|
Cayman Islands
|
| |
3569
|
| |
Not Applicable
|
|
|
(State or other jurisdiction of
incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
Yuting Wu, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP JingAn Kerry Centre, Tower II, 46/F 1539 Nanjing West Road Shanghai, the People’s Republic of China +86 21-6193-8200 |
| |
Shu Du, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP c/o 42/F, Edinburgh Tower, The Landmark 15 Queen’s Road Central Hong Kong +852 3740-4700 |
| |
Brian V. Breheny, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates 1440 New York Avenue, N.W. Washington, D.C. United States 1 202-371-7000 |
| |
Allen Wang, Esq.
Latham & Watkins LLP 18th Floor, One Exchange Square 8 Connaught Place, Central Hong Kong +852 2912 2500 |
|
| | |
Per ADS
|
| |
Total
|
|
Initial public offering price
|
| | US$ | | | US$ | |
Underwriting discount and commissions(1)
|
| | US$ | | | US$ | |
Proceeds, before expenses, to us
|
| | US$ | | | US$ | |
| | | | | 1 | | | |
| | | | | 15 | | | |
| | | | | 18 | | | |
| | | | | 21 | | | |
| | | | | 69 | | | |
| | | | | 71 | | | |
| | | | | 72 | | | |
| | | | | 73 | | | |
| | | | | 75 | | | |
| | | | | 77 | | | |
| | | | | 79 | | | |
| | | | | 80 | | | |
| | | | | 105 | | | |
| | | | | 115 | | | |
| | | | | 140 | | | |
| | | | | 156 | | | |
| | | | | 162 | | | |
| | | | | 165 | | | |
| | | | | 166 | | | |
| | | | | 178 | | | |
| | | | | 188 | | | |
| | | | | 190 | | | |
| | | | | 196 | | | |
| | | | | 207 | | | |
| | | | | 208 | | | |
| | | | | 209 | | | |
| | | | | 210 | | | |
| | | | | F-1 | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months
Ended September 30, |
| ||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |||||||||||||||||||||
| | |
(in thousands, except for share amount and per share data)
|
| |||||||||||||||||||||||||||||||||||||||
Summary Combined and Consolidated Statements of Operations and Comprehensive Loss:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Net revenues
|
| | | | 348,084 | | | | | | 415,514 | | | | | | 720,768 | | | | | | 101,324 | | | | | | 459,442 | | | | | | 793,485 | | | | | | 111,546 | | |
Cost of revenues
|
| | | | (103,377) | | | | | | (176,600) | | | | | | (338,972) | | | | | | (47,652) | | | | | | (214,671) | | | | | | (444,339) | | | | | | (62,464) | | |
Gross profit
|
| | | | 244,707 | | | | | | 238,914 | | | | | | 381,796 | | | | | | 53,672 | | | | | | 244,771 | | | | | | 349,146 | | | | | | 49,082 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Sales and marketing expenses
|
| | | | (38,740) | | | | | | (49,904) | | | | | | (69,266) | | | | | | (9,737) | | | | | | (48,072) | | | | | | (63,473) | | | | | | (8,924) | | |
General and administrative expenses
|
| | | | (55,112) | | | | | | (76,553) | | | | | | (236,713) | | | | | | (33,277) | | | | | | (185,184) | | | | | | (153,380) | | | | | | (21,562) | | |
Research and development expenses
|
| | | | (149,817) | | | | | | (229,653) | | | | | | (368,435) | | | | | | (51,794) | | | | | | (210,627) | | | | | | (376,362) | | | | | | (52,908) | | |
Litigation settlement expense
|
| | | | (160,098) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other operating income,
net |
| | | | 11,009 | | | | | | 15,384 | | | | | | 27,333 | | | | | | 3,842 | | | | | | 18,741 | | | | | | 5,948 | | | | | | 836 | | |
Total operating expenses
|
| | | | (392,758) | | | | | | (340,726) | | | | | | (647,081) | | | | | | (90,966) | | | | | | (425,142) | | | | | | (587,267) | | | | | | (82,558) | | |
Loss from operations
|
| | | | (148,051) | | | | | | (101,812) | | | | | | (265,285) | | | | | | (37,294) | | | | | | (180,371) | | | | | | (238,121) | | | | | | (33,476) | | |
Interest income
|
| | | | 19,107 | | | | | | 20,925 | | | | | | 32,584 | | | | | | 4,581 | | | | | | 14,203 | | | | | | 49,284 | | | | | | 6,928 | | |
Foreign exchange gain/(loss)
|
| | | | 9,619 | | | | | | (25,696) | | | | | | (13,275) | | | | | | (1,866) | | | | | | (9,805) | | | | | | 25,430 | | | | | | 3,575 | | |
Other income/(loss), net
|
| | | | 31 | | | | | | (832) | | | | | | 34 | | | | | | 5 | | | | | | 62 | | | | | | (2,116) | | | | | | (297) | | |
Net loss before income tax
|
| | | | (119,294) | | | | | | (107,415) | | | | | | (245,942) | | | | | | (34,574) | | | | | | (175,911) | | | | | | (165,523) | | | | | | (23,270) | | |
Income tax (expenses)/benefit
|
| | | | (930) | | | | | | 199 | | | | | | 1,115 | | | | | | 157 | | | | | | 1,113 | | | | | | 44 | | | | | | 6 | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | | | | | (174,798) | | | | | | (165,479) | | | | | | (23,264) | | |
Deemed dividend
|
| | | | (55,247) | | | | | | — | | | | | | (2,211,330) | | | | | | (310,864) | | | | | | (2,206,731) | | | | | | (446,022) | | | | | | (62,701) | | |
Net loss attributable to ordinary shareholders
|
| | | | (175,471) | | | | | | (107,216) | | | | | | (2,456,157) | | | | | | (345,281) | | | | | | (2,381,529) | | | | | | (611,501) | | | | | | (85,965) | | |
Net loss per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Basic and diluted
|
| | | | (2.20) | | | | | | (1.19) | | | | | | (23.39) | | | | | | (3.29) | | | | | | (23.48) | | | | | | (5.29) | | | | | | (0.74) | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months
Ended September 30, |
| ||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |||||||||||||||||||||
| | |
(in thousands, except for share amount and per share data)
|
| |||||||||||||||||||||||||||||||||||||||
Weighted average shares used in
calculating net loss per ordinary share: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | | | | | 104,987,478 | | | | | | 104,987,478 | | | | | | 101,433,139 | | | | | | 115,534,593 | | | | | | 115,534,593 | | |
Pro forma net loss per share(1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Basic and diluted
|
| | | | | | | |
|
| | | | (24.27) | | | | | | (3.41) | | | | | | | | | | | | | | | | | | | | | |||
Pro forma weighted average shares
used in calculating net loss per ordinary share(1): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Basic and diluted
|
| | | | | | | |
|
| | | | 104,987,478 | | | | | | 104,987,478 | | | | | | | | | | | | | | | | | | | | |
| | |
As of December 31,
|
| |
As of September 30,
|
| ||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Summary Combined and Consolidated Balance Sheets Data:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Cash and cash equivalents
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | | | | | 750,561 | | | | | | 105,512 | | |
Short-term investments
|
| | | | 910,972 | | | | | | 638,981 | | | | | | 2,342,743 | | | | | | 329,338 | | | | | | 1,317,564 | | | | | | 185,220 | | |
Accounts receivable (net of allowance
for doubtful accounts of RMB2,257, RMB5,270, RMB7,294 and RMB7,254 as of December 31, 2019, 2020 and 2021 and September 30, 2022, respectively) |
| | | | 36,511 | | | | | | 56,319 | | | | | | 85,821 | | | | | | 12,065 | | | | | | 362,944 | | | | | | 51,022 | | |
Inventories
|
| | | | 70,243 | | | | | | 149,925 | | | | | | 376,244 | | | | | | 52,892 | | | | | | 567,887 | | | | | | 79,832 | | |
Prepayments and other current assets
|
| | | | 31,835 | | | | | | 40,658 | | | | | | 89,119 | | | | | | 12,528 | | | | | | 111,005 | | | | | | 15,605 | | |
Total current assets
|
| | | | 1,170,260 | | | | | | 1,209,239 | | | | | | 3,493,359 | | | | | | 491,090 | | | | | | 3,115,459 | | | | | | 437,964 | | |
Total assets
|
| | | | 1,242,362 | | | | | | 1,312,125 | | | | | | 3,952,369 | | | | | | 555,617 | | | | | | 3,803,302 | | | | | | 534,659 | | |
Accounts payable
|
| | | | 18,608 | | | | | | 55,437 | | | | | | 77,271 | | | | | | 10,863 | | | | | | 181,380 | | | | | | 25,498 | | |
Accrued expenses and other current
liabilities |
| | | | 229,091 | | | | | | 91,895 | | | | | | 370,854 | | | | | | 52,134 | | | | | | 247,358 | | | | | | 34,773 | | |
Total current liabilities
|
| | | | 271,168 | | | | | | 166,740 | | | | | | 892,158 | | | | | | 125,418 | | | | | | 824,746 | | | | | | 115,940 | | |
Total liabilities
|
| | | | 313,150 | | | | | | 174,932 | | | | | | 902,548 | | | | | | 126,879 | | | | | | 853,783 | | | | | | 120,021 | | |
Total mezzanine equity
|
| | | | 1,098,639 | | | | | | — | | | | | | 5,540,491 | | | | | | 778,870 | | | | | | 5,986,513 | | | | | | 841,571 | | |
Total shareholders’ (deficit)/equity
|
| | | | (169,427) | | | | | | 1,137,193 | | | | | | (2,490,670) | | | | | | (350,132) | | | | | | (3,036,994) | | | | | | (426,933) | | |
Total liabilities, mezzanine equity and shareholders’ (deficit)/equity
|
| | | | 1,242,362 | | | | | | 1,312,125 | | | | | | 3,952,369 | | | | | | 555,617 | | | | | | 3,803,302 | | | | | | 534,659 | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months
Ended September 30, |
| ||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |||||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||||||||
Summary Combined and Consolidated Cash Flows Data:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Net cash provided by/(used in) operating activities
|
| | | | 46,166 | | | | | | (352,015) | | | | | | (228,386) | | | | | | (32,104) | | | | | | (114,090) | | | | | | (505,667) | | | | | | (71,086) | | |
Net cash (used in)/provided by investing activities
|
| | | | (779,497) | | | | | | 179,027 | | | | | | (1,980,237) | | | | | | (278,377) | | | | | | (1,168,823) | | | | | | 769,607 | | | | | | 108,190 | | |
Net cash provided by financing activities
|
| | | | 739,741 | | | | | | 323,437 | | | | | | 2,403,726 | | | | | | 337,908 | | | | | | 1,950,083 | | | | | | — | | | | | | — | | |
Net increase in cash and cash equivalents
|
| | | | 6,410 | | | | | | 150,449 | | | | | | 195,103 | | | | | | 27,427 | | | | | | 667,170 | | | | | | 263,940 | | | | | | 37,104 | | |
Cash and cash equivalents at the beginning of the year/period
|
| | | | 104,336 | | | | | | 112,737 | | | | | | 256,688 | | | | | | 36,085 | | | | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | |
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
| | | | 1,991 | | | | | | (6,498) | | | | | | (2,439) | | | | | | (343) | | | | | | 22,114 | | | | | | 37,269 | | | | | | 5,239 | | |
Cash and cash equivalents at the end
of the year/period |
| | | | 112,737 | | | | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | | | | | 945,972 | | | | | | 750,561 | | | | | | 105,512 | | |
| | |
As of September 30, 2022
|
| |||||||||||||||||||||||||||||||||
| | |
Actual
|
| |
Pro forma
|
| |
Pro forma as adjusted(1)
|
| |||||||||||||||||||||||||||
| | |
RMB
|
| |
US$
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
US$
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Mezzanine equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Redeemable shares (US$0.0001
par value, 54,551,513 shares issued and outstanding as of September 30, 2022 on an actual basis, and nil issued and outstanding on a pro forma basis and on a pro forma as adjusted basis) |
| | | | 5,986,513 | | | | | | 841,571 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Shareholders’ deficit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A Ordinary shares (US$0.0001 par value, 35,000,000 shares authorized, 30,033,379 shares issued and outstanding as of September 30, 2022, on an actual basis, on a pro forma basis and on a pro forma as adjusted basis)
|
| | | | 19 | | | | | | 3 | | | | | | 19 | | | | | | 3 | | | | | | 19 | | | | | | 3 | | |
Class B Ordinary shares
(US$0.0001 par value, 150,000,000 shares authorized, 30,949,701 shares issued and outstanding as of September 30, 2022 on an actual basis; 85,501,214 shares issued and outstanding on a pro forma basis, and 94,501,214 shares issued and outstanding on a pro forma as adjusted basis) |
| | | | 20 | | | | | | 3 | | | | | | 55 | | | | | | 8 | | | | | | 61 | | | | | | 9 | | |
Additional paid-in capital(2)
|
| | | | — | | | | | | — | | | | | | 5,986,478 | | | | | | 841,566 | | | | | | 7,020,490 | | | | | | 986,925 | | |
Subscription receivables
|
| | | | (310,227) | | | | | | (43,611) | | | | | | (310,227) | | | | | | (43,611) | | | | | | (310,227) | | | | | | (43,611) | | |
Accumulated deficit
|
| | | | (2,720,508) | | | | | | (382,443) | | | | | | (2,720,508) | | | | | | (382,443) | | | | | | (2,720,508) | | | | | | (382,443) | | |
| | |
Per Ordinary Share
|
| |
Per ADS
|
|
Assumed initial public offering price
|
| |
US$18.00
|
| |
US$18.00
|
|
Net tangible book value as of September 30, 2022
|
| |
US$3.56
|
| |
US$3.56
|
|
Pro forma as adjusted net tangible book value after giving effect (i) conversion of redeemable shares to Class B ordinary shares on a one-for-one-basis immediately prior to the completion of this offering, (ii) our sale of the ADSs offered in this offering at the assumed initial public offering price of US$ 18.00 per ADS, which is the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus
|
| |
US$4.47
|
| |
US$4.47
|
|
Amount of dilution in net tangible book value to new investors in this
offering |
| |
US$13.53
|
| |
US$13.53
|
|
| | |
Ordinary Shares
Purchased |
| |
Total Consideration
|
| |
Average
Price Per Ordinary Share |
| |
Average
Price Per ADS |
| ||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
(in thousands) |
| |
Percent
|
| ||||||||||||||||||
Existing shareholders
|
| | | | 115,534,593 | | | | | | | 92.8% | | | | | US$566,656 | | | | | 77.8% | | | | |
US$4.90
|
| |
US$4.90
|
|
New investors
|
| | | | 9,000,000 | | | | | | | 7.2% | | | | | US$162,000 | | | | | 22.2% | | | | |
US$18.00
|
| |
US$18.00
|
|
Total
|
| | | | 124,534,593 | | | | | | | 100.0% | | | | | US$728,656 | | | | | 100.0% | | | | | | | | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||||||||
Product revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
− Revenue from LiDAR
products |
| | | | 328,064 | | | | | | 94.2 | | | | | | 346,068 | | | | | | 83.3 | | | | | | 685,333 | | | | | | 96,343 | | | | | | 95.1 | | | | | | 433,849 | | | | | | 94.4 | | | | | | 726,605 | | | | | | 102,144 | | | | | | 91.6 | | |
− Revenue from gas detection
products |
| | | | 19,532 | | | | | | 5.6 | | | | | | 68,599 | | | | | | 16.5 | | | | | | 19,533 | | | | | | 2,746 | | | | | | 2.7 | | | | | | 13,536 | | | | | | 2.9 | | | | | | 17,210 | | | | | | 2,419 | | | | | | 2.2 | | |
− Other product revenues
|
| | | | 488 | | | | | | 0.2 | | | | | | 847 | | | | | | 0.2 | | | | | | 1,200 | | | | | | 169 | | | | | | 0.2 | | | | | | 945 | | | | | | 0.2 | | | | | | 4,648 | | | | | | 653 | | | | | | 0.6 | | |
Service revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
− Engineering design,
development and validation service |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,026 | | | | | | 1,972 | | | | | | 1.9 | | | | | | 10,879 | | | | | | 2.4 | | | | | | 40,672 | | | | | | 5,718 | | | | | | 5.1 | | |
− Other service revenues
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 676 | | | | | | 94 | | | | | | 0.1 | | | | | | 233 | | | | | | 0.1 | | | | | | 4,350 | | | | | | 612 | | | | | | 0.5 | | |
Total | | | | | 348,084 | | | | | | 100.0 | | | | | | 415,514 | | | | | | 100.0 | | | | | | 720,768 | | | | | | 101,324 | | | | | | 100.0 | | | | | | 459,442 | | | | | | 100.0 | | | | | | 793,485 | | | | | | 111,546 | | | | | | 100.0 | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Material and component
cost |
| | | | 46,115 | | | | | | 13.2 | | | | | | 64,838 | | | | | | 15.6 | | | | | | 153,695 | | | | | | 21,606 | | | | | | 21.3 | | | | | | 96,701 | | | | | | 21.0 | | | | | | 222,749 | | | | | | 31,314 | | | | | | 28.1 | | |
Manufacturing cost
|
| | | | 16,003 | | | | | | 4.6 | | | | | | 31,981 | | | | | | 7.7 | | | | | | 64,490 | | | | | | 9,066 | | | | | | 8.9 | | | | | | 38,953 | | | | | | 8.5 | | | | | | 136,375 | | | | | | 19,171 | | | | | | 17.2 | | |
Labor cost
|
| | | | 18,321 | | | | | | 5.3 | | | | | | 20,302 | | | | | | 4.9 | | | | | | 22,989 | | | | | | 3,232 | | | | | | 3.2 | | | | | | 17,932 | | | | | | 3.9 | | | | | | 15,205 | | | | | | 2,137 | | | | | | 1.9 | | |
Other cost(1)
|
| | | | 22,938 | | | | | | 6.6 | | | | | | 59,479 | | | | | | 14.3 | | | | | | 97,798 | | | | | | 13,748 | | | | | | 13.6 | | | | | | 61,085 | | | | | | 13.3 | | | | | | 70,010 | | | | | | 9,842 | | | | | | 8.8 | | |
Total cost of revenues
|
| | | | 103,377 | | | | | | 29.7 | | | | | | 176,600 | | | | | | 42.5 | | | | | | 338,972 | | | | | | 47,652 | | | | | | 47.0 | | | | | | 214,671 | | | | | | 46.7 | | | | | | 444,339 | | | | | | 62,464 | | | | | | 56.0 | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | 38,740 | | | | | | 11.1 | | | | | | 49,904 | | | | | | 12.0 | | | | | | 69,266 | | | | | | 9,737 | | | | | | 9.6 | | | | | | 48,072 | | | | | | 10.5 | | | | | | 63,473 | | | | | | 8,924 | | | | | | 8.0 | | |
General and administrative expenses
|
| | | | 55,112 | | | | | | 15.8 | | | | | | 76,553 | | | | | | 18.4 | | | | | | 236,713 | | | | | | 33,277 | | | | | | 32.9 | | | | | | 185,184 | | | | | | 40.3 | | | | | | 153,380 | | | | | | 21,562 | | | | | | 19.3 | | |
Research and development expenses
|
| | | | 149,817 | | | | | | 43.0 | | | | | | 229,653 | | | | | | 55.3 | | | | | | 368,435 | | | | | | 51,794 | | | | | | 51.1 | | | | | | 210,627 | | | | | | 45.8 | | | | | | 376,362 | | | | | | 52,908 | | | | | | 47.4 | | |
Litigation settlement expense
|
| | | | 160,098 | | | | | | 46.0 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other operating expenses (income), net
|
| | | | (11,009) | | | | | | (3.1) | | | | | | (15,384) | | | | | | (3.7) | | | | | | (27,333) | | | | | | (3,842) | | | | | | (3.8) | | | | | | (18,741) | | | | | | (4.1) | | | | | | (5,948) | | | | | | (836) | | | | | | (0.7) | | |
Total operating expenses
|
| | | | 392,758 | | | | | | 112.8 | | | | | | 340,726 | | | | | | 82.0 | | | | | | 647,081 | | | | | | 90,966 | | | | | | 89.8 | | | | | | 425,142 | | | | | | 92.5 | | | | | | 587,267 | | | | | | 82,558 | | | | | | 74.0 | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentages)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and development expenses:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Payroll expenses
|
| | | | 68,585 | | | | | | 19.7 | | | | | | 113,014 | | | | | | 27.2 | | | | | | 228,616 | | | | | | 32,139 | | | | | | 31.7 | | | | | | 126,244 | | | | | | 27.5 | | | | | | 217,437 | | | | | | 30,567 | | | | | | 27.4 | | |
Material expenses
|
| | | | 45,759 | | | | | | 13.1 | | | | | | 46,383 | | | | | | 11.2 | | | | | | 56,695 | | | | | | 7,970 | | | | | | 7.9 | | | | | | 38,649 | | | | | | 8.4 | | | | | | 48,555 | | | | | | 6,826 | | | | | | 6.1 | | |
Others
|
| | | | 35,473 | | | | | | 10.2 | | | | | | 70,256 | | | | | | 16.9 | | | | | | 83,124 | | | | | | 11,685 | | | | | | 11.5 | | | | | | 45,734 | | | | | | 10.0 | | | | | | 110,370 | | | | | | 15,515 | | | | | | 13.9 | | |
Total | | | | | 149,817 | | | | | | 43.0 | | | | | | 229,653 | | | | | | 55.3 | | | | | | 368,435 | | | | | | 51,794 | | | | | | 51.1 | | | | | | 210,627 | | | | | | 45.9 | | | | | | 376,362 | | | | | | 52,908 | | | | | | 47.4 | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
RMB
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| |
RMB
|
| |
%
|
| |
RMB
|
| |
US$
|
| |
%
|
| ||||||||||||||||||||||||||||||||||||
| | |
(in thousands, except for percentage data)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues
|
| | | | 348,084 | | | | | | 100.0 | | | | | | 415,514 | | | | | | 100.0 | | | | | | 720,768 | | | | | | 101,324 | | | | | | 100.0 | | | | | | 459,442 | | | | | | 100.0 | | | | | | 793,485 | | | | | | 111,546 | | | | | | 100.0 | | |
Cost of revenues
|
| | | | (103,377) | | | | | | (29.7) | | | | | | (176,600) | | | | | | (42.5) | | | | | | (338,972) | | | | | | (47,652) | | | | | | (47.0) | | | | | | (214,671) | | | | | | (46.7) | | | | | | (444,339) | | | | | | (62,464) | | | | | | (56.0) | | |
Gross profit
|
| | | | 244,707 | | | | | | 70.3 | | | | | | 238,914 | | | | | | 57.5 | | | | | | 381,796 | | | | | | 53,672 | | | | | | 53.0 | | | | | | 244,771 | | | | | | 53.3 | | | | | | 349,146 | | | | | | 49,082 | | | | | | 44.0 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (38,740) | | | | | | (11.1) | | | | | | (49,904) | | | | | | (12.0) | | | | | | (69,266) | | | | | | (9,737) | | | | | | (9.6) | | | | | | (48,072) | | | | | | (10.5) | | | | | | (63,473) | | | | | | (8,924) | | | | | | (8.0) | | |
General and administrative
expenses |
| | | | (55,112) | | | | | | (15.8) | | | | | | (76,553) | | | | | | (18.4) | | | | | | (236,713) | | | | | | (33,277) | | | | | | (32.9) | | | | | | (185,184) | | | | | | (40.3) | | | | | | (153,380) | | | | | | (21,562) | | | | | | (19.3) | | |
Research and development
expenses |
| | | | (149,817) | | | | | | (43.0) | | | | | | (229,653) | | | | | | (55.3) | | | | | | (368,435) | | | | | | (51,794) | | | | | | (51.1) | | | | | | (210,627) | | | | | | (45.8) | | | | | | (376,362) | | | | | | (52,908) | | | | | | (47.4) | | |
Litigation settlement expense
|
| | | | (160,098) | | | | | | (46.0) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Other operating income,
net |
| | | | 11,009 | | | | | | 3.1 | | | | | | 15,384 | | | | | | 3.7 | | | | | | 27,333 | | | | | | 3,842 | | | | | | 3.8 | | | | | | 18,741 | | | | | | 4.1 | | | | | | 5,948 | | | | | | 836 | | | | | | 0.7 | | |
Total operating expenses
|
| | | | (392,758) | | | | | | (112.8) | | | | | | (340,726) | | | | | | (82.0) | | | | | | (647,081) | | | | | | (90,966) | | | | | | (89.8) | | | | | | (425,142) | | | | | | (92.5) | | | | | | (587,267) | | | | | | (82,558) | | | | | | (74.0) | | |
Loss from operations
|
| | | | (148,051) | | | | | | (42.5) | | | | | | (101,812) | | | | | | (24.5) | | | | | | (265,285) | | | | | | (37,294) | | | | | | (36.8) | | | | | | (180,371) | | | | | | (39.2) | | | | | | (238,121) | | | | | | (33,476) | | | | | | (30.0) | | |
Interest income
|
| | | | 19,107 | | | | | | 5.5 | | | | | | 20,925 | | | | | | 5.0 | | | | | | 32,584 | | | | | | 4,581 | | | | | | 4.5 | | | | | | 14,203 | | | | | | 3.1 | | | | | | 49,284 | | | | | | 6,928 | | | | | | 6.2 | | |
Foreign exchange gain
(loss) |
| | | | 9,619 | | | | | | 2.8 | | | | | | (25,696) | | | | | | (6.2) | | | | | | (13,275) | | | | | | (1,866) | | | | | | (1.8) | | | | | | (9,805) | | | | | | (2.1) | | | | | | 25,430 | | | | | | 3,575 | | | | | | 3.2 | | |
Other income (loss),
net |
| | | | 31 | | | | | | 0.0 | | | | | | (832) | | | | | | (0.2) | | | | | | 34 | | | | | | 5 | | | | | | 0.0 | | | | | | 62 | | | | | | 0.0 | | | | | | (2,116) | | | | | | (297) | | | | | | (0.3) | | |
Net loss before income tax
|
| | | | (119,294) | | | | | | (34.2) | | | | | | (107,415) | | | | | | (25.9) | | | | | | (245,942) | | | | | | (34,574) | | | | | | (34.1) | | | | | | (175,911) | | | | | | (38.2) | | | | | | (165,523) | | | | | | (23,270) | | | | | | (20.9) | | |
Income tax (expenses)/benefit
|
| | | | (930) | | | | | | (0.3) | | | | | | 199 | | | | | | 0.0 | | | | | | 1,115 | | | | | | 157 | | | | | | 0.1 | | | | | | 1,113 | | | | | | 0.2 | | | | | | 44 | | | | | | 6 | | | | | | 0.0 | | |
Net loss
|
| | | | (120,224) | | | | | | (34.5) | | | | | | (107,216) | | | | | | (25.9) | | | | | | (244,827) | | | | | | (34,417) | | | | | | (34.0) | | | | | | (174,798) | | | | | | (38.0) | | | | | | (165,479) | | | | | | (23,264) | | | | | | (20.9) | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |||||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||||||||
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | | | | | (174,798) | | | | | | (165,479) | | | | | | (23,264) | | |
Add:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income
|
| | | | (19,107) | | | | | | (20,925) | | | | | | (32,584) | | | | | | (4,581) | | | | | | (14,203) | | | | | | (49,284) | | | | | | (6,928) | | |
Income tax expenses/(benefit)
|
| | | | 930 | | | | | | (199) | | | | | | (1,115) | | | | | | (157) | | | | | | (1,113) | | | | | | (44) | | | | | | (6) | | |
Depreciation of property and equipment
|
| | | | 8,611 | | | | | | 15,435 | | | | | | 21,187 | | | | | | 2,979 | | | | | | 15,558 | | | | | | 31,940 | | | | | | 4,490 | | |
Amortization of intangible assets
|
| | | | 1,113 | | | | | | 3,780 | | | | | | 7,044 | | | | | | 990 | | | | | | 4,985 | | | | | | 6,725 | | | | | | 945 | | |
EBITDA | | | | | (128,677) | | | | | | (109,125) | | | | | | (250,295) | | | | | | (35,186) | | | | | | (169,571) | | | | | | (176,142) | | | | | | (24,763) | | |
| | |
For the Three Months Ended,
|
| |||||||||||||||||||||||||||||||||||||||
| | |
March 31,
2021 |
| |
June 30,
2021 |
| |
September 30,
2021 |
| |
December 31,
2021 |
| |
March 31,
2022 |
| |
June 30,
2022 |
| |
September 30,
2022 |
| |||||||||||||||||||||
| | |
(RMB in thousands)
|
| |||||||||||||||||||||||||||||||||||||||
Total net revenues
|
| | | | 100,761 | | | | | | 134,237 | | | | | | 224,444 | | | | | | 261,326 | | | | | | 248,447 | | | | | | 211,184 | | | | | | 333,854 | | |
Cost of revenues
|
| | | | (38,304) | | | | | | (62,178) | | | | | | (114,189) | | | | | | (124,301) | | | | | | (121,953) | | | | | | (112,259) | | | | | | (210,127) | | |
Gross profit
|
| | | | 62,457 | | | | | | 72,059 | | | | | | 110,255 | | | | | | 137,025 | | | | | | 126,494 | | | | | | 98,925 | | | | | | 123,727 | | |
| | |
For the Three Months Ended,
|
| |||||||||||||||||||||||||||||||||||||||
| | |
March 31,
2021 |
| |
June 30,
2021 |
| |
September 30,
2021 |
| |
December 31,
2021 |
| |
March 31,
2022 |
| |
June 30,
2022 |
| |
September 30,
2022 |
| |||||||||||||||||||||
| | |
(RMB in thousands)
|
| |||||||||||||||||||||||||||||||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (9,143) | | | | | | (14,986) | | | | | | (23,943) | | | | | | (21,194) | | | | | | (19,312) | | | | | | (20,406) | | | | | | (23,755) | | |
General and administrative expenses
|
| | | | (15,169) | | | | | | (124,446) | | | | | | (45,569) | | | | | | (51,529) | | | | | | (44,727) | | | | | | (67,357) | | | | | | (41,296) | | |
Research and development expenses
|
| | | | (52,600) | | | | | | (67,539) | | | | | | (90,488) | | | | | | (157,808) | | | | | | (104,672) | | | | | | (107,999) | | | | | | (163,691) | | |
Other operating income,
net |
| | | | 7,676 | | | | | | 5,671 | | | | | | 5,394 | | | | | | 8,592 | | | | | | 564 | | | | | | 2,506 | | | | | | 2,878 | | |
Total operating expenses
|
| | | | (69,236) | | | | | | (201,300) | | | | | | (154,606) | | | | | | (221,939) | | | | | | (168,147) | | | | | | (193,256) | | | | | | (225,864) | | |
Loss from operations
|
| | | | (6,779) | | | | | | (129,241) | | | | | | (44,351) | | | | | | (84,914) | | | | | | (41,653) | | | | | | (94,331) | | | | | | (102,137) | | |
Interest income
|
| | | | 3,426 | | | | | | 2,333 | | | | | | 8,444 | | | | | | 18,381 | | | | | | 17,418 | | | | | | 16,197 | | | | | | 15,669 | | |
Foreign exchange gain
(loss) |
| | | | 3,264 | | | | | | (12,614) | | | | | | (455) | | | | | | (3,470) | | | | | | (677) | | | | | | 10,331 | | | | | | 15,776 | | |
Other income (loss), net
|
| | | | 61 | | | | | | (1) | | | | | | 2 | | | | | | (28) | | | | | | (173) | | | | | | (1,864) | | | | | | (79) | | |
Loss before income tax
|
| | | | (28) | | | | | | (139,523) | | | | | | (36,360) | | | | | | (70,031) | | | | | | (25,085) | | | | | | (69,667) | | | | | | (70,771) | | |
Income tax benefit
|
