001, and the exercise price of each pre-funded warrant will be $0.001 ADS.
+ The pre-funded warrants will be exercisable immediately and may be exercised at any time until all of the pre-funded warrants are
+ exercised in full. This prospectus also relates to the ADSs issuable upon exercise of any pre-funded warrants sold in this offering.
+ For each pre-funded warrant we sell, the number of ADSs we are offering will be decreased on a one-for-one basis
+
+ 
+ 
+ 
+ 
+
+ 
+ Term
+ of the offering
+ 
+ This
+ offering will terminate on September 15, 2024, unless we decide to terminate the offering (which we may do at any time in
+ our discretion) prior to that date.
+
+ 
+
+ -24-
+
+ 
+
+ 
+
+ 
+
+ 
+ Ordinary
+ shares outstanding before this offering
+ 
+ 103,692,641
+ ordinary shares
+
+ 
+ 
+ 
+ 
+
+ 
+ Warrants
+ outstanding before this offering
+ 
+ Warrants
+ to purchase 4,359,865 ADSs
+
+ 
+ 
+ 
+
+ Ordinary
+ shares to be outstanding after this offering, including ordinary shares represented by ADSs
+ 
+ 336,250,641
+ ordinary shares, assuming no sale of pre-funded
+ warrants, which, if sold, would reduce the number of ADSs that we are offering on a one-for-one basis, and no exercise of the Warrants
+ 
+
+ 
+ 
+ 
+ 
+
+ 
+ Use
+ of proceeds
+ 
+ We
+ estimate that our gross proceeds from this offering will be approximately $5 million. This is based on a public offering price of $4.30
+ per ADS, which is the last reported trading price of our ADSs on The Nasdaq Capital Market on August 22, 2024, before
+ deducting estimated offering expenses payable by us. We intend to use the net proceeds of this
+ offering to advance our preclinical and clinical pipeline, and for continuing operating expenses, including market
+ awareness and working capital.
+
+ 
+ 
+ 
+ 
+
+ 
+ Risk
+ factors
+ 
+ You
+ should read the "Risk Factors Summary" section within this prospectus and in Item 1A. "Risk Factors" in our
+ 2023 Form 10-K included by reference in this prospectus, for a discussion of factors to consider carefully before deciding to invest
+ in our securities.
+
+ 
+ 
+ 
+ 
+
+ 
+ Nasdaq
+ Capital market symbol
+ 
+ ADSs
+ on the Nasdaq Capital Market under the symbol "TCBP."
+
+ 
+ 
+
+The
+number of our ordinary shares (including shares represented by ADSs) to be outstanding after this offering is based on 103,692,641 ordinary
+shares outstanding as of August 22, 2024 and excludes:
+
+ 
+
+ 
+ 
+ 
+ 106,585
+ ordinary shares issuable upon the exercise of options outstanding under our 2014 Share Option Scheme as of March 31, 2024, with a
+ weighted-average exercise price of 23.00 per share;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 20,202
+ ordinary shares issuable upon the exercise of options outstanding under our 2021 Share Option Scheme, as of March 31, 2024, with
+ a weighted-average exercise price of $212.00 per share;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 17,575,360
+ ordinary shares issuable upon the exercise of options outstanding under our 2021 Share Option Scheme, as of March 31, 2024, with
+ a weighted-average exercise price of $0.06 per share;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 702,500
+ ordinary shares issuable upon the exercise of options outstanding under our 2021 Share Option Scheme, as of March 31, 2024, with
+ a weighted-average exercise price of $0.409 per share;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 15,891
+ ordinary shares issuable upon the exercise of options outstanding, at a future date based on the achievement of certain clinical
+ and commercial milestones with an exercise price of 215.00 per share;
+
+ 
+ 
+ 
+ 
+
+ 
+ 
+ 
+ 871,973,000
+ ordinary shares issuable upon the exercise of warrants outstanding, as of August 22, 2024, with a weighted-average exercise
+ price of 0.018 per share; and
+
+ 
+ 
+
+For
+the description of the 2014 Share Option Scheme and 2021 Share Option Scheme please refer to the 2023 Form 10-K, which is incorporated
+by reference herein.
+
+ 
+
+Unless
+otherwise stated, all information in this prospectus assumes no exercise of the outstanding options described above into ordinary shares
+or ADSs, treats all restricted shares issued with outstanding restrictions to be vested as issued and outstanding shares, no exercise
+of the Warrants issued in this offering and no sale of pre-funded warrants in this offering.
+
+ 
+
+Except
+as otherwise indicated all references to our articles of association in this prospectus refer to our articles of association, as amended
+as currently in force for TC BioPharm (Holdings) plc at the date of this prospectus.
+
+ 
+
+ -25-
+
+ 
+
+ 
+
+ 
+
+Summary
+Consolidated Financial Data
+
+ 
+
+The
+following table summarizes our consolidated financial data as at the dates and for the periods indicated. The consolidated financial
+statement data as of December 31, 2023 and 2022, and for the years ended December 31, 2023 and 2022 audited in accordance with
+the standards of the Public Company Accounting Oversight Board (United States) have been derived from our consolidated financial statements,
+which have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").
+The unaudited consolidated financial statement data as of March 31, 2024 and for the three months ended March, 2024 and
+2023 have been derived from our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting
+principles generally accepted in the United States ("U.S. GAAP").
+
+ 
+
+Our
+historical results are not necessarily indicative of the results that may be expected in the future.
+
+ 
+
+This
+information should be read together with, and is qualified in its entirety by, our consolidated financial statements and the notes thereto.
+You should read the following summary consolidated financial and other data in conjunction with "Item 5. Market for Registrant s
+Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities" and "Item 8. Financial Statements and
+Supplementary Data", our consolidated financial statements and the notes thereto and the other financial information included in
+our 2023 Form 10-K annual report and in our 2024 Form 10-Q quarterly report and incorporated by reference in this prospectus.
+
+ 
+
+ 
+ Consolidated Statement of Operations: 
+ For the Year Ended 
+ For the Year Ended 
+
+ 
+ 
+ December 31, 2023 
+ December 31, 2022 
+
+ 
+ 
+ 
+ 
+
+ 
+ Revenue 
+ - 
+ 3,844,532 
+
+ 
+ 
+ 
+ 
+
+ 
+ Operating expenses: 
+ 
+ 
+
+ 
+ Research and development expenses 
+ 7,771,391 
+ 7,592,470 
+
+ 
+ Administrative expenses 
+ 6,467,932 
+ 7,030,972 
+
+ 
+ Administrative expenses - costs related to preparing for listing 
+ - 
+ 1,305,087 
+
+ 
+ Total operating expenses 
+ 14,239,323 
+ 15,928,529 
+
+ 
+ Loss from operations 
+ (14,239,323) 
+ (12,083,997)
+
+ 
+ 
+ 
+ 
+
+ 
+ Other income (expense): 
+ 
+ 
+
+ 
+ Loss on modification of convertible loan 
+ (645,845) 
+ (140,344)
+
+ 
+ Change in fair value of derivative liability 
+ 8,052,581 
+ 16,064,945 
+
+ 
+ Foreign currency losses 
+ (80,070) 
+ (120,974)
+
+ 
+ Interest expense 
+ (83,025) 
+ (6,753,231)
+
+ 
+ Total other income (expense), net 
+ 7,243,641 
+ 9,050,396 
+
+ 
+ Net loss before income taxes 
+ (6,995,682) 
+ (3,033,601)
+
+ 
+ Income tax credit 
+ 1,088,729 
+ 1,720,000 
+
+ 
+ 
+ 
+ 
+
+ 
+ Net loss 
+ (5,906,953) 
+ (1,313,601)
+
+ 
+ 
+ 
+ 
+
+ 
+ Weighted-average ordinary shares outstanding, basic and diluted (1) 
+ 6,178,423 
+ 687,199 
+
+ 
+ Basic and diluted net loss per share (1) 
+ (0.96) 
+ (1.91)
+
+ 
+
+ 
+
+ 
+ 
+ For
+ the Three
+ Months
+ Ended
+ 
+ For
+ the Three
+ Months
+ Ended
+ 
+
+ 
+ Consolidated Statement of Operations: 
+ March 31, 2024 
+ March 31, 2023 
+
+ 
+ 
+ 
+ 
+
+ 
+ Operating expenses: 
+ 
+ 
+
+ 
+ Research and development expenses 
+ 1,298,942 
+ 1,934,304 
+
+ 
+ Administrative expenses 
+ 2,142,714 
+ 2,231,461 
+
+ 
+ Total operating expenses 
+ 3,441,656 
+ 4,165,765 
+
+ 
+ Loss from operations 
+ (3,441,656) 
+ (4,165,765)
+
+ 
+ 
+ 
+ 
+
+ 
+ Other income (expense): 
+ 
+ 
+
+ 
+ Change in fair value of derivative liability 
+ 11,446 
+ 3,148,648 
+
+ 
+ Other expense, net 
+ (2,386) 
+ (17,794)
+
+ 
+ Total other income (expense), net 
+ 9,060 
+ 3,130,854 
+
+ 
+ Net loss before income taxes 
+ (3,432,596) 
+ (1,034,911)
+
+ 
+ Income tax credit 
+ 110,742 
+ 400,000 
+
+ 
+ 
+ 
+ 
+
+ 
+ Net loss 
+ (3,321,854) 
+ (634,911)
+
+ 
+ 
+ 
+ 
+
+ 
+ Weighted-average common
+ shares outstanding, basic and diluted(1) 
+ 30,138,602 
+ 2,051,836 
+
+ 
+ Basic and diluted net loss
+ per share(1) 
+ (0.11) 
+ (0.31)
+
+ 
+
+ 
+
+ 
+ Consolidated Statement of Financial Position
+ items: 
+ March 31, 2024 
+ December 31, 2023 
+ December 31, 2022 
+
+ 
+ 
+ 
+ 
+ 
+
+ 
+ Cash and cash equivalents 
+ 980,955 
+ 2,462,609 
+ 4,808,060 
+
+ 
+ Working capital (2) 
+ (560,816) 
+ 950,326 
+ (1,716,361)
+
+ 
+ Total assets 
+ 7,264,053 
+ 8,931,664 
+ 11,291,977 
+
+ 
+ Total liabilities 
+ 6,183,565 
+ 6,246,434 
+ 10,960,712 
+
+ 
+ Share capital 
+ 403,789 
+ 399,455 
+ 397,493 
+
+ 
+ Additional paid-in capital 
+ 42,835,843 
+ 41,123,065 
+ 33,308,568 
+
+ 
+ Accumulated deficit 
+ (42,159,144) 
+ (38,837,290) 
+ (33,374,796)
+
+ 
+ Total shareholders equity 
+ 1,080,488 
+ 2,685,230 
+ 331,265 
+
+ 
+
+ 
+
+ 
+ (1)
+ On
+ November 18, 2022, the Company completed a reverse stock split of one (1) new share for every fifty (50) existing shares effective
+ November 21, 2022. As a result of the share split, all references in these financial statements and accompanying notes to units of
+ ordinary shares or per share amounts are reflective of the reverse share split for all periods presented. In addition, the exercise
+ prices and the numbers of ordinary shares issuable upon the exercise of any outstanding options to purchase ordinary shares were
+ proportionally adjusted pursuant to the respective anti-dilution terms of the share-based payment plans. 