| | | | 23 | | | | | | 12 | | | | | | 1,078 | | | | | | 2 | | | | | | 11 | | | | | | 13 | | | | | | 20 | | |
Net loss
|
| | | | (5) | | | | | | (139,511) | | | | | | (35,282) | | | | | | (70,029) | | | | | | (25,074) | | | | | | (69,654) | | | | | | (70,751) | | |
| | |
For the Year Ended December 31,
|
| |
For the Nine Months Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
2021
|
| |
2022
|
| |||||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| |||||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||||||||
Selected combined and Consolidated Cash Flows Data:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by/ (used in) operating activities
|
| | | | 46,166 | | | | | | (352,015) | | | | | | (228,386) | | | | | | (32,104) | | | | | | (114,090) | | | | | | (505,667) | | | | | | (71,086) | | |
Net cash (used in)/ provided by investing activities
|
| | | | (779,497) | | | | | | 179,027 | | | | | | (1,980,237) | | | | | | (278,377) | | | | | | (1,168,823) | | | | | | 769,607 | | | | | | 108,190 | | |
Net cash provided by financing activities
|
| | | | 739,741 | | | | | | 323,437 | | | | | | 2,403,726 | | | | | | 337,908 | | | | | | 1,950,083 | | | | | | — | | | | | | — | | |
Net increase in cash and cash
equivalents |
| | | | 6,410 | | | | | | 150,449 | | | | | | 195,103 | | | | | | 27,427 | | | | | | 667,170 | | | | | | 263,940 | | | | | | 37,104 | | |
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
| | | | 1,991 | | | | | | (6,498) | | | | | | (2,439) | | | | | | (343) | | | | | | 22,114 | | | | | | 37,269 | | | | | | 5,239 | | |
Cash and cash equivalents at the beginning of the year/period
|
| | | | 104,336 | | | | | | 112,737 | | | | | | 256,688 | | | | | | 36,085 | | | | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | |
Cash and cash equivalents at the end of the year/period
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | | | | | 945,972 | | | | | | 750,561 | | | | | | 105,512 | | |
| | |
Payment due by September 30,
|
| |||||||||||||||||||||||||||||||||
| | |
Total
|
| |
Remaining of
2022 |
| |
2023
|
| |
2024
|
| |
2025
|
| |
After
|
| ||||||||||||||||||
| | |
(RMB in thousands)
|
| |||||||||||||||||||||||||||||||||
Operating lease commitments
|
| | | | 54,780 | | | | | | 9,301 | | | | | | 34,914 | | | | | | 7,219 | | | | | | 3,346 | | | | | | — | | |
Capital expenditure commitments(1)
|
| | | | 148,628 | | | | | | 137,106 | | | | | | — | | | | | | 11,522 | | | | | | — | | | | | | — | | |
| | |
For the Year Ended
December 31, 2019 |
|
Expected volatility
|
| |
51.00% – 53.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.73% – 2.94%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
3.00
|
|
Fair value of the underlying ordinary share of Shanghai Hesai
|
| |
RMB5.41 – 6.71
|
|
Fair value of option to subscribe 1 ordinary share of Shanghai Hesai
|
| |
RMB4.88 – 5.95
|
|
| | |
For the Year Ended
December 31, 2020 |
|
Expected volatility
|
| |
49.00% – 52.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.70% – 2.88%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
1.93 – 3.93
|
|
Fair value of the underlying ordinary share of Shanghai Hesai
|
| |
RMB20.33
|
|
Fair value of option to subscribe 1 ordinary share of Shanghai Hesai
|
| |
RMB17.16 – 17.41
|
|
| | |
For the Year Ended
December 31, 2021 |
|
Expected volatility
|
| |
48.00% – 74.00%
|
|
Risk-free interest rate (per annum)
|
| |
0.97% – 1.55%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
7.00
|
|
Fair value of the underlying ordinary share
|
| |
US$14.10 – 18.42
|
|
Fair value of awards on grant date
|
| |
US$5.84 – 16.90
|
|
| | |
For the Nine Months
Ended September 30, 2022 |
|
Expected volatility
|
| |
74.00% – 75.00%
|
|
Risk-free interest rate (per annum)
|
| |
1.94% – 3.04%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80% – 3.92%
|
|
Expected multiples
|
| |
2.50
|
|
Contractual life
|
| |
7.00
|
|
Fair value of the underlying ordinary share
|
| |
US$18.11 – 19.91
|
|
Fair value of awards on grant date
|
| |
US$12.93 – 17.11
|
|
| | | |
Legacy Approach
|
| |
Minimum Channel
Approach (MEMS-based) |
| |
Minimum Channel
Approach (1550nm Wavelengths-based) |
| |
Line-flash ASIC
Approach |
| |
Hesai’s Approach
(AT series as an example) |
|
|
LiDAR architecture
|
| |
•
Discrete architecture —
large number of channels using discrete components
|
| |
•
Integrated architecture —
small number of channels
•
High speed MEMS beam scanning system
|
| |
•
Integrated architecture – small number of channels
•
High speed scanning mirror system
•
1550nm wavelengths
|
| |
•
ASIC-based
•
Integrated architecture —
large number of channels integrated at a single circuit board
•
Firing all lasers at the same time to form a line flash in vertical direction
•
Using a low-speed scanner in horizonal direction
|
| |
•
ASIC-based
•
Integrated architecture — large number of channels integrated at a single circuit board
•
Firing lasers at each channel sequentially to form a solid-state electronic scanning in vertical direction
•
Using a low-speed scanning mirror horizontal direction
|
|
|
Performance
|
| |
•
Difficult to enhance performance given complexity increases exponentially
|
| |
•
Limited range performance for MEMS due to small apertures
•
Limited field of view unless using multiple TX/RX systems
|
| |
•
High power consumption
•
Limited point density
•
Low receiver sensitivity
|
| |
•
Low performance in range and point cloud quality since power at each channel is limited
•
High power consumption
•
Severe channel crosstalk
|
| |
•
High performance in range and point cloud quality
•
Low power consumption
|
|
|
Quality
|
| |
•
Low product consistency due to large number of discrete components
|
| |
•
Concerns on reliability as the high-speed mechanical beam steering system has not been automotive grade proven
|
| |
•
Concerns on reliability as high-speed scanning mirror system has not been automotive grade proven
•
Requires many other non-automotive-grade components
|
| |
•
High product consistency as components are integrated on a single circuit board
•
Automotive grade proven scanning system
|
| |
•
High product consistency as components are integrated on a single circuit board
•
Automotive grade proven scanning system
|
|
|
Cost
|
| |
•
Complex manufacturing process
•
High cost
|
| |
•
Multiple TX/RX systems increase manufacturing complexity and cost
|
| |
•
High cost of fiber laser
|
| |
•
Low manufacturing complexity
•
Low-cost silicon-based components
|
| |
•
Low manufacturing complexity
•
Low-cost silicon-based components
|
|
| | |
Pandar128
|
| |
QT128
|
| |
XT32
|
| |
AT128
|
| |
FT120(1)
|
|
| | | | | | | | |
|
| | | ||||
Application
|
| |
Autonomous Mobility – long-range detection
|
| |
Autonomous Mobility – blind-spot detection
|
| | Robotics | | | ADAS | | |
ADAS – blind spot detection
|
|
Operating principle
|
| | Time of Flight (ToF) | | | ToF | | | ToF | | | ToF | | | ToF | |
Scanning method (vertical)
|
| | Electronic scanning | | | Electronic scanning | | | Electronic scanning | | | Electronic scanning | | | Electronic scanning | |
Scanning method (horizontal)
|
| | Mechanical rotation | | | Mechanical rotation | | | Mechanical rotation | | | Scanning mirror | | | Electronic scanning | |
Channel
|
| | 128 | | | 128 | | | 32 | | | 128 | | | 120 | |
Range
|
| |
up to 200 m at 10% reflectivity(2)
|
| |
up to 20 m at 10% reflectivity
|
| |
up to 80 m at 10% reflectivity
|
| |
up to 200 m at 10% reflectivity
|
| |
up to 30 m at 10% reflectivity
|
|
Data points generated (single return)
|
| |
3,456,000 points/second
|
| | 864,000 points/second | | | 640,000 points/second | | |
1,536,000 points/second
|
| | 192,000 points/second | |
FOV (vertical)
|
| | 40° | | | 105.2° | | | 31° | | | 25.4° | | | 75° | |
FOV (horizontal)
|
| | 360° | | | 360° | | | 360° | | | 120° | | | 100° | |
Resolution
(vertical) |
| | 0.125° finest | | | 0.4° finest | | | 1° | | | 0.2° | | | 0.625° | |
Resolution (horizontal)
|
| |
0.1° finest (10 Hz frame rate)
|
| |
0.4° finest (10 Hz frame rate)
|
| |
0.18° (10 Hz frame rate)
|
| | 0.1° (10 Hz frame rate) | | | 0.625° | |
Interference
rejection |
| | Yes | | | Yes | | | Yes | | | Yes | | | Yes | |
Power consumption
|
| | 27 W | | | 10 W | | | 10 W | | | 18 W | | | <12 W | |
|
Field of View
|
| | |
Mechanical vs. Solid-State
|
| | |
Beam Steering Mechanisms
|
|
| Surrounding View (360 degrees) | | | |
Mechanical — TX/RX is physically rotated by a motor
|
| | |
•
Full rotation of TX/RX
|
|
|
Directional View (less than 180 degrees)
|
| | |
Hybrid Solid-State — TX/RX is static, but is complemented by one or more moving scanners in the LiDAR
|
| | |
•
Two-dimensional scanning MEMS mirror
•
One-dimensional scanning polygon mirror
•
One-dimensional scanning galvo mirror
|
|
| Full Solid-State — no moving parts | | | |
•
Optical phased array (OPA)
•
Electronic scanning (one-dimensional or two-dimensional)
|
|
|
Category
|
| |
Subjects of Related Patents
|
|
| TX/RX System | | | | |
|
Proprietary customized ASICs for LiDAR
|
| | The key aspects of the laser driver ASICs and receiver front-end ASICs | |
|
Proprietary SoC ASICs for LiDAR
|
| |
The key aspects of the monolithic integrated receiver, front-end circuit, waveform digitization and waveform algorithm processing
|
|
|
Proprietary optoelectronic and micro-optical devices
|
| |
The key aspects of optoelectronic devices that enable integration of micro-optoelectronic devices into small packages
|
|
|
Hardware system design
|
| | The key aspects of the TX/RX architecture | |
| Scanning Mechanisms | | | | |
|
360-degree mechanical rotation solution
|
| |
The key aspects of the overall structure, integration and working mode of the 360-degree mechanical rotation LiDAR
|
|
|
Scanning mirror solution
|
| |
The key aspects of the overall structure, integration and working mode of the LiDAR using scanning mirror
|
|
|
Electronic scanning solution
|
| |
The key aspects of the overall structure, integration and working mode of the electronic scanning technology
|
|
| System-level Know-how | | | | |
|
Interference rejection technique
|
| |
The key aspects of the technology to mitigate the interference from other LiDARs and the crosstalk of distinct channels of the same LiDAR
|
|
|
Close-range enhancement technology
|
| |
The key aspects of the technology to enhance the range measurement precision at short ranges of a non-coaxial LiDAR system
|
|
|
Waveform processing algorithms
|
| | The key aspects of the waveform processing, digital signal processing for LiDAR | |
|
Advanced physical design
|
| |
The key aspects of the design of dynamic balancing, heat dissipation, microstructure, and shock-proof of the LiDAR system
|
|
|
Non-uniform distribution technology
|
| |
The key aspects of the resolution improvement of by using non-uniform distribution of laser and receiver channels on the TX and RX board
|
|
|
Functional safety, cybersecurity and vehicle regulation design
|
| |
The key aspects of the fault diagnosis, reliability, electromagnetic compatibility, environmental adaptability of LiDAR
|
|
|
Detection algorithms and multi-sensor fusion technology
|
| |
The key aspects of the detection algorithms and multi-sensor fusion algorithms for the combination of LiDARs and cameras
|
|
|
Automated Calibration, Assembly and Mass Production Testing
|
| |
The key aspects of the calibration method, calibration device, automatic adjustment, test methods, and devices
|
|
Function
|
| |
Number of Employees
|
| |||
Research and development | | | | | 530 | | |
Production and supply chain | | | | | 227 | | |
Management | | | | | 55 | | |
Sales and marketing | | | | | 81 | | |
Others | | | | | 127 | | |
Total | | | | | 1,020 | | |
Location
|
| |
Space
(square feet) |
| |
Use
|
| |
Lease Term
|
| |||
Shanghai, China | | | | | 509,383 | | | |
Office space and manufacturing facility
|
| |
One to three years
|
|
Silicon Valley, California the United States
|
| | | | 18,147 | | | | Office space | | |
Three to four years
|
|
Directors and Executive Officers
|
| |
Age
|
| |
Position/Title
|
|
Yifan Li | | |
36
|
| | Co-Founder, Director and Chief Executive Officer | |
Kai Sun | | |
37
|
| | Co-Founder, Director and Chief Scientist | |
Shaoqing Xiang | | |
37
|
| | Co-Founder, Director and Chief Technology Officer | |
Louis T. Hsieh | | |
58
|
| | Director and Global Chief Financial Officer | |
Cailian Yang | | |
32
|
| | Director and Vice President of Operations | |
Bonnie Zhang* | | |
49
|
| | Independent director nominee | |
Jie Chen* | | |
42
|
| | Independent director nominee | |
Name
|
| |
Class B Ordinary
Shares Underlying Options |
| |
Exercise Price
(US$/Share) |
| |
Date of Grant
|
| |
Date of
Expiration |
| ||||||
Louis T. Hsieh
|
| | | | 2,000,000 | | | | | | 1.05 | | | |
July 19, 2021
|
| |
July 19, 2028
|
|
Cailian Yang
|
| | | | * | | | | | | 2.1 | | | |
July 3, 2021
|
| |
July 3, 2028
|
|
| | | | | * | | | | | | 3.3 | | | |
November 22, 2021
|
| |
November 22, 2028
|
|
Total
|
| | | | 2,345,108 | | | | | | — | | | |
—
|
| |
—
|
|
| | |
Ordinary Shares Beneficially Owned Prior
to This Offering |
| |
Ordinary Shares Beneficially Owned
After This Offering |
| ||||||||||||||||||||||||||||||||||||||||||
| | |
Class A
Ordinary shares |
| |
Class B
Ordinary Shares |
| |
% of Total
Ordinary Shares on An As- converted Basis† |
| |
% of
Aggregate Voting Power†† |
| |
Class A
Ordinary shares |
| |
Class B
Ordinary Shares |
| |
% of
Total Ordinary Shares on An As- converted Basis |
| |
% of
Aggregate Voting Power |
| ||||||||||||||||||||||||
Directors and Executive Officers**: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Yifan Li(1)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | 9,899,374 | | | | | | — | | | | | | 7.9% | | | | | | 25.1% | | |
Kai Sun(2)
|
| | | | 10,234,631 | | | | | | — | | | | | | 8.9 | | | | | | 26.5 | | | | | | 10,234,631 | | | | | | — | | | | | | 8.2% | | | | | | 25.9% | | |
Shaoqing Xiang(3)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | 9,899,374 | | | | | | — | | | | | | 7.9% | | | | | | 25.1% | | |
Louis T. Hsieh(4)
|
| | | | — | | | | | | 1,375,000 | | | | | | 1.2 | | | | | | 0.4 | | | | | | — | | | | | | 1,375,000 | | | | | | 1.1% | | | | | | 0.3% | | |
Cailian Yang(5)
|
| | | | — | | | | | | * | | | | | | * | | | | | | * | | | | | | — | | | | | | * | | | | | | * | | | | | | * | | |
Bonnie Zhang***
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jie Chen***
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All Directors and Executive Officers as
a Group |
| | | | 30,033,379 | | | | | | 1,682,342 | | | | | | 27.1 | | | | | | 77.9 | | | | | | 30,033,379 | | | | | | 1,682,342 | | | | | | 25.1% | | | | | | 76.2% | | |
Principal Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALBJ Limited(1)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | 9,899,374 | | | | | | — | | | | | | 7.9% | | | | | | 25.1% | | |
Fermat Star Limited(2)
|
| | | | 10,234,631 | | | | | | — | | | | | | 8.9 | | | | | | 26.5 | | | | | | 10,234,631 | | | | | | — | | | | | | 8.2% | | | | | | 25.9% | | |
Galbadia Limited(3)
|
| | | | 9,899,374 | | | | | | — | | | | | | 8.6 | | | | | | 25.7 | | | | | | 9,899,374 | | | | | | — | | | | | | 7.9% | | | | | | 25.1% | | |
Lightspeed Opportunity(6)
|
| | | | — | | | | | | 10,688,294 | | | | | | 9.3 | | | | | | 2.8 | | | | | | — | | | | | | 10,688,294 | | | | | | 7.9% | | | | | | 2.6% | | |
Lightspeed China Partners(7)
|
| | | | — | | | | | | 9,523,412 | | | | | | 8.2 | | | | | | 2.5 | | | | | | — | | | | | | 9,523,412 | | | | | | 7.1% | | | | | | 2.4% | | |
Baidu Holdings(8)
|
| | | | — | | | | | | 7,881,155 | | | | | | 6.8 | | | | | | 2.0 | | | | | | — | | | | | | 7,881,155 | | | | | | 6.0% | | | | | | 2.0% | | |
Bosch(9)
|
| | | | — | | | | | | 7,653,252 | | | | | | 6.6 | | | | | | 2.0 | | | | | | — | | | | | | 7,653,252 | | | | | | 5.8% | | | | | | 1.9% | | |
Xiaomi (10)
|
| | | | — | | | | | | 7,272,727 | | | | | | 6.3 | | | | | | 1.9 | | | | | | — | | | | | | 7,272,727 | | | | | | 5.5% | | | | | | 1.8% | | |
Yuanzhan(11)
|
| | | | — | | | | | | 6,777,885 | | | | | | 5.9 | | | | | | 1.8 | | | | | | — | | | | | | 6,777,885 | | | | | | 5.2% | | | | | | 1.7% | | |
|
Service
|
| |
Fees
|
|
|
•
To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash)
|
| | Up to US$0.05 per ADS issued | |
|
•
Cancellation of ADSs, including in the case of termination of the deposit agreement
|
| | Up to US$0.05 per ADS cancelled | |
|
•
Distribution of cash dividends
|
| | Up to US$0.05 per ADS held | |
|
•
Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements
|
| | Up to US$0.05 per ADS held | |
|
•
Distribution of ADSs pursuant to exercise of rights.
|
| | Up to US$0.05 per ADS held | |
|
•
Distribution of securities other than ADSs or rights to purchase additional ADSs
|
| | Up to US$0.05 per ADS held | |
|
•
Depositary services
|
| | Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank | |
|
If we:
|
| |
Then:
|
|
| Change the nominal or par value of our Class B ordinary shares | | | The cash, shares or other securities received by the depositary will become deposited securities. | |
| Reclassify, split up or consolidate any of the deposited securities | | | Each ADS will automatically represent its equal share of the new deposited securities. | |
| Distribute securities on the Class B ordinary shares that are not distributed to you, or recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action | | | The depositary may distribute some or all of the cash, shares or other securities it received. It may also deliver new ADSs or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities. | |
Name
|
| |
Number of ADSs
|
| |||
Goldman Sachs (Asia) L.L.C.
|
| |
|
| |||
Morgan Stanley Asia Limited
|
| |
|
| |||
Credit Suisse Securities (USA) LLC
|
| |
|
| |||
Huatai Securities (USA), Inc.
|
| |
|
| |||
Total:
|
| | | | | |
| | | | | | | | |
Total
|
| |||||||||
| | |
Per
ADS |
| |
No
Exercise |
| |
Full
Exercise |
| |||||||||
Public offering price
|
| | | US$ | | | | | US$ | | | | | US$ | | | |||
Underwriting discounts and commissions to be paid by us:
|
| | | US$ | | | | | US$ | | | | | US$ | | | |||
Proceeds, before expenses, to us
|
| | | US$ | | | | | US$ | | | | | US$ | | |
|
SEC Registration Fee
|
| | | US | $ 21,671 | | |
|
FINRA Filing Fee
|
| | | | 29,998 | | |
|
Stock Exchange Market Entry and Listing Fee
|
| | | | 270,000 | | |
|
Printing and Engraving Expenses
|
| | | | 300,000 | | |
|
Legal Fees and Expenses
|
| | | | 2,800,000 | | |
|
Accounting Fees and Expenses
|
| | | | 1,000,000 | | |
|
Miscellaneous
|
| | | | 878,331 | | |
| Total | | | | US | $5,300,000 | | |
| | |
Page
|
| |||
Combined and Consolidated Financial Statements for the Years Ended December 31, 2019, 2020 and 2021
|
| | | | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-8 | | | |
| | | | F-44 | | | |
Unaudited Condensed Consolidated Financial Statements for the Nine Months Ended September 30, 2021 (As Restated) and 2022
|
| | | | | | |
| | | | F-48 | | | |
| | | | F-49 | | | |
| | | | F-50 | | | |
| | | | F-51 | | | |
| | | | F-52 | | |
| | |
As of December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
(Note 2) |
| ||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | |
Short-term investments
|
| | | | 910,972 | | | | | | 638,981 | | | | | | 2,342,743 | | | | | | 329,338 | | |
Accounts receivable (net of allowance of RMB2,257, RMB5,270 and RMB7,294 as of December 31, 2019, 2020 and 2021, respectively)
|
| | | | 36,511 | | | | | | 56,319 | | | | | | 85,821 | | | | | | 12,065 | | |
Contract assets (net of allowance for of nil, RMB687 and RMB1,223 as of December 31, 2019, 2020 and 2021, respectively)
|
| | | | — | | | | | | 38,337 | | | | | | 146,537 | | | | | | 20,600 | | |
Amounts due from related parties (net of allowance of RMB31, RMB504 and nil as of December 31, 2019, 2020 and 2021, respectively)
|
| | | | 7,962 | | | | | | 28,331 | | | | | | 3,543 | | | | | | 498 | | |
Inventories
|
| | | | 70,243 | | | | | | 149,925 | | | | | | 376,244 | | | | | | 52,892 | | |
Prepayments and other current assets
|
| | | | 31,835 | | | | | | 40,658 | | | | | | 89,119 | | | | | | 12,528 | | |
Total current assets
|
| | | | 1,170,260 | | | | | | 1,209,239 | | | | | | 3,493,359 | | | | | | 491,090 | | |
Property and equipment, net
|
| | | | 47,409 | | | | | | 63,837 | | | | | | 321,627 | | | | | | 45,214 | | |
Investment in equity method investee
|
| | | | 1,990 | | | | | | 1,986 | | | | | | 1,902 | | | | | | 267 | | |
Intangible assets, net
|
| | | | 9,060 | | | | | | 14,260 | | | | | | 19,553 | | | | | | 2,749 | | |
Land-use rights, net
|
| | | | — | | | | | | — | | | | | | 42,470 | | | | | | 5,970 | | |
Goodwill
|
| | | | 3,893 | | | | | | 3,640 | | | | | | 3,499 | | | | | | 492 | | |
Other non-current assets
|
| | | | 9,750 | | | | | | 19,163 | | | | | | 69,959 | | | | | | 9,835 | | |
Total non-current assets
|
| | | | 72,102 | | | | | | 102,886 | | | | | | 459,010 | | | | | | 64,527 | | |
TOTAL ASSETS
|
| | | | 1,242,362 | | | | | | 1,312,125 | | | | | | 3,952,369 | | | | | | 555,617 | | |
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ (DEFICIT) EQUITY
|
| | | | | ||||||||||||||||||||
Current liabilities: | | | | | | ||||||||||||||||||||
Accounts payable
|
| | | | 18,608 | | | | | | 55,437 | | | | | | 77,271 | | | | | | 10,863 | | |
Contract liabilities
|
| | | | 11,843 | | | | | | 9,357 | | | | | | 122,603 | | | | | | 17,235 | | |
Amounts due to related parties
|
| | | | 2,906 | | | | | | — | | | | | | 307,498 | | | | | | 43,227 | | |
Income tax payable
|
| | | | 1,263 | | | | | | 9 | | | | | | — | | | | | | — | | |
Accrued warranty liability
|
| | | | 7,457 | | | | | | 10,042 | | | | | | 13,932 | | | | | | 1,959 | | |
Accrued expenses and other current liabilities
|
| | | | 229,091 | | | | | | 91,895 | | | | | | 370,854 | | | | | | 52,134 | | |
Total current liabilities
|
| | | | 271,168 | | | | | | 166,740 | | | | | | 892,158 | | | | | | 125,418 | | |
Deferred tax liabilities
|
| | | | 693 | | | | | | 578 | | | | | | 466 | | | | | | 66 | | |
Other non-current liabilities
|
| | | | 41,289 | | | | | | 7,614 | | | | | | 9,924 | | | | | | 1,395 | | |
Total non-current liabilities
|
| | | | 41,982 | | | | | | 8,192 | | | | | | 10,390 | | | | | | 1,461 | | |
TOTAL LIABILITIES
|
| | | | 313,150 | | | | | | 174,932 | | | | | | 902,548 | | | | | | 126,879 | | |
Commitments and contingencies (Note 25) | | | | | | | | | | | | | | | | | | | | | | | | | |
Mezzanine equity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Redeemable equity
|
| | | | 1,098,639 | | | | | | — | | | | | | — | | | | | | — | | |
Redeemable shares (US$0.0001 par value, 54,551,513 shares issued and outstanding as of December 31, 2021)
|
| | | | — | | | | | | — | | | | | | 5,540,491 | | | | | | 778,870 | | |
TOTAL MEZZANINE EQUITY
|
| | | | 1,098,639 | | | | | | — | | | | | | 5,540,491 | | | | | | 778,870 | | |
Shareholders’ (deficit) equity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A Ordinary shares (US$0.0001 par value, nil share authorized, issued and
outstanding as of December 31, 2019 and 2020; 35,000,000 shares authorized, 30,033,379 shares issued and outstanding as of December 31, 2021) |
| | | | — | | | | | | — | | | | | | 19 | | | | | | 3 | | |
Class B Ordinary shares (US$0.0001 par value, nil share authorized, issued and
outstanding as of December 31, 2019 and 2020; 150,000,000 shares authorized, 30,949,701 shares issued and outstanding as of December 31, 2021) |
| | | | — | | | | | | — | | | | | | 20 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | — | | | | | | 1,193,857 | | | | | | — | | | | | | — | | |
Subscription receivables
|
| | | | — | | | | | | — | | | | | | (310,227) | | | | | | (43,611) | | |
Accumulated other comprehensive income (loss)
|
| | | | 1,332 | | | | | | (618) | | | | | | 8,465 | | | | | | 1,190 | | |
Accumulated deficit
|
| | | | (170,759) | | | | | | (56,046) | | | | | | (2,188,947) | | | | | | (307,717) | | |
TOTAL SHAREHOLDERS’ (DEFICIT) EQUITY
|
| | | | (169,427) | | | | | | 1,137,193 | | | | | | (2,490,670) | | | | | | (350,132) | | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ (DEFICIT) EQUITY
|
| | | | 1,242,362 | | | | | | 1,312,125 | | | | | | 3,952,369 | | | | | | 555,617 | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
(Note 2) |
| ||||||||||||
Net revenues (including revenues from related party
of RMB47,852, RMB41,765 and RMB15,655 for the years ended December 31, 2019, 2020, and 2021 respectively) |
| | | | 348,084 | | | | | | 415,514 | | | | | | 720,768 | | | | | | 101,324 | | |
Cost of revenues
|
| | | | (103,377) | | | | | | (176,600) | | | | | | (338,972) | | | | | | (47,652) | | |
Gross Profit
|
| | | | 244,707 | | | | | | 238,914 | | | | | | 381,796 | | | | | | 53,672 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (38,740) | | | | | | (49,904) | | | | | | (69,266) | | | | | | (9,737) | | |
General and administrative expenses
|
| | | | (55,112) | | | | | | (76,553) | | | | | | (236,713) | | | | | | (33,277) | | |
Research and development expenses
|
| | | | (149,817) | | | | | | (229,653) | | | | | | (368,435) | | | | | | (51,794) | | |
Litigation settlement expense
|
| | | | (160,098) | | | | | | — | | | | | | — | | | | | | — | | |
Other operating income, net
|
| | | | 11,009 | | | | | | 15,384 | | | | | | 27,333 | | | | | | 3,842 | | |
Total operating expenses
|
| | | | (392,758) | | | | | | (340,726) | | | | | | (647,081) | | | | | | (90,966) | | |
Loss from operations
|
| | | | (148,051) | | | | | | (101,812) | | | | | | (265,285) | | | | | | (37,294) | | |
Interest income
|
| | | | 19,107 | | | | | | 20,925 | | | | | | 32,584 | | | | | | 4,581 | | |
Foreign exchange gain (loss), net
|
| | | | 9,619 | | | | | | (25,696) | | | | | | (13,275) | | | | | | (1,866) | | |
Other income (loss), net
|
| | | | 31 | | | | | | (832) | | | | | | 34 | | | | | | 5 | | |
Net loss before income tax
|
| | | | (119,294) | | | | | | (107,415) | | | | | | (245,942) | | | | | | (34,574) | | |
Income tax benefit (expense)
|
| | | | (930) | | | | | | 199 | | | | | | 1,115 | | | | | | 157 | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | |
Deemed dividend
|
| | | | (55,247) | | | | |
|
—
|
| | | | | (2,211,330) | | | | | | (310,864) | | |
Net loss attributable to ordinary shareholders of the
Company |
| | | | (175,471) | | | | | | (107,216) | | | | | | (2,456,157) | | | | | | (345,281) | | |
Net loss per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (2.20) | | | | | | (1.19) | | | | | | (23.39) | | | | | | (3.29) | | |
Weighted average shares used in calculating net loss
per share: |
| | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | | | | | 104,987,478 | | | | | | 104,987,478 | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | |
Other comprehensive (loss) income, net of tax of nil:
|
| | | | | ||||||||||||||||||||
Foreign currency translation adjustments
|
| | | | 1,332 | | | | | | (1,950) | | | | | | 9,083 | | | | | | 1,277 | | |
Comprehensive loss
|
| | | | (118,892) | | | | | | (109,166) | | | | | | (235,744) | | | | | | (33,140) | | |
| | |
Class A
Ordinary shares |
| |
Class B
Ordinary shares |
| |
Additional
Paid-in capital |
| |
Subscription
Receivables |
| |
Accumulated
deficit |
| |
Accumulated
other comprehensive income (loss) |
| |
Total
Shareholders’ (deficit) Equity |
| |||||||||||||||||||||||||||||||||
| | |
Number
|
| |
RMB
|
| |
Number
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||||||||||||||
Balance as of December 31, 2018
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,817 | | | | | | — | | | | | | (5,105) | | | | | | — | | | | | | 4,712 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (120,224) | | | | | | — | | | | | | (120,224) | | |
Change in redemption value of redeemable equity
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (9,817) | | | | | | — | | | | | | (45,430) | | | | | | — | | | | | | (55,247) | | |
Foreign currency translation
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | | | 1,332 | | | | | | 1,332 | | |
Balance as of December 31, 2019
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (170,759) | | | | | | 1,332 | | | | | | (169,427) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | |
|
—
|
| | | | | (107,216) | | | | | | — | | | | | | (107,216) | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | |
|
—
|
| | | | | — | | | | | | (1,950) | | | | | | (1,950) | | |
Conversion to joint stock company as part of 2020 Reorganization
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (221,929) | | | | |
|
—
|
| | | | | 221,929 | | | | | | — | | | | | | — | | |
Conversion of redeemable equity to ordinary shares as part of the 2020 Reorganization
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,098,639 | | | | |
|
—
|
| | | | | — | | | | | | — | | | | | | 1,098,639 | | |
Issuance of shares of Shanghai Hesai to new
investors |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 317,147 | | | | |
|
—
|
| | | | | — | | | | | | — | | | | | | 317,147 | | |
Balance as of December 31, 2020
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,193,857 | | | | | | — | | | | | | (56,046) | | | | | | (618) | | | | | | 1,137,193 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (244,827) | | | | | | — | | | | | | (244,827) | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,083 | | | | | | 9,083 | | |
Issuance of ordinary shares in connection with the 2021 Reorganization
|
| | | | 30,033,379 | | | | | | 19 | | | | | | 62,834,548 | | | | | | 40 | | | | | | (59) | | | | | | (310,227) | | | | | | — | | | | | | — | | | | | | (310,227) | | |
Reclassification of ordinary shares to redeemable shares
|
| | | | — | | | | | | — | | | | | | (31,884,847) | | | | | | (20) | | | | | | (1,193,798) | | | | | | — | | | | | | (1,862,599) | | | | | | — | | | | | | (3,056,417) | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 54,283 | | | | | | — | | | | | | — | | | | | | — | | | | | | 54,283 | | |
Accretion in redemption value of redeemable shares
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (54,283) | | | | | | — | | | | | | (25,475) | | | | | | — | | | | | | (79,758) | | |
Balance as of December 31, 2021
|
| | | | 30,033,379 | | | | | | 19 | | | | | | 30,949,701 | | | | | | 20 | | | | | | — | | | | | | (310,227) | | | | | | (2,188,947) | | | | | | 8,465 | | | | | | (2,490,670) | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
(Note 2) |
| ||||||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | ||||||||||||||||||||
Depreciation and amortization
|
| | | | 9,724 | | | | | | 19,215 | | | | | | 28,231 | | | | | | 3,969 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 54,283 | | | | | | 7,631 | | |
Allowance for doubtful accounts
|
| | | | 91 | | | | | | 4,174 | | | | | | 2,561 | | | | | | 360 | | |
Loss from disposal of property and equipment
|
| | | | — | | | | | | 28 | | | | | | 169 | | | | | | 24 | | |
Fair value change of short-term investments
|
| | | | — | | | | | | — | | | | | | (7,717) | | | | | | (1,085) | | |
Share of loss in equity method investee
|
| | | | 10 | | | | | | 4 | | | | | | 84 | | | | | | 12 | | |
Foreign exchange (gain) loss, net
|
| | | | (10,404) | | | | | | 21,503 | | | | | | 10,945 | | | | | | 1,539 | | |
Inventory write-down
|
| | | | 4,195 | | | | | | 7,060 | | | | | | 16,600 | | | | | | 2,334 | | |
Changes in operating assets and liabilities:
|
| | | | | ||||||||||||||||||||
Accounts receivable
|
| | | | 6,963 | | | | | | (22,578) | | | | | | (31,696) | | | | | | (4,456) | | |
Contract assets
|
| | | | — | | | | | | (39,024) | | | | | | (108,737) | | | | | | (15,286) | | |
Inventories
|
| | | | (32,387) | | | | | | (83,607) | | | | | | (237,755) | | | | | | (33,423) | | |
Prepayments and other current assets
|
| | | | (13,037) | | | | | | (8,790) | | | | | | (48,618) | | | | | | (6,835) | | |
Amounts due from related parties
|
| | | | (1,817) | | | | | | (20,842) | | | | | | 24,788 | | | | | | 3,485 | | |
Non-current assets
|
| | | | 1,000 | | | | | | (4,100) | | | | | | (5,573) | | | | | | (783) | | |
Amounts due to related parties
|
| | | | (719) | | | | | | (2,906) | | | | | | — | | | | | | — | | |
Contract liabilities
|
| | | | 8,192 | | | | | | (2,569) | | | | | | 113,265 | | | | | | 15,923 | | |
Deferred tax liabilities
|
| | | | (325) | | | | | | (156) | | | | | | (113) | | | | | | (16) | | |
Accounts payable
|
| | | | (8,480) | | | | | | 36,258 | | | | | | 21,834 | | | | | | 3,069 | | |
Income tax payable
|
| | | | 1,255 | | | | | | (1,268) | | | | | | (9) | | | | | | (1) | | |
Accrued expenses and other current liabilities
|
| | | | 205,646 | | | | | | (143,526) | | | | | | 170,125 | | | | | | 23,916 | | |
Other non-current liabilities
|
| | | | (3,517) | | | | | | (3,675) | | | | | | 13,774 | | | | | | 1,936 | | |
Net cash provided by (used in) operating activities
|
| | | | 46,166 | | | | | | (352,015) | | | | | | (228,386) | | | | | | (32,104) | | |
Cash flows from investing activities: | | | | | | ||||||||||||||||||||
Purchases of short-term investments
|
| | | | (1,845,438) | | | | | | (2,001,137) | | | | | | (4,812,942) | | | | | | (676,593) | | |
Maturity of short-term investments
|
| | | | 1,120,447 | | | | | | 2,256,724 | | | | | | 3,114,287 | | | | | | 437,800 | | |
Payment for business acquisition, net of cash RMB613
acquired |
| | | | (12,930) | | | | | | — | | | | | | — | | | | | | — | | |
Payment for investment in equity investee
|
| | | | (2,000) | | | | | | — | | | | | | — | | | | | | — | | |
Proceeds from disposals of property and equipment
|
| | | | — | | | | | | 19 | | | | | | 22 | | | | | | 3 | | |
Purchases of property and equipment
|
| | | | (32,420) | | | | | | (66,000) | | | | | | (220,096) | | | | | | (30,941) | | |
Purchases of land-use right
|
| | | | — | | | | | | — | | | | | | (43,188) | | | | | | (6,071) | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
(Note 2) |
| ||||||||||||
Purchases of intangible assets
|
| | | | (7,156) | | | | | | (10,579) | | | | | | (18,320) | | | | | | (2,575) | | |
Net cash (used in) provided by investing activities
|
| | | | (779,497) | | | | | | 179,027 | | | | | | (1,980,237) | | | | | | (278,377) | | |
Cash flows from financing activities: | | | | | | ||||||||||||||||||||
Proceeds from issuance of redeemable equity
|
| | | | 739,741 | | | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| |
Cash distribution to shareholders of Shanghai Hesai in connection with the 2021 Reorganization
|
| | | | — | | | | | | — | | | | | | (507,620) | | | | | | (71,360) | | |
Cash contribution from shareholders in connection with the 2021 Reorganization
|
| | | | — | | | | | | — | | | | | | 507,620 | | | | | | 71,360 | | |
Proceeds from issuance of equity shares of Hesai Shanghai
|
| | | | — | | | | | | 317,147 | | | | | | — | | | | | | — | | |
Proceeds from issuance of convertible loans
|
| | | | — | | | | | | — | | | | | | 1,950,338 | | | | | | 274,172 | | |
Proceeds from issuance of ordinary shares of Hesai Group
|
| | | | — | | | | | | — | | | | | | 453,978 | | | | | | 63,819 | | |
Advances from and return of advances to employees in
connection with share option grants |
| | | | — | | | | | | 6,290 | | | | | | (590) | | | | | | (83) | | |
Net cash provided by financing activities
|
| | | | 739,741 | | | | | | 323,437 | | | | | | 2,403,726 | | | | | | 337,908 | | |
Net increase in cash and cash equivalents
|
| | | | 6,410 | | | | | | 150,449 | | | | | | 195,103 | | | | | | 27,427 | | |
Cash and cash equivalents, beginning of the year
|
| | | | 104,336 | | | | | | 112,737 | | | | | | 256,688 | | | | | | 36,085 | | |
Effect of foreign exchange rate changes on cash and cash equivalents
|
| | | | 1,991 | | | | | | (6,498) | | | | | | (2,439) | | | | | | (343) | | |
Cash and cash equivalents, end of the year
|
| | | | 112,737 | | | | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | |
Supplemental disclosure of cash flow information: | | | | | | ||||||||||||||||||||
Income taxes paid (refund)
|
| | | | 8,662 | | | | | | (8,662) | | | | | | 213 | | | | | | 30 | | |
Supplemental disclosure of non-cash investing and financing activities:
|
| | | | | ||||||||||||||||||||
Conversion of convertible loans to redeemable shares
|
| | | | — | | | | | | — | | | | | | 1,950,338 | | | | | | 274,174 | | |
Accrued purchases of property and equipment
|
| | | | 3,919 | | | | | | 3,823 | | | | | | 114,446 | | | | | | 16,089 | | |
Deferred government subsidy applied to purchases of property and equipment
|
| | | | — | | | | | | 30,000 | | | | | | 3,850 | | | | | | 541 | | |
Deemed dividend
|
| | | | 55,247 | | | | | | — | | | | | | 2,211,330 | | | | | | 310,864 | | |
| | | | | |
Fair Value Measurements at Reporting Date Using
|
| ||||||||||||||||||||||||
| | |
As of December 31,
2019 |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||||||||
Description
|
| |
Carrying
Value |
| |
Fair
Value |
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||
Short-term investments
|
| | | | 910,972 | | | | | | 910,972 | | | | | | — | | | | | | 910,972 | | | | | | — | | |
Total
|
| | | | 910,972 | | | | | | 910,972 | | | | | | — | | | | | | 910,972 | | | | | | — | | |
| | | | | |
Fair Value Measurements at Reporting Date Using
|
| ||||||||||||||||||||||||
| | |
As of December 31, 2020
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||||||||
Description
|
| |
Carrying
Value |
| |
Fair
Value |
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||
Short-term investments
|
| | | | 638,981 | | | | | | 638,981 | | | | | | — | | | | | | 638,981 | | | | | | — | | |
Total
|
| | | | 638,981 | | | | | | 638,981 | | | | | | — | | | | | | 638,981 | | | | | | — | | |
| | | | | |
Fair Value Measurements at Reporting Date Using
|
| ||||||||||||||||||||||||
| | |
As of December 31, 2021
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||||||||
Description
|
| |
Carrying
Value |
| |
Fair
Value |
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||
Short-term investments
|
| | | | 2,342,743 | | | | | | 2,342,743 | | | | | | — | | | | | | 2,342,743 | | | | | | — | | |
Total
|
| | | | 2,342,743 | | | | | | 2,342,743 | | | | | | — | | | | | | 2,342,743 | | | | | | — | | |
|
Electronic equipment
|
| | 3 – 5 years | |
|
Machinery and equipment
|
| | 10 years | |
|
Furniture and fixture
|
| | 5 years | |
|
Transportation vehicles
|
| | 4 years | |
|
Leasehold improvements
|
| |
Over the shorter of the lease term or expected useful lives
|
|
|
Software
|
| | 3 – 5 years | |
|
Technology
|
| | 3 – 5 years | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Balance as of the beginning of the year
|
| | | | 2,780 | | | | | | 7,457 | | | | | | 10,042 | | |
Warranty provision
|
| | | | 8,354 | | | | | | 8,752 | | | | | | 10,766 | | |
Consumption
|
| | | | (3,677) | | | | | | (6,167) | | | | | | (6,876) | | |
Balance as of the end of the year
|
| | | | 7,457 | | | | | | 10,042 | | | | | | 13,932 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
Supplier A
|
| | | | 11.5% | | | | | | 14.0% | | | | | | 13.7% | | |
| | |
RMB
|
| |||
Total cash consideration
|
| | | | 13,543 | | |
Recognized amounts of identifiable assets acquired and liabilities assumed | | | | | | | |
Cash and cash equivalents
|
| | | | 613 | | |
Accounts receivable
|
| | | | 1,721 | | |
Inventories
|
| | | | 3,310 | | |
Intangible assets
|
| | | | 2,424 | | |
Other non-current assets
|
| | | | 2,169 | | |
Prepayments and other current assets
|
| | | | 875 | | |
Total assets acquired
|
| | | | 11,112 | | |
Accounts payable
|
| | | | 279 | | |
Deferred tax liabilities
|
| | | | 985 | | |
Accrued expenses and other current liabilities
|
| | | | 62 | | |
Total liability assumed
|
| | | | 1,326 | | |
Net assets acquired
|
| | | | 9,786 | | |
Goodwill | | | | | 3,757 | | |
| | | | | 13,543 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Structured bank financial products
|
| | | | 454,455 | | | | | | 246,612 | | | | | | 2,342,743 | | |
Time deposits
|
| | | | 456,517 | | | | | | 392,369 | | | | | | — | | |
Total short-term investments
|
| | | | 910,972 | | | | | | 638,981 | | | | | | 2,342,743 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Accounts receivable
|
| | | | 38,768 | | | | | | 61,589 | | | | | | 93,115 | | |
Less: allowance for expected credit losses
|
| | | | (2,257) | | | | | | (5,270) | | | | | | (7,294) | | |
Total Accounts receivable, net
|
| | | | 36,511 | | | | | | 56,319 | | | | | | 85,821 | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Balance at beginning of year
|
| | | | 2,197 | | | | | | 2,257 | | | | | | 5,270 | | |
Provision for expected credit losses
|
| | | | 60 | | | | | | 3,015 | | | | | | 2,024 | | |
Write-off
|
| | | | — | | | | | | (2) | | | | | | — | | |
Balance at end of year
|
| | | | 2,257 | | | | | | 5,270 | | | | | | 7,294 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Raw materials
|
| | | | 28,305 | | | | | | 61,609 | | | | | | 123,940 | | |
Work-in-process
|
| | | | 36,236 | | | | | | 81,104 | | | | | | 91,898 | | |
Finished goods
|
| | | | 5,702 | | | | | | 7,212 | | | | | | 160,406 | | |
Inventories | | | | | 70,243 | | | | | | 149,925 | | | | | | 376,244 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Advances to suppliers
|
| | | | 9,400 | | | | | | 18,307 | | | | | | 53,666 | | |
Value-added tax recoverable
|
| | | | 8,662 | | | | | | 5,937 | | | | | | 9,360 | | |
Prepaid expenses
|
| | | | 6,112 | | | | | | 8,295 | | | | | | 9,123 | | |
Deposits
|
| | | | 7,214 | | | | | | 7,024 | | | | | | 8,941 | | |
Others
|
| | | | 447 | | | | | | 1,095 | | | | | | 8,029 | | |
Total | | | | | 31,835 | | | | | | 40,658 | | | | | | 89,119 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Cost
|
| | | | | | | | | | | | | | | | | | |
Electronic equipment
|
| | | | 23,179 | | | | | | 29,651 | | | | | | 46,856 | | |
Leasehold improvements
|
| | | | 20,645 | | | | | | 32,488 | | | | | | 48,901 | | |
Machinery and equipment
|
| | | | 14,682 | | | | | | 11,602 | | | | | | 12,622 | | |
Furniture and fixture
|
| | | | 1,869 | | | | | | 4,452 | | | | | | 32,599 | | |
Transportation vehicles
|
| | | | 382 | | | | | | 382 | | | | | | 2,003 | | |
Total cost
|
| | | | 60,757 | | | | | | 78,575 | | | | | | 142,981 | | |
Less: Accumulated depreciation
|
| | | | (13,348) | | | | | | (19,793) | | | | | | (39,810) | | |
Property and equipment, net
|
| | | | 47,409 | | | | | | 58,782 | | | | | | 103,171 | | |
Construction in progress
|
| | | | — | | | | | | 5,055 | | | | | | 218,456 | | |
Total | | | | | 47,409 | | | | | | 63,837 | | | | | | 321,627 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Shanghai Kunjie Phototonics Technology Co., Ltd
|
| | | | 1,990 | | | | | | 1,986 | | | | | | 1,902 | | |
Total | | | | | 1,990 | | | | | | 1,986 | | | | | | 1,902 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Software
|
| | | | 2,627 | | | | | | 11,080 | | | | | | 21,346 | | |
Technology
|
| | | | 8,044 | | | | | | 7,667 | | | | | | 8,178 | | |
Total cost
|
| | | | 10,671 | | | | | | 18,747 | | | | | | 29,524 | | |
Less: Accumulated amortization
|
| | | | (1,611) | | | | | | (4,487) | | | | | | (9,971) | | |
Intangible assets, net
|
| | | | 9,060 | | | | | | 14,260 | | | | | | 19,553 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Prepayments for purchase of property and equipment
|
| | | | 4,352 | | | | | | 9,810 | | | | | | 55,207 | | |
Demonstration fleet
|
| | | | 3,152 | | | | | | 7,252 | | | | | | 5,790 | | |
Long-term deposits
|
| | | | — | | | | | | — | | | | | | 6,909 | | |
Others
|
| | | | 2,246 | | | | | | 2,101 | | | | | | 2,053 | | |
Other non-current assets
|
| | | | 9,750 | | | | | | 19,163 | | | | | | 69,959 | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Salaries and welfare payables
|
| | | | 36,885 | | | | | | 63,365 | | | | | | 122,489 | | |
Advances from employee
|
| | | | — | | | | | | 6,290 | | | | | | 5,581 | | |
Payables for purchase of property and equipment
|
| | | | 3,919 | | | | | | 3,823 | | | | | | 114,446 | | |
VAT and other tax payables
|
| | | | 1,055 | | | | | | 1,490 | | | | | | 115,540 | | |
Accrued litigation settlement cost
|
| | | | 160,098 | | | | | | — | | | | | | — | | |
Other
|
| | | | 27,134 | | | | | | 16,927 | | | | | | 12,798 | | |
Total | | | | | 229,091 | | | | | | 91,895 | | | | | | 370,854 | | |
Series
|
| |
Issuance
Date |
| |
As
percent of equity at issuance date |
| |
Proceeds
from Issuance, net of issuance cost |
| |
January 1,
2019 Carrying Amount |
| |
Change in
redemption value |
| |
December 31,
2019 Carrying Amount |
| |
August 1,
2020 Carrying Amount |
| |
Upon
Completion of the 2020 Reorganization Amount |
| |
December 31,
2020 Carrying Amount |
| ||||||||||||||||||||||||
| | | | | | | | | | | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||||||||
Series A+
|
| |
March 2017
|
| | | | 10.9% | | | | | | 75,750 | | | | | | 86,827 | | | | | | 6,946 | | | | | | 93,773 | | | | | | 93,773 | | | | | | (93,773) | | | | | | — | | |
Series B
|
| |
November 2017
|
| | | | 10.9% | | | | | | 104,611 | | | | | | 115,412 | | | | | | 9,233 | | | | | | 124,645 | | | | | | 124,645 | | | | | | (124,645) | | | | | | — | | |
Series B+
|
| |
June 2018
|
| | | | 6.0% | | | | | | 96,316 | | | | | | 101,412 | | | | | | 8,113 | | | | | | 109,525 | | | | | | 109,525 | | | | | | (109,525) | | | | | | — | | |
Series C-1
|
| |
May 2019
|
| | | | 7.8% | | | | | | 261,635 | | | | | | — | | | | | | 11,868 | | | | | | 273,503 | | | | | | 273,503 | | | | | | (273,503) | | | | | | — | | |
Series C-2
|
| |
June 2019
|
| | | | 7.0% | | | | | | 254,052 | | | | | | — | | | | | | 11,008 | | | | | | 265,060 | | | | | | 265,060 | | | | | | (265,060) | | | | | | — | | |
Series C-3
|
| |
July 2019
|
| | | | 5.8% | | | | | | 224,054 | | | | | | — | | | | | | 8,079 | | | | | | 232,133 | | | | | | 232,133 | | | | | | (232,133) | | | | | | — | | |
Total
|
| | | | | | | | | | | | | 1,016,418 | | | | | | 303,651 | | | | | | 55,247 | | | | | | 1,098,639 | | | | | | 1,098,639 | | | | | | (1,098,639) | | | | | | — | | |
Series
|
| |
Number
of shares |
| |
Fair value
at the date of amendment |
| |
Change in
carrying value |
| |
Carrying
value at December 31, 2021 |
| ||||||||||||
| | | | | | | | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Series A+ | | | | | 3,029,522 | | | | | | 284,480 | | | | | | — | | | | | | 284,480 | | |
Series B
|
| | | | 7,881,155 | | | | | | 742,091 | | | | | | — | | | | | | 742,091 | | |
Series B+
|
| | | | 3,957,617 | | | | | | 375,599 | | | | | | — | | | | | | 375,599 | | |
Series C-1 | | | | | 4,289,102 | | | | | | 416,021 | | | | | | — | | | | | | 416,021 | | |
Series C-2 | | | | | 6,176,311 | | | | | | 598,974 | | | | | | — | | | | | | 598,974 | | |
Series C-3 | | | | | 5,594,483 | | | | | | 542,489 | | | | | | — | | | | | | 542,489 | | |
Series C+ | | | | | 956,657 | | | | | | 96,763 | | | | | | — | | | | | | 96,763 | | |
Series D | | | | | 22,666,666 | | | | | | 2,404,316 | | | | | | 79,758 | | | | | | 2,484,074 | | |
Total | | | | | 54,551,513 | | | | | | 5,460,733 | | | | | | 79,758 | | | | | | 5,540,491 | | |
Series
|
| |
Redemption
Value at December 31, 2022 |
| |||
| | |
RMB
|
| |||
Series A+
|
| | | | 53,514 | | |
Series B
|
| | | | 157,050 | | |
Series B+
|
| | | | 110,451 | | |
Series C-1
|
| | | | 226,775 | | |
Series C-2
|
| | | | 324,984 | | |
Series C-3
|
| | | | 292,483 | | |
Series C+
|
| | | | 83,599 | | |
Series D
|
| | | | 2,682,749 | | |
Total | | | | | 3,931,605 | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Product revenues | | | | | | | | | | | | | | | | | | | |
Revenue from LiDAR products
|
| | | | 328,064 | | | | | | 346,068 | | | | | | 685,333 | | |
Revenue from gas detection products
|
| | | | 19,532 | | | | | | 68,599 | | | | | | 19,533 | | |
Other product revenues
|
| | | | 488 | | | | | | 847 | | | | | | 1,200 | | |
Service revenues | | | | | | | | | | | | | | | | | | | |
Engineering design, development and validation service
|
| | | | — | | | | | | — | | | | | | 14,026 | | |
Other service revenues
|
| | | | — | | | | | | — | | | | | | 676 | | |
Total | | | | | 348,084 | | | | | | 415,514 | | | | | | 720,768 | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Product revenue by geographic location | | | | | | | | | | | | | | | | | | | |
North America
|
| | | | 150,477 | | | | | | 201,194 | | | | | | 269,634 | | |
Mainland China
|
| | | | 125,704 | | | | | | 185,516 | | | | | | 352,981 | | |
Europe
|
| | | | 64,491 | | | | | | 16,589 | | | | | | 67,912 | | |
Other regions
|
| | | | 7,412 | | | | | | 12,215 | | | | | | 30,241 | | |
Net revenues
|
| | | | 348,084 | | | | | | 415,514 | | | | | | 720,768 | | |
| | |
Accounts
receivable |
| |
Contract
assets |
| |
Contract
liabilities |
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Opening Balance as of January 1, 2019
|
| | | | 47,846 | | | | | | — | | | | | | 3,772 | | |
(Decrease)/increase, net
|
| | | | (11,335) | | | | |
|
—
|
| | | | | 8,071 | | |
Ending Balance as of December 31, 2019
|
| | | | 36,511 | | | | | | — | | | | | | 11,843 | | |
Increase/(decrease), net
|
| | | | 19,808 | | | | | | 38,337 | | | | | | (2,486) | | |
Ending Balance as of December 31, 2020
|
| | | | 56,319 | | | | | | 38,337 | | | | | | 9,357 | | |
Increase, net
|
| | | | 29,502 | | | | | | 108,200 | | | | | | 113,246 | | |
Ending Balance as of December 31, 2021
|
| | | | 85,821 | | | | | | 146,537 | | | | | | 122,603 | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Current tax expenses
|
| | | | 1,255 | | | | | | — | | | | | | — | | |
Over-provision in prior year
|
| | | | — | | | | | | (125) | | | | | | (1,057) | | |
Deferred tax benefits
|
| | | | (325) | | | | | | (74) | | | | | | (58) | | |
Income tax expenses (benefits)
|
| | | | 930 | | | | | | (199) | | | | | | (1,115) | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Net loss before income tax from PRC operations
|
| | | | (119,205) | | | | | | (104,524) | | | | | | (92,498) | | |
Net loss before income tax from non-PRC operations
|
| | | | (89) | | | | | | (2,891) | | | | | | (153,444) | | |
Total net loss before income tax
|
| | | | (119,294) | | | | | | (107,415) | | | | | | (245,942) | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
Statutory income tax rate
|
| | | | 25.00% | | | | | | 25.00% | | | | | | 25.00% | | |
Effect of different tax rate of different jurisdictions
|
| | | | 0.02% | | | | | | 0.10% | | | | | | (4.39)% | | |
Non-deductible expenses
|
| | | | (1.61)% | | | | | | (0.30)% | | | | | | (17.98)% | | |
Effect of super deduction on R&D expenses
|
| | | | 23.39% | | | | | | 38.83% | | | | | | 34.83% | | |
Effect of change of valuation allowance
|
| | | | (47.58)% | | | | | | (63.56)% | | | | | | (37.44)% | | |
Over provision for prior years
|
| | | | — | | | | | | 0.12% | | | | | | 0.43% | | |
Income tax expenses
|
| | | | (0.78)% | | | | | | 0.19% | | | | | | 0.45% | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Deferred tax assets | | | | | | | | | | | | | | | | | | | |
– Net operating loss carry forwards
|
| | | | 11,935 | | | | | | 119,354 | | | | | | 220,480 | | |
– Deductible temporary differences
|
| | | | 45,728 | | | | | | 7,637 | | | | | | 11,562 | | |
– Deferred revenue
|
| | | | 10,322 | | | | | | 9,278 | | | | | | 9,443 | | |
Less: valuation allowance
|
| | | | (67,985) | | | | | | (136,269) | | | | | | (241,485) | | |
Net deferred tax assets
|
| | | | — | | | | | | — | | | | | | — | | |
Deferred tax liabilities | | | | | | | | | | | | | | | | | | | |
- Identifiable intangible assets from business combination.
|
| | | | 693 | | | | | | 578 | | | | | | 466 | | |
Total deferred tax liabilities
|
| | | | 693 | | | | | | 578 | | | | | | 466 | | |
| | |
For the Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Balance at beginning of the year
|
| | | | 11,478 | | | | | | 67,985 | | | | | | 136,269 | | |
Addition
|
| | | | 56,507 | | | | | | 68,284 | | | | | | 105,216 | | |
Total | | | | | 67,985 | | | | | | 136,269 | | | | | | 241,485 | | |
| | |
For the Year ended
December 31, 2019 |
|
Expected volatility
|
| |
51.00% – 53.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.73% – 2.94%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
3.00
|
|
Fair value of the underlying ordinary share of Shanghai Hesai
|
| |
RMB5.41 – 6.71
|
|
Fair value of option to subscribe 1 ordinary share of Shanghai Hesai
|
| |
RMB4.88 – 5.95
|
|
| | |
For the Year ended
December 31, 2020 |
|
Expected volatility
|
| |
49.00% – 52.00%
|
|
Risk-free interest rate (per annum)
|
| |
2.70% – 2.88%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
1.93 – 3.93
|
|
Fair value of the underlying ordinary share of Shanghai Hesai
|
| |
RMB20.33
|
|
Fair value of option to subscribe 1 ordinary share of Shanghai Hesai
|
| |
RMB17.16 – 17.41
|
|
| | |
For the Year ended
December 31, 2021 |
|
Expected volatility
|
| |
48.00% – 74.00%
|
|
Risk-free interest rate (per annum)
|
| |
0.97% – 1.55%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80%
|
|
Exercise multiples
|
| |
2.50
|
|
Contractual life
|
| |
7.00
|
|
Fair value of the underlying ordinary share
|
| |
US$14.10 – 18.42
|
|
Fair value of awards on grant date
|
| |
US$5.84 – 16.90
|
|
| | |
Number
of options |
| |
Weighted
average exercise price |
| |
Weighted
average grant date fair value |
| |
Weighted
average remaining contract life |
| |
Aggregate
intrinsic value |
| |||||||||||||||
| | | | | | | | |
RMB
|
| |
RMB
|
| |
Years
|
| |
RMB
|
| ||||||||||||
Outstanding at January 1, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Granted (the 2017 Replacement and the 2020 Replacement)
|
| | | | 5,419,677 | | | | | | 3.87 | | | | | | 22.83 | | | | | | | | | | | | | | |
Granted (the New Grant)
|
| | | | 4,286,828 | | | | | | 15.25 | | | | | | 102.74 | | | | | | | | | | | | | | |
Forfeited
|
| | | | 220,831 | | | | | | 5.96 | | | | | | | | | | | | | | | | | | | | |
Cancelled
|
| | | | 312,051 | | | | | | 0.90 | | | | | | | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2021
|
| | | | 9,173,623 | | | | | | 9.23 | | | | | | 56.58 | | | | | | 6.32 | | | | | | 1,005,549 | | |
Vested and expected to vest as of December 31,
2021 |
| | | | 4,255,117 | | | | | | 15.03 | | | | | | 99.26 | | | | | | 6.73 | | | | | | 441,726 | | |
Exercisable as of December 31, 2021
|
| | | | 750,000 | | | | | | 6.69 | | | | | | 97.30 | | | | | | 6.55 | | | | | | 84,111 | | |
Name of the related parties
|
| |
Relationship
|
|
Mr. Kai Sun | | | Founding Shareholders | |
Mr. Yifan Li | | | Founding Shareholders | |
Mr. Shaoqing Xiang | | | Founding Shareholders | |
Mr. Minglie Hu | | | Shareholder | |
Mr. Min Ai | | | Shareholder | |
Shanghai Kunjie Phototonics Technology Co., Ltd.