+
+ 
+ (2)
+ Working
+ capital is defined as current assets less current liabilities.
+
+ 
+ 
+
+ -26-
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/TKNO_alpha_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/TKNO_alpha_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/TKNO_alpha_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/TLN_talen_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/TLN_talen_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/TLN_talen_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/TOYWF_toyo-co_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/TOYWF_toyo-co_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..bc2e58b55b7abbe59c072d2e4dc70870ec528f94
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/TOYWF_toyo-co_prospectus_summary.txt
@@ -0,0 +1 @@
+We are an emerging growth company and a foreign private issuer, each as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company disclosure and reporting requirements. See Summary of the Prospectus Emerging Growth Company and Summary of the Prospectus Foreign Private Issuer, respectively. Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described in the section titled Risk Factors beginning on page 8 of this prospectus, and under similar headings in any amendments or supplements to this prospectus. None of the U.S. Securities and Exchange Commission or any state securities commission has approved or disapproved of the securities or determined if this prospectus is accurate or adequate. Any representation to the contrary is a criminal offense. The date of this prospectus is [__], 2024. Table of Contents TABLE OF CONTENTS Page ABOUT THIS PROSPECTUS ii MARKET PRICE INFORMATION iv FREQUENTLY USED TERMS iv FREQUENTLY USED TECHNICAL TERMS vi CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS vii SUMMARY OF THE PROSPECTUS 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/TRSG_tungray_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/TRSG_tungray_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..47b39f6f8b66a592b767e4946bba905e0ef2347c
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/TRSG_tungray_prospectus_summary.txt
@@ -0,0 +1,1804 @@
+PROSPECTUS SUMMARY
+
+ 
+
+The following
+summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements
+appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially
+the risks of investing in our Class A Ordinary Shares discussed under "Risk Factors," before deciding whether to buy
+our Class A Ordinary Shares.
+
+ 
+
+Business Overview
+
+ 
+
+We are an engineer-to-order
+("ETO") company that provides customized industrial manufacturing solutions to Original Equipment Manufacturers ("OEMs")
+in the semiconductors, printers, electronics, and home appliances sectors. As an ETO company, we take pride in our ability to design and
+build solutions that fulfil our customers unique specifications.
+
+ 
+
+Our capabilities in this
+field are the result of more than a decade of experience in completing various ETO projects. We mainly generate revenues through customized
+industrial manufacturing solutions, direct drive and linear direct current ("DC") motors and induction welding equipment manufacturing.
+During the six months ended June 30, 2023, 76%, 11%, and 13% of our revenues were generated from these three business lines, respectively.
+During the year ended December 31, 2022, 78%, 9%, and 13% of our revenues were generated from these three business lines, respectively. 
+
+ 
+
+Singapore is the main development
+and manufacturing location while we also have manufacturing bases in China, namely Qingdao and Shenzhen. During the six months ended June
+30, 2023, 64.9%% and 35.1%%, and during the six months ended June 30, 2022, 59.1%% and 40.9%%, of our revenues were generated
+from Singapore and China, respectively. During the year ended December 31, 2022, 64.8% and 35.2%, and during the year
+ended December 31, 2021, 61.1% and 38.9%, of our revenues were generated from Singapore and China, respectively. 
+
+ 
+
+Our customers include industry-leading OEMs in the printer,
+electronics in Singapore and home appliance manufacturing sectors in China.
+
+ 
+
+1. Customized
+Industrial Manufacturing Solutions
+
+ 
+
+We
+provide customized industrial manufacturing solutions through our two subsidiaries in Singapore, Tung Resource and Tungray Singapore,
+and one subsidiary in China, Tungray Industrial.
+
+ 
+
+Our
+two Singapore subsidiaries mentioned above and Tungray Industrial work hand-in-hand to deliver customized solutions for our customers.
+We offer comprehensive ETO services to design, build and assemble industrial manufacturing solutions that are used for various quality
+control, product manufacturing and product testing processes. We leverage on our approximately 20 years of experience in motor control,
+sensor technologies, computer vision and overall product design to produce solutions that can meet the given specifications from our customers.
+Our Singapore subsidiaries serve as the primary location for our core activities such as research, development and assembling of solution
+prototypes, while Tungray Industrial provides manufacturing support for necessary component productions or deliver certain high-volume
+solution manufacturing purchases. Our Singapore subsidiaries are the main customer service point-of-contact for our non-Chinese market,
+such as Singapore and the Southeast Asia markets, while our Shenzhen subsidiary serves as a customer service point-of-contact for the
+Chinese market.
+
+ 
+
+2.
+Direct Drive and Linear DC Motors
+
+ 
+
+Qingdao
+Tungray Intelligent designs and manufactures industrial-grade direct drive and linear DC motors. We also have ETO capabilities
+to provide customized motion platform solutions to suit the needs of our customers.
+
+ 
+
+Our
+direct drive motors do not require any gears for speed and torque manipulation as they can directly manipulate both parameters
+over a wide range of values. These motors are used, for example, in the solar panel assembly lines to turn and transport semi-completed
+products between different manufacturing processes.
+
+ 
+
+Our
+motion platforms offer two degrees of freedom to move independently in the X and Y axis, thereby eliminating the need for any
+belt or gears. These high precision platforms require two linear DC motors and are mainly used in the glue application and laser
+cutting machines, in which precise movements in X and Y directions are required.
+
+ 
+
+Through
+our in-house R&D and manufacturing teams, we have accumulated extensive knowledge in direct drive and linear DC motors. We
+currently have several patented technologies that are used in the manufacturing of our motors. We currently offer our customers
+the following product lines – Tungray Drive B ("TDB") Series, Tungray Core ("TC") Series, Tungray
+"U" Type ("TU") Series, Tungray Linear Series ("TLS") standard linear modules. We also offer
+our customers ETO solutions in the form of high precision motion platforms. Finally, we also have compatible control modules for
+our motors to maximize its performance.
+
+ 
+
+ 11 
+
+ 
+
+ 
+
+ 
+
+ 
+
+3. Welding Equipment
+
+ 
+
+Tongri Electric our subsidiary
+in Qingdao, PRC, specializes in the design and manufacturing of self-contained, high-frequency induction welding equipment.
+
+ 
+
+Tongri Electric manufactures manual
+and automatic induction welding equipment that is mostly used in the production of refrigerators, air conditioners and heat pump clothes
+dryers. For our operator-attended products lines, our TB, TP, TD and TI series induction welding units are designed with full enclosures
+that enhances production safety. They also feature programmable logic controllers ("PLC") and human machine interfaces ("HMI")
+for ease of use.
+
+ 
+
+Our automatic induction welding units are equipped with patented
+machine vision technologies (2019SR0205465 and 2019SR0208252) to recognize and track metal tubes endings, before sending welding
+commands to the actuators for welding tip movements and subsequent induction welding. Our induction welding units are used by many
+Chinese home appliance OEMs in air conditioning, refrigerators and heat pump clothes dryer sectors.
+
+ 
+
+Competitive Strengths
+
+ 
+
+Most of our customers
+are market-leading OEMs in their respective industries that value quality, reliable and cost-effective products. Over the years,
+we have established ourselves as a reputable company that excels in product quality and service excellence. We believe the following
+strengths contribute to our success and are the differentiating factors that set us apart from our peers in the areas of ETO customized
+industrial manufacturing solutions, induction welding, direct drive and linear DC motors.
+
+ 
+
+1. ETO Customized Industrial Manufacturing
+Solutions 
+
+ 
+
+ 
+ 
+ Established Engineering Capabilities - Our engineering capabilities, accumulated through the hundreds of projects we complete each year, enable us to offer our customers tailor-made solutions that address their unique needs.
+
+ 
+
+ 
+ 
+ High-Cost Effectiveness - The internal cost control system that we have established plays a vital role in managing costs. We pass down these cost savings by offering our customers with solutions at attractive prices that are unavailable in the standard, off-the-shelf market.
+
+ 
+
+ 
+ 
+ Expertise in Components Used and Solution Design - Our engineers have extensive knowledge on a wide range of sensors, motors, raw materials, including their dimensions and performance parameters. They rely on such expertise to select the best component and material to satisfy the designed functions.
+
+ 
+
+ 12 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ Short Lead Time - Many of our customers are market-leading OEMs that are very sensitive to lead time. We complement our engineering capabilities with an agile workflow that reduces overall solution lead time.
+
+ 
+
+2. Direct Drive and Linear DC Motors
+
+ 
+
+ 
+ 
+ Quality Assurance - We have full control over the quality of our motors because each motor is designed, manufactured, and tested in-house.
+
+ 
+
+ 
+ 
+ Patented Technologies - We have implemented many patented technologies in the manufacturing of our motors.