|
| | An equity method investee of the Group | |
Shanghai Leyi Technology L.P. | | | An affiliate of the shareholder of the Group | |
Robert Bosch Kft. | | | An affiliate of the shareholder of the Group | |
Robert Bosch Ltd. | | | An affiliate of the shareholder of the Group | |
Robert Bosch France | | | An affiliate of the shareholder of the Group | |
Name of the related parties
|
| |
Relationship
|
|
Bosch Automotive Products (Suzhou) Co., Ltd. | | | An affiliate of the shareholder of the Group | |
Baidu (China) Co., Ltd. (Note) | | | An affiliate of the shareholder of the Group | |
Baidu USA LLC (Note) | | | An affiliate of the shareholder of the Group | |
Beijing Baidu Netcom Technology Co., Ltd. (Note)
|
| | An affiliate of the shareholder of the Group | |
Apollo Intelligent Transportation Technology (Guangzhou) Co., Ltd. (Note) | | | An affiliate of the shareholder of the Group | |
Baidu Smart Travel Information Technology (Chongqing) Co., Ltd. (Note) | | | An affiliate of the shareholder of the Group | |
Apollo Intelligent Transportation Technology (Hefei) Co., Ltd. (Note) | | | An affiliate of the shareholder of the Group | |
Luobo Yunli (Beijing) Technology Co., Ltd. (Note)
|
| | An affiliate of the shareholder of the Group | |
Apollo Intelligent Transportation Technology (Dalian) Co., Ltd. (Note) | | | An affiliate of the shareholder of the Group | |
Apollo Intelligent Technology (Beijing) Co., Ltd. (Note) | | | An affiliate of the shareholder of the Group | |
Apollo Intelligent Connection (Beijing) Co., Ltd. (Note) | | | An affiliate of the shareholder of the Group | |
| | |
For year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Net revenues | | | | | | | | | | | | | | | | | | | |
Affiliates of the shareholders of the Group
|
| | | | 47,852 | | | | | | 41,765 | | | | | | 15,655 | | |
Total | | | | | 47,852 | | | | | | 41,765 | | | | | | 15,655 | | |
| | |
For year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Research and development expenses | | | | | | | | | | | | | | | | | | | |
An equity method investee of the Group
|
| | | | 485 | | | | | | 900 | | | | | | — | | |
Total | | | | | 485 | | | | | | 900 | | | | | | — | | |
| | |
For year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Purchases | | | | | | | | | | | | | | | | | | | |
An equity method investee of the Group
|
| | |
|
—
|
| | | | | 83 | | | | | | — | | |
Total | | | | | — | | | | | | 83 | | | | | | — | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Amounts due from related parties, net of allowance | | | | | | | | | | | | | | | | | | | |
Affiliates of the shareholder of the Group
|
| | | | 6,946 | | | | | | 28,088 | | | | |
|
—
|
| |
An equity method investee of the Group
|
| | | | 960 | | | | | | — | | | | |
|
—
|
| |
Total
|
| | |
|
7,906
|
| | | |
|
28,088
|
| | | | | — | | |
| | |
As of December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Amounts due to related parties | | | | | | | | | | | | | | | | | | | |
Founding Shareholders and certain shareholders (Note)
|
| | | | — | | | | | | — | | | | | | 307,498 | | |
Total
|
| | | | — | | | | | | — | | | | |
|
307,498
|
| |
| | |
For the year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Numerator | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | |
Deemed dividend
|
| | | | (55,247) | | | | | | — | | | | | | (2,211,330) | | |
Net loss attributable to ordinary shareholders of the Company
|
| | | | (175,471) | | | | | | (107,216) | | | | | | (2,456,157) | | |
Denominator | | | | | | | | | | | | | | | | | | | |
Weighted average number of ordinary shares outstanding-basic and diluted
|
| | | | 79,899,201 | | | | | | 89,895,471 | | | | | | 104,987,478 | | |
Basic and diluted net loss per share
|
| | | | (2.20) | | | | | | (1.19) | | | | | | (23.39) | | |
| | |
For the year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
Number
|
| |
Number
|
| |
Number
|
| |||||||||
Shares issuable upon exercise of share options
|
| | | | 4,176,093 | | | | | | 5,490,261 | | | | | | 9,173,623 | | |
Total
|
| | | | 4,176,093 | | | | | | 5,490,261 | | | | | | 9,173,623 | | |
| | |
Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
LiDAR segment | | | | | | | | | | | | | | | | | | | |
LiDAR product revenues
|
| | | | 328,552 | | | | | | 346,915 | | | | | | 701,235 | | |
Cost of Revenues
|
| | | | 97,358 | | | | | | 155,986 | | | | | | 330,769 | | |
Segment profit
|
| | | | 231,194 | | | | | | 190,929 | | | | | | 370,466 | | |
Gas detection segment | | | | | | | | | | | | | | | | | | | |
Gas detection product revenues
|
| | | | 19,532 | | | | | | 68,599 | | | | | | 19,533 | | |
Cost of products sold
|
| | | | 6,019 | | | | | | 20,614 | | | | | | 8,203 | | |
Segment profit
|
| | | | 13,513 | | | | | | 47,985 | | | | | | 11,330 | | |
Total segment profit
|
| | | | 244,707 | | | | | | 238,914 | | | | | | 381,796 | | |
| | |
Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Total profit for reportable segments
|
| | | | 244,707 | | | | | | 238,914 | | | | | | 381,796 | | |
Unallocated amounts* | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (38,740) | | | | | | (49,904) | | | | | | (69,266) | | |
General and administrative expenses
|
| | | | (55,112) | | | | | | (76,553) | | | | | | (236,713) | | |
Research and development expenses
|
| | | | (149,817) | | | | | | (229,653) | | | | | | (368,435) | | |
Litigation settlement expense
|
| | | | (160,098) | | | | | | — | | | | | | — | | |
Other operating income, net
|
| | | | 11,009 | | | | | | 15,384 | | | | | | 27,333 | | |
Interest income
|
| | | | 19,107 | | | | | | 20,925 | | | | | | 32,584 | | |
Foreign exchange gain (loss), net
|
| | | | 9,619 | | | | | | (25,696) | | | | | | (13,275) | | |
Other income (loss), net
|
| | | | 31 | | | | | | (832) | | | | | | 34 | | |
Loss before income tax
|
| | | | (119,294) | | | | | | (107,415) | | | | | | (245,942) | | |
| | |
Year ended December 31,
|
| |||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Total depreciation of property and equipment, net | | | | | | | | | | | | | | | | | | | |
LiDAR segment
|
| | | | 1,364 | | | | | | 2,528 | | | | | | 3,021 | | |
Gas detection segment
|
| | | | 81 | | | | | | 500 | | | | | | 84 | | |
| | | | | 1,445 | | | | | | 3,028 | | | | | | 3,105 | | |
| | |
As of December 31,
2021 |
| |||
| | |
RMB
|
| |||
2022
|
| | | | 30,429 | | |
2023
|
| | | | 26,071 | | |
2024
|
| | | | 4,536 | | |
2025
|
| | | | 3,096 | | |
Total | | | | | 64,132 | | |
| | |
As of December 31,
2021 |
| |||
| | |
RMB
|
| |||
2022
|
| | | | 249,784 | | |
2023
|
| | | | — | | |
2024
|
| | | | 11,522 | | |
Total | | | | | 261,306 | | |
| | |
As of December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
(Note 2)
|
| |||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | — | | | | | | — | | | | | | 36,160 | | | | | | 5,083 | | |
Prepayments and other current assets
|
| | | | — | | | | | | — | | | | | | 496 | | | | | | 70 | | |
Investment in and amount due from subsidiaries
|
| | | | 929,211 | | | | | | 1,137,193 | | | | | | 3,037,606 | | | | | | 427,020 | | |
TOTAL ASSETS
|
| | | | 929,211 | | | | | | 1,137,193 | | | | | | 3,074,262 | | | | | | 432,173 | | |
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Amounts due to subsidiaries
|
| | | | — | | | | | | — | | | | | | 272 | | | | | | 38 | | |
Accrued expenses and other current liabilities
|
| | | | — | | | | | | — | | | | | | 24,169 | | | | | | 3,398 | | |
TOTAL LIABILITIES
|
| | | | — | | | | | | — | | | | | | 24,441 | | | | | | 3,436 | | |
MEZZANINE EQUITY | | | | | | ||||||||||||||||||||
Redeemable shares (US$0.0001 par value, 54,551,513 shares issued and outstanding as of December 31, 2021)
|
| | | | — | | | | | | — | | | | | | 5,540,491 | | | | | | 778,870 | | |
TOTAL MEZZANINE EQUITY
|
| | | | — | | | | | | — | | | | |
|
5,540,491
|
| | | |
|
778,870
|
| |
SHAREHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | | |||||
Class A Ordinary shares (US$0.0001 par value, nil share
authorized, issued and outstanding as of December 31, 2019 and 2020; 35,000,000 shares authorized, 30,033,379 shares issued and outstanding as of December 31, 2021) |
| | | | — | | | | | | — | | | | | | 19 | | | | | | 3 | | |
Class B Ordinary shares (US$0.0001 par value, nil share
authorized, issued and outstanding as of December 31, 2019 and 2020; 150,000,000 shares authorized, 30,949,701 shares issued and outstanding as of December 31, 2021) |
| | | | — | | | | | | — | | | | | | 20 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | 1,098,638 | | | | | | 1,193,857 | | | | | | — | | | | | | — | | |
Subscription receivables
|
| | | | — | | | | | | — | | | | | | (310,227) | | | | | | (43,611) | | |
Accumulated other comprehensive income (loss)
|
| | | | 1,332 | | | | | | (618) | | | | | | 8,465 | | | | | | 1,190 | | |
Accumulated deficit
|
| | | | (170,759) | | | | | | (56,046) | | | | | | (2,188,947) | | | | | | (307,717) | | |
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)
|
| | | | 929,211 | | | | | | 1,137,193 | | | | | | (2,490,670) | | | | | | (350,133) | | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT)
|
| | | | 929,211 | | | | | | 1,137,193 | | | | | | 3,074,262 | | | | | | 432,173 | | |
| | |
As of December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
(Note 2)
|
| |||
Net revenues
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Cost of revenues
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Sales and marketing expenses
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
General and administrative expenses
|
| | | | — | | | | | | — | | | | | | (146,838) | | | | | | (20,642) | | |
Research and development expenses
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Foreign exchange loss
|
| | | | — | | | | | | — | | | | | | (2,324) | | | | | | (327) | | |
Other income, net
|
| | | | — | | | | | | — | | | | | | 34 | | | | | | 5 | | |
Equity in deficit of subsidiaries
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (95,699) | | | | | | (13,453) | | |
Net Loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | |
Deemed dividend
|
| | | | — | | | | | | — | | | | | | (2,211,330) | | | | | | (310,864) | | |
Net loss attributable to ordinary shareholders of the Company
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (2,456,157) | | | | | | (345,281) | | |
Net Loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | |
Foreign currency translation adjustments
|
| | | | 1,332 | | | | | | (1,950) | | | | | | 9,083 | | | | | | 1,277 | | |
Comprehensive loss, net of tax of nil
|
| | | | (118,892) | | | | | | (109,166) | | | | | | (235,744) | | | | | | (33,140) | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
US$
|
| ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
(Note 2)
|
| |||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | | (120,224) | | | | | | (107,216) | | | | | | (244,827) | | | | | | (34,417) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Loss from equity in earnings of subsidiaries
|
| | | | 120,224 | | | | | | 107,216 | | | | | | 95,699 | | | | | | 13,453 | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | 35,056 | | | | | | 4,928 | | |
Foreign exchange gain, net
|
| | | | — | | | | | | — | | | | | | 2,324 | | | | | | 327 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Prepayments and other current assets
|
| | | | — | | | | | | — | | | | | | (496) | | | | | | (70) | | |
Amounts due from related parties
|
| | | | — | | | | | | — | | | | | | (255) | | | | | | (36) | | |
Accrued expenses and other current liabilities
|
| | | | — | | | | | | — | | | | | | 24,746 | | | | | | 3,479 | | |
Net cash used in operating activities
|
| | | | — | | | | | | — | | | | |
|
(87,753)
|
| | | |
|
(12,336)
|
| |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Investments in subsidiaries
|
| | | | — | | | | | | — | | | | | | (2,787,572) | | | | | | (391,871) | | |
Net cash (used in) provided by investing activities
|
| | | | — | | | | | | — | | | | |
|
(2,787,572)
|
| | | |
|
(391,871)
|
| |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash contribution from shareholders in connection with the 2021 Reorganization
|
| | | | — | | | | |
|
—
|
| | | | | 507,620 | | | | | | 71,360 | | |
Proceeds from issuance of convertible loans
|
| | | | — | | | | | | — | | | | | | 1,950,338 | | | | | | 274,174 | | |
Proceeds from issuance of ordinary shares
|
| | | | — | | | | | | — | | | | | | 453,978 | | | | | | 63,819 | | |
Net cash provided by financing activities
|
| | | | — | | | | | | — | | | | |
|
2,911,936
|
| | | |
|
409,353
|
| |
Net increase in cash and cash equivalents
|
| | | | — | | | | |
|
—
|
| | | | | 36,611 | | | | | | 5,147 | | |
Cash and cash equivalents, beginning of the year
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Effect of foreign exchange rate changes on cash and cash equivalents
|
| | | | — | | | | | | — | | | | | | (451) | | | | | | (63) | | |
Cash and cash equivalents, end of the year
|
| | | | — | | | | | | — | | | | |
|
36,160
|
| | | |
|
5,083
|
| |
Supplemental disclosure of non-cash financing activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Conversion of convertible loans
|
| | | | — | | | | | | — | | | | | | 1,950,338 | | | | | | 274,174 | | |
Deemed dividend
|
| | | | — | | | | | | — | | | | | | 2,211,330 | | | | | | 310,864 | | |
| | |
As of December 31,
2021 |
| |
As of September 30,
2022 |
| ||||||||||||
| | |
RMB
|
| |
RMB
|
| |
US$
(Note 2) |
| |||||||||
ASSETS | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 449,352 | | | | | | 750,561 | | | | | | 105,512 | | |
Short-term investments
|
| | | | 2,342,743 | | | | | | 1,317,564 | | | | | | 185,220 | | |
Accounts receivable (net of allowance for doubtful accounts of RMB7,294 and RMB7,254 as of December 31, 2021 and September 30, 2022, respectively)
|
| | | | 85,821 | | | | | | 362,944 | | | | | | 51,022 | | |
Contract assets (net of allowance for doubtful accounts of RMB1,223 and nil as of
December 31, 2021 and September 30, 2022, respectively) |
| | | | 146,537 | | | | | | — | | | | | | — | | |
Amounts due from related parties (net of allowance for doubtful accounts of nil and nil as of December 31, 2021 and September 30, 2022, respectively)
|
| | | | 3,543 | | | | | | 5,498 | | | | | | 773 | | |
Inventories
|
| | | | 376,244 | | | | | | 567,887 | | | | | | 79,832 | | |
Prepayments and other current assets
|
| | | | 89,119 | | | | | | 111,005 | | | | | | 15,605 | | |
Total current assets
|
| | | | 3,493,359 | | | | | | 3,115,459 | | | | | | 437,964 | | |
Property and equipment, net
|
| | | | 321,627 | | | | | | 466,937 | | | | | | 65,641 | | |
Long-term investments
|
| | | | 1,902 | | | | | | 31,870 | | | | | | 4,480 | | |
Intangible assets, net
|
| | | | 19,553 | | | | | | 20,162 | | | | | | 2,834 | | |
Land-use rights, net
|
| | | | 42,470 | | | | | | 41,822 | | | | | | 5,879 | | |
Goodwill
|
| | | | 3,499 | | | | | | 3,897 | | | | | | 548 | | |
Right-of-use assets
|
| | | | — | | | | | | 52,903 | | | | | | 7,437 | | |
Other non-current assets
|
| | | | 69,959 | | | | | | 70,252 | | | | | | 9,876 | | |
Total non-current assets
|
| | | | 459,010 | | | | | | 687,843 | | | | | | 96,695 | | |
TOTAL ASSETS
|
| | | | 3,952,369 | | | | | | 3,803,302 | | | | | | 534,659 | | |
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | 77,271 | | | | | | 181,380 | | | | | | 25,498 | | |
Contract liabilities
|
| | | | 122,603 | | | | | | 36,895 | | | | | | 5,187 | | |
Amounts due to related parties
|
| | | | 307,498 | | | | | | 340,433 | | | | | | 47,855 | | |
Accrued warranty liability
|
| | | | 13,932 | | | | | | 18,680 | | | | | | 2,627 | | |
Accrued expenses and other current liabilities
|
| | | | 370,854 | | | | | | 247,358 | | | | | | 34,773 | | |
Total current liabilities
|
| | | | 892,158 | | | | | | 824,746 | | | | | | 115,940 | | |
Deferred tax liabilities
|
| | | | 466 | | | | | | 471 | | | | | | 66 | | |
Lease liabilities
|
| | | | — | | | | | | 17,337 | | | | | | 2,437 | | |
Other non-current liabilities
|
| | | | 9,924 | | | | | | 11,229 | | | | | | 1,578 | | |
Total non-current liabilities
|
| | | | 10,390 | | | | | | 29,037 | | | | | | 4,081 | | |
TOTAL LIABILITIES
|
| | | | 902,548 | | | | | | 853,783 | | | | | | 120,021 | | |
Commitments and contingencies (Note 16) | | | | | | | | | | | | | | | | | | | |
Mezzanine equity: | | | | | | | | | | | | | | | | | | | |
Redeemable shares (US$0.0001 par value, 54,551,513 shares issued and outstanding
as of December 31, 2021 and September 30, 2022) |
| | | | 5,540,491 | | | | | | 5,986,513 | | | | | | 841,571 | | |
Shareholders’ Deficit | | | | | | | | | | | | | | | | | | | |
Class A Ordinary shares (US$0.0001 par value, 35,000,000 shares authorized, 30,033,379 shares issued and outstanding as of December 31, 2021 and September 30, 2022)
|
| | | | 19 | | | | | | 19 | | | | | | 3 | | |
Class B Ordinary shares (US$0.0001 par value, 150,000,000 shares authorized, 30,949,701 shares issued and outstanding as of December 31, 2021 and September 30, 2022)
|
| | | | 20 | | | | | | 20 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | — | | | | | | — | | | | | | — | | |
Subscription receivables
|
| | | | (310,227) | | | | | | (310,227) | | | | | | (43,611) | | |
Accumulated other comprehensive income (loss)
|
| | | | 8,465 | | | | | | (6,298) | | | | | | (885) | | |
Accumulated deficit
|
| | | | (2,188,947) | | | | | | (2,720,508) | | | | | | (382,443) | | |
TOTAL SHAREHOLDERS’ DEFICIT
|
| | | | (2,490,670) | | | | | | (3,036,994) | | | | | | (426,933) | | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT
|
| | | | 3,952,369 | | | | | | 3,803,302 | | | | | | 534,659 | | |
| | |
Nine months ended September 30,
|
| |||||||||||||||
| | |
2021
|
| |
2022
|
| ||||||||||||
| | |
RMB
(As Restated) |
| |
RMB
|
| |
US$
(Note 2) |
| |||||||||
Net revenues (including related party revenues of RMB15,655 and nil for the nine months ended September 30, 2021 and 2022, respectively)
|
| | | | 459,442 | | | | | | 793,485 | | | | | | 111,546 | | |
Cost of revenues
|
| | | | (214,671) | | | | | | (444,339) | | | | | | (62,464) | | |
Gross profit
|
| | | | 244,771 | | | | | | 349,146 | | | | | | 49,082 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (48,072) | | | | | | (63,473) | | | | | | (8,924) | | |
General and administrative expenses
|
| | | | (185,184) | | | | | | (153,380) | | | | | | (21,562) | | |
Research and development expenses
|
| | | | (210,627) | | | | | | (376,362) | | | | | | (52,908) | | |
Other operating income, net
|
| | | | 18,741 | | | | | | 5,948 | | | | | | 836 | | |
Total operating expenses
|
| | | | (425,142) | | | | | | (587,267) | | | | | | (82,558) | | |
Loss from operations
|
| | | | (180,371) | | | | | | (238,121) | | | | | | (33,476) | | |
Interest income
|
| | | | 14,203 | | | | | | 49,284 | | | | | | 6,928 | | |
Foreign exchange (loss) gain, net
|
| | | | (9,805) | | | | | | 25,430 | | | | | | 3,575 | | |
Other income (loss), net
|
| | | | 62 | | | | | | (2,116) | | | | | | (297) | | |
Net loss before income tax
|
| | | | (175,911) | | | | | | (165,523) | | | | | | (23,270) | | |
Income tax benefit
|
| | | | 1,113 | | | | | | 44 | | | | | | 6 | | |
Net loss
|
| | | | (174,798) | | | | | | (165,479) | | | | | | (23,264) | | |
Deemed dividend
|
| | | | (2,206,731) | | | | | | (446,022) | | | | | | (62,701) | | |
Net loss attributable to ordinary shareholders of the Company
|
| | | | (2,381,529) | | | | | | (611,501) | | | | | | (85,965) | | |
Net loss per share: | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (23.48) | | | | | | (5.29) | | | | | | (0.74) | | |
Weighted average ordinary shares used in calculating net loss per
share: |
| | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | 101,433,139 | | | | | | 115,534,593 | | | | | | 115,534,593 | | |
Net loss
|
| | | | (174,798) | | | | | | (165,479) | | | | | | (23,264) | | |
Other comprehensive income (loss), net of tax of nil: | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | 16,391 | | | | | | (14,763) | | | | | | (2,075) | | |
Comprehensive loss, net of tax of nil
|
| | | | (158,407) | | | | | | (180,242) | | | | | | (25,339) | | |
| | |
Ordinary shares
Class A |
| |
Ordinary shares
Class B |
| |
Additional
paid-in capital |
| |
Subscription
receivables |
| |
Accumulated
deficit |
| |
Accumulated
other comprehensive (loss) income |
| |
Total
shareholders’ equity (deficit) |
| |||||||||||||||||||||||||||||||||
| | |
Number
|
| |
RMB
|
| |
Number
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||||||||||||||
Balance as of January 1, 2021
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,193,857 | | | | | | — | | | | | | (56,046) | | | | | | (618) | | | | | | 1,137,193 | | |
Net loss (As Restated)
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | | | (174,798) | | | | |
|
—
|
| | | | | (174,798) | | |
Foreign currency translation
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | | | 16,391 | | | | | | 16,391 | | |
Issuance of ordinary shares in connection with the 2021 Reorganization
|
| | | | 30,033,379 | | | | | | 19 | | | | | | 62,834,548 | | | | | | 40 | | | | | | (59) | | | | | | (312,120) | | | | |
|
—
|
| | | |
|
—
|
| | | | | (312,120) | | |
Reclassification of redeemable shares
(As Restated) |
| | |
|
—
|
| | | |
|
—
|
| | | | | (31,884,847) | | | | | | (20) | | | | | | (1,193,798) | | | | | | — | | | | | | (1,862,599) | | | | |
|
—
|
| | | | | (3,056,417) | | |
Share-based compensation
|
| | |
|
—
|
| | | |
|
—
|
| | | | | — | | | | | | — | | | | | | 23,558 | | | | | | — | | | | |
|
—
|
| | | |
|
—
|
| | | | | 23,558 | | |
Deemed dividend relating to change in redemption value of redeemable shares (As Restated)
|
| | |
|
—
|
| | | |
|
—
|
| | | | | — | | | | | | — | | | | | | (23,558) | | | | | | — | | | | | | (51,601) | | | | | | — | | | | | | (75,159) | | |
Balance as of September 30, 2021 (As Restated)
|
| | | | 30,033,379 | | | | | | 19 | | | | | | 30,949,701 | | | | | | 20 | | | | | | — | | | | | | (312,120) | | | | | | (2,145,044) | | | | | | 15,773 | | | | | | (2,441,352) | | |
Balance as of January 1, 2022
|
| | | | 30,033,379 | | | | | | 19 | | | | | | 30,949,701 | | | | | | 20 | | | | | | — | | | | | | (310,227) | | | | | | (2,188,947) | | | | | | 8,465 | | | | | | (2,490,670) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (165,479) | | | | | | — | | | | | | (165,479) | | |
Foreign currency translation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (14,763) | | | | | | (14,763) | | |
Share-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 79,940 | | | | | | — | | | | | | — | | | | | | — | | | | | | 79,940 | | |
Deemed dividend relating to change in redemption value of redeemable shares (Note 9)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (79,940) | | | | | | — | | | | | | (366,082) | | | | | | — | | | | | | (446,022) | | |
Balance as of September 30, 2022
|
| | | | 30,033,379 | | | | | | 19 | | | | | | 30,949,701 | | | | | | 20 | | | | | | — | | | | | | (310,227) | | | | | | (2,720,508) | | | | | | (6,298) | | | | | | (3,036,994) | | |
| | |
Nine months ended September 30,
|
| |||||||||||||||
| | |
2021
|
| |
2022
|
| ||||||||||||
| | |
RMB
(As Restated) |
| |
RMB
|
| |
US$
(Note 2) |
| |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | | (174,798) | | | | | | (165,479) | | | | | | (23,264) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 20,543 | | | | | | 38,665 | | | | | | 5,435 | | |
Share-based compensation
|
| | | | 23,558 | | | | | | 80,140 | | | | | | 11,267 | | |
Allowance for doubtful accounts
|
| | | | 2,237 | | | | | | (1,263) | | | | | | (178) | | |
Loss from disposal of property and equipment
|
| | | | 64 | | | | | | 298 | | | | | | 42 | | |
Share of loss in equity method investee
|
| | | | 74 | | | | | | 32 | | | | | | 4 | | |
Fair value change of short-term investments
|
| | | | — | | | | | | 3,179 | | | | | | 447 | | |
Foreign exchange gain, net
|
| | | | (1,047) | | | | | | (15,710) | | | | | | (2,208) | | |
Non-cash lease expense
|
| | | | — | | | | | | 21,973 | | | | | | 3,089 | | |
Inventory write-down
|
| | | | 11,546 | | | | | | 19,421 | | | | | | 2,730 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | | | | | | | |
Accounts receivable
|
| | | | (23,686) | | | | | | (276,378) | | | | | | (38,853) | | |
Contract assets
|
| | | | (40,669) | | | | | | 147,761 | | | | | | 20,772 | | |
Inventories
|
| | | | (189,212) | | | | | | (205,388) | | | | | | (28,873) | | |
Prepayments and other current assets
|
| | | | (61,836) | | | | | | (21,887) | | | | | | (3,077) | | |
Amounts due from related parties
|
| | | | 24,570 | | | | | | (2,002) | | | | | | (281) | | |
Non-current assets
|
| | | | (1,678) | | | | | | (2,519) | | | | | | (354) | | |
Contract liabilities
|
| | | | 142,913 | | | | | | (86,032) | | | | | | (12,094) | | |
Deferred tax liabilities
|
| | | | (56) | | | | | | 5 | | | | | | 1 | | |
Accounts payable
|
| | | | 34,777 | | | | | | 103,593 | | | | | | 14,563 | | |
Income tax payable
|
| | | | (9) | | | | | | — | | | | | | — | | |
Accrued expenses and other current liabilities
|
| | | | 106,788 | | | | | | (122,628) | | | | | | (17,238) | | |
Operating leases liabilities
|
| | | | — | | | | | | (22,553) | | | | | | (3,171) | | |
Non-current liabilities
|
| | | | 11,831 | | | | | | 1,105 | | | | | | 155 | | |
Net cash used in operating activities
|
| | | | (114,090) | | | | | | (505,667) | | | | | | (71,086) | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | |
Purchases of short-term investments
|
| | | | (2,441,942) | | | | | | (4,271,000) | | | | | | (600,408) | | |
Maturity of short-term investments
|
| | | | 1,460,287 | | | | | | 5,293,000 | | | | | | 744,078 | | |
Purchases of property and equipment
|
| | | | (139,274) | | | | | | (217,716) | | | | | | (30,606) | | |
Purchases of land-use rights
|
| | | | (43,188) | | | | | | — | | | | | | — | | |
Purchases of intangible assets
|
| | | | (4,706) | | | | | | (4,677) | | | | | | (657) | | |
Purchases of equity securities
|
| | | | — | | | | | | (30,000) | | | | | | (4,217) | | |
Net cash (used in) provided by investing activities
|
| | | | (1,168,823) | | | | | | 769,607 | | | | | | 108,190 | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | |
Cash distribution to shareholders of Shanghai Hesai in connection with the 2021 Reorganization
|
| | | | (507,062) | | | | | | — | | | | | | — | | |
Cash contribution from Shareholders in connection with the 2021 Reorganization
|
| | | | 507,062 | | | | | | — | | | | | | — | | |
Proceeds from issuance of convertible loans
|
| | | | 1,950,338 | | | | | | — | | | | | | — | | |
Return of advance due to forfeiture of share-based awards
|
| | | | (255) | | | | | | — | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 1,950,083 | | | | | | — | | | | | | — | | |
Net increase in cash and cash equivalents
|
| | | | 667,170 | | | | | | 263,940 | | | | | | 37,104 | | |
Cash and cash equivalents, beginning of the period
|
| | | | 256,688 | | | | | | 449,352 | | | | | | 63,169 | | |
Effect of foreign exchange rate changes on cash and cash equivalents
|
| | | | 22,114 | | | | | | 37,269 | | | | | | 5,239 | | |
Cash and cash equivalents, end of the period
|
| | | | 945,972 | | | | | | 750,561 | | | | | | 105,512 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | | | | | | | |
Income taxes paid (refund received)
|
| | | | 210 | | | | | | (1,230) | | | | | | (173) | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | | | | | | | | |
Accrued purchases of property and equipment
|
| | | | 2,059 | | | | | | 74,401 | | | | | | 10,459 | | |
Conversion of convertible loans to redeemable shares
|
| | | | 1,950,338 | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | |
Fair value measurements at reporting date using
|
| |||||||||||||||
| | |
As of December 31, 2021
|
| |
Quoted prices in
active markets for identical assets (Level 1) |
| |
Significant
other observable inputs (Level 2) |
| |
Significant
unobservable inputs (Level 3) |
| ||||||||||||||||||
Description
|
| |
Carrying
value |
| |
Fair
value |
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||
Short-term investments
|
| | | | 2,342,743 | | | | | | 2,342,743 | | | | | | — | | | | | | 2,342,743 | | | | | | — | | |
Total | | | | | 2,342,743 | | | | | | 2,342,743 | | | | | | — | | | | | | 2,342,743 | | | | | | — | | |
| | | | | | | | | | | | | | |
Fair value measurements at reporting date using
|
| |||||||||||||||
| | |
As of September 30, 2022
|
| |
Quoted prices in
active markets for identical assets (Level 1) |
| |
Significant
other observable inputs (Level 2) |
| |
Significant
unobservable inputs (Level 3) |
| ||||||||||||||||||
Description
|
| |
Carrying
value |
| |
Fair
value |
| ||||||||||||||||||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||||||||
Short-term investments
|
| | | | 1,317,564 | | | | | | 1,317,564 | | | | | | — | | | | | | 1,317,564 | | | | | | — | | |
Total
|
| | |
|
1,317,564
|
| | | |
|
1,317,564
|
| | | | | — | | | | |
|
1,317,564
|
| | | | | — | | |
| | |
December 31, 2021
|
| |
January 1, 2022
|
| ||||||||||||
| | |
As reported
|
| |
Effect of the
adoption of ASC 842 |
| |
After adoption of
ASC 842 |
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
ASSETS | | | | | | | | | | | | | | | | | | | |
Right-of-use assets
|
| | | | — | | | | | | 36,030 | | | | | | 36,030 | | |
TOTAL ASSETS
|
| | | | — | | | | | | 36,030 | | | | | | 36,030 | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | |
Accrued expenses and other current liabilities
|
| | | | 569 | | | | | | 12,566 | | | | | | 13,135 | | |
Lease liabilities, non-current
|
| | | | — | | | | | | 23,464 | | | | | | 23,464 | | |
TOTAL LIABILITIES
|
| | | | 569 | | | | | | 36,030 | | | | | | 36,599 | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
| | | | 569 | | | | | | 36,030 | | | | | | 36,599 | | |
| | |
For the year ended
December 31, |
| |
For the nine months
ended September 30, |
| ||||||
| | |
2021
|
| |
2022
|
| ||||||
| | | | | RMB | | | | | | RMB | | |
Balance as of the beginning of the year/period
|
| | | | 10,042 | | | | | | 13,932 | | |
Warranty provision, net
|
| | | | 10,766 | | | | | | 6,324 | | |
Consumption
|
| | | | (6,876) | | | | | | (1,576) | | |
Balance as of the end of the year/period
|
| | | | 13,932 | | | | | | 18,680 | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
Customer J
|
| | | | * | | | | | | 29.5% | | |
Customer B
|
| | | | 64.4% | | | | | | 25.2% | | |
| | |
For the nine months ended
September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
Supplier A
|
| | | | 14.6% | | | | | | 10.3% | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Structured bank financial products
|
| | | | 2,342,743 | | | | | | 1,317,564 | | |
Total short-term investments
|
| | | | 2,342,743 | | | | | | 1,317,564 | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Accounts receivable
|
| | | | 93,115 | | | | | | 370,198 | | |
Less: allowance for expected credit losses
|
| | | | (7,294) | | | | | | (7,254) | | |
Total accounts receivable, net
|
| | | | 85,821 | | | | | | 362,944 | | |
| | |
For the year
ended December 31, 2021 |
| |
For the
nine months ended September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Balance at beginning of year/period
|
| | | | 5,270 | | | | | | 7,294 | | |
Provision (reverse) for expected credit losses
|
| | | | 2,024 | | | | | | (40) | | |
Write-off
|
| | | | — | | | | | | — | | |
Balance at end of year/period
|
| | | | 7,294 | | | | | | 7,254 | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Raw materials
|
| | | | 123,940 | | | | | | 309,800 | | |
Work-in-process
|
| | | | 91,898 | | | | | | 150,581 | | |
Finished goods
|
| | | | 160,406 | | | | | | 107,506 | | |
Total inventories
|
| | | | 376,244 | | | | | | 567,887 | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Cost | | | | | | | | | | | | | |
Electronic equipment
|
| | | | 46,856 | | | | | | 70,964 | | |
Leasehold improvements
|
| | | | 48,901 | | | | | | 59,180 | | |
Machinery and equipment
|
| | | | 12,622 | | | | | | 118,537 | | |
Furniture and fixture
|
| | | | 32,599 | | | | | | 49,724 | | |
Transportation vehicles
|
| | | | 2,003 | | | | | | 2,374 | | |
Total cost
|
| | | | 142,981 | | | | | | 300,779 | | |
Less: Accumulated depreciation
|
| | | | (39,810) | | | | | | (71,706) | | |
Property and equipment, net
|
| | | | 103,171 | | | | | | 229,073 | | |
Construction in progress
|
| | | | 218,456 | | | | | | 237,864 | | |
Total | | | | | 321,627 | | | | | | 466,937 | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Investments in equity securities
|
| | | | — | | | | | | 30,000 | | |
Investments in equity method investee
|
| | | | 1,902 | | | | | | 1,870 | | |
Total | | | | | 1,902 | | | | | | 31,870 | | |
| | |
As of
December 31, 2021 |
| |||
| | |
RMB
|
| |||
2022
|
| | | | 30,429 | | |
2023
|
| | | | 26,071 | | |
2024
|
| | | | 4,536 | | |
2025
|
| | | | 3,096 | | |
Total lease payment
|
| | | | 64,132 | | |
| | |
As of
September 30, 2022 |
| |||
| | |
RMB
|
| |||
Remaining of 2022
|
| | | | 9,301 | | |
2023
|
| | | | 34,914 | | |
2024
|
| | | | 7,219 | | |
2025
|
| | | | 3,346 | | |
Total lease payment
|
| | | | 54,780 | | |
Less: imputed interest
|
| | | | (1,838) | | |
Present value of minimum operating lease payments
|
| | | | 52,942 | | |
Less: Current operating lease liabilities
|
| | | | (35,605) | | |
Long-term operating lease liabilities
|
| | | | 17,337 | | |
Series
|
| |
Number of
shares |
| |
Carrying value at
the date of re-classification |
| |
Change in
carrying value |
| |
Carrying value at
December 31, 2021 |
| ||||||||||||
| | | | | | | | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Series A+
|
| | | | 3,029,522 | | | | | | 284,480 | | | | | | — | | | | | | 284,480 | | |
Series B
|
| | | | 7,881,155 | | | | | | 742,091 | | | | | | — | | | | | | 742,091 | | |
Series B+
|
| | | | 3,957,617 | | | | | | 375,599 | | | | | | — | | | | | | 375,599 | | |
Series C-1
|
| | | | 4,289,102 | | | | | | 416,021 | | | | | | — | | | | | | 416,021 | | |
Series C-2
|
| | | | 6,176,311 | | | | | | 598,974 | | | | | | — | | | | | | 598,974 | | |
Series C-3
|
| | | | 5,594,483 | | | | | | 542,489 | | | | | | — | | | | | | 542,489 | | |
Series C+
|
| | | | 956,657 | | | | | | 96,763 | | | | | | — | | | | | | 96,763 | | |
Series D
|
| | | | 22,666,666 | | | | | | 2,404,316 | | | | | | 79,758 | | | | | | 2,484,074 | | |
Total | | | | | 54,551,513 | | | | | | 5,460,733 | | | | | | 79,758 | | | | | | 5,540,491 | | |
Series
|
| |
Number of
shares |
| |
Carrying value at
December 31, 2021 |
| |
Change in
carrying value |
| |
Carrying value at
September 30, 2022 |
| ||||||||||||
| | | | | | | | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Series A+
|
| | | | 3,029,522 | | | | | | 284,480 | | | | | | — | | | | | | 284,480 | | |
Series B
|
| | | | 7,881,155 | | | | | | 742,091 | | | | | | — | | | | | | 742,091 | | |
Series B+
|
| | | | 3,957,617 | | | | | | 375,599 | | | | | | — | | | | | | 375,599 | | |
Series C-1
|
| | | | 4,289,102 | | | | | | 416,021 | | | | | | — | | | | | | 416,021 | | |
Series C-2
|
| | | | 6,176,311 | | | | | | 598,974 | | | | | | — | | | | | | 598,974 | | |
Series C-3
|
| | | | 5,594,483 | | | | | | 542,489 | | | | | | — | | | | | | 542,489 | | |
Series C+
|
| | | | 956,657 | | | | | | 96,763 | | | | | | — | | | | | | 96,763 | | |
Series D
|
| | | | 22,666,666 | | | | | | 2,484,074 | | | | | | 446,022 | | | | | | 2,930,096 | | |
Total | | | | | 54,551,513 | | | | | | 5,540,491 | | | | | | 446,022 | | | | | | 5,986,513 | | |
Series
|
| |
Redemption value as of
December 31, 2022 |
| |||
| | |
RMB
|
| |||
Series A+
|
| | | | 53,514 | | |
Series B
|
| | | | 157,050 | | |
Series B+
|
| | | | 110,451 | | |
Series C-1
|
| | | | 226,775 | | |
Series C-2
|
| | | | 324,984 | | |
Series C-3
|
| | | | 292,483 | | |
Series C+
|
| | | | 83,599 | | |
Series D
|
| | | | 2,987,434 | | |
Total | | | | | 4,236,290 | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Salaries and welfare payables
|
| | | | 122,489 | | | | | | 91,756 | | |
Payables for purchase of property and equipment
|
| | | | 114,446 | | | | | | 74,401 | | |
Accrued expenses
|
| | | | 12,798 | | | | | | 34,888 | | |
Current portion of operating lease liabilities
|
| | | | — | | | | | | 35,605 | | |
Advances from employees
|
| | | | 5,581 | | | | | | 5,402 | | |
VAT and other tax payables
|
| | | | 115,540 | | | | | | 5,306 | | |
Total | | | | | 370,854 | | | | | | 247,358 | | |
| | |
For the nine months ended
September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Product revenues | | | | | | | | | | | | | |
Revenue from LiDAR products
|
| | | | 433,849 | | | | | | 726,605 | | |
Revenue from gas detection products
|
| | | | 13,536 | | | | | | 17,210 | | |
Other product revenues
|
| | | | 945 | | | | | | 4,648 | | |
Service revenues | | | | | | | | | | | | | |
Engineering design, development and validation service
|
| | | | 10,879 | | | | | | 40,672 | | |
Other service revenues
|
| | | | 233 | | | | | | 4,350 | | |
Total | | | | | 459,442 | | | | | | 793,485 | | |
| | |
For the nine months ended
September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Revenues recognized at a point in time
|
| | | | 448,330 | | | | | | 772,359 | | |
Revenues recognized over time
|
| | | | 11,112 | | | | | | 21,126 | | |
Total | | | | | 459,442 | | | | | | 793,485 | | |
| | |
For the nine months ended
September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Revenues by geographic location | | | | | | | | | | | | | |
Mainland China
|
| | | | 239,644 | | | | | | 445,203 | | |
United States
|
| | | | 149,939 | | | | | | 218,897 | | |
Europe
|
| | | | 47,953 | | | | | | 78,592 | | |
Other regions
|
| | | | 21,906 | | | | | | 50,793 | | |
Total | | | | | 459,442 | | | | | | 793,485 | | |
| | |
Accounts
receivable |
| |
Contract
assets |
| |
Contract
liabilities |
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
Balance as of January 1, 2021
|
| | | | 56,319 | | | | | | 38,337 | | | | | | 9,357 | | |
Increase, net
|
| | | | 29,502 | | | | | | 108,200 | | | | | | 113,246 | | |
Balance as of December 31, 2021
|
| | | | 85,821 | | | | | | 146,537 | | | | | | 122,603 | | |
Increase (decrease), net
|
| | | | 277,123 | | | | | | (146,537) | | | | | | (85,708) | | |
Ending Balance as of September 30, 2022
|
| | | | 362,944 | | | | | | — | | | | | | 36,895 | | |
| | |
Number of
options |
| |
Weighted
average exercise price |
| |
Weighted
average grant date fair value |
| |
Weighted
average remaining contract life |
| |
Aggregate
intrinsic value |
| |||||||||||||||
| | | | | | | | |
RMB
|
| |
RMB
|
| |
Years
|
| |
RMB
|
| ||||||||||||
Outstanding at January 1, 2022
|
| | | | 9,173,623 | | | | | | 9.23 | | | | | | 56.58 | | | | | | 6.32 | | | | | | 1,005,546 | | |
Granted
|
| | | | 966,514 | | | | | | 34.51 | | | | | | 103.68 | | | | | | | | | | | | | | |
Forfeited
|
| | | | 456,925 | | | | | | 15.61 | | | | | | | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
Outstanding at September 30, 2022
|
| | | | 9,683,212 | | | | | | 12.45 | | | | | | 63.15 | | | | | | 5.95 | | | | | | 1,254,457 | | |
Vested and expected to vest as of September 30, 2022
|
| | | | 4,971,132 | | | | | | 19.87 | | | | | | 99.05 | | | | | | 6.40 | | | | | | 607,089 | | |
Exercisable as of September 30, 2022
|
| | | | 1,628,056 | | | | | | 12.92 | | | | | | 89.13 | | | | | | 5.91 | | | | | | 210,146 | | |
| | |
For the nine months ended
September 30, 2022 |
|
Expected volatility
|
| |
74.00% – 75.00%
|
|
Risk-free interest rate (per annum)
|
| |
1.94% – 3.04%
|
|
Expected dividend yield
|
| |
0.00%
|
|
Employee forfeiture rate (per annum)
|
| |
3.80% – 3.92%
|
|
Expected multiples
|
| |
2.50
|
|
Contractual life
|
| |
7.00
|
|
Fair value of underlying ordinary share
|
| |
US$18.11 – 19.91
|
|
Fair value of awards on grant date
|
| |
US$12.93 – 17.11
|
|
Name of the related parties
|
| |
Relationship
|
|
Mr. Kai Sun | | |
Founding Shareholders
|
|
Mr. Yifan Li | | |
Founding Shareholders
|
|
Mr. Shaoqing Xiang | | |
Founding Shareholders
|
|
Mr. Xiaoming Hang | | |
Shareholder
|
|
Mr. Min Ai | | |
Shareholder
|
|
Robert Bosch Gesellschaft mit Beschraenkter Haftung | | |
An affiliate of the shareholder of the Group
|
|
Robert Bosch Kft. | | |
An affiliate of the shareholder of the Group
|
|
Robert Bosch Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Robert Bosch France | | |
An affiliate of the shareholder of the Group
|
|
Bosch Automotive Products (Suzhou) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Baidu USA LLC | | |
An affiliate of the shareholder of the Group
|
|
Beijing Baidu Netcom Technology Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Transportation Technology (Guangzhou) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Baidu Smart Travel Information Technology (Chongqing) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Transportation Technology (Hefei) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Luobo Yunli (Beijing) Technology Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Transportation Technology (Dalian) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Technology (Beijing) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
Apollo Intelligent Connection (Beijing) Co., Ltd. | | |
An affiliate of the shareholder of the Group
|
|
| | |
For the nine months
ended September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Revenues from sale of LiDAR products | | | | | | | | | | | | | |
Affiliates of the shareholders of the Group
|
| | | | 15,655 | | | | | | — | | |
Total | | | | | 15,655 | | | | | | — | | |
| | |
As of
December 31, 2021 |
| |
As of
September 30, 2022 |
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Amounts due to related parties | | | | | | | | | | | | | |
Founding Shareholders and certain shareholders (Note)
|
| | | | 307,498 | | | | | | 340,433 | | |
Total | | | | | 307,498 | | | | | | 340,433 | | |
| | |
For the nine months ended
September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Numerator: | | | | | | | | | | | | | |
Net loss
|
| | | | (174,798) | | | | | | (165,479) | | |
Deemed dividend
|
| | | | (2,206,731) | | | | | | (446,022) | | |
Net loss attributable to ordinary shareholders of the Company
|
| | | | (2,381,529) | | | | | | (611,501) | | |
Denominator: | | | | | | | | | | | | | |
Weighted average number of shares outstanding-basic and diluted
|
| | | | 101,433,139 | | | | | | 115,534,593 | | |
Basic and diluted net loss per share
|
| | | | (23.48) | | | | | | (5.29) | | |
| | |
For the nine months ended
September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
LiDAR segment | | | | | | | | | | | | | |
LiDAR revenues
|
| | | | 445,906 | | | | | | 776,275 | | |
Cost of revenues
|
| | | | (208,968) | | | | | | (435,348) | | |
Segment profit
|
| | | | 236,938 | | | | | | 340,927 | | |
Gas detection segment | | | | | | | | | | | | | |
Gas detection revenues
|
| | | | 13,536 | | | | | | 17,210 | | |
Cost of revenues
|
| | | | (5,703) | | | | | | (8,991) | | |
Segment profit
|
| | | | 7,833 | | | | | | 8,219 | | |
| | |
For the nine months ended
September 30, |
| |||||||||
| | |
2021
|
| |
2022
|
| ||||||
| | |
RMB
|
| |
RMB
|
| ||||||
Total profit for reportable segments
|
| | | | 244,771 | | | | | | 349,146 | | |
Unallocated amounts* | | | | | | | | | | | | | |
Sales and marketing expenses
|
| | | | (48,072) | | | | | | (63,473) | | |
General and administrative expenses
|
| | | | (185,184) | | | | | | (153,380) | | |
Research and development expenses
|
| | | | (210,627) | | | | | | (376,362) | | |
Other operating income, net
|
| | | | 18,741 | | | | | | 5,948 | | |
Interest income
|
| | | | 14,203 | | | | | | 49,284 | | |
Foreign exchange (loss) gain, net
|
| | | | (9,805) | | | | | | 25,430 | | |
Other income (loss), net
|
| | | | 62 | | | | | | (2,116) | | |
Loss before income tax
|
| | | | (175,911) | | | | | | (165,523) | | |
| | |
As of September 30,
2022 |
| |||
| | |
RMB
|
| |||
The remaining of 2022
|
| | | | 137,106 | | |
2023
|
| | | | — | | |
2024
|
| | | | 11,522 | | |
Total | | | | | 148,628 | | |
Condensed consolidated statements of comprehensive loss for the nine months
ended |
| |
As previously
reported |
| |
Adjustment
|
| |
As
restated |
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
September 30, 2021 | | | | | | | | | | | | | | | | | | | |
General and administrative expenses
|
| | | | (265,328) | | | | | | 80,144 | | | | | | (185,184) | | |
Other income (loss), net
|
| | | | 33,412 | | | | | | (33,350) | | | | | | 62 | | |
Net loss per share: | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | (2.18) | | | | | | (21.30) | | | | | | (23.48) | | |
Condensed consolidated statements of cash flows for the nine months ended
|
| |
As previously
reported |
| |
Adjustment
|
| |
As
restated |
| |||||||||
| | |
RMB
|
| |
RMB
|
| |
RMB
|
| |||||||||
September 30, 2021 | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | | (221,592) | | | | | | 46,794 | | | | | | (174,798) | | |
Derivative liability
|
| | | | 46,794 | | | | | | (46,794) | | | | | | — | | |
Net cash (used in) operating activities
|
| | | | (114,089) | | | | | | — | | | | | | (114,089) | | |
Securities/Purchaser
|
| |
Date of Issuance
|
| |
Number of
Securities |
| |
Consideration
|
|
Class A Ordinary Shares | | | | | | | | | | |
Fermat Star Limited
|
| |
April 21, 2021
|
| |
9,893,855
|
| |
US$989.3855
|
|
ALBJ Limited
|
| |
April 21, 2021
|
| |
9,569,762
|
| |
US$956.9762
|
|
Galbadia Limited
|
| |
April 21, 2021
|
| |
9,569,762
|
| |
US$956.9762
|
|
Fermat Star Limited
|
| |
June 1, 2021
|
| |
340,775
|
| |
US$14,856,826
|
|
ALBJ Limited
|
| |
June 1, 2021
|
| |
329,612
|
| |
US$14,370,160
|
|
Securities/Purchaser
|
| |
Date of Issuance
|
| |
Number of
Securities |
| |
Consideration
|
|
Galbadia Limited
|
| |
June 1, 2021
|
| |
329,612
|
| |
US$14,370,160
|
|
Class B Ordinary Shares | | | | | | | | | | |
Rice No.2 Limited
|
| |
June 1, 2021
|
| |
1,790,797
|
| |
US$2,805,372
|
|
Forward Captain Limited
|
| |
June 1, 2021
|
| |
1,800,370
|
| |
US$2,881,719
|
|
SAIHEYUANXIN INVESTMENT LIMITED
|
| |
June 1, 2021
|
| |
813,663
|
| |
US$1,324,977
|
|
Lighthouse Blossom Limited
|
| |
June 1, 2021
|
| |
1,052,323
|
| |
US$1,886,769
|
|
Forward Sight Investment Limited
|
| |
June 1, 2021
|
| |
3,022,369
|
| |
US$5,418,976
|
|
Baidu Holdings Limited
|
| |
June 1, 2021
|
| |
7,881,155
|
| |
US$14,130,566
|
|
Zhen Partners Fund IV, L.P.
|
| |
June 1, 2021
|
| |
524,127
|
| |
US$939,738
|
|
Lightspeed China Partners III, L.P.
|
| |
June 1, 2021
|
| |
4,857,725
|
| |
US$8,709,688
|
|
Lightspeed China Partners Select I, L.P.
|
| |
June 1, 2021
|
| |
3,431,282
|
| |
US$6,152,139
|
|
Moonstone Investments Limited
|
| |
June 1, 2021
|
| |
1,715,641
|
| |
US$3,076,069
|
|
Knollwood Investment Fund LLC
|
| |
June 1, 2021
|
| |
514,692
|
| |
US$922,820
|
|
AJ5 Ltd
|
| |
June 1, 2021
|
| |
514,692
|
| |
US$922,820
|
|
Qiming Venture Partners VI, L.P.
|
| |
June 1, 2021
|
| |
2,506,031
|
| |
US$4,493,203
|
|
Qiming Managing Directors Fund VI, L.P.
|
| |
June 1, 2021
|
| |
67,432
|
| |
US$120,903
|
|
Robert Bosch GmbH
|
| |
June 1, 2021
|
| |
7,653,252
|
| |
EUR11,288,118.06
|
|
ON Semiconductor Benelux B.V.
|
| |
June 1, 2021
|
| |
171,564
|
| |
US$307,607
|
|
Lightspeed Opportunity Fund, L.P.
|
| |
June 1, 2021
|
| |
7,981,370
|
| |
US$14,310,247
|
|
MC2 (Hong Kong) Limited
|
| |
June 1, 2021
|
| |
956,657
|
| |
US$1,715,244
|
|
Fast Pace Limited
|
| |
June 11, 2021
|
| |
3,030,303
|
| |
US$50,000,000
|
|
GSPR IV Holdings Limited
|
| |
June 11, 2021
|
| |
5,454,545
|
| |
US$90,000,000
|
|
Solid Bit Hong Kong Limited
|
| |
June 11, 2021
|
| |
3,030,303
|
| |
US$50,000,000
|
|
CPandar Investment Limited
|
| |
June 11, 2021
|
| |
3,030,303
|
| |
US$50,000,000
|
|
Lightspeed Opportunity Fund, L.P.
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
SMRS-TOPE LLC
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
KGT Strategic Private Investments, LP
|
| |
June 11, 2021
|
| |
303,030
|
| |
US$5,000,000
|
|
Pantheon Access Co-Investment Program, L.P.-Series 151
|
| |
June 11, 2021
|
| |
303,030
|
| |
US$5,000,000
|
|
Moonrise China Partners I LP
|
| |
June 11, 2021
|
| |
242,424
|
| |
US$4,000,000
|
|
Qiming Venture Partners VI, L.P.
|
| |
June 11, 2021
|
| |
472,144
|
| |
US$7,790,376
|
|
Qiming Managing Directors Fund VI, L.P.
|
| |
June 11, 2021
|
| |
12,704
|
| |
US$209,624
|
|
Pagoda Innovation Partners L.P.
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
HT Global Investment Limited
|
| |
June 11, 2021
|
| |
606,061
|
| |
US$10,000,000
|
|
Yuanzhan Equity Investment Management (Shanghai) Co., Ltd.
|
| |
June 25, 2021
|
| |
1,436,192
|
| |
US$2,575,029
|
|
Shanghai Wenqian Enterprise Management Center L.P.
|
| |
June 25, 2021
|
| |
3,513,909
|
| |
US$5,164,707
|
|
Zhuhai Hengqinruishi Growth Venture Capital Fund L.P.
|
| |
June 25, 2021
|
| |
1,905,016
|
| |
US$2,933,606
|
|
Hangzhou Yuanzhan Huayao Venture Capital L.P.
|
| |
June 25, 2021
|
| |
775,461
|
| |
US$1,388,827
|
|
PANGU VC INC
|
| |
June 25, 2021
|
| |
647,296
|
| |
US$1,160,573
|
|
Guangyi HS Holding Limited
|
| |
June 25, 2021
|
| |
1,234,405
|
| |
US$2,213,234
|
|
SONIC WAY DEVELOPMENTS LIMITED
|
| |
June 25, 2021
|
| |
780,069
|
| |
US$1,398,629
|
|
TALENT CHOICE INTERNATIONAL LIMITED
|
| |
June 25, 2021
|
| |
420,038
|
| |
US$753,109
|
|
Suzhou Detong Hexin Venture Capital L.P.
|
| |
June 25, 2021
|
| |
1,175,691
|
| |
US$2,107,962
|
|
Shanghai Feiyu Xinyan Investment Management L.P.
|
| |
June 25, 2021
|
| |
2,878,171
|
| |
US$5,160,434
|
|
Securities/Purchaser
|
| |
Date of Issuance
|
| |
Number of
Securities |
| |
Consideration
|
|
Chuang Zhi Limited
|
| |
June 25, 2021
|
| |
813,158
|
| |
US$1,457,958
|
|
PANGU VC INC | | |
September 30, 2021
|
| |
121,212
|
| |
US$2,000,000
|
|
Shanghai Ziyue Enterprise Management Consulting Partnership (Limited Partnership) | | |
September 30, 2021
|
| |
4,242,424
|
| |
US$70,000,000
|
|
Convertible Loans | | | | | | | | | | |
Fast Pace Limited
|
| |
May 17, 2021
|
| |
Convertible to 3,030,303
Class B ordinary shares |
| |
US$50,000,000
|
|
GSPR IV Holdings Limited
|
| |
May 10, 2021
|
| |
Convertible to 5,454,545
Class B ordinary shares |
| |
US$90,000,000
|
|
Solid Bit Hong Kong Limited
|
| |
May 10, 2021
|
| |
Convertible to 3,030,303
Class B ordinary shares |
| |
US$50,000,000
|
|
CPandar Investment Limited
|
| |
May 11, 2021
|
| |
Convertible to 3,030,303
Class B ordinary shares |
| |
US$50,000,000
|
|
Lightspeed Opportunity Fund, L.P.
|
| |
May 19, 2021
|
| |
Convertible to 606,061
Class B ordinary shares |
| |
US$10,000,000
|
|
SMRS-TOPE LLC
|
| |
May 10, 2021
|
| |
Convertible to 606,061
Class B ordinary shares |
| |
US$10,000,000
|
|
KGT Strategic Private Investments, LP
|
| |
May 10, 2021
|
| |
Convertible to 303,030
Class B ordinary shares |
| |
US$5,000,000
|
|
Pantheon Access Co-Investment Program, L.P.-Series 151
|
| |
May 10, 2021
|
| |
Convertible to 303,030
Class B ordinary shares |
| |
US$5,000,000
|
|
Moonrise China Partners I LP
|
| |
May 10, 2021
|
| |
Convertible to 242,424
Class B ordinary shares |
| |
US$4,000,000
|
|
Qiming Venture Partners VI, L.P.
|
| |
May 11, 2021
|
| |
Convertible to 472,144
Class B ordinary shares |
| |
US$7,790,376
|
|
Qiming Managing Directors Fund VI, L.P.
|
| |
May 11, 2021
|
| |
Convertible to 12,704
Class B ordinary shares |
| |
US$209,624
|
|
Pagoda Innovation Partners L.P.
|
| |
May 11, 2021
|
| |
Convertible to 606,061
Class B ordinary shares |
| |
US$10,000,000
|
|
HT Global Investment Limited
|
| |
May 10, 2021
|
| |
Convertible to 606,061
Class B ordinary shares |
| |
US$10,000,000
|
|
PANGU VC INC
|
| |
May 14, 2021
|
| |
Convertible to 121,212
Class B ordinary shares |
| |
US$2,000,000
|
|
Warrants | | | | | | | | | | |
Yuanzhan Equity Investment Management (Shanghai) Co., Ltd.
|
| |
May 18, 2021
|
| |
1,436,192
|
| |
N/A
|
|
Shanghai Wenqian Enterprise Management Center L.P.
|
| |
May 18, 2021
|
| |
3,513,909
|
| |
N/A
|
|
Zhuhai Hengqinruishi Growth Venture Capital Fund L.P.
|
| |
May 18, 2021
|
| |
1,905,016
|
| |
N/A
|
|
Hangzhou Yuanzhan Huayao Venture Capital L.P.
|
| |
May 18, 2021
|
| |
775,461
|
| |
N/A
|
|
PANGU VC INC
|
| |
May 18, 2021
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647,296
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N/A
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Guangyi HS Holding Limited
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May 18, 2021
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1,234,405
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N/A
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SONIC WAY DEVELOPMENTS LIMITED
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May 18, 2021
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780,069
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N/A
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TALENT CHOICE INTERNATIONAL LIMITED
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May 18, 2021
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420,038
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N/A
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Suzhou Detong Hexin Venture Capital L.P.
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May 18, 2021
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1,175,691
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N/A
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Shanghai Feiyu Xinyan Investment Management L.P.
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May 18, 2021
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2,878,171
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N/A
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Chuang Zhi Limited
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May 18, 2021
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813,158
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N/A
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Options | | | | | ||||||
Certain directors and employees
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Between July 3, 2021
and December 24, 2022 |
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9,670,478
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Past and future services
provided by these individuals to us |
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Exhibit
Number |
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Description of Document
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1.1
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3.1*
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3.2
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4.1
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4.2
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4.3
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5.1
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8.1
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8.2
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| | Opinion of Commerce & Finance Law Offices regarding certain mainland China tax matters (included in Exhibit 99.2) | |
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10.1 *
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10.2*
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10.3*
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10.4*
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10.5*
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10.6*
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10.7*†
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10.8*
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10.9*
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10.10*†
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10.11*†
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10.12*†
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Exhibit
Number |
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Description of Document
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21.1*
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23.1
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23.2
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23.3
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24.1*
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99.1*
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99.2
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99.3*
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99.4*
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99.5
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| | Consent of Ms. Bonnie Zhang, independent director nominee | |
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99.6
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| | Consent of Dr. Jie Chen, independent director nominee | |
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107
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Signature
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Title
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/s/ Yifan Li
Yifan Li
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Director and Chief Executive Officer
(Principal Executive Officer) |
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*
Kai Sun
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Director
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*
Shaoqing Xiang
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Director
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/s/ Louis T. Hsieh
Louis T. Hsieh
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Director and Global Chief Financial Officer
(Principal Financial and Accounting Officer) |
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*
Cailian Yang
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Director
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| *By: | | |
/s/ Yifan Li
Name: Yifan Li
Attorney-in-fact |
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Exhibit 1.1
9,000,000 American Depositary Shares
Representing
9,000,000 Class B Ordinary Shares
(par value US$0.0001 per share)
HESAI GROUP
UNDERWRITING AGREEMENT
[ l ], 2023
[ l ], 2023
[Goldman Sachs (Asia) L.L.C.
68th Floor, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
Morgan Stanley Asia Limited
46/F, International Commerce Center
1 Austin Road West, Kowloon
Hong Kong
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue New York
NY 10010, United States]
As representatives (the “Representatives”) of the several Underwriters named in Schedule I hereto
Ladies and Gentlemen:
Hesai Group, an exempted company incorporated in the Cayman Islands (the “Company”), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”) an aggregate of 9,000,000 American Depositary Shares (“ADSs”) representing 9,000,000 Class B ordinary shares, par value US$0.0001 per share, of the Company (the “Firm ADSs”).
The Company also proposes to issue and sell to the several Underwriters not more than an additional 1,350,000 American Depositary Shares representing 1,350,000 Class B ordinary shares, par value US$0.0001 per share, of the Company (the “Additional ADSs”) if and to the extent that the Representatives, as managers of the offering, shall have determined to exercise, on behalf of the Underwriters, the right to purchase such American Depositary Shares granted to the Underwriters in Section 2 hereof. The Firm ADSs and the Additional ADSs are hereinafter collectively referred to as the “Offered Securities.” The Class A ordinary shares, par value US$0.0001 per share, and the Class B ordinary shares, par value US$0.0001 per share, of the Company to be issued after giving effect to the sales contemplated hereby are hereinafter referred to as the “Ordinary Shares.”
The ADSs are to be issued pursuant to a deposit agreement (the “Deposit Agreement”), dated as of [ l ], 2023, among the Company, Deutsche Bank Trust Company Americas, as depositary (the “Depositary”), and holders from time to time of the American Depositary Receipts (the “ADRs”) issued by the Depositary and evidencing the ADSs. The ADSs will represent the right to receive the Ordinary Shares deposited pursuant to the Deposit Agreement.
1
The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-1, including a prospectus, relating to the Ordinary Shares represented by the Offered Securities. The registration statement as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended (the “Securities Act”), is hereinafter referred to as the “Registration Statement”; the prospectus in the form first used to confirm sales of Offered Securities (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Prospectus.” If the Company has filed an abbreviated registration statement to register additional ADSs pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement. The Company has filed a registration statement on Form F-6 relating to the Offered Securities with the Commission (such registration statement on Form F-6, including all exhibits thereto, as amended at the time such registration statement becomes effective, being hereafter referred to as the “ADS Registration Statement”). The Company has also filed, in accordance with Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a registration statement on Form 8-A (the “Form 8-A Registration Statement”) to register the Ordinary Shares and the Class B ordinary shares, par value US$0.0001 per share, of the Company under Section 12(b) of the Exchange Act.
For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the preliminary prospectus together with the documents and pricing information set forth in Schedule II hereto, and “broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person. As used herein, the terms “Registration Statement,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein as of the date hereof.
1. Representations and Warranties of the Company. The Company represents and warrants to and agrees with each of the Underwriters that:
(a) Each of the Registration Statement, the ADS Registration Statement and the Form 8-A Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement, the ADS Registration Statement or the Form 8-A Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission.
2
(b) (i) Each of the Registration Statement, ADS Registration Statement and the Form 8-A Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) each of the Registration Statement, the ADS Registration Statement and the Prospectus complies and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iii) the Form 8-A Registration Statement complies and, as amended or supplemented, if applicable, will comply in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (iv) the Time of Sale Prospectus does not, and at the time of each sale of the Offered Securities in connection with the offering when the Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in Section 4) and at each Option Closing Date (as defined in Section 2), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (v) each road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (vi) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information is that described in Section 9(b).
(c) The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Any such free writing prospectus, as of its issue date and at all subsequent times through the completion of the sale of the Offered Securities, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement, the Time of Sale Prospectus or any preliminary or other prospectus deemed to part thereof that has not been superseded or modified. Except for the free writing prospectuses, if any, identified in Schedule II hereto, and electronic road shows, if any, each furnished to the Representatives before first use, the Company has not prepared, used or referred to, and will not, without the prior consent of the Representatives, prepare, use or refer to, any free writing prospectus.
3
(d) The Company has been duly incorporated, is validly existing as an exempted company in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not, individually or in the aggregate, result in a material adverse effect on the condition (financial or otherwise), earnings, results of operations, business or prospects of the Company and its subsidiaries, taken as a whole, or on the ability of the Company and its subsidiaries to carry out their obligations under this Agreement and the Deposit Agreement (a “Material Adverse Effect”). The currently effective memorandum and articles of association of the Company comply with the requirements of applicable Cayman Islands law and are in full force and effect. The amended and restated memorandum and articles of association of the Company adopted on [ l ], filed as Exhibit [3.2] to the Registration Statement, comply with the requirements of applicable Cayman Islands law and, immediately following closing on the Closing Date, will be in full force and effect.
(e) Each of the Company’s subsidiaries has been duly incorporated, is validly existing as a corporation or organization in good standing under the laws of the jurisdiction of its incorporation or organization, has the corporate power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect; all of the equity interests of each subsidiary have been duly and validly authorized and issued, are owned directly or indirectly by the Company, are fully paid and non-assessable and are free and clear of all liens, encumbrances, equities or claims. None of the outstanding share capital or equity interest in any subsidiary was issued in violation of preemptive or similar rights of any security holder of such subsidiary. All of the constitutive or organizational documents of each of the subsidiaries comply with the requirements of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect.
4
(f) Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) none of the Company nor any of its subsidiaries is prohibited, directly or indirectly, from (1) paying any dividends or making any other distributions on its share capital, (2) making or repaying any loan or advance to the Company or any other subsidiary or (3) transferring any of its properties or assets to the Company or any other subsidiary; and (ii) all dividends and other distributions declared and payable upon the share capital of the Company or any of its subsidiaries (1) may be converted into foreign currency that may be freely transferred out of such entity’s jurisdiction of incorporation, without the consent, approval, authorization or order of, or qualification with, any court or governmental agency or body in such entity’s jurisdiction of incorporation or tax residence, provided however, that (i) such distribution has been duly approved by the shareholders and/or board meeting of the Company or any of its other subsidiaries pursuant to its constitutional documents; (ii) any enterprise income tax, if applicable to the Company or any of its other subsidiaries, has been fully paid; (iii) any withholding tax has been duly withheld; (iv) in case of the dividends declared and payable on the equity interest in a subsidiary of the Company that is a foreign invested enterprise in China, such subsidiary has duly obtained, and maintain effective, its foreign exchange registration; (v) the allocations to statutory reserves by the Company or any of its other subsidiaries have been duly made; and (vi) the remittance of such dividends outside of the PRC complies with the procedures required under PRC laws relating to foreign exchange; and (2) are not and will not be subject to any other withholding, value added or other taxes under the currently effective laws and regulations of such entity’s jurisdiction of incorporation, except for those already described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus without the necessity of obtaining any consents, approvals, authorizations, orders, registrations, clearances or qualifications of or with any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company, any of the subsidiaries or any of their respective properties, assets or operations (each, a “Governmental Entity”).
(g) The Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the subsidiaries, through its rights to authorize the shareholders of the subsidiaries to exercise their voting rights.
(h) The Offered Securities have been approved for listing on the NASDAQ Global Market, subject to official notice of issuance.
(i) This Agreement has been duly authorized, executed and delivered by the Company.
(j) The Deposit Agreement has been duly authorized and, when executed and delivered by the Company and, assuming due authorization, execution and delivery by the Depositary, will constitute a valid and legally binding agreement of the Company, enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and upon issuance by the Depositary of ADRs evidencing Offered Securities and the deposit of Ordinary Shares in respect thereof in accordance with the provisions of the Deposit Agreement, such ADRs will be duly and validly issued and the persons in whose names the ADRs are registered will be entitled to the rights specified therein and in the Deposit Agreement; and the Deposit Agreement and the ADRs conform in all material respects to the descriptions thereof contained in each of the Time of Sale Prospectus and the Prospectus.
(k) The authorized share capital of the Company conforms as to legal matters to the description thereof contained in each of the Time of Sale Prospectus and the Prospectus.
5
(l) The Ordinary Shares issued and outstanding prior to the issuance of the Ordinary Shares represented by the Offered Securities to be sold by the Company have been duly authorized and are validly issued, fully paid and non-assessable.
(m) The Ordinary Shares represented by the Offered Securities to be sold by the Company have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Ordinary Shares will not be subject to any preemptive or similar rights. No person has the right, contractual or otherwise, to cause the Company to issue or sell to it any Ordinary Shares, ADSs or any other share capital of or other equity interests in the Company.
(n) Neither the Company nor any of its subsidiaries is (i) in breach of or in default under any laws, regulations, rules, orders, judgments, decrees, guidelines or notices of its jurisdiction of organization or any other jurisdiction where it operates, (ii) in violation of its constitutive or organizational documents, or (iii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except in the case of (i) and (iii) above, where any such breach or default would not, individually or in aggregate, have a Material Adverse Effect.
(o) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the Deposit Agreement will not contravene any provision of applicable law or the memorandum and articles of association of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any Governmental Entity having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any Governmental Entity is required for the performance by the Company of its obligations under this Agreement and the Deposit Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Offered Securities.
(p) The application of the net proceeds from the offering of Offered Securities, as described in the Time of Sale Prospectus and the Prospectus, will not (i) contravene any provision of any current and applicable laws or the current constituent documents of the Company or any of its subsidiaries, (ii) contravene the terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument currently binding upon the Company or any of its subsidiaries, or (iii) contravene or violate the terms or provisions of any order or decree of any Governmental Entity having jurisdiction over the Company or any subsidiary.
6
(q) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus.
(r) There are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject (i) other than proceedings accurately described in all material respects in the Time of Sale Prospectus and proceedings that would not have a Material Adverse Effect or (ii) that are required to be described in the Registration Statement or the Prospectus and are not so described.
(s) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder.
(t) The Company is not, and after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
(u) The Company and its subsidiaries (i) are in compliance with any and all applicable national, provincial, local and foreign laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect.
(v) There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a Material Adverse Effect.
(w) Except as disclosed in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or to require the Company to include such securities with the Ordinary Shares registered pursuant to the Registration Statement.
7
(x) Neither the Company nor any of its subsidiaries or their respective affiliates, nor any director, officer or employee thereof, nor, to the best of the Company’s knowledge, any agent or representative thereof, (i) has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any foreign or domestic “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; (ii) has violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or has committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption laws; or (iii) will use, directly or indirectly, the proceeds of this offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any applicable anti-corruption laws; and the Company and its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein. No investigation, action, suit or proceedings by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of the subsidiaries with respect to the Anti-Corruption Laws is pending or threatened.