+
+ 
+
+ 
+ 
+ Comprehensive
+ product line - Our customers use our products in manufacturing activities that require high throughput and high
+ precision such as 3C manufacturing and voltaic transports. To ensure their requirements are met, we offer our customers a
+ wide range of motors, modules, compared to traditional motor manufacturers that might only provide stand-alone sales of
+ motors.
+
+ 
+
+ 
+ 
+ Service commitment - With our deep product knowledge, we help our customers pick motors that best suit their needs. We reduce the project lead time of our customers by providing them with a complete working solution with our motors. We also offer a nationwide quick response service to ensure fast troubleshooting and resolution of any product-related problems.
+
+ 
+
+ 
+ 
+ Strong Customer Relationship - Based on quality product and service excellence, we have built strong relationship with many of our customers.
+
+ 
+
+3. Induction Welding Equipment
+
+ 
+
+ 
+ 
+ Comprehensive Product Line - We offer our customers a comprehensive line of products that covers the manual and fully automatic induction welding spectrum and include a wide range of self-contained, single welding units. We have also developed a new series of fully automated welding stations that use our patented technologies and increase welding efficiency.
+
+ 
+
+ 
+ 
+ Patented Technologies - We have patented numerous welding technologies that are used in our products.
+
+ 
+
+ 
+ 
+ Strong Customer Relationship - Over the years, we have built a strong relationship with our customers, which helps us maintain direct access to decision-level makers of our customers. 
+
+ 
+
+Growth Strategies
+
+ 
+
+Our goal is to increase
+our market share and product offerings by leveraging the geographical and technological advantage of our Singapore headquarters.
+In order to achieve this growth, we plan to:
+
+ 
+
+ Expand our sales in ASEAN countries
+
+ 
+
+We believe the demand
+for smart manufacturing solutions will remain strong in the region, as companies take advantage of the relative low cost of labor
+and large customer base found in the region. We intend to expand our sales in ASEAN countries by strategically setting up dedicated
+business units in emerging economies such as Vietnam and Thailand. We believe these dedicated business units can better cater to
+the unique manufacturing activities (automobile manufacturing for Thailand and general electronics manufacturing for Vietnam) of
+these countries. Meanwhile, we expect our Singapore headquarter to continue to provide strong technical and manufacturing support
+to these business units in their respective countries.
+
+ 
+
+ 13 
+
+ 
+
+ 
+
+ 
+
+ Continue to invest in R&D and technology innovations
+
+ 
+
+We intend to continue
+to invest in R&D and technology innovations to enhance our capabilities of providing ETO solutions. In the age of disruptive
+technologies, we expect the industry to adapt quickly to stay relevant. We take pride in offering our customers with ETO solutions
+that can meet their requirements and we believe our continuous investment in R&D and technology innovations will allow us to
+keep up with technological changes. By offering our customers with the latest, viable ETO solutions, we also expect to secure our
+growth in the long run.
+
+ 
+
+ Develop and recruit employees
+
+ 
+
+We believe our employees
+are our biggest asset. We intend to support our growth strategies with human resource investment, specifically through talent recruitment
+and employee development. Talent recruitment can help us to complement the current experience accumulated by our employees in customization,
+product design and production methodologies, while employee development can sharpen the knowledge of our current employees in the
+field of ETO solutions, motor and welding equipment design.
+
+ 
+
+ Grow sales volume from current customers
+
+ 
+
+We believe our strong
+customer base in Singapore and China can be further strengthened, thus increasing our sales. We could offer additional, value-added
+solutions to help them to achieve their various goals in smart manufacturing. On top of our current after-sales services, we expect
+such solutions to better meet demands of manufacturing efficiencies in the age of Industry 4.0.
+
+ 
+
+ Pursue strategic acquisitions
+
+ 
+
+To complement our
+technology and our growth, we may pursue strategic acquisitions with companies that fit into our overall growth strategy. We believe
+such acquisitions could help us to expand the usage of our products or solutions. Additionally, such acquisitions could also provide
+greater access to our target markets outlined in our general growth strategy.
+
+ 
+
+Marketing and Sales
+
+ 
+
+We market and sell
+our products through our direct sales force that is made up of our own employees.
+
+ 
+
+As of the date of this prospectus,
+we have a direct sales and marketing team of 14 personnel. Our sales team provides us with direct access to our customers and is capable
+of addressing our customers needs in a fast and efficient way. They also coordinate with our suppliers to ensure the timely delivery
+of any required components.
+
+ 
+
+The compensation package
+for our sales team generally includes fixed base salaries. Sales employees of Qingdao Tungray Intelligent also receive commissions
+based on the revenues or collection they achieve. We provide our sales team with regular training and internally developed systems
+to assist them in quickly becoming proficient and productive sales personnel.
+
+ 
+
+Research and Development ("R&D")
+
+ 
+
+We invest in R&D efforts
+that advance our technology with the goal to expand new products and improve upon our existing product offerings. Our R&D expenses
+totalled approximately $0.4 million and $0.4 million for the six months ended June 30, 2023 and 2022, respectively. Our R&D
+expenses totalled approximately $0.8 million and $0.7 million, for the years ended December 31, 2022 and 2021, respectively. R&D expenses
+mainly consist of applicable personnel, design, sample manufacturing and materials expenses. As of the date of this prospectus, we have
+a total of 34 employees in the R&D department. In the future, we expect R&D expenses to increase as we continue to develop
+new products, and enhance existing products and technologies.
+
+ 
+
+ 14 
+
+ 
+
+ 
+
+ 
+
+By continuously upgrading
+and improving products and technologies that are tailored to our customers requirements, we have further strengthened our
+customer s loyalty.
+
+ 
+
+As of the date of
+the prospectus, we have 50 registered patents, all registered within the jurisdiction of the PRC.
+
+ 
+
+Competition
+
+ 
+
+The industries of ETO customized industrial manufacturing solutions,
+direct drive and linear DC motors and induction welding equipment, are intensely competitive, subject to rapid change and significantly
+affected by new product introductions and other market activities of industry participants. We compete with manufacturers and other
+solution providers globally. Some of these competitors are large, well-capitalized companies with significantly greater market
+share and resources than we have. As a consequence, they are able to spend more on product development, marketing, sales and other
+product initiatives than we can.
+
+ 
+
+1. Customized Industrial Test and Tooling
+Solutions
+
+ 
+
+In the ETO industrial
+manufacturing solutions market, we believe Sigma Design & Engineering Pte Ltd is our main competitor. The company provides
+similar ETO solutions and competes with us in similar industries. In addition to the North American markets, they have a presence
+in the regional and the Chinese market with a large employee size of about 400. We believe this competitor also has equally strong
+capabilities in coming up with customized solutions. However, we believe our edge lies in lead time and cost control, two of the
+important features of an ETO solution provider. We rely on our component knowledge and design experience to help us reduce lead
+time and finalize project designs. Cost savings from time savings are also shared with our customers by means of reasonable price
+tags.
+
+ 
+
+2. Direct Drive and Linear DC Motors
+
+ 
+
+The market for direct drive and linear DC motors is characterized
+by many individual companies of different capabilities. We believe Qingdao Zhihe Precision Technology Co., Ltd. and Yokokawa Robotics
+(Shenzhen) Co., Ltd. are our competitors as both have similar scale of operations and offer similar products. Moreover, our product
+application industries and that of our competitors overlap mainly in the 3C, and laser welding industries. However, we believe
+our competitors are focused on a narrower product range and that our competitive edge lies in our diverse product offerings and
+our ETO abilities. When it comes to ETO, high precision motion platforms solutions, we believe our experience in this area helps
+to differentiate ourselves from our competitors.
+
+ 
+
+3. Induction Welding Equipment
+
+ 
+
+In the manual induction
+welding equipment market, we believe Xiamen Inker Induction Co., Ltd. is our main competitor. The company is the Chinese subsidiary
+of the Incoil Induktion AB from Sweden. Some of their manual induction welding units are directly imported from Sweden and have
+similar performance parameters as ours. In terms of price, their products are on par with us, posing as a formidable competitor.
+However, we believe our competitive edge lies in our responsive after sales services. We have a team of service engineers that
+responds to our customers requests within 24 hours. This ensures their needs can be attended and resolved expeditiously.
+
+ 
+
+Xinchang Kechuang Automation Equipment Co., Ltd. is our major
+competitor in the automatic induction welding equipment market. The company initially focused on the R&D of automatic flame-type
+welding equipment but has recently started to also offer automatic induction welding equipment. We believe one of the reasons for
+their competitive edge is their lower per unit cost. However, we have since move up the value chain by offering induction welding
+equipment with higher levels of automation using robotic arms, machine visions algorithms etc. We believe this helps us to differentiate
+our products. Additionally, we also increase our competitiveness by offering our customers with more technologically advanced equipment
+that is vital in the age of Industry 4.0, which conceptualizes rapid change to technology, industries, and societal patterns and
+processes due to increasing interconnectivity and smart automation.
+
+ 
+
+ 15 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Industry
+
+ 
+
+1. Smart Manufacturing and ETO
+Solutions
+
+ 
+
+The smart manufacturing
+market is forecasted to grow at a compounded annual growth rate ("CAGR") of about 13% from 2022 to 2029, reaching a
+market worth of about USD 658 billion globally. According to a 2022 report from Fortune Business Insights, one of the main
+drivers behind this rapid growth is the increased adoption of Industry 4.0, in which factories become highly interconnected via
+the Internet of Things ("IoT"). These smart factories usually leverage on the power of cloud computing and IoT devices
+(such as embedded micro controllers, secure PLCs) for communication. They also harness the power of big data and artificial intelligence
+("AI") to achieve the goals of faster production and higher levels of resource optimization, thereby increasing efficiency
+and reducing costs.
+
+ 
+
+Besides Industry 4.0,
+the increased focus on automating many industrial manufacturing processes as well as investment by governments during the COVID-19
+pandemic provide other means of impetus to the growth of the smart manufacturing market. According to the same report from Fortune
+Business Insights in 2022 mentioned above, the Asia Pacific region ("APCA") will hold the largest market share in smart manufacturing,
+owing to its desire for rapid industrialization to boost the manufacturing sector output. The supply chain shock during the COVID-19
+pandemic also makes manufactures more likely to adopt smart manufacturing solutions in order to be more resilient and agile to such
+possible disruptions in the future.
+
+ 
+
+The market for ETO
+industrial manufacturing solutions is closely linked to the smart manufacturing market because almost each type of automated, high
+volume manufacturing activity is supported by a set of customized, usually ETO solutions. Given our traditional strength, and experience
+accumulated over the years in providing ETO manufacturing solutions, we are confident in staying relevant in the age of Industry
+4.0 as well as smart manufacturing in the years to come.
+
+ 
+
+2. Direct Drive and Linear Motors
+
+ 
+
+Electric
+direct drive and linear motors are used in many industries. The demand for global linear motors is expected to register a CAGR
+of about 6% till 2031 according to Fact.MR in 2022. China is forecasted to be a strong growth factor with its high domestic volume
+of manufacturing output and modernization of its industrial infrastructure for high-end manufacturing. About 70% of our direct
+drive and linear motors are used in productions lines related to the manufacturing of 3C (computer, communication and consumer
+electronic) products.
+
+ 
+
+3. Induction Welding Equipment
+
+ 
+
+Globally, the welding
+equipment market is forecasted to increase at a CAGR of about 7.17% between 2022 to 2026. 51% of this growth is expected to
+originate from the Asia Pacific ("APAC") region according to a report on ReportLinker in 2022. The adoption of
+automation such as using robots to enhance welding efficiency is one of the driving factors behind this growth.
+
+ 
+
+While
+induction welding does not contribute to a major share of the total welding equipment used in China, it is, however, essential
+in the production of many household appliances such as air conditioners, refrigerators and heat pump clothes dryers. The Chinese
+market for these appliances is growing at the fastest rate around the world with a forecasted value of more than $130 billion by
+2026 according to Research and Markets in 2020.
+
+ 
+
+In air conditioners
+and refrigerators, a compressor first compresses a working agent, usually freon, before passing it through a series of copper tubes
+to expand. It is through this expansion that heat is absorbed from the tubes surroundings to create a cooling effect. In
+heat pump clothes dryers, the process is similar, with the only differences of using the heat generated from the compressor for
+heating and using the cooling effect from expansion for moisture extraction. The quality welding of compressors and copper tube
+systems is therefore indispensable in such household appliances, as both components must be joined perfectly to prevent freon leakage
+and to provide the desired functions of heating and cooling.
+
+ 
+
+ 16 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Corporate History and Company Structure
+
+ 
+
+Tungray is an exempted
+company incorporated with limited liability under the laws of the Cayman Islands on June 1, 2022 with operations conducted through
+primarily its Singapore Subsidiaries and PRC Subsidiaries.
+
+ 
+
+The following diagram illustrates our corporate legal structure* as
+of the date of this prospectus.
+
+ 
+
+ 
+
+* The diagram only includes our consolidated
+subsidiaries that are wholly-owned or majority-owned by us. 
+
+ 
+
+ 
+
+ 17 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Approvals from Singapore and the PRC
+Authorities to Conduct Our Operations and Issue Our Class A Ordinary Shares to Foreign Investors 
+
+ 
+
+Our operations in
+Singapore are governed by Singapore laws and regulations. Our Singapore legal counsel, Shook Lin & Bok LLP, has advised us
+that, as of the date of this prospectus, based on their understanding of the current Singapore laws, regulations and rules, we
+and our Singapore Subsidiaries have received all requisite permissions and approvals from the Singapore government authorities
+that are material for our business operations currently conducted in Singapore. Neither have we nor our Singapore Subsidiaries
+received any denial of permissions for our business operations currently conducted in Singapore. In addition, our Singapore legal
+counsel has advised us that, as of the date of this prospectus, based on their understanding of the current Singapore laws, regulations
+and rules, we and our Singapore Subsidiaries are currently not required to obtain permission from any of the Singapore authorities
+to issue our Class A Ordinary Shares to foreign investors, or list and trade of our Class A Ordinary Shares on Nasdaq in connection
+with this offering.
+
+ 
+
+Our operations in
+China are governed by PRC laws and regulations. On August 8, 2006, six PRC regulatory
+agencies, including the Ministry of Commerce of China (the "MOFCOM"), jointly issued the Regulations on Mergers and
+Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and
+amended on June 22, 2009. The M&A Rules contains provisions that require that an offshore special purpose vehicle ("SPV")
+formed for listing purposes and controlled directly or indirectly by Chinese companies or individuals shall obtain the approval
+of the CSRC prior to the listing and trading of such SPV s securities on an overseas stock exchange. As advised by our PRC
+legal counsel, Han Kun Law Offices, based on their understanding of the current PRC law, rules and regulations, as of the date
+of this prospectus, the CSRC s approval under the M&A Rules is not required for the listing and trading of our Class
+A Ordinary Shares on Nasdaq in the context of this offering as the CSRC currently has not
+issued any definitive rule or interpretation concerning whether offerings such as this offering contemplated by us are subject
+to the M&A Rules.
+
+ 
+
+However, our PRC legal counsel,
+Han Kun Law Offices, has further advised us that there remains uncertainty as to how the M&A Rules will be interpreted or implemented
+by the relevant PRC authorities, and there can be no assurance that the relevant PRC government
+agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel. We are subject to the risks of uncertainty
+of any future actions of the PRC government in this regard including the risk that we inadvertently conclude that the permissions or approvals
+discussed here are not required, that applicable laws, regulations or interpretations change such that we are required to obtain approvals
+in the future, or that the PRC government could disallow our holding company structure, which would likely result in a material change
+in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign
+investments, and offer or continue to offer securities to our investors. These adverse actions could cause the value of our Class A Ordinary
+Shares to significantly decline or become worthless. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies,
+including the CSRC, if we fail to comply with such rules and regulations, which would likely adversely affect the ability of our securities
+to be listed on a U.S. exchange, and would likely cause the value of our securities to significantly decline or become worthless. Recently,
+the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in mainland
+China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based
+companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews,
+and expanding the efforts in anti-monopoly enforcement. Please see "Risk Factor — Risks Related to Doing Business in
+China — The approval of and the filing with the CSRC may be required in connection with our current or future offshore offerings
+under PRC laws, and our future offerings will be contingent upon the completion of such filing procedures.
+If we fail to comply with such filing requirements, our ability to offer securities to investors to become significantly limited or completely
+hindered, and the securities being offered to substantially decline in value and become worthless." on page 54 of this prospectus,
+and "Risk Factor — Risks Related to Doing Business in China – The approval of and the filing with CAC or other PRC
+government authorities may be required in connection with offshore offerings under PRC laws, and, if required, we cannot predict whether
+or for how long we will be able to obtain such approval or complete such filing." on page 55 of this prospectus.
+
+ 
+
+ 18 
+
+ 
+
+ 
+
+ 
+
+As of the date of this prospectus,
+we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC, the CAC or other
+PRC governmental authorities. Notwithstanding the foregoing, on February 17, 2023, the CSRC promulgated the Trial Measures and five supporting
+guidelines, which became effective on March 31, 2023. According to the Trial Measures, among other requirements, any domestic companies
+that seek to offer or list securities overseas, including those indirect overseas offering and listing which meet certain conditions,
+should fulfil the filing procedures with the CSRC within three business days after the submission of the overseas offering and listing
+application. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration
+for the Filing of Overseas Offering and Listing by Domestic Companies, which clarifies that on or prior to the effective date of the Trial
+Measures, domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval
+from overseas regulatory authorities or stock exchanges may reasonably arrange the timing for submitting their filing applications with
+the CSRC, and must complete the filing before the completion of their overseas offering and listing. Without relying on any opinions of
+counsel, we do not believe that we are required to obtain the approval from or complete the filing with the CSRC for this offering,
+based on the facts that (1) we do not meet the explicit conditions set out in the Trial Measures to determine whether an overseas offering
+shall be deemed as an indirect overseas offering and listing by a domestic company; and (2) the majority of our operations are not in
+the mainland China. However, as the Trial Measures were newly published, there are substantial uncertainties as to the implementation
+and interpretation and the CSRC may take a view that is contrary to our understanding of the Trial Measures because the Trial Measures
+adopts the principle of "substance over form" regarding the determination of "indirect overseas offering and listing
+by a domestic company", over which the CSRC may have substantial discretions. To reduce such uncertainties under the Trial Measures
+for this offering and our listing on Nasdaq Capital Market, we voluntarily submitted our filling application documents to the CSRC on
+July 26, 2023, and the CSRC published the notification on our completion of the required filing procedures
+on November 14, 2023 for this offering. However, if the filing procedures with the CSRC under
+the Trial Measures are required for any future offerings or any other capital raising activities, we cannot assure you that we
+will be able to complete such filings in a timely manner, or even at all, and our future offerings
+will be contingent upon the completion of filing procedures. Any failure by us to comply with such filing requirements under the Trial
+Measures may result in an order to rectify, warnings and fines against us and could materially hinder our ability to offer or to continue
+to offer our securities in any future offerings or any other capital raising activities. 
+
+ 
+
+See "Risk Factor — Risks
+Related to Doing Business in China – The approval of and the filing with the CSRC may be required in connection with our current
+or future offshore offerings under PRC laws, and our future offerings will be contingent upon the
+completion of such filing procedures. If we fail to comply with such filing requirements, our ability to offer securities to investors
+to become significantly limited or completely hindered, and the securities being offered to substantially decline in value and become
+worthless." on page 54 of this prospectus and "Risk Factor — Risks Related to Doing Business in China –
+The approval of and the filing with CAC or other PRC government authorities may be required in connection with offshore offerings under
+PRC laws, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing."
+on page 55 of this prospectus.