(y) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of all jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best of the Company’s knowledge, threatened.
8
(z) (i) Neither the Company nor any of its subsidiaries, nor any director, officer or employee of the Company or any of its subsidiaries, nor, to the best of the Company’s knowledge, any agent, affiliate or representative of the Company or any of its subsidiaries, is an individual or entity (“Person”) that is, or is owned 50% or more or controlled by a Person that is:
(A) the subject or the target of any sanctions administered or enforced by the U.S. government, including but not limited to the Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person,” the United Nations Security Council (“UNSC”), the European Union (“EU”) (including under Council Regulation (EC) No. 194/2008), or Her Majesty’s Treasury (“HMT”), the Hong Kong Monetary Authority (“HKMA”), or other applicable sanctions authority (collectively, “Sanctions”), nor
(B) engaged in any activities sanctionable under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, the Iran Sanctions Act, the Iran Threat Reduction and Syria Human Rights Act, or any applicable executive order; nor
(C) located, organized or resident in a country, region or territory that is, or whose government is, the subject or the target of Sanctions (including, without limitation, the Crimea region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Cuba, Iran, North Korea and Syria).
(ii) The Company represents and covenants that the Company and its subsidiaries will not, directly or indirectly, use the proceeds of the offering of the Offered Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:
(A) to fund or facilitate any activities or business of or with any Person or in any country, region or territory that, at the time of such funding or facilitation, is, or whose government is, the subject or the target of Sanctions; or
(B) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering of the Offered Securities, whether as underwriter, advisor, investor or otherwise).
(iii) The Company represents and covenants that, for the past five years, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country, region or territory, that at the time of the dealing or transaction is or was, or whose government was, the subject or the target of Sanctions.
9
(aa) Subsequent to the respective dates as of which information is given in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction; (ii) the Company has not purchased any of its outstanding share capital, nor declared, paid or otherwise made any dividend or distribution of any kind on its share capital other than ordinary and customary dividends; and (iii) there has not been any material change in the share capital, short-term debt or long-term debt of the Company and its subsidiaries, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(bb) The Company and its subsidiaries have good and marketable title (in fee simple in the case of real property in applicable jurisdictions, and valid real property ownership and land use rights in the case of real property in the PRC) to all real property owned by them, if any, which is material to the business of the Company and its subsidiaries taken as a whole and good and marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries which are material to the business of the Company and its subsidiaries taken as a whole are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(cc) The Company and its subsidiaries own, possess, or have been authorized to use, or can acquire on reasonable terms, sufficient trademarks, trade names, patent rights, copyrights, domain names, licenses, trade secrets, inventions, technology, know-how and other intellectual property and similar rights, including registrations and applications for registration thereof (collectively, “Intellectual Property Rights”) necessary or material to the conduct of the business as now conducted, and the expected expiration of any such Intellectual Property Rights would not, individually or in the aggregate, have a Material Adverse Effect. To the knowledge of the Company, (i) there is no material infringement, misappropriation, breach, default or other violation, or the occurrence of any event that with notice or the passage of time would constitute any of the foregoing, by any third parties of any of the Intellectual Property Rights of the Company or its subsidiaries; (ii) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s or the subsidiaries’ rights in or to, or the violation of any of the terms of, any of their Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim; and (iii) there is no pending or threatened action, suit, proceeding or claim by others that the Company or any of its subsidiaries infringes, misappropriates or otherwise violates or conflicts with any Intellectual Property Rights or other proprietary rights of others and the Company is unaware of any other fact which would form a reasonable basis for any such claim, except in each case covered by clauses (i) to (iii) such as would not, if determined adversely to the Company or its subsidiaries, individually or in the aggregate, have a Material Adverse Effect and except in the case of (ii) and (iii) as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.
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(dd) The Company’s and the subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications and databases are adequate for, and operate and perform as required in connection with, the operation of the business of the Company and the subsidiaries as currently conducted, free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruption, except where such inadequacies would not, individually or in the aggregate, result in a Material Adverse Effect. The Company has adopted and maintains data privacy and security policies designed to comply with all applicable laws, and each of the Company and the subsidiaries has at all times complied with all applicable policies and third-party obligations (imposed by applicable laws, regulations or contracts) regarding the collection, use, transfer, storage, protection, disposal and disclosure by the Company and the subsidiaries of personally identifiable information and data and any other information and data collected from or provided by third parties in all material respects. The Company and the subsidiaries have taken all commercially reasonable steps to protect the information technology systems and data used in connection with the operation of the Company and the subsidiaries. There has been no material security breach or attack or other compromise of or relating to any such information technology systems or data, and, no material action, suit or proceeding (including, without limitation, governmental investigations or inquiries) by or before any Governmental Entity involving the Company or any of the subsidiaries with respect to applicable data privacy and security laws is pending or threatened. The Company has not been informed by any Governmental Entity that the Company must file for a cybersecurity review under the Cybersecurity Review Measures of the Cyberspace Administration of China, which came into effect on February 25, 2022. The Company will use reasonable best efforts to fully cooperate once being informed by any Governmental Entity of any such cybersecurity review and report to the Cybersecurity Review Office once relevant network products and services provided by the Company may affect national security and is required by applicable Laws to make such report. The Company has not been designated as a “critical information infrastructure” operator by the Cyberspace Administration of China or any other Governmental Entity.
(ee) No material labor dispute with the employees of the Company or any of its subsidiaries exists, except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could have a Material Adverse Effect.
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(ff) Neither the Company nor any of its subsidiaries has sent or received any written communication regarding termination of, or intent not to renew, any of the material contracts or agreements specifically referred to or described in the Time of Sale Prospectus, or specifically referred to or described in, or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Company, any of its subsidiaries or, to the Company’s knowledge after due inquiry, any other party to any such contract or agreement.
(gg) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(hh) The Company and its subsidiaries possess all material licenses, consents, authorizations, approvals, orders, certificates and permits issued by the appropriate national, provincial, local or foreign regulatory authorities necessary to conduct their respective businesses; neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such license, consent, authorization, approval, order, certificate or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus; and the Company and its subsidiaries are in compliance with the provisions of all such licenses, consents, authorizations, approvals, orders, certificates or permits in all material respects.
(ii) Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company and each of its subsidiaries maintain effective internal control over financial reporting (as defined under Rule 13-a15 and Rule 15d-15 under the Exchange Act) and a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company will maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act upon the effectiveness of the Registration Statement; such disclosure controls and procedures will be designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures will be effective.
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(jj) The Company has taken all necessary actions to ensure that, upon the effectiveness of the Registration Statement, it will be in compliance with all provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”) that are then in effect and with which the Company is required to comply as of the effectiveness of the Registration Statement.
(kk) Deloitte Touche Tohmatsu Certified Public Accountants LLP, who have certified certain financial statements of the Company, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder and are independent in accordance with the requirements of the U.S. Public Company Accounting Oversight Board.
(ll) The audited consolidated financial statements (and the notes thereto) of the Company included in the Registration Statement, Time of Sale Prospectus and Prospectus fairly present in all material respects the consolidated financial position of the Company as of the dates specified and the consolidated results of operations and changes in the consolidated financial position of the Company for the periods specified, and such financial statements have been prepared in conformity with US GAAP applied on a consistent basis throughout the periods presented (other than as described therein); the summary and selected consolidated financial data included in the Registration Statement, Time of Sale Prospectus and Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited consolidated financial statements included therein. The Company is not reviewing or investigating, and neither the Company’s independent auditors nor its internal auditors have recommended that the Company review or investigate, (i) adding to, deleting, changing the application of, or changing the Company’s disclosure with respect to, any of the Company’s material accounting policies, (ii) any matter that could result in a restatement of the Company’s financial statements for any annual or interim period during the current or prior two fiscal years, or (iii) any material weakness, change in internal controls or fraud involving management or other employees who have a significant role in internal controls.
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(mm) The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” in the Time of Sale Prospectus accurately describes: (i) accounting policies which the Company believes are the most important in the portrayal of the Company’s financial condition and results of operations and which require management’s most difficult, subjective or complex judgments (“Critical Accounting Policies”); and (ii) judgments and uncertainties affecting the application of Critical Accounting Policies; and the Company’s Board of Directors and management have reviewed and agreed with the selection, application and disclosure of Critical Accounting Policies and have consulted with its legal counsel and independent public accountants with regard to such disclosure.
(nn) The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Time of Sale Prospectus accurately and fully describes: (i) all material trends, demands, commitments, events, uncertainties and risks, and the potential effects thereof, that the Company believes would materially affect liquidity and are reasonably likely to occur; and (ii) all off-balance sheet transactions, arrangements, and obligations, including, without limitation, relationships with unconsolidated entities that are contractually limited to narrow activities that facilitate the transfer of or access to assets by the Company or any of its subsidiaries, such as structured finance entities and special purpose entities (collectively, “off-balance sheet arrangements”) that are reasonably likely to have a material effect on the liquidity of the Company or any of its subsidiaries or the availability thereof or the requirements of the Company or any of its subsidiaries for capital resources.
(oo) The statements in the Time of Sale Prospectus and the Prospectus under the headings “Prospectus Summary,” “Risk Factors,” “Use of Proceeds”, “Dividend Policy”, “Enforceability of Civil Liabilities,” “Corporate History and Structure,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Regulation,” “Management”, “Related Party Transactions,” “Description of Share Capital,” “Description of American Depositary Shares,” “Shares Eligible for Future Sale”, “Taxation” and “Underwriting,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate, complete and fair summaries of such matters described therein in all material respects.
(pp) Any statistical and market-related data included in the Registration Statement, the Time of Sale Prospectus or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.
(qq) Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company has not sold, issued or distributed any Ordinary Shares during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified share option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.
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(rr) Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action which was designed to or which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.
(ss) The Company and each of its subsidiaries have filed all national, provincial, local and foreign tax returns required to be filed through the date of this Agreement or have requested extensions thereof (except where the failure to file would not, individually or in the aggregate, have a Material Adverse Effect) and have paid all taxes required to be paid thereon (except for cases in which the failure to pay would not have a Material Adverse Effect, or, except as currently being contested in good faith and for which reserves required by U.S. GAAP have been created in the financial statements of the Company), and, to the knowledge of the Company, no tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does the Company nor any of its subsidiaries have any notice or knowledge of any tax deficiency which could reasonably be expected to be determined adversely to the Company or its subsidiaries and which could reasonably be expected to have) a Material Adverse Effect.
(tt) From the time of initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
(uu) The Company (i) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communication other than those listed on Schedule III hereto. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
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(vv) As of the time of each sale of Offered Securities in connection with the offering when the Prospectus is not yet available to prospective purchasers, none of (i) the Time of Sale Prospectus, (ii) any free writing prospectus, when considered together with the Time of Sale Prospectus, and (iii) any individual Written Testing-the-Waters Communication, when considered together with the Time of Sale Prospectus, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Time of Sale Prospectus and any free writing prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information is that described in Section 9(b).
(ww) The Company has not distributed and, prior to the later of the Closing Date or any Option Closing Date and the completion of the distribution of the Offered Securities will not distribute any offering material in connection with the offering and sale of the Offered Securities other than any preliminary prospectus, the Prospectus, any free writing prospectuses, if any, identified in Schedule II hereto and any Written Testing-the-Waters Communications listed on Schedule III hereto.
(xx) Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, none of the Company or any of its subsidiaries is engaged in any material transactions with its directors, officers, management, shareholders, or any other affiliate, including any person who formerly held a position as a director, officer and/or shareholder that are required to be described in the Registration Statement or the Prospectus and are not so described.
(yy) There are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or other similar payment in connection with the issuance and sale of the ADSs and the Ordinary Shares represented thereby.
(zz) The Company is aware of and has been advised as to, the content of the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly promulgated by the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Tax Administration, the State Administration of Industry and Commerce, the China Securities Regulatory Commission (“CSRC”) and the State Administration of Foreign Exchange of the PRC on August 8, 2006, as amended on June 22, 2009 (together with any official clarification, guidance, interpretation or implementation rules related thereto, the “M&A Rules”), in particular the relevant provisions thereof which purport to require offshore special purpose vehicles, or SPVs, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals, to obtain the approval of the CSRC prior to the listing and trading of their securities on an overseas stock exchange; the Company has received legal advice specifically with respect to the M&A Rules from its PRC counsel and the Company understands such legal advice; and the Company has fully communicated such legal advice from its PRC counsel to each of its directors that signed the Registration Statement and each director has confirmed that he or she understands such legal advice; the Company and each director of the Company that signed the Registration Statement understand the potential personal liability to which each director of the Company that signed the Registration Statement and the executive officers of the Company may be subject in the event that the offering and sales of the Offered Securities as contemplated in this Agreement or the listing and trading of the Offered Securities on the NASDAQ Global Market were deemed not to be in compliance with the PRC Mergers and Acquisitions Rules.
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(aaa) The issuance and sale of the Offered Securities and the Ordinary Shares represented thereby, the listing and trading of the Offered Securities on the NASDAQ Global Market and the consummation of the transactions contemplated by this Agreement and the Deposit Agreement are not and will not be at the Closing Date or any Option Closing Date adversely affected by the M&A Rules, except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus. The Company has not been informed by any Governmental Entity that it needs to obtain approval from any Governmental Entity in connection with the transactions contemplated under this Agreement, and, except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, to the Company’s knowledge no such approval is required.
(bbb) Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, each of the Company and its subsidiaries that were incorporated outside of the PRC has taken, or is in the process of taking, reasonable steps to comply with, and to ensure compliance by each of its shareholders, option holders, directors, officers, employees that, to the knowledge of the Company, is, or is directly or indirectly owned or controlled by, a PRC resident or PRC citizen with any applicable rules and regulations of the relevant PRC government agencies (including but not limited to the Ministry of Commerce, the National Development and Reform Commission and the State Administration of Foreign Exchange) relating to overseas investment by PRC residents and citizens or the repatriation of the proceeds from overseas offering and listing by offshore special purpose vehicles controlled directly or indirectly by PRC companies and individuals, such as the Company (the “PRC Overseas Investment and Listing Regulations”), including without limitation, requesting each shareholder, option holder, that, to the knowledge of the Company, is, or is directly or indirectly owned or controlled by, a PRC resident or citizen to complete any registration and other procedures required under applicable PRC Overseas Investment and Listing Regulations.
(ccc) [Reserved].
(ddd) Except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, there are no affiliations or associations between any member of FINRA and the Company; there are no affiliations or associations between (i) any member of FINRA and (ii) any of the Company’s officers, directors or 5% or greater security holders or any beneficial owner of the Company’s unregistered equity securities that were acquired at any time on or after the 180th day immediately preceding the date the Registration Statement was initially filed with the Commission.
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(eee) No stamp, documentary, issuance, registration, transfer, withholding, capital gains, income or other taxes or duties are payable by or on behalf of the Underwriters, the Company or any of its subsidiaries in the Cayman Islands, Hong Kong or the PRC, or to any taxing authority thereof or therein, in connection with (i) the execution, delivery or consummation of this Agreement, (ii) the creation, allotment and issuance of the Ordinary Shares represented by the Offered Securities, (iii) the deposit with the Depositary of the Ordinary Shares represented by the Offered Securities by the Company against the issuance of ADRs evidencing the Offered Securities, (iv) the sale and delivery of the Offered Securities to the Underwriters or purchasers procured by the Underwriters, or (iv) the resale and delivery of the Offered Securities by the Underwriters in the manner contemplated herein, except as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(fff) Based upon its current and projected income and assets, including the proceeds from the offering, and projections as to the value of its assets immediately following the offering, the Company does not expect to be a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes for its current taxable year or the foreseeable future.
(ggg) It is not necessary under the laws of the Cayman Islands (i) to enable the Underwriters to enforce their rights under this Agreement or to enable any holder of Offered Securities to enforce their respective rights thereunder, provided that they are not otherwise engaged in business in the Cayman Islands, or (ii) solely by reason of the execution, delivery or consummation of this Agreement, for any of the Underwriters or any holder of Offered Securities or Ordinary Shares to be qualified or entitled to carry out business in the Cayman Islands.
(hhh) Under the laws of the Cayman Islands, each holder of ADRs evidencing Offered Securities issued pursuant to the Deposit Agreement shall be entitled, subject to the Deposit Agreement, to seek enforcement of its rights through the Depositary or its nominee registered as representative of the holders of the ADRs in a direct suit, action or proceeding against the Company.
(iii) Each of this Agreement and the Deposit Agreement is in proper form under the laws of the Cayman Islands for the enforcement thereof against the Company; and to ensure the legality, validity, enforceability or admissibility into evidence in Cayman Islands of this Agreement and the Deposit Agreement, it is not necessary that this Agreement or the Deposit Agreement be filed or recorded with any court or other authority in the Cayman Islands or that any stamp or similar tax in the Cayman Islands be paid on or in respect of this Agreement, the Deposit Agreement or any other documents to be furnished hereunder, except for nominal stamp duty if the documents are executed in or brought into the Cayman Islands.
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(jjj) The Company is a “foreign private issuer” as defined in Rule 405 of the Securities Act.
(kkk) Except as described under the section “Enforceability of Civil Liabilities” in the Time of Sale Prospectus and the Prospectus, the courts of the Cayman Islands, Hong Kong and the PRC would recognize as a valid judgment any final monetary judgment obtained against the Company in the courts of the State of New York.
(lll) Neither the Company nor any of its subsidiaries nor any of its or their properties or assets has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the laws of the Cayman Islands, Hong Kong or the PRC. To the extent that the Company or any of its subsidiaries, or any of their properties, assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced, the Company or such subsidiary waives or will waive such right to the extent permitted by law and has consented to such relief and enforcement as provided in Section 20(a) of this Agreement.
(mmm) The choice of law of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of the Cayman Islands, Hong Kong and the PRC and will be honored by the courts of the Cayman Islands, Hong Kong and the PRC. The Company has the power to submit, and pursuant to Section 20(a) has, to the extent permitted by law, legally, validly, effectively and irrevocably submitted, to the jurisdiction of the Specified Courts (as defined in Section 20(a)), and has the power to designate, appoint and empower, and pursuant to Section 20(a), has legally, validly and effectively designated, appointed and empowered an agent for service of process in any suit or proceeding based on or arising under this Agreement in any of the Specified Courts.
(nnn) No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus (including all amendments and supplements thereto) has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(ooo) There are no legal or governmental proceedings or contracts or other documents of a character required to be described in the Registration Statement, the ADS Registration Statement or the Form 8-A Registration Statement or, in the case of documents, to be filed as exhibits to the Registration Statement, that are not described and filed as required.
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2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company at US$[ l ] per ADS (the “Purchase Price”) the number of Firm ADSs (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the number of Firm ADSs to be sold by the Company as the number of Firm ADSs set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm ADSs.
On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Underwriters the Additional ADSs, and the Underwriters shall have the right to purchase, severally and not jointly, up to [ l ] Additional ADSs at the Purchase Price, provided, however, that the amount paid by the Underwriters for any Additional ADSs shall be reduced by an amount per share equal to any dividends declared by the Company and payable on the Ordinary Shares represented by the Firm ADSs but not payable on the Ordinary Shares represented by such Additional ADSs. The Representatives may exercise this right on behalf of the Underwriters in whole or from time to time in part by giving written notice not later than 30 days after the date of this Agreement. Any exercise notice shall specify the number of Additional ADSs to be purchased by the Underwriters and the date on which such shares are to be purchased. Each purchase date must be at least one business day after the written notice is given and may not be earlier than the closing date for the Firm ADSs nor later than ten business days after the date of such notice. Additional ADSs may be purchased as provided in Section 4 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm ADSs. On each day, if any, that Additional ADSs are to be purchased (an “Option Closing Date”), each Underwriter agrees, severally and not jointly, to purchase the number of Additional ADSs (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the total number of Additional ADSs to be purchased on such Option Closing Date as the number of Firm ADSs set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm ADSs.
The Company hereby agrees that, without the prior written consent of the Representatives (which consent shall not be unreasonably withheld or delayed) on behalf of the Underwriters, it will not, during the period ending 180 days after the date of the Prospectus (the “Restricted Period”), (1) offer, pledge, issue, 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 ADSs or Ordinary Shares or any other securities so owned convertible into or exercisable or exchangeable for ADSs or Ordinary Shares or (2) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the ADSs or Ordinary Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of ADSs, Ordinary Shares or such other securities, in cash or otherwise [(other than pursuant to employee benefit plans of the Company as disclosed in the Time of Sale Prospectus and the Prospectus)] or (3) file any registration statement with the Commission (other than registration statements on Form S-8 relating to the issuance, vesting, exercise or settlement of equity awards granted or to be granted pursuant to any employee benefit plan) relating to the offering of any ADSs or Ordinary Shares or any securities convertible into or exercisable or exchangeable for ADSs or Ordinary Shares.
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The restrictions contained in the preceding paragraph shall not apply to (a) the Offered Securities to be sold hereunder, (b) the issuance by the Company of ADSs or Ordinary Shares upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and which is described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, or [(c) issue securities upon the exercise of an option or a warrant, the vesting of a restricted share or restricted share unit or the conversion of a security pursuant to employee benefit plans of the Company as disclosed in the Time of Sale Prospectus and the Prospectus, (d) deposit ordinary shares with the Depositary for conversion into ADSs in connection with the contemplated issuance of options under the Company’s employee benefit plans as disclosed in the Time of Sale Prospectus and the Prospectus, or (e)] the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of ADSs or Ordinary Shares, provided that (i) such plan does not provide for the transfer of ADSs or Ordinary Shares during the Restricted Period and (ii) no public announcement or filing under the Exchange Act is required of or voluntarily made by or on behalf of the Company regarding the establishment of such plan.
If the Representatives, in their sole discretion, agree to release or waive the restrictions set forth in a “lock-up” agreement described in Section 5(k) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two business days before the effective date of the release or waiver.
3. Terms of Public Offering. The Company is advised by the Representatives that the Underwriters propose to make a public offering of their respective portions of the Offered Securities as soon after the Registration Statement and this Agreement have become effective as in the judgment of the Representatives is advisable. The Company is further advised by the Representatives that the Offered Securities are to be offered to the public initially at US$ [l ] per ADS (the “Public Offering Price”).
4. Payment and Delivery. Payment for the Firm ADSs to be sold by the Company shall be made to the Company in Federal or other funds immediately available in New York City to the account specified by the Company to the Underwriters at least forty-eight hours in advance of such payment against delivery of such Firm ADSs for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on [ l ], 2023, or at such other time on the same or such other date, not later than [ l ], 2023, as shall be designated in writing by the Representatives. The time and date of such payment are hereinafter referred to as the “Closing Date.”
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Payment for any Additional ADSs shall be made to the Company in Federal or other funds immediately available in New York City to the account specified by the Company to the Underwriters at least forty-eight hours in advance of such payment against delivery of such Additional ADSs for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in Section 2 or at such other time on the same or on such other date, in any event not later than [ l ], 2023, as shall be designated in writing by the Representatives.
The Firm ADSs and Additional ADSs shall be registered in such names and in such denominations as the Representatives shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The Firm ADSs and Additional ADSs shall be delivered to the Representatives on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts of the several Underwriters through the facilities of the Depository Trust Company.
5. Conditions to the Underwriters’ Obligations. The obligations of the Company to sell the Offered Securities to the Underwriters and the several obligations of the Underwriters to purchase and pay for the Offered Securities on the Closing Date are subject to the condition that the Registration Statement shall have become effective not later than [ l ] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus that, in the judgment of the Representatives, is material and adverse and that makes it, in the judgment of the Representatives, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Section 5(a), Section 5(m) and Section 5(t) and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion and negative assurance letter of Skadden, Arps, Slate, Meagher & Flom LLP, U.S. counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.
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(d) The Underwriters shall have received on the Closing Date an opinion of Maples and Calder (Hong Kong) LLP, Cayman Islands counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.
(e) The Underwriters shall have received on the Closing Date an opinion of Commerce & Finance Law Offices, PRC counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.
(f) The Underwriters shall have received on the Closing Date an opinion of Skadden, Arps, Slate, Meagher & Flom, Hong Kong counsel for the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Underwriters.
The opinions of counsel for the Company (except for the opinion of PRC counsel for the Company) described above shall be rendered to the Underwriters at the request of the Company, and shall so state therein.
(g) The Underwriters shall have received on the Closing Date an opinion and negative assurance letter of Latham & Watkins LLP, U.S. counsel for the Underwriters, dated the Closing Date, in form and substance satisfactory to the Underwriters.
(h) The Underwriters shall have received on the Closing Date an opinion of Fangda Partners, PRC counsel for the Underwriters, dated the Closing Date, in form and substance satisfactory to the Underwriters.
(i) The Underwriters shall have received on the Closing Date an opinion of White & Case LLP, counsel for the Depositary, dated the Closing Date, in form and substance satisfactory to the Underwriters.
(j) The Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Underwriters, from Deloitte Touche Tohmatsu Certified Public Accountants LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.
(k) The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between the Company, the Representatives and certain shareholders, officers and directors of the Company relating to sales and certain other dispositions of ADSs, Ordinary Shares or certain other securities, delivered to the Representatives on or before the date hereof, shall be in full force and effect on the Closing Date.
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(l) The several obligations of the Underwriters to purchase Additional ADSs hereunder are subject to the delivery to the Representatives on the applicable Option Closing Date of the following:
(i) a certificate, dated the Option Closing Date and signed by an executive officer of the Company, confirming that the certificate delivered on the Closing Date pursuant to Section 5(b) hereof remains true and correct as of such Option Closing Date;
(ii) an opinion and negative assurance letter Skadden, Arps, Slate, Meagher & Flom LLP, U.S. counsel for the Company, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(c) hereof;
(iii) an opinion of Maples and Calder (Hong Kong) LLP, Cayman Islands counsel for the Company, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(d) hereof;
(iv) an opinion of Commerce & Finance Law Offices, PRC counsel for the Company, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(e) hereof;
(v) an opinion of Skadden, Arps, Slate, Meagher & Flom, Hong Kong counsel for the Company, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(f) hereof;
(vi) an opinion and negative assurance letter of Latham & Watkins LLP, U.S. counsel for the Underwriters, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(g) hereof;
(vii) an opinion of Fangda Partners, PRC counsel for the Underwriters, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(h) hereof;
(viii) an opinion of White & Case LLP, counsel for the Depositary, dated the Option Closing Date, relating to the Additional ADSs to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(i) hereof;
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(ix) a letter dated the Option Closing Date, in form and substance satisfactory to the Underwriters, from Deloitte Touche Tohmatsu Certified Public Accountants LLP, independent public accountants, substantially in the same form and substance as the letter furnished to the Underwriters pursuant to Section 5(j) hereof; provided that the letter delivered on the Option Closing Date shall use a “cut-off date” not earlier than three business days prior to such Option Closing Date; and
(x) such other documents as the Representatives may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional ADSs to be sold on such Option Closing Date and other matters related to the issuance of such Additional ADSs.
(m) There shall not have been any adverse legislative or regulatory developments in the PRC following the signing of this Agreement, which in the Representatives’ sole judgment in good faith after consultation with the Company, would make it inadvisable or impractical to proceed with the public offering or the delivery of the Offered Securities at the Closing Date or any Option Closing Date, as the case may be, on the terms and in the manner contemplated in this Agreement.
(n) The Company and the Depositary shall have executed and delivered the Deposit Agreement and, in the case of the Company, a side letter (the “Depositary Side Letter”) addressed to the Depositary, instructing the Depositary not to accept any shareholder’s deposit of Ordinary Shares in the Company’s American Depositary Receipt facility or issue any new ADSs evidencing the ADSs to any shareholder or any third party, unless consented to by the Company, and the Deposit Agreement shall be in full force and effect on the Closing Date. The Company and the Depositary shall have taken all actions necessary to permit the deposit of the Offered Securities and the issuance of the ADSs representing such Ordinary Shares in accordance with the Deposit Agreement.
(o) The Depositary shall have furnished or caused to be furnished to the Underwriters a certificate satisfactory to the Representatives of one of its authorized officers with respect to the deposit with it of the ADSs against issuance of the Offered Securities, the execution, issuance, countersignature and delivery of the ADSs pursuant to the Deposit Agreement and such other matters related thereto as the Representatives may reasonably request.
(p) The ADSs representing the Offered Securities shall have been approved for listing on the NASDAQ Global Market, subject only to official notice of issuance.
(q) If the Company elects to rely upon Rule 462(b) under the Securities Act, the Company shall have filed a Rule 462 Registration Statement with the Commission in compliance with Rule 462(b) promptly after 4:00 p.m., New York City time, on the date of this Agreement, and the Company shall have at the time of filing either paid to the Commission the filing fee for the Rule 462 Registration Statement or given irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Securities Act.
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(r) The Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective amendment shall have become effective.
(s) No free writing prospectus, Prospectus or amendment or supplement to the Registration Statement, the ADS Registration Statement or the Prospectus shall have been filed to which the Representatives object in writing.
(t) No stop order suspending the effectiveness of the Registration Statement, the ADS Registration Statement, any Rule 462 Registration Statement, or any post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission.
(u) FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting, or other arrangements of the transactions contemplated hereby.
(v) At or prior to the Closing Date and each Option Closing Date, the Offered Securities shall be eligible for clearance and settlement through the facilities of the DTC.
(w) On the Closing Date or Option Closing Date, as the case may be, the Representatives and counsel for the Underwriters shall have received such information, documents, certificates and opinions as they may reasonably require for the purposes of enabling them to pass upon the accuracy and completeness of any statement in the Registration Statement, the Time of Sale Prospectus and the Prospectus, issuance and sale of the Offered Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
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6. Covenants of the Company. The Company covenants with each Underwriter as follows:
(a) To comply with the requirements of Rule 430A, and notify the Representatives promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement, the Form 8-A Registration Statement or the ADS Registration Statement shall become effective, or any supplement to the Prospectus (including any prospectus wrapper) or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement, the Form 8-A Registration Statement, the ADS Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, the Form 8-A Registration Statement, the ADS Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Offered Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement or the ADS Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Offered Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)). The Company will use reasonable efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) To furnish to the Representatives, without charge, copies of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and to furnish to the Representatives in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 6(i) or 6(j) below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the Registration Statement as the Representatives may reasonably request.
(c) Before amending or supplementing the Registration Statement, the ADS Registration Statement, the Form 8-A Registration Statement, the Time of Sale Prospectus or the Prospectus, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Representatives reasonably object.
(d) To give the Representatives notice of its intention to make any filing pursuant to the Exchange Act prior to or on the later of the Closing Date or any Option Closing Date and to furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing, and not to file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.
(e) To furnish to the Representatives a copy of each proposed free writing prospectus (including any electronic roadshow), or amendment thereof or supplement thereto, to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which the Representatives reasonably object.
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(f) If at any time following issuance of a free writing prospectus there occurred or occurs an event or development as a result of which such free writing prospectus conflicted or would conflict with the information contained in the Registration Statement or the ADS Registration Statement relating to the Offered Securities or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances, prevailing at that subsequent time, not misleading, to promptly notify the Representatives and to promptly (subject to Section 6(c)) amend or supplement, at its own expense, such free writing prospectus to eliminate or correct such conflict, untrue statement or omission.
(g) Not to take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.
(h) Not to (and to cause its affiliates not to) take, directly or indirectly, any action which is designed to or which constitutes or which would reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company or facilitate the sale or resale of the Offered Securities.
(i) If the Time of Sale Prospectus is being used to solicit offers to buy the Offered Securities at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission (subject to the last clause of this subsection (i)) and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law; to promptly give the Representatives written notice of any such event or condition of which the Company becomes aware; and before amending or supplementing the Time of Sale Prospectus, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Representatives reasonably object.
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(j) If, during such period after the first date of the public offering of the Offered Securities as in the opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission (subject to the last clause of this subsection (j)) and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Company) to which Offered Securities may have been sold by the Representatives on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law; to promptly give the Representatives written notice of any such event or condition of which the Company becomes aware; and before amending or supplementing the Prospectus, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Representatives reasonably object.
(k) To endeavor to qualify the Offered Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request.
(l) To make generally available to the Company’s security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. The Company, during the period when the Prospectus is required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the applicable rules and regulations of the Commission thereunder. During the three-year period after the date of this Agreement, the Company will furnish to the Representatives and, upon written request, to each of the other Underwriters, as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each report of the Company filed with the Commission under the Exchange Act or mailed to shareholders, and (ii) from time to time, such other information concerning the Company as the Representatives may reasonably request in writing. However, so long as the Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with the Commission on its EDGAR reporting system, it is not required to furnish such reports or statements filed through EDGAR to the Underwriters.
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(m) To use the net proceeds received by it from the sale of the Offered Securities pursuant to this Agreement in the manner specified in the Time of Sale Prospectus under the caption “Use of Proceeds” and in compliance with any applicable laws, rules and regulations of any governmental body, agency or court having jurisdiction over the Company or any subsidiary; to not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions, or in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise); and to maintain and implement adequate internal controls and procedures to monitor and audit transactions that are reasonably designed to detect and prevent any use of the proceeds from the offering of the Offered Securities contemplated hereby that is inconsistent with any of the Company’s representations and obligations under the preceding sentence.