+
+ 
+
+ 19 
+
+ 
+
+ 
+
+ 
+
+Dividend Distributions
+or Assets Transfer among the Holding Company and Its Subsidiaries
+
+ 
+
+Tungray is a holding company
+with no material operations of its own and does not generate any revenue. We currently conduct substantially all of our operations through
+our Singapore Subsidiaries and PRC Subsidiaries. We are permitted under Singapore laws and regulations to provide funding to Singapore
+Subsidiaries through debt or equity contributions, and provided any applicable government registration and approval requirements have
+been satisfied. We are permitted under PRC laws and regulations to provide funding to PRC Subsidiaries only through loans or capital contributions.
+Subject to satisfaction of applicable government registration and approval requirements, we may extend inter-company loans or make additional
+capital contributions to our PRC Subsidiaries to fund their capital expenditures or working capital. We cannot assure you that we will
+be able to obtain these government registrations or approvals on a timely basis, if at all. See "Risk Factors — Risks Related
+to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRC entities may
+delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC Subsidiaries,
+which could materially and adversely affect our liquidity and our ability to fund and expand our business." on pages 56 and
+57 of this prospectus.
+
+ 
+
+Neither Tungray or
+its subsidiaries has cash management policies dictating how funds are transferred, and each entity needs to comply with applicable
+laws or regulations with respect to transfer of funds, dividends and distributions with other entities.
+
+ 
+
+In November 2022, the Company s
+subsidiaries, Tungray Singapore and Tung Resource, declared dividends in the amounts of SGD 2,500,000 (approximately $1.8 million) and
+SGD 3,500,000 (approximately $2.6 million), respectively. Other than the aforementioned dividend payments by two subsidiaries of the Company,
+as of the date of this prospectus, there were no cash flows including all dividends, transfer and distribution between Tungray and its
+subsidiaries; and there has been no dividend or distributions made between U.S. investors, other investors and any of the Company s
+entities. For the summary of the condensed consolidated schedule and the consolidated financial statements, see page 35 of this prospectus
+for "Summary Consolidated Financial And Operating Data — summary consolidated balance sheet data" (which is a summary
+of page F-4 of the Consolidated Balance Sheets); "— summary consolidated statement of income" (which is a summary of
+page F-5 of the Consolidated Statements of Income and Comprehensive Income); and "Risk Factor — Risks Related to Our
+Corporate Structure — The transfer of funds or assets between Tungray and its subsidiaries is subject to restrictions."
+from page 49 to 50 of this prospectus.
+
+ 
+
+Cash proceeds raised from overseas
+financing activities, including the cash proceeds from this offering, may be transferred by Tungray to the BVI subsidiaries, and then
+transferred to their respective Singapore Subsidiaries, and then transferred to the respective PRC Subsidiaries, as capital contribution
+and/or shareholder loans subject to applicable regulatory approvals, as the case may be, respectively.
+
+ 
+
+We intend to keep
+any future earnings to re-invest in and finance the expansion of our business, and we do not anticipate that any cash dividends
+will be paid in the foreseeable future.
+
+ 
+
+Under Cayman Islands
+law, a Cayman Islands company may pay a dividend on its shares out of profits of the company or its share premium amount or a combination
+of both, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts
+as they fall due in the ordinary course of business immediately following the date on which the distribution or dividend is paid.
+If we determine to pay dividends on any of our Class A Ordinary Shares in the future, as a holding company, unless we receive proceeds
+from future offerings, we will be dependent on receipt of funds from our BVI subsidiaries, which will be dependent on receipt of
+dividends from their respective Singapore Subsidiaries, which will be dependent on receipt of payments from their respective PRC
+Subsidiaries in accordance with the laws and regulations of the PRC.
+
+ 
+
+ 20 
+
+ 
+
+ 
+
+ 
+
+Tungray s ability
+to distribute dividends is based upon its distributable earnings. Each Singapore Subsidiary s ability to distribute dividends
+is based on whether it has any profits available for distribution. If we decide to pay dividends on any of our Class A Ordinary
+Shares in the future, as a holding company, we will be dependent on receipt of funds from our principal subsidiaries in Singapore
+and mainland China. The distributed dividends from our PRC Subsidiaries will be made to our Singapore Subsidiaries in accordance
+with the laws and regulations of the PRC, and then Singapore Subsidiaries will transfer the dividends to Tungray and subsequently
+to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors
+or investors in other countries or regions.
+
+ 
+
+The PRC government imposes controls
+on the convertibility of the Renminbi into foreign currencies and the remittance of currency out of mainland China which may restrict
+our PRC Subsidiaries ability to transfer cash from our PRC Subsidiaries to our other non-PRC entities. To the extent cash is generated
+in our PRC Subsidiaries, and may need to be used to fund operations outside of mainland China, such funds may not be available due to
+limitations placed by the PRC government. Furthermore, to the extent assets (other than cash) in our business are located in mainland
+China and held by PRC Subsidiaries, the assets may not be available to fund operations or for other use outside of mainland China due
+to interventions in or the imposition of restrictions and limitations on the ability of us and our subsidiaries to transfer assets by
+the PRC government. In addition, the PRC Subsidiaries are required to set aside at least 10% of their after-tax profits each year, if
+any, to fund a statutory reserve until such reserve reaches 50% of their registered capital. Each of such entity in mainland China may
+also set aside a portion of its after-tax profits to fund an optional reserve, although the amount to be set aside, if any, is determined
+at the discretion of its board of shareholders. The reserves can be used, cover losses made in past years and enhance the company s
+productivity and expand its business, however, a company s capital reserve shall not be used to cover the company s losses.
+In addition, the PRC EIT Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends
+payable by mainland China 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.
+
+ 
+
+Therefore, in the
+event that our PRC Subsidiaries were to remit foreign currency payments out of mainland China in the future, we may experience
+difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends
+from our profits in the mainland China, if any. Furthermore, if any of our subsidiaries incurs debt on its own in the future, the
+instruments governing the debt may restrict its ability to pay dividends or make other payments.
+
+ 
+
+Our subsidiaries in Singapore
+and mainland China generally plan to generate and retain cash generated from operating activities and re-invest it in our business. Other
+than the dividend payments of SGD 2,500,000 (approximately $1.8 million) and SGD 3,500,000 (approximately $2.6 million) by Tungray Singapore
+and Tung Resource, two subsidiaries of the Company, respectively in November 2022, as of the date of this prospectus, none of our Singapore
+and PRC Subsidiaries have paid any dividends to their respective parent companies. Based on our understanding of the BVI laws and regulations,
+as at the date of this prospectus, there is no restriction on the transfer of capital within, into and out of BVI. See "Risk Factors
+— Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies
+to PRC entities may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to
+our PRC Subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business."
+on pages 56 and 57 of this prospectus.
+
+ 
+
+Impacts of COVID-19
+
+ 
+
+On March 11, 2020,
+the World Health Organization declared COVID-19 a pandemic. The outbreak has reached almost every country (including Singapore
+and the PRC), resulting in the implementation of significant governmental measures, including lockdowns, closures, quarantines,
+and travel bans, intended to control the spread of the virus. Companies are also taking precautions, such as requiring employees
+to work remotely, imposing travel restrictions, and temporarily closing businesses.
+
+ 
+
+ 21 
+
+ 
+
+ 
+
+ 
+
+ 
+
+The negative impacts
+of the COVID-19 pandemic on our business, financial condition, and results of operations include, but are not limited
+to, the following:
+
+ 
+
+ 
+ 
+ Temporary lockdown or suspension of business. In response to the COVID-19 pandemic,
+ local governments in Singapore and the PRC have imposed restrictions on large-scale gathering activities in various places
+ or imposed extra requirements on participants of such activities from time to time, which have caused suspension of the Company s
+ business operation in Singapore briefly from April 2020 to June 2020 and in the PRC from February 2020 to March 2020.
+
+ 
+
+ 
+ 
+ Limitations on our
+ employees ability to work and travel. Resulting from the implementation of significant governmental measures in the PRC
+ and Singapore, including lockdowns, closures, quarantines, and travel bans from time to time, intended to control the spread of
+ COVID-19, our employees ability to work and travel was adversely affected and therefore the Company s ability to manage
+ day-to-day operations and service delivery was impaired in the PRC until late December 2022 and in Singapore from April 2020 to June 2020. 
+
+ 
+
+ 
+ 
+ Limitations on in-person
+business activities. Affected by the self-quarantine requirement and travel restrictions in Singapore from April 2020 to June 2020
+and restrictions in the PRC nationwide until late December 2022, the Company s marketing staffs were unable to carry out in-person
+promotion activities and face-to-face communication with customers, which greatly affected the development and introduction of potential
+customers.
+
+ 
+
+ 
+ 
+ Restrictions on
+ shipment of products. Affected by traffic control and logistics restrictions in Singapore from April 2020 to June 2020 and
+ restrictions in the PRC nationwide until late December 2022, we had some difficulties during the respective restricted periods in
+ obtaining raw materials due to the supply chains disruptions as a result of local lockdowns and transporting our completed products
+ due to logistic disruptions. 
+
+ 
+
+ 
+ 
+ Reduction of
+ customer s spending. The pandemic caused negative impact on the global economy, including Singapore and the PRC, and
+ severely interrupted our customers normal work and businesses, which negatively affected our customers spending and
+ investment in their businesses and caused them to be more inclined to reduce expenditures, and in turn affect our revenues and
+ operational results. Although none of our customers has terminated contracts with us to date, we cannot assure you if any customer
+ will in the future terminate its contract with us due to the pandemic.
+
+ 
+
+We have implemented
+the following measures and responses for the COVID-19 pandemic:
+
+ 
+
+ 
+ 
+ When returning personnel arrive at the Company for the first time, we implement necessary quarantine and observation and restrict contact among employees;
+
+ 
+
+ 
+ 
+ We ensure that we have available pandemic prevention materials (such as masks, gloves, hand sanitizers and cleaning products) and monitoring sites for quarantine;
+
+ 
+
+ 
+ 
+ We take necessary control measures according to governmental guidelines and regulations;
+
+ 
+
+ 
+ 
+ We have implemented a more comprehensive automation transformation of the production workshop to reduce man-powered workload and improve production efficiency; and
+
+ 
+
+ 
+ 
+ We encourage our employees to get COVID-19 vaccinations, if they are deemed medically fit to do so. 
+
+ 
+
+ 22 
+
+ 
+
+ 
+
+ 
+
+The COVID-19 outbreak
+has adversely affected (and a significant outbreak of other infectious diseases could result in an additional widespread health
+crisis that could adversely affect) the economies and financial markets worldwide, and the business of the Company could be
+materially and adversely affected by the COVID-19 outbreak and any such other outbreak. Furthermore, our business may be
+adversely affected if continued concerns relating to COVID-19 continue to restrict travel, or result in the Company s
+personnel, vendors and customers being unavailable to pursue their business objectives free of COVID-19 related restrictions.
+Although travel restrictions and quarantine requirements have been lifted in Singapore and the PRC, the extent to which
+COVID-19 impacts our business in the future will depend on future developments, which are evolving and cannot be predicted,
+including for example new information which may emerge concerning the severity of COVID-19 and the actions taken by relevant
+government authorities to contain COVID-19 or treat its impact. If the disruptions posed by COVID-19 or other matters of
+global concern continue for an extended period of time, our ability to pursue our business objectives may be materially adversely
+affected. In addition, our ability to raise equity and debt financing which may be adversely impacted by COVID-19 and other
+events, including as a result of increased market volatility, decreased market liquidity and third-party financing being
+unavailable on terms acceptable to us or at all. The spread of COVID-19 did not adversely affect the Company s business during the years
+ended December 31, 2022 and 2021. However, during the six months ended June 30, 2023, with the end of the COVID-19 pandemic, people s
+work mode has changed from work from home during the pandemic to work at office, thus reducing the demand for office equipment such as
+printers, which had an impact on our business.
+
+ 
+
+Summary of Significant Risk Factors
+
+ 
+
+Investing in our
+Class A Ordinary Shares involves significant risks. You should carefully consider all of the information in this prospectus before
+making an investment in our Class A Ordinary Shares. Below please find a summary of the principal risks we face, organized under
+relevant headings. These risks are discussed more fully in the section titled "Risk factors."
+
+ 
+
+Risks Related to Our Business and
+Industry
+
+ 
+
+Risks and uncertainties
+related to our business and industry, beginning on page 36 of this prospectus, include, but are not limited to, the following:
+
+ 
+
+ Any adverse material changes to the Singapore
+and the PRC markets (whether localized or resulting from global economic or other conditions) such as the occurrence of an economic
+recession could have a material adverse effect on our business, results of operations and financial condition. See a more detailed
+discussion of this risk factor on page 36 of this prospectus.
+
+ 
+
+ Some of our subsidiaries have a limited operating history and are subject
+to the risks encountered by development-stage companies. See a more detailed discussion of this risk factor on page
+38 of this prospectus. 
+
+ 
+
+ If our products do not respond to changes in technology, our products may become obsolete and we may experience a
+loss of customers and lower revenues. See a more detailed discussion of this risk factor on page 40 of this prospectus.
+
+ 
+
+ The manufacture of many of our products is
+ a highly exacting and complex process, and if we directly or indirectly encounter problems in manufacturing products, business and
+ financial results could suffer. See a more detailed discussion of this risk factor on page 40 of this prospectus.
+
+ 
+
+ We are dependent on our manufacturing facilities for the production
+of our highly engineered products and our suppliers factories, which subjects us to risks associated with disruptions and changing
+technology and manufacturing techniques that could place us at a competitive disadvantage. See a more detailed discussion of this risk
+factor on page 41 of this prospectus.
+
+ 
+
+ 23 
+
+ 
+
+ 
+
+ 
+
+ If we lose the services of any of our
+key executive officers and other key employees, or are unable to retain, recruit and hire experienced staff, our ability to effectively
+manage and execute our operations and meet our strategic objectives could be harmed. See a more detailed discussion of this risk
+factor on page 42 of this prospectus.
+
+ 
+
+ If we fail to protect our intellectual
+property rights, it could harm our business and competitive position. See a more detailed discussion of this risk factor on page
+43 of this prospectus. 
+
+ 
+
+ If
+we are unable to retain existing customers or attract new ones, or to attract sufficient spending from our customers, our business, results
+of operations and financial condition could be materially and adversely affected. See a more detailed discussion of this risk factor
+on pages 45 and 46 of this prospectus.
+
+ 
+
+ 
+ 
+ 
+ Fluctuations in exchange rates could have a material adverse effect
+on our results of operations and the price of our Class A Ordinary Shares. See a more detailed discussion of this risk factor on page
+47 of this prospectus.
+
+ 
+
+ 
+
+Risks Related to Our Corporate Structure
+
+ 
+
+Risks and uncertainties
+related to our corporate structure, beginning on page 47 of this prospectus, include, but are not limited to, the following:
+
+ 
+
+ You
+may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because
+we are incorporated under Cayman Islands law. See a more detailed discussion of this risk factor on pages 47 and 48 of this prospectus.
+
+ 
+
+ You may experience difficulties in effecting
+service of legal process, enforcing foreign judgments or bringing actions in Singapore and China against us or our management named
+in the prospectus. See a more detailed discussion of this risk factor on page 48 of this prospectus. 
+
+ 
+
+ The transfer of funds or assets between Tungray and its subsidiaries is
+subject to restrictions. See a more detailed discussion of this risk factor from page 49 to 50 of this prospectus.
+
+ 
+
+Risks Related to Doing Business in
+Singapore 
+
+ 
+
+The majority of our operations
+are in Singapore, so we face risks and uncertainties related to doing business in Singapore in general, including, but not limited to,
+the following:
+
+ 
+
+ We are subject to the laws of Singapore, which differ in certain material
+respects from the laws of the United States. See a more detailed discussion of this risk factor on page 51 of this prospectus.
+
+ 
+
+ Any adverse material changes to the Singapore market (whether localized
+or resulting from economic or other conditions) such as the occurrence of an economic recession, pandemic or widespread outbreak of an
+infectious disease (such as COVID-19), could have a material adverse effect on our business, results of operations and financial condition.
+See a more detailed discussion of this risk factor on pages 51 and 52 of this prospectus.
+
+ 
+
+Risks Related to Doing Business in
+China
+
+ 
+
+A substantial portion
+of our operations are in China, so we face risks and uncertainties related to doing business in China in general, including, but
+not limited to, the following:
+
+ 
+
+ 
+ 
+ 
+ Because approximately 35% of our operations are in China, our business
+is subject to the complex and rapidly evolving laws and regulations there, which are different in material aspects from the laws of the
+United States and may change and continue to evolve. The uncertainties with respect to the PRC legal system and with respect to the interpretation
+and enforcement of PRC laws and regulations could have a material adverse effect on us and the PRC government may exercise significant
+oversight over the conduct of our business, and may intervene in, influence or exert control over our operations at any time, which could
+result in a material change in our operations and/or the value of our Class A Ordinary Shares. See a more detailed discussion of this
+risk factor on page 53 of this prospectus.
+
+ 
+
+ 
+
+ 24 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ The approval of and the filing with the CSRC may be required in connection
+with our current or future offshore offerings under PRC laws, and our future offerings will be contingent upon the completion of such
+filing procedures. If we fail to comply with such filing requirements, our ability to offer securities to investors to become significantly
+limited or completely hindered, and the securities being offered to substantially decline in value and become worthless. See a more detailed
+discussion of this risk factor on page 54 of this prospectus.
+
+ 
+
+ 
+ 
+ 
+ The approval of and the filing with CAC or other PRC government
+ authorities may be required in connection with offshore offerings under PRC laws, and, if required, we cannot predict whether or for
+ how long we will be able to obtain such approval or complete such filing. See a more detailed discussion of this risk factor on page
+ 55 of this prospectus.
+
+ 
+
+ 
+
+ 
+ 
+ 
+ Recent joint statement by the SEC and PCAOB, proposed rule changes
+submitted by Nasdaq, and an act passed by the US Senate 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 a more detailed discussion of this risk factor from page 57 to 59 of this
+prospectus.
+
+ 
+
+ 
+
+ PRC regulations relating to the establishment of offshore special purpose
+companies by PRC residents may subject our PRC resident beneficial owners or our PRC Subsidiaries to liability or penalties, limit our
+ability to inject capital into our PRC Subsidiaries, limit our PRC Subsidiaries ability to increase their registered capital or
+distribute profits to us, or may otherwise adversely affect us. See a more detailed discussion of this risk factor on page 60 of this
+prospectus.
+
+ 
+
+Risks Related to Our Class A Ordinary
+Shares and this Offering
+
+ 
+
+Risks and uncertainties related to this offering and
+Class A Ordinary Shares, beginning on page 69 of this prospectus, include, but are not limited to, the following:
+
+ 
+
+ There has been no public market for our Class A Ordinary Shares prior
+to this offering, and you may not be able to resell our Class A Ordinary Shares at or above the price you paid, or at all. See a more
+detailed discussion of this risk factor on page 63 of this prospectus. 
+
+ 
+
+ The market price for the Class A Ordinary Shares may be volatile. See
+a more detailed discussion of this risk factor on pages 64 and 65 of this prospectus.
+
+ 
+
+ 
+ 
+ 
+ We may experience extreme stock price volatility unrelated to our actual
+or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly
+changing value of our Class A Ordinary Shares. See a more detailed discussion of this risk factor on page 65 of this prospectus.
+
+ 
+
+ 
+
+ We are a "foreign private issuer," and our disclosure obligations
+differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting
+companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.
+See a more detailed discussion of this risk factor on page 66 of this prospectus.
+
+ 
+
+ 25 
+
+ 
+
+ 
+
+ 
+
+ Our
+ dual-class voting structure will limit your ability to influence corporate matters and could
+ discourage others from pursuing any change of control transactions that holders of our Class
+ A Ordinary Shares may view as beneficial. See
+ a more detailed discussion of this risk factor on page 71 of this prospectus.