(n) Not to facilitate any shareholder’s conversion of Ordinary Shares to ADSs during the restricted Period and not to release the Depositary from the obligations set forth in, or otherwise amend, terminate or fail to enforce, the Depositary Agreement without the prior written consent of the Representatives. The Company shall at all times maintain transfer restrictions with respect to the ADSs and Ordinary Shares that are subject to transfer restrictions pursuant to this Agreement and the “lock-up” agreements referred to in Section 5(k) and shall ensure compliance with such restrictions on transfer of restricted ADSs and Ordinary Shares, provided that no restrictions shall apply to (A) the issuance, vesting, exercise or settlement of equity awards granted or to be granted pursuant to any employee benefit plan in effect on the date hereof and disclosed in the Prospectus, and (B) the issuances of ADSs and Ordinary Shares pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of options, in each case outstanding on the date hereof. The Company shall retain all share certificates that are by their terms subject to transfer restrictions until such time as such transfer restrictions are no longer applicable to such securities.
(o) To pay, and indemnify and hold the Underwriters harmless against, any stamp, issue, registration, documentary, sales, transfer, or other similar taxes or duties imposed under the laws of Cayman Islands, Hong Kong or the PRC or any political sub-division or taxing authority thereof or therein that is payable in connection with (i) the execution, delivery, consummation or enforcement of this Agreement or the Deposit Agreement, (ii) the creation, allotment and issuance of the Ordinary Shares represented by the Offered Securities, (iii) the sale and delivery of the Offered Securities to the Underwriters or purchasers procured by the Underwriters, or (iv) the resale and delivery of the Offered Securities by the Underwriters in the manner contemplated herein.
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(p) To promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (a) completion of the distribution of the Offered Securities within the meaning of the Securities Act and (b) completion of the Restricted Period referred to in Section 2.
(q) If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, to promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.
(r) To comply with the terms of the Deposit Agreement so that the ADSs will be issued by the Depositary and delivered to each Underwriter’s participant account in DTC, pursuant to this Agreement on the Closing Date and each applicable Option Closing Date.
(s) (i) To not attempt to avoid any judgment in connection with this Agreement obtained by it, applied to it, or denied to it in a court of competent jurisdiction outside the Cayman Islands; (ii) following the consummation of the offering, to use its best efforts to obtain and maintain all approvals required in the Cayman Islands to pay and remit outside the Cayman Islands all dividends declared by the Company and payable on the Ordinary Shares, if any; and (iii) to use its best efforts to obtain and maintain all approvals, if any, required in the Cayman Islands for the Company to acquire sufficient foreign exchange for the payment of dividends and all other relevant purposes.
(t) To comply with the PRC Overseas Investment and Listing Regulations in all material respects, and to use its reasonable efforts to request holders of its Ordinary Shares that are, or that are directly or indirectly owned or controlled by, Chinese residents or Chinese citizens, to comply with the PRC Overseas Investment and Listing Regulations applicable to them, including, without limitation, requesting each such shareholder to complete any registration and other procedures required under applicable PRC Overseas Investment and Listing Regulations (including any applicable rules and regulations of the SAFE).
(u) To use its best efforts to have the ADSs accepted for listing on the NASDAQ Global Market and maintain the listing of the ADSs on the NASDAQ Global Market.
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(v) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Company’s trademarks, service marks and corporate logo for use on the website, if any, operated by such Underwriter solely for the purpose of facilitating the offering of the Offered Securities.
(w) To use its best efforts to comply with and will use its best efforts to require the Company’s directors and executive officers, in their capacities as such, to comply with all applicable laws, rules and regulations, including, without limitation, the Sarbanes-Oxley Act.
(x) That all sums payable by the Company under this Agreement shall be paid free and clear of and without deductions or withholdings of any present or future taxes or duties, unless the deduction or withholding is required by law, in which case the Company shall pay such additional amount as will result in the receipt by each Underwriter of the full amount that would have been received had no deduction or withholding been made; except that no additional amounts shall be payable in respect of (i) any reasonable taxes that would not have been imposed but for a present or former connection between the recipient of such payment and the applicable taxing jurisdiction other than a connection arising solely from such recipient having executed, delivered or performed its obligations, or received a payment, under this Agreement or from the enforcement of this Agreement or (ii) any taxes that would not have been imposed but for the failure of the recipient of such payment to use reasonable efforts to comply, upon commercially reasonable request by the Company, with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the taxing jurisdiction of the recipient if such compliance is required or imposed by law as a precondition to an exemption from, or reduction in, such taxes.
(y) That all sums payable to an Underwriter shall be considered exclusive of any value added or similar taxes (“VAT”), and if any VAT is or becomes chargeable in respect of any such payment, the Company shall, subject to receipt of an appropriate VAT invoice, pay in addition the amount of such VAT (at the same time and in the same manner as the payment to which such VAT relates).
(z) To deliver to the Representatives, on the date of execution of this Agreement, a properly completed and executed Certification Regarding Beneficial Owners of Legal Entity Customers, together with copies of identifying documentation, and to provide such additional supporting documentation as the Representatives may reasonably request in connection with the verification of the foregoing certification.
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7. Expenses.
(a) [Subject to Section 7(b) below, whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid all reasonable expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel, the Company’s accountants in connection with the registration and delivery of the Offered Securities and Ordinary Shares represented thereby under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Offered Securities to the Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Offered Securities under state securities laws and all expenses in connection with the qualification of the Offered Securities for offer and sale under state securities laws as provided in Section 6(k) hereof, (iv) all filing fees and the reasonable fees and disbursements of counsel up to a cap of US$50,000 to the Underwriters incurred in connection with the review and qualification of the offering of the Offered Securities by the Financial Industry Regulatory Authority, (v) all fees and expenses in connection with the preparation and filing of the Form 8-A Registration Statement relating to the Class B ordinary shares, par value US$0.0001 per share, of the Company and all costs and expenses incident to listing the ADSs on the NASDAQ Global Market, (vi) the cost of printing certificates representing the ADSs or Ordinary Shares represented thereby, (vii) the costs and charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” as defined in Rule 433(h) under the Securities Act (a “road show”) undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production of road show slides and graphics, and travel, meals and lodging expenses of the Company’s representatives, and (ix) the document production charges and expenses associated with printing this Agreement. It is understood, however, that except as provided in this Section 7, Section 9 entitled “Indemnity and Contribution” and the last paragraph of Section 13 below, the Underwriters will pay all of their costs and expenses, including but not limited to fees and disbursements of their counsel, expenses associated with hosting investor meetings or luncheons, travel, meals and lodging expenses of the Underwriters, share transfer taxes payable on resale of any of the Offered Securities by them and any advertising expenses connected with any offers they may make.
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(b) If the offering closes, each of the respective Underwriters agree, based on the proportion of shares underwritten by each such Underwriter in connection with the offering , to reimburse the Company for all of such documented expenses incurred in connection with the offering of the Offered Securities in an aggregate amount equal to US$1,000,000 (the “Reimbursement Amount”), including but not limited to:
(i) the domestic and international travel, meals and lodging expenses relating to any road show or Testing-the-Waters Communications incurred by the Company’s representatives,
(ii) travel, meals and lodging expenses of the Company’s representatives to attend the listing ceremony in the United States, and
(iii) other expenses related to the offering, including, without limitation, the fees, disbursements and expenses of the Company’s counsel, the Company’s accountants in connection with the registration and delivery of the Offered Securities and Ordinary Shares represented thereby.
8. Covenants of the Underwriters. Each Underwriter severally covenants with the Company not to, without the consent of the Company, take any action that would result in the Company being required to file with the Commission under Rule 433(d) a free writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter.
9. Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act, and each of their respective directors, officers and employees, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim), joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus or any amendment or supplement thereto, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any “issuer information” that the Company has filed or is required to be filed pursuant to Rule 433(d) under the Securities Act, any “road show” as defined in Rule 433(h) under the Securities Act (a “road show”), or the Prospectus or any amendment or supplement thereto, or any Written Testing-the-Waters Communication or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information is that described in Section 9(b);
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(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the directors of the Company, the officers of the Company who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus or any amendment or supplement thereto, or any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus, road show, or the Prospectus or any amendment or supplement thereto, it being understood and agreed that the only such information furnished by any Underwriter through the Representatives consists of the names and addresses of the Underwriters in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 9(a) or 9(b), such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding; provided that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of any Underwriter within the meaning of Rule 405 under the Securities Act, (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Underwriters and such control persons and affiliates of any Underwriters, such firm shall be designated in writing by the Representatives. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (y) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
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(d) To the extent the indemnification provided for in Section 9(a) or 9(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Offered Securities or (ii) if the allocation provided by Section 9(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in Section 9(d)(i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Offered Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Offered Securities (before deducting expenses) received by the Company on the one hand and the total underwriting discounts and commissions received by the Underwriters on the other hand, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the Offered Securities. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters’ respective obligations to contribute pursuant to this Section 9 are several in proportion to the respective number of Offered Securities they have purchased hereunder, and not joint.
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(e) The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 9(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in Section 9(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 9 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Offered Securities.
10. [Reserved]
11. Termination. The Underwriters may terminate this Agreement by notice given by the Representatives to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Market, the Stock Exchange of Hong Kong Limited or the London Stock Exchange, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States, the PRC, Hong Kong, the Cayman Islands or other relevant jurisdiction shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal, New York State, Hong Kong, London, PRC, Cayman Islands or other relevant authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets, currency exchange rates or controls or any calamity or crisis that, in the judgment of the Representatives, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the offer, sale or delivery of the Offered Securities on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.
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12. Representations, Warranties and Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its affiliates or selling agents, any person controlling any Underwriter, its officers or directors, any person controlling the Company and (ii) delivery of and payment for the Offered Securities.
13. Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Offered Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Offered Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm ADSs set forth opposite their respective names in Schedule I bears to the aggregate number of Firm ADSs set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Representatives may specify, to purchase the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Offered Securities that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 13 by an amount in excess of one-ninth of such number of Offered Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm ADSs and the aggregate number of Firm ADSs with respect to which such default occurs is more than one-tenth of the aggregate number of Firm ADSs to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Firm ADSs are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Representatives or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other documents or arrangements may be effected. If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional ADSs and the aggregate number of Additional ADSs with respect to which such default occurs is more than one-tenth of the aggregate number of Additional ADSs to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional ADSs to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional ADSs that such non-defaulting Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
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If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all accountable out-of-pocket expenses (including the fees and disbursements of their counsel) actually incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder.
14. Entire Agreement. (a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Offered Securities, represents the entire agreement between the Company, on the one hand, and the Underwriters, on the other, with respect to the preparation of any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Offered Securities.
(b) the Company acknowledges that in connection with the offering of the Offered Securities: (i) the Underwriters have acted at arms’ length, and each Underwriter is acting solely as a principal and not the agent or fiduciary of, the Company or any other person, (ii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement, if any, and (iii) the Underwriters may have interests that differ from those of the Company. The Underwriters have not provided any legal, accounting, regulatory, investment or tax advice with respect to the offering of the Offered Securities, the Company has consulted its own respective legal, accounting, financial, regulatory and tax advisors to the extent it deemed appropriate, and none of the activities of the Underwriters in connection with the transactions contemplated herein constitutes a recommendation, investment advice or solicitation of any action by the Underwriters with respect to any entity or natural person. The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters for breach of fiduciary duty or an alleged breach of fiduciary duty and agrees that the Underwriters shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including shareholders, employees or creditors of the Company.
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15. Trial by Jury. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
16. Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of a signature or signature page to this Agreement by facsimile, DocuSign, or other e-signature or electronic transmission (e.g., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.
17. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.
18. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.
19. Notices. All communications hereunder shall be in writing and effective only upon receipt and if to the Underwriters shall be delivered, mailed or sent to the Representatives, at:
[Goldman Sachs (Asia) L.L.C.
68th Floor, Cheung Kong Center,
2 Queens Road, Central,
Hong Kong
Attention: Equity Capital Markets
Morgan Stanley Asia Limited
46/F, International Commerce Center
1 Austin Road West, Kowloon
Hong Kong
Attention: Equity Syndicate Desk
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue New York
NY 10010, United States
Attention: Equity Syndicate Desk]
if to the Company shall be delivered, mailed or sent to
Hesai Group
9th Floor, Building L2-B
1588 Zhuguang Road, Qingpu District
Shanghai 201702
People’s Republic of China
Attention: Louis T. Hsieh
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20. Submission to Jurisdiction; Appointment of Agents for Service.
(a) The Company hereby submits to the exclusive jurisdiction of any New York State or United States Federal court sitting in Borough of Manhattan in The City of New York (the “Specified Courts”) over any suit, action or proceeding arising out of or relating to this Agreement, the Prospectus, the Registration Statement or the offering of the Offered Securities (each, a “Related Proceeding”). The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Related Proceeding brought in such a court and any claim that any such Related Proceeding brought in such a court has been brought in an inconvenient forum. To the extent that the Company has or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Company irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding. The Company hereby irrevocably appoints [Cogency Global Inc.], with offices at [122 East 42nd Street, 18th Floor, New York, NY 10168] as its agent for service of process in any Related Proceeding and agrees that service of process in any such Related Proceeding may be made upon it at the office of such agent. The Company waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that such agent has agreed to act as the Company’s agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.
21. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to any Underwriter or any person controlling any Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Underwriter or controlling person of any sum in such other currency, and only to the extent that such Underwriter or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Underwriter or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter or controlling person hereunder, such Underwriter or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to such Underwriter or controlling person hereunder.
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22. Representatives. The Representatives will act for the several Underwriters in connection with the transactions contemplated by this Agreement, and any action under this Agreement taken by the Representatives jointly will be binding upon all the Underwriters.
23. Recognition of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
For purposes of this Section 23: (A) a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); (B) “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); (C) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and (D) “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
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Very truly yours, | |||
Hesai Group | |||
By: | |||
Name: | |||
Title: |
[Signature page to Underwriting Agreement]
Accepted as of the date hereof
[Goldman Sachs (Asia) L.L.C.
Morgan Stanley Asia Limited
Credit Suisse Securities (USA) LLC]
Acting severally on behalf of themselves and the several Underwriters named in Schedule I hereto |
By: | Goldman Sachs (Asia) L.L.C. (Incorporated in Delaware, U.S.A. with limited liability) |
||
By: | |||
Name: | |||
Title: | |||
By: | Morgan Stanley Asia Limited | ||
By: | |||
Name: | |||
Title: | |||
By: | Credit Suisse Securities (USA) LLC | ||
By: | |||
Name: | |||
Title: |
[Signature page to Underwriting Agreement]
Schedule I
Underwriter | Number
of Firm ADSs | |||
[Goldman Sachs (Asia) L.L.C. | ||||
Morgan Stanley Asia Limited | ||||
Credit Suisse Securities (USA) LLC | ||||
Huatai Securities (USA), Inc.] | ||||
Total: |
I-1
Schedule II
Time of Sale Prospectus
II-1
Schedule III
Written Testing-the-Waters Communications
III-1
EXHIBIT A
FORM OF LOCK-UP LETTER
A-1
EXHIBIT B
FORM OF WAIVER OF LOCK-UP
B-1
FORM OF PRESS RELEASE
B-2
Exhibit 3.2
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
SECOND
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
HESAI GROUP
(adopted by a Special Resolution passed on January 28, 2023 and effective immediately prior to the completion of the initial public offering of the Company’s American Depositary Shares representing its Class B Ordinary Shares)
1. | The name of the Company is Hesai Group. |
2. | The Registered Office of the Company will be situated at the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other location within the Cayman Islands as the Directors may from time to time determine. |
3. | The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act or any other law of the Cayman Islands. |
4. | The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Act. |
5. | The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands. |
6. | The liability of each Shareholder is limited to the amount, if any, unpaid on the Shares held by such Shareholder. |
7. | The authorized share capital of the Company is US$100,000 divided into 1,000,000,000 shares of a par value of US$0.0001 each, comprising (i) 50,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 900,000,000 Class B ordinary shares of a par value of US$0.0001 each, and (iii) 50,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with the Articles. Subject to the Companies Act and the Articles, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorized share capital and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided. |
8. | The Company has the power contained in the Companies Act to deregister in the Cayman Islands and be registered by way of continuation in some other jurisdiction. |
9. | Capitalized terms that are not defined in this Memorandum of Association bear the same meanings as those given in the Articles of Association of the Company. |
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
SECOND AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
HESAI GROUP
(adopted by a Special Resolution passed on January 16, 2023 and effective immediately prior to the completion of the initial public offering of the Company’s American Depositary Shares representing its Class B Ordinary Shares)
TABLE A
The regulations contained or incorporated in Table ‘A’ in the First Schedule of the Companies Act shall not apply to the Company and the following Articles shall comprise the Articles of Association of the Company.
INTERPRETATION
1. | In these Articles the following defined terms will have the meanings ascribed to them, if not inconsistent with the subject or context: |
“ADS” | means an American Depositary Share representing Class B Ordinary Shares; |
“Affiliate” | means in respect of a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, and (i) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law, father-in-law, brothers-in-law and sisters-in-law, a trust for the benefit of any of the foregoing, and a corporation, partnership or any other entity wholly or jointly owned by any of the foregoing, and (ii) in the case of an entity, shall include a partnership, a corporation or any other entity or any natural person which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. The term “control” shall mean the ownership, directly or indirectly, of shares possessing more than fifty percent (50%) of the voting power of the corporation, partnership or other entity (other than, in the case of a corporation, securities having such power only by reason of the happening of a contingency), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity; |
“Articles” | means these articles of association of the Company, as amended or substituted from time to time; |
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3
“Electronic Transactions Act” | means the Electronic Transactions Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof; |
“electronic record” | has the meaning given to it in the Electronic Transactions Act and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor; |
“Memorandum of Association” | means the memorandum of association of the Company, as amended or substituted from time to time; |
“Ordinary Resolution” |
means a resolution: | |
(a) | passed by a simple majority of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company held in accordance with these Articles; or | |
(b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed; |
“Ordinary Share” | means a Class A Ordinary Share or a Class B Ordinary Share; |
“paid up” | means paid up as to the par value in respect of the issue of any Shares and includes credited as paid up; |
“Person” | means any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires; |
“Present” | means in respect of any Person, such Person’s presence at a general meeting of Shareholders (or any meeting of the holders of any Class of Shares), which may be satisfied by means of such Person or, if a corporation or other non-natural Person, its duly authorized representative (or, in the case of any Shareholder, a proxy which has been validly appointed by such Shareholder in accordance with these Articles), being: (a) physically present at the venue specified in the notice convening the meeting; or (b) in the case of any meeting at which Communication Facilities are permitted in accordance with these Articles, including any Virtual Meeting, connected by means of the use of such Communication Facilities in accordance with procedures specified in the notice convening such general meeting; and “Presence” shall be construed accordingly; |
“Register” | means the register of Members of the Company maintained in accordance with the Companies Act; |
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“Registered Office” | means the registered office of the Company as required by the Companies Act; |
“Seal” | means the common seal of the Company (if adopted) including any facsimile thereof; |
“Secretary” | means any Person appointed by the Directors to perform any of the duties of the secretary of the Company; |
“Securities Act” | means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time; |
“Share” | means a share in the share capital of the Company. All references to “Shares” herein shall be deemed to be Shares of any or all Classes as the context may require. For the avoidance of doubt in these Articles the expression “Share” shall include a fraction of a Share; |
“Shareholder” or “Member” | means a Person who is registered as the holder of one or more Shares in the Register; |
“Share Premium Account” | means the share premium account established in accordance with these Articles and the Companies Act; |
“signed” | means bearing a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a Person with the intent to sign the electronic communication; |
“Special Resolution” |
means a special resolution of the Company passed in accordance with the Companies Act, being a resolution: | |
(a) | passed by not less than two-thirds of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given; or | |
(b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed; |
“Treasury Share” | means a Share held in the name of the Company as a treasury share in accordance with the Companies Act; |
“United States” | means the United States of America, its territories, its possessions and all areas subject to its jurisdiction; and |
“Virtual Meeting” | means any general meeting of the Shareholders (or any meeting of the holders of any Class of Shares) at which the Shareholders (and any other permitted participants of such meeting, including without limitation the chairman of the meeting and any Directors) are permitted to be Present solely by means of Communication Facilities. |
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2. | In these Articles, save where the context requires otherwise: |
(a) | words importing the singular number shall include the plural number and vice versa; |
(b) | words importing the masculine gender only shall include the feminine gender and any Person as the context may require; |
(c) | the word “may” shall be construed as permissive and the word “shall” shall be construed as imperative; |
(d) | reference to a dollar or dollars (or US$) and to a cent or cents is reference to dollars and cents of the United States of America; |
(e) | reference to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force; |
(f) | reference to any determination by the Directors shall be construed as a determination by the Directors in their sole and absolute discretion and shall be applicable either generally or in any particular case; |
(g) | reference to “in writing” shall be construed as written or represented by any means reproducible in writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing including in the form of an electronic record or partly one and partly another; |
(h) | any requirements as to delivery under the Articles include delivery in the form of an electronic record or an electronic communication; |
(i) | any requirements as to execution or signature under the Articles, including the execution of the Articles themselves, can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act; and |
(j) | Sections 8 and 19(3) of the Electronic Transactions Act shall not apply. |
3. | Subject to the last two preceding Articles, any words defined in the Companies Act shall, if not inconsistent with the subject or context, bear the same meaning in these Articles. |
PRELIMINARY
4. | The business of the Company may be conducted as the Directors see fit. |
5. | The Registered Office shall be at such address in the Cayman Islands as the Directors may from time to time determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine. |
6. | The expenses incurred in the formation of the Company and in connection with the offer for subscription and issue of Shares shall be paid by the Company. Such expenses may be amortized over such period as the Directors may determine and the amount so paid shall be charged against income and/or capital in the accounts of the Company as the Directors shall determine. |
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7. | The Directors shall keep, or cause to be kept, the Register at such place as the Directors may from time to time determine and, in the absence of any such determination, the Register shall be kept at the Registered Office. |
SHARES
8. | Subject to these Articles, all Shares for the time being unissued shall be under the control of the Directors who may, in their absolute discretion and without the approval of the Members, cause the Company to: |
(a) | issue, allot and dispose of Shares (including, without limitation, preferred shares) (whether in certificated form or non-certificated form) to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine; |
(b) | grant rights over Shares or other securities to be issued in one or more classes or series as they deem necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attaching to such Shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers, preferences, privileges and rights associated with the then issued and outstanding Shares, at such times and on such other terms as they think proper; and |
(c) | grant options with respect to Shares and issue warrants or similar instruments with respect thereto. |
9. | The Directors may authorize the division of Shares into any number of Classes and the different Classes shall be authorized, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by an Ordinary Resolution. The Directors may issue Shares with such preferred or other rights, all or any of which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate. Notwithstanding Article 18, the Directors may issue from time to time, out of the authorised share capital of the Company (other than the authorised but unissued Ordinary Shares), series of preferred shares in their absolute discretion and without approval of the Members; provided, however, before any preferred shares of any such series are issued, the Directors shall by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including: |
(a) | the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from the par value thereof; |
(b) | whether the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited; |
(c) | the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or any other series of shares; |
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(d) | whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions of such redemption; |
(e) | whether the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference shall bear to the entitlements of the holders of shares of any other class or any other series of shares; |
(f) | whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof; |
(g) | whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange; |
(h) | the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares or shares of any other class of shares or any other series of preferred shares; |
(i) | the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including additional shares of such series or of any other class of shares or any other series of preferred shares; and |
(j) | any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof; |
and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued. The Company shall not issue Shares to bearer.
10. | The Company may insofar as may be permitted by law, pay a commission to any Person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. Such commissions may be satisfied by the payment of cash or the lodgment of fully or partly paid-up Shares or partly in one way and partly in the other. The Company may also pay such brokerage as may be lawful on any issue of Shares. |
11. | The Directors may refuse to accept any application for Shares, and may accept any application in whole or in part, for any reason or for no reason. |
CLASS A ORDINARY SHARES AND CLASS B ORDINARY SHARES
12. | Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall entitle the holder thereof to ten (10) votes on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company. |
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13. | Each Class A Ordinary Share is convertible into one (1) Class B Ordinary Share at any time at the option of the holder thereof. The right to convert shall be exercisable by the holder of the Class A Ordinary Share delivering a written notice to the Company that such holder elects to convert a specified number of Class A Ordinary Shares into Class B Ordinary Shares. |
14. | Any conversion of Class A Ordinary Shares into Class B Ordinary Shares pursuant to these Articles shall be effected by means of the re-designation of each relevant Class A Ordinary Share as a Class B Ordinary Share. Such conversion shall become effective (i) in the case of any conversion effected pursuant to Article 13, forthwith upon the receipt by the Company of the written notice delivered to the Company as described in Article 13 (or at such later date as may be specified in such notice), or (ii) in the case of any automatic conversion effected pursuant to Article 15, forthwith upon occurrence of the event specified in Article 15 which triggers such automatic conversion, and the Company shall make entries in the Register to record the re-designation of the relevant Class A Ordinary Shares as Class B Ordinary Shares at the relevant time. |
15. | Any number of Class A Ordinary Shares held by a holder thereof will be automatically and immediately converted into an equal number of Class B Ordinary Shares upon the occurrence of any of the following: |
(a) | any direct or indirect sale, transfer, assignment or disposition of such number of Class A Ordinary Shares by the holder thereof or the direct or indirect transfer or assignment of the voting power attached to such number of Class A Ordinary Shares through voting proxy or otherwise to any person that is neither an Affiliate of such holder nor another holder of Class A Ordinary Shares or an Affiliate of such another holder; |
for the avoidance of doubt, the creation of any pledge, charge, encumbrance or other third party right of whatever description on any of Class A Ordinary Shares to secure contractual or legal obligations shall not be deemed as a sale, transfer, assignment or disposition under this clause (a) unless and until any such pledge, charge, encumbrance or other third party right is enforced and results in a third party, which is neither an Affiliate of such holder nor another holder of Class A Ordinary Shares or an Affiliate of such another holder, holding directly or indirectly beneficial ownership or voting power through voting proxy or otherwise to the related Class A Ordinary Shares, in which case all the related Class A Ordinary Shares shall be automatically converted into the same number of Class B Ordinary Shares; or
(b) | any direct or indirect sale, transfer, assignment or disposition of a majority of the issued and outstanding voting securities of, or the direct or indirect transfer or assignment of the voting power attached to such voting securities through voting proxy or otherwise, or the direct or indirect sale, transfer, assignment or disposition of all or substantially all of the assets of, a holder of Class A Ordinary Shares that is an entity to any person that is neither an Affiliate of such holder nor another holder of Class A Ordinary Shares or an Affiliate of such holder; |
for the avoidance of doubt, the creation of any pledge, charge, encumbrance or other third party right of whatever description on the issued and outstanding voting securities or the assets of a holder of Class A Ordinary Shares that is an entity to secure contractual or legal obligations shall not be deemed as a sale, transfer, assignment or disposition under this clause (b) unless and until any such pledge, charge, encumbrance or other third party right is enforced and results in a third party, which is neither an Affiliate of such holder nor another holder of Class A Ordinary Shares or an Affiliate of such another holder, holding directly or indirectly beneficial ownership or voting power through voting proxy or otherwise to the related issued and outstanding voting securities or the assets.