+
+ 
+
+ Our
+ dual-class voting structure may render our Class A Ordinary Shares ineligible for inclusion
+ in certain stock market indices, and thus adversely affect the trading price and liquidity
+ of our Class A Ordinary Shares. See a more detailed discussion of this risk factor on page
+ 71 of this prospectus.
+
+ 
+
+Compliance with Foreign Investment
+
+ 
+
+All limited liability
+companies formed and operating in the PRC are governed by the Company Law of the People s Republic of China, or the PRC Company
+Law, which was amended and promulgated by the SCNPC on October 26, 2018 and came into effect on the same day. Foreign
+invested enterprises ("FIEs") must also comply with the PRC Company Law, with exceptions as specified in the relevant
+foreign investment laws. Under our corporate structure as of the date of this prospectus, 100% of the equity interests of each
+of Tungray Industrial, Tongri Electric and Tongsheng Development are entirely and directly held by our company through our Singapore
+Subsidiaries, Tungray Singapore, Tungray Resource and Tungray Technology, respectively. Although Tongsheng Intelligent and
+Qingdao Tungray Intelligent are not directly held by foreign investors, Tungray Singapore and Tungray Technology indirectly hold
+all or part of the equity interests of them. Therefore, each of Tungray Industrial, Tongsheng Intelligent, Tongri Electric, Tongsheng
+Development and Qingdao Tungray Intelligent should be regarded as a foreign-invested enterprise and comply with both the PRC
+Company Law and other applicable foreign investment laws.
+
+ 
+
+Recent Regulatory Development in PRC
+
+ 
+
+We are a holding company incorporated
+in the Cayman Islands with approximately 35% of our operation conducted by the subsidiaries in mainland China. We are aware that, recently,
+the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in mainland
+China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based
+companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews,
+and expanding the efforts in anti-monopoly enforcement.
+
+ 
+
+In
+addition, on December 28, 2021, the Cyberspace Administration of China (the "CAC") adopted the Measures for
+Cybersecurity Review (2021), which became effective on February 15, 2022. Pursuant to the Measures for Cybersecurity Review (2021),
+online platform operators holding more than one million users individual information shall be subject to cybersecurity review
+before listing abroad. We cannot assure you that we will not be deemed as the "online platform operators" as mentioned
+above, even though we do not operate any online platforms. We do not believe that we are directly subject to these regulatory
+actions or statements, as our business does not rely on the collection of user data or implicate cybersecurity. As of the date of
+this prospectus, we have also not been involved in any investigations on cybersecurity or data security initiated by related
+governmental regulatory authorities, and we have not received any inquiry, notice, warning, or sanction in such respect. 
+
+ 
+
+ 26 
+
+ 
+
+ 
+
+ 
+
+Furthermore, on February 17,
+2023, the CSRC promulgated the Trial Measures and five supporting guidelines, which became effective on March 31, 2023. According to the
+Trial Measures, among other requirements, any domestic companies that seek to offer or list securities overseas, including those indirect
+overseas offering and listing which meet certain conditions, should fulfil the filing procedures with the CSRC within three business days
+after the submission of the overseas offering and listing application. On the same day, the CSRC also held a press conference for the
+release of the Trial Measures and clarified that on or prior to the effective date of the Trial Measures, domestic companies that have
+already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities
+or stock exchanges must complete the filing with the CSRC before the completion of their overseas offering and listing. As of the date
+of this prospectus, we have not received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with
+respect to this offering. To reduce the uncertainties under the Trial Measures for this offering and our
+listing on Nasdaq Capital Market, we voluntarily submitted our
+filling application documents to the CSRC on July 26, 2023, and the
+CSRC published the notification on our completion of the required filing procedures on November 14, 2023 for this offering. However,
+if the filing procedures with the CSRC under the Trial Measures are required for any future offerings
+or any other capital raising activities, we cannot assure you that we will be able to complete such filings in a timely manner,
+or even at all, and our future offerings will be contingent upon the completion of the filing
+procedures. Any failure by us to comply with such filing requirements under the Trial Measures may result in an order to rectify, warnings
+and fines against us and could materially hinder our ability to offer or to continue to offer our securities in any
+future offerings or any other capital raising activities.
+
+ 
+
+See "Risk Factors —
+Risks Related to Doing Business in China — The approval of and the filing with the CSRC may be required in connection with our
+current or future offshore offerings under PRC laws, and our future offerings will be contingent upon
+the completion of such filing procedures. If we fail to comply with such filing requirements, our ability to offer securities to investors
+to become significantly limited or completely hindered, and the securities being offered to substantially decline in value and become
+worthless." on page 54, "Risk Factor — Risks Related to Doing Business in China – The approval of and the
+filing with CAC or other PRC government authorities may be required in connection with offshore offerings under PRC laws, and, if required,
+we cannot predict whether or for how long we will be able to obtain such approval or complete such filing." on page 55 and "–—
+Risks Related to Doing Business in China — Because approximately 35% of our operations are in China, our business is subject
+to the complex and rapidly evolving laws and regulations there, which are different in material aspects from the laws of the United States
+and may change and continue to evolve. The uncertainties with respect to the PRC legal system and with respect to the interpretation and
+enforcement of PRC laws and regulations could have a material adverse effect on us and the PRC government may exercise significant oversight
+over the conduct of our business, and may intervene in, influence or exert control over our operations at any time, which could result
+in a material change in our operations and/or the value of our Class A Ordinary Shares." on page 53 of this prospectus.
+
+ 
+
+ 27 
+
+ 
+
+ 
+
+ 
+
+Implications of the Holding Foreign
+Companies Accountable Act
+
+ 
+
+On March 24, 2021, the
+SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act.
+An identified issuer will be required to comply with these rules if the SEC identifies it as having a "non-inspection"
+year under a process to be subsequently established by the SEC. In June 2021, the Senate passed the AHFCAA, which, if signed into
+law, would reduce the time period for the delisting of foreign companies under the HFCA Act to two consecutive years instead of
+three years. If our auditor cannot be inspected by the PCAOB for two consecutive years, the trading of our securities on any U.S.
+national securities exchanges, as well as any over-the-counter trading in the U.S., will be prohibited. On September 22, 2021, the
+PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as
+contemplated under the HFCA Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms
+located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021,
+the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply
+to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public
+accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a
+position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a report (the "Determination
+Report") on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms
+headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions.
+
+ 
+
+On August 26, 2022, the
+Statement of Protocol was signed by the PCAOB, the CSRC and the Ministry of Finance of the People s Republic of China
+governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the Statement of
+Protocol, the PCAOB conducted inspections on select registered public accounting firms subject to the Determination Report in Hong
+Kong between September and November 2022. On December 15, 2022, the PCAOB board announced that it has completed the inspections,
+determined that it had complete access to inspect or investigate completely registered public accounting firms headquartered in
+mainland China and Hong Kong, and voted to vacate the Determination Report.
+
+ 
+
+ 28 
+
+ 
+
+ 
+
+ 
+
+Our former auditor, Friedman
+LLP, the independent registered public accounting firm of our company, that issued the audit report for the year ended December 31,
+2021 included elsewhere in this prospectus, is headquartered in Manhattan, New York. Friedman LLP had been subject to PCAOB inspections on a regular basis prior to September 1, 2022 when Friedman LLP
+combined with Marcum LLP.
+
+ 
+
+Our current
+auditor, Marcum Asia CPAs LLP, an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB,
+is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable
+professional standards. Marcum Asia CPAs LLP is headquartered in Manhattan, New York, and is subject to inspection by the PCAOB on a regular basis. 
+
+ 
+
+Neither our former nor current
+auditor is identified in the report issued by the PCAOB on December 16, 2021 as a firm subject to the PCAOB s determination. Notwithstanding
+the foregoing, in the future, if there is any regulatory change or step taken by PRC regulators that does not permit Friedman LLP or Marcum
+Asia CPAs LLP to provide audit work papers located in mainland China or Hong Kong to the PCAOB for inspection or investigation, or the
+PCAOB re-evaluates its determination as a result of any obstruction with the implementation of the Statement of Protocol in the future,
+you may be deprived of the benefits of such inspection which could result in limitation or restriction to our access to the U.S. capital
+markets and trading of our securities on a national exchange or "over-the-counter" markets may be prohibited under the HFCA
+Act. In addition, under the HFCA Act, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if
+our auditor is not inspected by the PCAOB for three consecutive years, which could be reduced to two consecutive years if the AHFCAA,
+passed by the U.S. Senate on June 22, 2021, is signed into law, and this ultimately could result in our Class A Ordinary Shares being
+delisted by the exchange. On December 29, 2022, the CAA was signed into law by President Biden. The CAA contained, among other things,
+an identical provision to the AHFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions
+under the HFCA Act from three years to two. Further, we cannot assure you whether Nasdaq or regulatory authorities would apply additional
+and more stringent criteria to us after considering the effectiveness of our auditor s audit procedures and quality control procedures,
+adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial
+statements. See "Risk Factors — Risks Related to Doing Business in China — Recent joint statement by the SEC and
+PCAOB, proposed rule changes submitted by Nasdaq, and an act passed by the US Senate 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." from page 57 to 59 of this prospectus.
+
+ 
+
+Implications of Being an Emerging Growth Company
+
+ 
+
+As a company with less than US$1.235 billion
+in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups
+Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared
+to those that are otherwise applicable generally to public companies. These provisions include, but are not limited to:
+
+ 
+
+ 
+ 
+ 
+ being permitted to present only two years
+ of audited financial statements and only two years of related Management s Discussion and Analysis of Financial Condition
+ and Results of Operations in our SEC filings;
+
+ 
+
+ 
+ 
+ 
+ not being required to comply with the auditor
+ attestation requirements of Section 404 of the Sarbanes-Oxley Act;
+
+ 
+
+ 
+ 
+ 
+ reduced disclosure obligations regarding
+ executive compensation in periodic reports, proxy statements and registration statements; and
+
+ 
+
+ 
+ 
+ exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
+
+ 
+
+The JOBS Act also
+provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such
+date that a private company is otherwise required to comply with such new or revised accounting standards. We have elected
+to use the extended transition period under the JOBS Act. Accordingly, our financial statements may not be comparable to the financial
+statements of public companies that comply with such new or revised accounting standards.
+
+ 
+
+We will remain an
+emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross
+revenues of at least US$1.235 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion
+of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion
+in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer" under the Securities
+Exchange Act of 1934, as amended, or the Exchange Act, which would occur as of the end of our fiscal year if the market value of
+our Class A Ordinary Shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most
+recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions
+provided in the JOBS Act discussed above.
+
+ 
+
+ 29 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Implications of Being a Controlled Company
+
+ 
+
+Immediately prior
+to the completion of this offering, our issued and outstanding share capital will consist of Class A Ordinary Shares and Class
+B Ordinary Shares. Holders of Class A Ordinary Shares and Class B Ordinary Shares will have the same rights except for voting and
+conversion rights. Holders of Class A Ordinary Shares shall be entitled to one vote per share on all matters subject to the vote
+at general meetings of our company, and holders of Class B Ordinary Shares shall be entitled to 20 votes per share on all
+matters subject to the vote at general meetings of our company. Holders of our Class A Ordinary Shares and Class B Ordinary Shares
+vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by
+law. Each Class B Ordinary Share will be convertible into one Class A Ordinary Share at the option of the holder of Class B Ordinary
+Shares at any time. Class A Ordinary Shares will not be convertible into Class B Ordinary Shares under any circumstances.
+
+ 
+
+Mr. Wanjun Yao, our Chairman
+and Chief Executive Officer, beneficially owns 3,660,000 Class A Ordinary Shares and 4,560,000 Class B Ordinary Shares through three entities
+controlled by him, and will be able to exercise approximately 92.20% of the total voting power of our issued and outstanding share capital
+immediately following the completion of this offering, assuming the underwriter does not exercise the option to purchase additional Class
+A Ordinary Shares. As a result, upon the completion of this offering, we will be a "controlled company" as defined under the
+Nasdaq Stock Market Listing Rules because Mr. Yao will hold more than 50% of the voting power for the election of directors.
+
+ 
+
+For so long as we
+remain a "controlled company," we are permitted to elect not to comply with certain corporate governance requirements,
+including:
+
+ 
+
+ an exemption from the rule that a majority
+of our board of directors must be independent directors;
+
+ 
+
+ an exemption from the rule that the compensation
+of our chief executive officer must be determined or recommended solely by independent directors; and
+
+ 
+
+ an exemption from the rule that our director
+nominees must be selected or recommended solely by independent directors.
+
+ 
+
+Although we currently
+do not intend to rely on the "controlled company" exemption for at least one year following completion of this offering,
+we could elect to rely on this exemption in the future. If we rely on these exemptions in the future, you will not have the same
+protection afforded to shareholders of companies that are subject to these corporate governance requirements.
+
+ 
+
+In addition, as a result
+of the dual-class share structure and the concentration of ownership, holders of Class B Ordinary Shares will have considerable influence
+over matters such as decisions regarding mergers and consolidations, election of directors and other significant corporate actions. For
+a detailed description of the risks associated with our dual-class structure, see "Risk Factors — Risks Related to Our Class
+A Ordinary Shares and this Offering — Our dual-class voting structure will limit your ability to influence corporate matters
+and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial"
+on page 71 of this prospectus, and "Risk Factors — Risks Related to Our Class A Ordinary Shares and this Offering —
+Our dual-class voting structure may render our Class A Ordinary Shares ineligible for inclusion in certain stock market indices, and thus
+adversely affect the trading price and liquidity of our Class A Ordinary Shares." on page 71 of this prospectus.
+
+ 
+
+Implications of Being a Foreign Private
+Issuer
+
+ 
+
+We are incorporated
+in the Cayman Islands, and more than 50% of our issued and outstanding voting securities are not directly or indirectly held by
+residents of the United States. Therefore, we are a "foreign private issuer," as defined in Rule 405 under the Securities
+Act and Rule 3b-4(c) under the Exchange Act. As a result, we are not subject to the same requirements as U.S. domestic issuers.
+Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than
+those of U.S. domestic reporting companies. For example:
+
+ 
+
+ 30 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ we are not required to provide as many Exchange Act reports or provide periodic and current reports as frequently, as a domestic public company;
+
+ 
+ 
+ 
+
+ 
+ 
+ for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;
+
+ 
+ 
+ 
+
+ 
+ 
+ we are not required to provide the same level of disclosure on certain issues, such as executive compensation;
+
+ 
+ 
+ 
+
+ 
+ 
+ we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;
+
+ 
+ 
+ 
+
+ 
+ 
+ we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and
+
+ 
+ 
+ 
+
+ 
+ 
+ we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction.
+
+ 
+
+Corporate Information
+
+ 
+
+Our principal executive
+offices are located at #02-01, 31 Mandai Estate, Innovation Place Tower 4, Singapore 729933. Our telephone number at this address
+is +65 6636 9820. Our registered office in the Cayman Islands is currently located at the office of Harneys Fiduciary (Cayman)
+Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. Our agent for
+service of process in the United States is Puglisi & Associates located at 850 Library Avenue, Suite 204, Newark,
+Delaware 19711.
+
+ 
+
+Investors should
+contact us for any inquiries through the address and telephone number of our principal executive offices. Our Website is www.tungray.tech. The
+information contained on our Website is not a part of this prospectus.
+
+ 
+
+Notes on Prospectus Presentation
+
+ 
+
+This prospectus contains
+translations of certain RMB amounts into U.S. dollar amounts and certain S$ amounts into U.S. dollar amounts at specified rates solely
+for the convenience of the reader. The relevant exchange rates are listed below:
+
+ 
+
+ 
+ 
+ 
+ For the Six Months
+
+Ended
+
+June 30,
+
+2023
+ 
+ 
+ For the Six Months
+
+Ended
+
+June 30,
+
+2022
+ 
+ 
+ For the Year
+
+Ended
+
+December 31, 
+
+2022
+ 
+ 
+ For the Year
+
+Ended
+
+December 31, 
+
+2021
+ 
+
+ 
+ Period Ended RMB: USD exchange rate
+ 
+ 
+ 7.2513
+ 
+ 
+ 
+ 6.6981
+ 
+ 
+ 
+ 6.8972
+ 
+ 
+ 
+ 6.3726
+ 
+
+ 
+ Period Average RMB: USD exchange rate
+ 
+ 
+ 6.9283
+ 
+ 
+ 
+ 6.4791
+ 
+ 
+ 
+ 6.7290
+ 
+ 
+ 
+ 6.4508
+ 
+
+ 
+ Period Ended S Dollar: USD exchange rate
+ 
+ 
+ 1.3523
+ 
+ 
+ 
+ 1.3903
+ 
+ 
+ 
+ 1.3404
+ 
+ 
+ 
+ 1.3520
+ 
+
+ 
+ Period Average S Dollar: USD exchange rate
+ 
+ 
+ 1.3361
+ 
+ 
+ 
+ 1.3651
+ 
+ 
+ 
+ 1.3787
+ 
+ 
+ 
+ 1.3438
+ 
+
+ 
+
+ 
+
+Numerical figures included
+in this prospectus have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not
+be arithmetic aggregations of the figures that precede them.
+
+ 
+
+For clarification,
+this prospectus follows the English naming convention of first name followed by last name, regardless of whether an individual s
+name is Chinese or English. For example, the name of our Chairman will be presented as "Wanjun Yao," even though, in
+Chinese, his name is presented as "Yao Wanjun."
+
+ 
+
+ 31 
+
+ 
+
+ 
+
+ 
+
+We have relied on
+statistics provided by a variety of publicly-available sources regarding expectations of growth of Singapore and China. Some market
+data and statistical information contained in this prospectus are based on management s estimates and calculations, which
+are derived from our review and interpretation of the sources listed above, our internal research and our knowledge of the precision
+engineering, manufacturing and consumer appliances industries in Singapore and China. While we believe such information is reliable,
+we have not independently verified any third-party information and our internal data has not been verified by any independent source.
+
+ 
+
+ 32
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/TRWD_tradewinds_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/TRWD_tradewinds_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/TRWD_tradewinds_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/TWFG_twfg-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/TWFG_twfg-inc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6fd1b31a26ec10bc1fd1e216e073634da63e7929
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/TWFG_twfg-inc_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/VCIG_vci_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/VCIG_vci_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/VCIG_vci_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/VIVS_vivosim_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/VIVS_vivosim_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/VIVS_vivosim_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/VSEEW_vsee_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/VSEEW_vsee_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..aae943fe5a8abe6d8c5c38e269e932d272afbdf7
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/VSEEW_vsee_prospectus_summary.txt
@@ -0,0 +1,3 @@
+PROSPECTUS SUMMARY
+The following summary highlights information contained elsewhere in this prospectus and in documents incorporated by reference. This summary is not complete and may not contain all the information you should consider before investing in our securities. You should read this entire prospectus and the documents incorporated by reference in this prospectus carefully, especially the risks of investing in our securities discussed under the heading Risk Factors, and our financial statements and related notes incorporated by reference in this prospectus before making an investment decision. Except as otherwise indicated herein or as the context otherwise requires, references in this prospectus and the documents incorporated by reference in this prospectus to, the Company , we , us , our , VSee Health and VSEE refer to VSee Health, Inc., a Delaware corporation, and its wholly-owned consolidated subsidiaries VSee Lab, Inc. ( VSee Lab ) and iDoc Virtual Telehealth Solutions, Inc. ( iDoc ).
+This prospectus includes forward-looking statements that involve risks and uncertainties. See
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/VTAK_catheter_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/VTAK_catheter_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ac26eed300d5ab790e90f0662e51509962c60653
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/VTAK_catheter_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 2
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/XBPEW_xbp_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/XBPEW_xbp_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/XBPEW_xbp_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2024/YYAI_airwa-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2024/YYAI_airwa-inc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2024/YYAI_airwa-inc_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file