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16. | Class B Ordinary Shares are not convertible into Class A Ordinary Shares under any circumstances. |
17. | Save and except for voting rights and conversion rights as set out in Articles 12 to 16 (inclusive), Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions. |
MODIFICATION OF RIGHTS
18. | Whenever the capital of the Company is divided into different Classes the rights attached to any such Class may, subject to any rights or restrictions for the time being attached to any Class, only be materially adversely varied with the consent in writing of the holders of at least two-thirds (2/3) of the issued Shares of that Class or with the sanction of an Ordinary Resolution passed at a separate meeting of the holders of the Shares of that Class. To every such separate meeting all the provisions of these Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis, apply, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least one-third (1/3) in nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not Present, those Shareholders who are Present shall form a quorum) and that, subject to any rights or restrictions for the time being attached to the Shares of that Class, every Shareholder of the Class shall on a poll have one vote for each Share of the Class held by him. For the purposes of this Article the Directors may treat all the Classes or any two or more Classes as forming one Class if they consider that all such Classes would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes. |
19. | The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the Shares of that Class, be deemed to be materially adversely varied by, inter alia, the creation, allotment or issue of further Shares ranking pari passu with or subsequent to them or the redemption or purchase of any Shares of any Class by the Company. The rights of the holders of Shares shall not be deemed to be materially adversely varied by the creation or issue of Shares with preferred or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights. |
CERTIFICATES
20. | Every Person whose name is entered as a Member in the Register may, without payment and upon its written request, request a certificate within two calendar months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) in the form determined by the Directors. All certificates shall specify the Share or Shares held by that Person, provided that in respect of a Share or Shares held jointly by several Persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all. All certificates for Shares shall be delivered personally or sent through the post addressed to the Member entitled thereto at the Member’s registered address as appearing in the Register. |
21. | Every share certificate of the Company shall bear legends required under the applicable laws, including the Securities Act. |
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22. | Any two or more certificates representing Shares of any one Class held by any Member may at the Member’s request be cancelled and a single new certificate for such Shares issued in lieu on payment (if the Directors shall so require) of one dollar (US$1.00) or such smaller sum as the Directors shall determine. |
23. | If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same Shares may be issued to the relevant Member upon request, subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit. |
24. | In the event that Shares are held jointly by several Persons, any request may be made by any one of the joint holders and if so made shall be binding on all of the joint holders. |
FRACTIONAL SHARES
25. | The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, contributions, calls or otherwise), limitations, preferences, privileges, qualifications, restrictions, rights (including, without prejudice to the generality of the foregoing, voting and participation rights) and other attributes of a whole Share. If more than one fraction of a Share of the same Class is issued to or acquired by the same Shareholder such fractions shall be accumulated. |
LIEN
26. | The Company has a first and paramount lien on every Share (whether or not fully paid) for all amounts (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Company also has a first and paramount lien on every Share registered in the name of a Person indebted or under liability to the Company (whether he is the sole registered holder of a Share or one of two or more joint holders) for all amounts owing by him or his estate to the Company (whether or not presently payable). The Directors may at any time declare a Share to be wholly or in part exempt from the provisions of this Article. The Company’s lien on a Share extends to any amount payable in respect of it, including but not limited to dividends. |
27. | The Company may sell, in such manner as the Directors in their absolute discretion think fit, any Share on which the Company has a lien, but no sale shall be made unless an amount in respect of which the lien exists is presently payable nor until the expiration of fourteen (14) calendar days after a notice in writing, demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the Persons entitled thereto by reason of his death or bankruptcy. |
28. | For giving effect to any such sale the Directors may authorize a Person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. |
29. | The proceeds of the sale after deduction of expenses, fees and commission incurred by the Company shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the Person entitled to the Shares immediately prior to the sale. |
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CALLS ON SHARES
30. | Subject to the terms of the allotment, the Directors may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their Shares, and each Shareholder shall (subject to receiving at least fourteen (14) calendar days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on such Shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed. |
31. | The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof. |
32. | If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the Person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part. |
33. | The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified. |
34. | The Directors may make arrangements with respect to the issue of partly paid Shares for a difference between the Shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment. |
35. | The Directors may, if they think fit, receive from any Shareholder willing to advance the same all or any part of the moneys uncalled and unpaid upon any partly paid Shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an Ordinary Resolution, eight percent per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable. |
FORFEITURE OF SHARES
36. | If a Shareholder fails to pay any call or instalment of a call in respect of partly paid Shares on the day appointed for payment, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. |
37. | The notice shall name a further day (not earlier than the expiration of fourteen (14) calendar days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited. |
38. | If the requirements of any such notice as aforesaid 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 notice has been made, be forfeited by a resolution of the Directors to that effect. |
39. | A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. |
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40. | A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares forfeited, but his liability shall cease if and when the Company receives payment in full of the amount unpaid on the Shares forfeited. |
41. | A certificate in writing under the hand of a Director that a Share has been duly forfeited on a date stated in the certificate shall be conclusive evidence of the facts in the declaration as against all Persons claiming to be entitled to the Share. |
42. | The Company may receive the consideration, if any, given for a Share on any sale or disposition thereof pursuant to the provisions of these Articles as to forfeiture and may execute a transfer of the Share in favor of the Person to whom the Share is sold or disposed of and that Person shall be registered as the holder of the Share and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the disposition or sale. |
43. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by the terms of issue of a Share becomes due and payable, whether on account of the amount of the Share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified. |
TRANSFER OF SHARES
44. | The instrument of transfer of any Share shall be in writing and in any usual or common form or such other form as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares. |
45. | (a) | The Directors may in their absolute discretion decline to register any transfer of Shares which is not fully paid up or on which the Company has a lien. |
(b) | The Directors may also decline to register any transfer of any Share unless: |
(i) | the instrument of transfer is lodged with the Company, accompanied by the certificate for the Shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; |
(ii) | the instrument of transfer is in respect of only one Class of Shares; |
(iii) | the instrument of transfer is properly stamped, if required; |
(iv) | in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred does not exceed four; and |
(v) | a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Board of Directors may from time to time require, is paid to the Company in respect thereof. |
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46. | The registration of transfers may, on ten (10) calendar days’ notice being given by advertisement in such one or more newspapers, by electronic means or by any other means in accordance with the Designated Stock Exchange Rules, be suspended and the Register closed at such times and for such periods as the Directors may, in their absolute discretion, from time to time determine, provided always that such registration of transfer shall not be suspended nor the Register closed for more than thirty (30) calendar days in any calendar year. |
47. | All instruments of transfer that are registered shall be retained by the Company. If the Directors refuse to register a transfer of any Shares, they shall within three calendar months after the date on which the transfer was lodged with the Company send notice of the refusal to each of the transferor and the transferee. |
TRANSMISSION OF SHARES
48. | The legal personal representative of a deceased sole holder of a Share shall be the only Person recognized by the Company as having any title to the Share. In the case of a Share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only Person recognized by the Company as having any title to the Share. |
49. | Any Person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall, upon such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the death or bankruptcy. |
50. | A Person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such Person to elect either to be registered himself or to transfer the Share, and if the notice is not complied with within ninety (90) calendar days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. |
REGISTRATION OF EMPOWERING INSTRUMENTS
51. | The Company shall be entitled to charge a fee not exceeding one U.S. dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument. |
ALTERATION OF SHARE CAPITAL
52. | The Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided into Shares of such Classes and amount, as the resolution shall prescribe. |
53. | The Company may by Ordinary Resolution: |
(a) | increase its share capital by new Shares of such amount as it thinks expedient; |
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(b) | consolidate and divide all or any of its share capital into Shares of a larger amount than its existing Shares; |
(c) | subdivide its Shares, or any of them, into Shares of an amount smaller than that fixed by the Memorandum, 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 |
(d) | 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. |
54. | The Company may by Special Resolution reduce its share capital and any capital redemption reserve in any manner authorized by the Companies Act. |
REDEMPTION, PURCHASE AND SURRENDER OF SHARES
55. | Subject to the provisions of the Companies Act and these Articles, the Company may: |
(a) | issue Shares that are to be redeemed or are liable to be redeemed at the option of the Shareholder or the Company. The redemption of Shares shall be effected in such manner and upon such terms as may be determined, before the issue of such Shares, by either the Board or by the Shareholders by Ordinary Resolution; |
(b) | purchase its own Shares (including any redeemable Shares) on such terms and in such manner and terms as have been approved by the Board or by the Members by Ordinary Resolution, or are otherwise authorized by these Articles; and |
(c) | make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Companies Act, including out of capital. |
56. | The purchase of any Share shall not oblige the Company to purchase any other Share other than as may be required pursuant to applicable law and any other contractual obligations of the Company. |
57. | The holder of the Shares being purchased shall be bound to deliver up to the Company the certificate(s) (if any) thereof for cancellation and thereupon the Company shall pay to him the purchase or redemption monies or consideration in respect thereof. |
58. | The Directors may accept the surrender for no consideration of any fully paid Share. |
TREASURY SHARES
59. | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share. |
60. | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration). |
GENERAL MEETINGS
61. | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
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62. | (a) | The Company may (but shall not be obliged to) in each calendar year hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as may be determined by the Directors. |
(b) | At these meetings the report of the Directors (if any) shall be presented. |
63. | (a) | The Chairman or a majority of the Directors may call general meetings, and they shall on a Shareholders’ requisition forthwith proceed to convene an extraordinary general meeting of the Company. |
(b) | A Shareholders’ requisition is a requisition of Members holding at the date of deposit of the requisition Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares of the Company that as at the date of the deposit carry the right to vote at general meetings of the Company. |
(c) | The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists. |
(d) | If there are no Directors as at the date of the deposit of the Shareholders’ requisition, or if the Directors do not within twenty-one (21) calendar days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further forty-five (45) calendar days, the requisitionists, or any of them representing more than one-half (1/2) of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three calendar months after the expiration of the said forty-five (45) calendar days. |
(e) | A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors. |
NOTICE OF GENERAL MEETINGS
64. | At least seven (7) calendar days’ notice shall be given for any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place (except in the case of a Virtual Meeting), the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: |
(a) | in the case of an annual general meeting, by all the Shareholders (or their proxies) entitled to attend and vote thereat; and |
(b) | in the case of an extraordinary general meeting, by a majority of the Shareholders having a right to attend and vote at the meeting and Present at the meeting. |
65. | The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting. |
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PROCEEDINGS AT GENERAL MEETINGS
66. | No business except for the appointment of a chairman for the meeting shall be transacted at any general meeting unless a quorum of Shareholders is Present at the time when the meeting proceeds to business. One or more Shareholders holding Shares which carry in aggregate (or representing by proxy) not less than one-third (1/3) of all votes attaching to all Shares in issue and entitled to vote at such general meeting Present shall be a quorum for all purposes. |
67. | If within half an hour from the time appointed for the meeting a quorum is not Present, the meeting shall be dissolved. |
68. | If the Directors wish to make this facility available for a specific general meeting or all general meetings of the Company, Presence at the relevant general meeting of the Company may be by means of Communication Facilities. Without limiting the generality of the foregoing, the Directors may determine that any general meeting may be held as a Virtual Meeting. The notice of any general meeting at which Communication Facilities may be utilized (including any Virtual Meeting) must disclose the Communication Facilities that will be used, including the procedures to be followed by any Shareholder or other participant of the meeting who wishes to utilize such Communication Facilities for the purposes of attending and participating in such meeting, including attending and casting any vote thereat. |
69. | The Chairman, if any, shall preside as chairman at every general meeting of the Company. If there is no such Chairman, or if at any general meeting he is not Present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman of the meeting, any Director or Person nominated by the Directors Present at the meeting shall preside as chairman of that meeting, failing which the Shareholders Present shall choose any Person Present to be chairman of that meeting. |
70. | The chairman of any general meeting (including any Virtual Meeting) shall be entitled to attend and participate at any such general meeting by means of Communication Facilities, and to act as the chairman of such general meeting, in which event the following provisions shall apply: |
70.1 | The chairman of the meeting shall be deemed to be Present at the meeting; and |
70.2 | If the Communication Facilities are interrupted or fail for any reason to enable the chairman of the meeting to hear and be heard by all other Persons participating in the meeting, then the other Directors Present at the meeting shall choose another Director Present to act as chairman of the meeting for the remainder of the meeting; provided that if no other Director is Present at the meeting, or if all the Directors Present decline to take the chair, then the meeting shall be automatically adjourned to the same day in the next week and at such time and place as shall be decided by the Board of Directors. |
71. | The chairman of the meeting may with the consent of any general meeting at which a quorum is Present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting, or adjourned meeting, is adjourned for fourteen (14) calendar days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. |
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72. | The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting, except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason, upon notice in writing to Shareholders. A postponement may be for a stated period of any length or indefinitely as the Directors may determine. |
73. | At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting or any Shareholder holding not less than ten percent (10%) of the votes attaching to the Shares Present, and unless a poll is so demanded, a declaration by the chairman of the meeting that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution. |
74. | If a poll is duly demanded it shall be taken in such manner as the chairman of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. |
75. | All questions submitted to a meeting shall be decided by an Ordinary Resolution except where a greater majority is required by these Articles or by the Companies Act. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote. |
76. | A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. |
VOTES OF SHAREHOLDERS
77. | Subject to any rights and restrictions for the time being attached to any Share, on a show of hands every Shareholder Present at the meeting shall, at a general meeting of the Company, each have one vote and on a poll every Shareholder Present at the meeting shall have ten (10) votes for each Class A Ordinary Share and one (1) vote for each Class B Ordinary Share of which he is the holder. |
78. | In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy) shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register. |
79. | Shares carrying the right to vote that are held by a Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may be voted, whether on a show of hands or on a poll, by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person may vote in respect of such Shares by proxy. |
80. | No Shareholder shall be entitled to vote at any general meeting of the Company unless all calls, if any, or other sums presently payable by him in respect of Shares carrying the right to vote held by him have been paid. |
81. | On a poll votes may be given either personally or by proxy. |
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82. | Each Shareholder, other than a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)), may only appoint one proxy on a show of hand. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorized. A proxy need not be a Shareholder. |
83. | An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve. |
84. | The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company: |
(a) | not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or |
(b) | in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or |
(c) | where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded be delivered at the meeting at which the poll was demanded to the chairman of the meeting or to the secretary or to any Director; |
provided that the Directors may in the notice convening the meeting, or in an instrument of proxy sent out by the Company, direct that the instrument appointing a proxy may be deposited at such other time (no later than the time for holding the meeting or adjourned meeting) at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company. The chairman of the meeting may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted shall be invalid.
85. | The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. |
86. | A resolution in writing signed by all the Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings of the Company (or being corporations by their duly authorized representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held. |
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
87. | Any corporation which is a Shareholder or a Director may by resolution of its directors or other governing body authorize such Person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder or Director. |
DEPOSITARY AND CLEARING HOUSES
88. | If a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) is a Member of the Company it may, by resolution of its directors or other governing body or by power of attorney, authorize such Person(s) as it thinks fit to act as its representative(s) at any general meeting of the Company or of any Class of Shareholders provided that, if more than one Person is so authorized, the authorization shall specify the number and Class of Shares in respect of which each such Person is so authorized. A Person so authorized pursuant to this Article shall be entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) could exercise if it were an individual Member holding the number and Class of Shares specified in such authorization, including the right to vote individually on a show of hands. |
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DIRECTORS
89. | (a) | Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than three (3) Directors, the exact number of Directors to be determined from time to time by the Board of Directors. |
(b) | The Board of Directors shall elect and appoint a Chairman by a majority of the Directors then in office, and the period for which the Chairman will hold office will also be determined by a majority of all of the Directors then in office. The Chairman shall preside as chairman at every meeting of the Board of Directors. To the extent the Chairman is not present at a meeting of the Board of Directors within fifteen minutes after the time appointed for holding the same, the attending Directors may choose one of their number to be the chairman of the meeting. |
(c) | The Board may, by the affirmative vote of a simple majority of the Directors present and voting at a Board meeting, or the Company may by Ordinary Resolution appoint any person to be a Director. |
(d) | The Board may, by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting, appoint any person as a Director, to fill a casual vacancy on the Board or as an addition to the existing Board. |
(e) | An appointment of a Director may be on terms that the Director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the Company and the Director, if any; but no such term shall be implied in the absence of express provision. Any Director whose term of office expires shall be eligible for re-election at a meeting of the Shareholders or re-appointment by the Board. |
90. | A Director may be removed from office by Ordinary Resolution (except with regard to the removal of the Chairman, who may only be removed from office by Special Resolution) of the Company, notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). The notice of any meeting at which a resolution to remove a Director shall be proposed or voted upon must contain a statement of the intention to remove that Director and such notice must be served on that Director not less than ten (10) calendar days before the meeting. Such Director is entitled to attend the meeting and be heard on the motion for his removal. A vacancy on the Board created by the removal of a Director under the previous sentence may be filled by Ordinary Resolution or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting. |
91. | The Board may, from time to time, and except as required by applicable law or Designated Stock Exchange Rules, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives of the Company and determine on various corporate governance related matters of the Company as the Board shall determine by resolution of Directors from time to time. |
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92. | A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a Member of the Company shall nevertheless be entitled to attend and speak at general meetings. |
93. | The remuneration of the Directors may be determined by the Directors or by Ordinary Resolution. |
94. | The Directors shall be entitled to be paid for their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive such fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other. |
ALTERNATE DIRECTOR OR PROXY
95. | Any Director may in writing appoint another Person to be his alternate and, save to the extent provided otherwise in the form of appointment, such alternate shall have authority to sign written resolutions on behalf of the appointing Director, but shall not be required to sign such written resolutions where they have been signed by the appointing director, and to act in such Director’s place at any meeting of the Directors at which the appointing Director is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them. |
96. | Any Director may appoint any Person, whether or not a Director, to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting. |
POWERS AND DUTIES OF DIRECTORS
97. | Subject to the Companies Act, these Articles and any resolutions passed in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. No resolution passed by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been passed. |
98. | Subject to these Articles, the Directors may from time to time appoint any natural person or corporation, whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, chief executive officer, one or more other executive officers, president, one or more vice-presidents, treasurer, assistant treasurer, manager or controller, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any natural person or corporation so appointed by the Directors may be removed by the Directors. The Directors may also appoint one or more of their number to the office of managing director upon like terms, but any such appointment shall ipso facto terminate if any managing director ceases for any cause to be a Director, or if the Company by Ordinary Resolution resolves that his tenure of office be terminated. |
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99. | The Directors may appoint any natural person or corporation to be a Secretary (and if need be an assistant Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the Directors or by the Company by Ordinary Resolution. |
100. | The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors. |
101. | The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys or authorized signatory (any such Person being an “Attorney” or “Authorized Signatory”, respectively) of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such Attorney or Authorized Signatory as the Directors may think fit, and may also authorize any such Attorney or Authorized Signatory to delegate all or any of the powers, authorities and discretion vested in him. |
102. | The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article. |
103. | The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any natural person or corporation to be a member of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such natural person or corporation. |
104. | The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorize the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any natural person or corporation so appointed and may annul or vary any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby. |
105. | Any such delegates as aforesaid may be authorized by the Directors to sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them. |
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BORROWING POWERS OF DIRECTORS
106. | The Directors may from time to time at their discretion exercise all the powers of the Company to raise or borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof, to issue debentures, debenture stock, bonds and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party. |
THE SEAL
107. | The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixings of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence. |
108. | The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixings of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the instrument signed by a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose. |
109. | Notwithstanding the foregoing, a Secretary or any assistant Secretary shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company. |
DISQUALIFICATION OF DIRECTORS
110. | The office of Director shall be vacated, if the Director: |
(a) | becomes bankrupt or makes any arrangement or composition with his creditors; |
(b) | dies or is found to be or becomes of unsound mind; |
(c) | resigns his office by notice in writing to the Company; |
(d) | without special leave of absence from the Board, is absent from meetings of the Board for three (3) consecutive meetings and the Board resolves that his office be vacated; or |
(e) | is removed from office pursuant to any other provision of these Articles. |
PROCEEDINGS OF DIRECTORS
111. | The Directors may meet together (either within or outside the Cayman Islands) for the dispatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. At any meeting of the Directors, each Director present in person or represented by his proxy or alternate shall be entitled to one vote. In case of an equality of votes the Chairman shall have a second or casting vote. A Director may, and a Secretary or assistant Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. |
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112. | A Director may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director is a member, by means of telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting. |
113. | The quorum necessary for the transaction of the business of the Board may be fixed by the Directors, and unless so fixed, the quorum shall be a majority of Directors then in office, including the Chairman; provided, however, a quorum shall nevertheless exist at a meeting at which a quorum would exist but for the fact that the Chairman is voluntarily absent from the meeting and notifies the Board of his decision to be absent from that meeting, before or at the meeting. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether or not a quorum is present. |
114. | A Director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made or transaction so consummated. Subject to the Designated Stock Exchange Rules and disqualification by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting for consideration. |
115. | A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realized by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting of the Directors whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement. |
116. | Any Director may act by himself or through his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorize a Director or his firm to act as auditor to the Company. |
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117. | The Directors shall cause minutes to be made for the purpose of recording: |
(a) | all appointments of officers made by the Directors; |
(b) | the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and |
(c) | all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors. |
118. | When the chairman of a meeting of the Directors signs the minutes of such meeting the same shall be deemed to have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings. |
119. | A resolution in writing signed by all the Directors or all the members of a committee of Directors entitled to receive notice of a meeting of Directors or committee of Directors, as the case may be (an alternate Director, subject as provided otherwise in the terms of appointment of the alternate Director, being entitled to sign such a resolution on behalf of his appointer), shall be as valid and effectual as if it had been passed at a duly called and constituted meeting of Directors or committee of Directors, as the case may be. When signed a resolution may consist of several documents each signed by one or more of the Directors or his duly appointed alternate. |
120. | The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose. |
121. | Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the committee members present may choose one of their members to be chairman of the meeting. |
122. | A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall have a second or casting vote. |
123. | All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and was qualified to be a Director. |
PRESUMPTION OF ASSENT
124. | A Director who is present at a meeting of the Board of Directors at which an action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. |
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DIVIDENDS
125. | Subject to any rights and restrictions for the time being attached to any Shares, the Directors may from time to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorize payment of the same out of the funds of the Company lawfully available therefor. |
126. | Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors. |
127. | The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of the Directors, be applicable for meeting contingencies or for equalizing dividends or for any other purpose to which those funds may be properly applied, and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments (other than Shares of the Company) as the Directors may from time to time think fit. |
128. | Any dividend payable in cash to the holder of Shares may be paid in any manner determined by the Directors. If paid by cheque it will be sent by mail addressed to the holder at his address in the Register, or addressed to such person and at such addresses as the holder may direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such Shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. |
129. | The Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the Directors may fix the value of such specific assets, may determine that cash payment shall be made to some Shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors think fit. |
130. | Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares, but if and for so long as nothing is paid up on any of the Shares dividends may be declared and paid according to the par value of the Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share. |
131. | If several Persons are registered as joint holders of any Share, any of them may give effective receipts for any dividend or other moneys payable on or in respect of the Share. |
132. | No dividend shall bear interest against the Company. |
133. | Any dividend unclaimed after a period of six calendar years from the date of declaration of such dividend may be forfeited by the Board of Directors and, if so forfeited, shall revert to the Company. |
ACCOUNTS, AUDIT AND ANNUAL RETURN AND DECLARATION
134. | The books of account relating to the Company’s affairs shall be kept in such manner as may be determined from time to time by the Directors. |
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135. | The books of account shall be kept at the Registered Office, or at such other place or places as the Directors think fit, and shall always be open to the inspection of the Directors. |
136. | The Directors may from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right to inspect any account or book or document of the Company except as conferred by law or authorized by the Directors or by Ordinary Resolution. |
137. | The accounts relating to the Company’s affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited. |
138. | The Directors may appoint an auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration. |
139. | Every auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors. |
140. | The auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment, and at any time during their term of office, upon request of the Directors or any general meeting of the Members. |
141. | The Directors in each calendar year shall prepare, or cause to be prepared, an annual return and declaration setting forth the particulars required by the Companies Act and deliver a copy thereof to the Registrar of Companies in the Cayman Islands. |
CAPITALIZATION OF RESERVES
142. | Subject to the Companies Act, the Directors may: |
(a) | resolve to capitalize an amount standing to the credit of reserves (including a Share Premium Account, capital redemption reserve and profit and loss account), which is available for distribution; |
(b) | appropriate the sum resolved to be capitalized to the Shareholders in proportion to the nominal amount of Shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards: |
(i) | paying up the amounts (if any) for the time being unpaid on Shares held by them respectively, or |
(ii) | paying up in full unissued Shares or debentures of a nominal amount equal to that sum, |
and allot the Shares or debentures, credited as fully paid, to the Shareholders (or as they may direct) in those proportions, or partly in one way and partly in the other, but the Share Premium Account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued Shares to be allotted to Shareholders credited as fully paid;
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(c) | make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalized reserve and in particular, without limitation, where Shares or debentures become distributable in fractions the Directors may deal with the fractions as they think fit; |
(d) | authorize a Person to enter (on behalf of all the Shareholders concerned) into an agreement with the Company providing for either: |
(i) | the allotment to the Shareholders respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalization, or |
(ii) | the payment by the Company on behalf of the Shareholders (by the application of their respective proportions of the reserves resolved to be capitalized) of the amounts or part of the amounts remaining unpaid on their existing Shares, |
and any such agreement made under this authority being effective and binding on all those Shareholders; and
(e) | generally do all acts and things required to give effect to the resolution. |
143. | Notwithstanding any provisions in these Articles and subject to the Companies Act, the Directors may resolve to capitalize an amount standing to the credit of reserves (including the share premium account, capital redemption reserve and profit and loss account) or otherwise available for distribution by applying such sum in paying up in full unissued Shares to be allotted and issued to: |
(a) | employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members; |
(b) | any trustee of any trust or administrator of any share incentive scheme or employee benefit scheme to whom shares are to be allotted and issued by the Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or Members; or |
(c) | any depositary of the Company for the purposes of the issue, allotment and delivery by the depositary of ADSs to employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members. |
SHARE PREMIUM ACCOUNT
144. | The Directors shall in accordance with the Companies Act establish a Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share. |
145. | There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Companies Act, out of capital. |
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NOTICES
146. | Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the Person entitled to give notice to any Shareholder either personally, or by posting it by airmail or a recognized courier service in a prepaid letter addressed to such Shareholder at his address as appearing in the Register, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile to any facsimile number such Shareholder may have specified in writing for the purpose of such service of notices, or by placing it on the Company’s Website should the Directors deem it appropriate. In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands first in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders. |
147. | Notices sent from one country to another shall be sent or forwarded by prepaid airmail or a recognized courier service. |
148. | Any Shareholder Present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened. |
149. | Any notice or other document, if served by: |
(a) | post, shall be deemed to have been served five (5) calendar days after the time when the letter containing the same is posted; |
(b) | facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient; |
(c) | recognized courier service, shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service; or |
(d) | electronic means, shall be deemed to have been served immediately (i) upon the time of the transmission to the electronic mail address supplied by the Shareholder to the Company or (ii) upon the time of its placement on the Company’s Website. |
In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service.
150. | Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document have been removed from the Register as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share. |
151. | Notice of every general meeting of the Company shall be given to: |
(a) | all Shareholders holding Shares with the right to receive notice and who have supplied to the Company an address for the giving of notices to them; and |
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(b) | every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who but for his death or bankruptcy would be entitled to receive notice of the meeting. |
No other Person shall be entitled to receive notices of general meetings.
INFORMATION
152. | Subject to the relevant laws, rules and regulations applicable to the Company, no Member shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public. |
153. | Subject to due compliance with the relevant laws, rules and regulations applicable to the Company, the Board shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register and transfer books of the Company. |
INDEMNITY
154. | Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the provisions of these Articles), Secretary, assistant Secretary, or other officer for the time being and from time to time of the Company (but not including the Company’s auditors) and the personal representatives of the same (each an “Indemnified Person”) shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person’s own dishonesty, willful default or fraud, in or about the conduct of the Company’s business or affairs (including as a result of any mistake 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 Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere. |
155. | No Indemnified Person shall be liable: |
(a) | for the acts, receipts, neglects, defaults or omissions of any other Director or officer or agent of the Company; or |
(b) | for any loss on account of defect of title to any property of the Company; or |
(c) | on account of the insufficiency of any security in or upon which any money of the Company shall be invested; or |
(d) | for any loss incurred through any bank, broker or other similar Person; or |
(e) | for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or oversight on such Indemnified Person’s part; or |
(f) | for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers, authorities, or discretions of such Indemnified Person’s office or in relation thereto; |
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unless the same shall happen through such Indemnified Person’s own dishonesty, willful default or fraud.
FINANCIAL YEAR
156. | Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31st in each calendar year and shall begin on January 1st in each calendar year. |
NON-RECOGNITION OF TRUSTS
157. | No Person shall be recognized by the Company as holding any Share upon any trust and the Company shall not, unless required by law, be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the Companies Act requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register. |
WINDING UP
158. | If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Companies Act, divide amongst the Members in species or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability. |
159. | If the Company shall be wound up, and the assets available for distribution amongst the Members shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them. If in a winding up the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions. |
AMENDMENT OF ARTICLES OF ASSOCIATION
160. | Subject to the Companies Act, the Company may at any time and from time to time by Special Resolution alter or amend these Articles in whole or in part. |
CLOSING OF REGISTER OR FIXING RECORD DATE
161. | For the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at any meeting of Shareholders or any adjournment thereof, or those Shareholders that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Shareholder for any other purpose, the Directors may provide that the Register shall be closed for transfers for a stated period which shall not exceed in any case thirty (30) calendar days in any calendar year. |
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162. | In lieu of or apart from closing the Register, the Directors may fix in advance a date as the record date for any such determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of the Shareholders and for the purpose of determining those Shareholders that are entitled to receive payment of any dividend the Directors may, at or within ninety (90) calendar days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination. |
163. | If the Register is not so closed and no record date is fixed for the determination of those Shareholders entitled to receive notice of, attend or vote at a meeting of Shareholders or those Shareholders that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof. |
REGISTRATION BY WAY OF CONTINUATION
164. | The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company. |
DISCLOSURE
165. | The Directors, or any service providers (including the officers, the Secretary and the registered office provider of the Company) specifically authorized by the Directors, shall be entitled to disclose to any regulatory or judicial authority or to any stock exchange on which securities of the Company may from time to time be listed any information regarding the affairs of the Company including without limitation information contained in the Register and books of the Company. |
EXCLUSIVE FORUM
166. | For the avoidance of doubt and without limiting the jurisdiction of the Cayman Courts to hear, settle and/or determine disputes related to the Company, the courts of the Cayman Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any Director, officer, or other employee of the Company to the Company or the Members, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act or these Articles including but not limited to any purchase or acquisition of Shares, security, or guarantee provided in consideration thereof, or (iv) any action asserting a claim against the Company which if brought in the United States of America would be a claim arising under the internal affairs doctrine (as such concept is recognized under the laws of the United States from time to time). |
167. | Unless the Company consents in writing to the selection of an alternative forum, the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall be the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or proceeding also involves parties other than the Company. Any person or entity purchasing or otherwise acquiring any Share or other securities in the Company, or purchasing or otherwise acquiring ADSs issued pursuant to deposit agreements, shall be deemed to have notice of and consented to the provisions of this Article. Without prejudice to the foregoing, if the provision in this Article is held to be illegal, invalid or unenforceable under applicable law, the legality, validity or enforceability of the rest of these Articles shall not be affected and this Article shall be interpreted and construed to the maximum extent possible to apply in the relevant jurisdiction with whatever modification or deletion may be necessary so as best to give effect to the intention of the Company. |
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Exhibit 4.2
Hesai Group
Number | Class B Ordinary Shares |
Incorporated under the laws of the Cayman Islands
Share capital is US$100,000 divided into
1,000,000,000 shares of a par value of US$0.0001 each, comprising
(i) 50,000,000 Class A Ordinary Shares of a par value of US$0.0001 each,
(ii) 900,000,000 Class B Ordinary Shares of a par value of US$0.0001 each, and
(iii) 50,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the Board may
determine in accordance with the Articles of Association of the Company.
THIS IS TO CERTIFY THAT
is the registered holder of Class B Ordinary Shares in the above-named Company subject to the Memorandum and Articles of Association thereof.
EXECUTED on behalf of the said Company on the | day of | by: |
DIRECTOR |
Exhibit 4.3
DEPOSIT AGREEMENT
by and among
Hesai GROUP
as Issuer,
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Depositary,
AND
THE HOLDERS AND BENEFICIAL OWNERS
OF AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER
Dated as of , 2023
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of , 2023, by and among (i) Hesai Group, a company incorporated in the Cayman Islands, with its principal executive office at 9th Floor, Building L2-B, 1588 Zhuguang Road, Qingpu District, Shanghai, 201702, the People’s Republic of China, and its registered office at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (together with its successors, the “Company”), (ii) Deutsche Bank Trust Company Americas, an indirect wholly owned subsidiary of Deutsche Bank A.G., acting in its capacity as depositary, with its principal office at 1 Columbus Circle, New York, NY 10019, United States of America (the “Depositary”, which term shall include any successor depositary hereunder) and (iii) all Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued hereunder (all such capitalized terms as hereinafter defined).
W I T N E S S E T H T H A T:
WHEREAS, the Company desires to establish an ADR facility with the Depositary to provide for the deposit of the Shares and the creation of American Depositary Shares representing the Shares so deposited;
WHEREAS, the Depositary is willing to act as the depositary for such ADR facility upon the terms set forth in this Deposit Agreement;
WHEREAS, the American Depositary Receipts evidencing the American Depositary Shares issued pursuant to the terms of this Deposit Agreement are to be substantially in the form of Exhibit A and Exhibit B annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;
WHEREAS, the American Depositary Shares to be issued pursuant to the terms of this Deposit Agreement are accepted for trading on the NASDAQ Stock Market; and
WHEREAS, the Board of Directors of the Company (or an authorized committee thereof) has duly approved the establishment of an ADR facility upon the terms set forth in this Deposit Agreement, the execution and delivery of this Deposit Agreement on behalf of the Company, and the actions of the Company and the transactions contemplated herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
All capitalized terms used, but not otherwise defined, herein shall have the meanings set forth below, unless otherwise clearly indicated:
SECTION 1.1 “Affiliate” shall have the meaning assigned to such term by the Commission under Regulation C promulgated under the Securities Act.
SECTION 1.2 “Agent” shall mean such entity or entities as the Depositary may appoint under Section 7.8 hereof, including the Custodian or any successor or addition thereto.
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SECTION 1.3 “American Depositary Share(s)” and “ADS(s)” shall mean the securities represented by the rights and interests in the Deposited Securities granted to the Holders and Beneficial Owners pursuant to this Deposit Agreement and evidenced by the American Depositary Receipts issued hereunder. Each American Depositary Share shall represent the right to receive one Share, until there shall occur a distribution upon Deposited Securities referred to in Section 4.2 hereof or a change in Deposited Securities referred to in Section 4.9 hereof with respect to which additional American Depositary Receipts are not executed and delivered and thereafter each American Depositary Share shall represent the Shares or Deposited Securities specified in such Sections.
SECTION 1.4 “Article” shall refer to an article of the American Depositary Receipts as set forth in the Form of Face of Receipt and Form of Reverse of Receipt in Exhibit A and Exhibit B annexed hereto.
SECTION 1.5 “Articles of Association” shall mean the articles of association of the Company, as amended from time to time.
SECTION 1.6 “ADS Record Date” shall have the meaning given to such term in Section 4.7 hereof.
SECTION 1.7 “Beneficial Owner” shall mean as to any ADS, any person or entity having a beneficial interest in such ADS. A Beneficial Owner need not be the Holder of the ADR evidencing such ADSs. A Beneficial Owner may exercise any rights or receive any benefits hereunder solely through the Holder of the ADR(s) evidencing the ADSs in which such Beneficial Owner has an interest.
SECTION 1.8 “Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not (a) a day on which banking institutions in the Borough of Manhattan, The City of New York are authorized or obligated by law or executive order to close and (b) a day on which the market(s) in which ADSs are traded are closed.
SECTION 1.9 “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.
SECTION 1.10 “Company” shall mean Hesai Group, a company incorporated and existing under the laws of the Cayman Islands, and its successors.
SECTION 1.11 “Corporate Trust Office” when used with respect to the Depositary, shall mean the corporate trust office of the Depositary at which at any particular time its depositary receipts business shall be administered, which, at the date of this Deposit Agreement, is located at 1 Columbus Circle, New York, NY 10019, U.S.A.
SECTION 1.12 “Custodian” shall mean, as of the date hereof, Deutsche Bank AG, Hong Kong Branch, having its principal office at 57/F International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong S.A.R., People’s Republic of China, as the custodian for the purposes of this Deposit Agreement, and any other firm or corporation which may hereinafter be appointed by the Depositary pursuant to the terms of Section 5.5 hereof as a successor or an additional custodian or custodians hereunder, as the context shall require. The term “Custodian” shall mean all custodians, collectively.
SECTION 1.13 “Deliver”, “Deliverable” and “Delivery” shall mean, when used in respect of American Depositary Shares, Receipts, Deposited Securities and Shares, the physical delivery of the certificate representing such security, or the electronic delivery of such security by means of book-entry transfer, as appropriate, including, without limitation, through DRS/Profile. With respect to DRS/Profile ADRs, the terms “execute”, “issue”, “register”, “surrender”, “transfer” or “cancel” refer to applicable entries or movements to or within DRS/Profile.
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SECTION 1.14 “Deposit Agreement” shall mean this Deposit Agreement and all exhibits annexed hereto, as the same may from time to time be amended and supplemented in accordance with the terms hereof.
SECTION 1.15 “Depositary” shall mean Deutsche Bank Trust Company Americas, an indirect wholly owned subsidiary of Deutsche Bank AG, in its capacity as depositary under the terms of this Deposit Agreement, and any successor depositary hereunder.
SECTION 1.16 “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement and any and all other securities, property and cash received or deemed to be received by the Depositary or the Custodian in respect thereof and held hereunder, subject, in the case of cash, to the provisions of Section 4.6.
SECTION 1.17 “Dollars” and “$” shall mean the lawful currency of the United States.
SECTION 1.18 “DRS/Profile” shall mean the system for the uncertificated registration of ownership of securities pursuant to which ownership of ADSs is maintained on the books of the Depositary without the issuance of a physical certificate and transfer instructions may be given to allow for the automated transfer of ownership between the books of DTC and the Depositary. Ownership of ADSs held in DRS/Profile is evidenced by periodic statements issued by the Depositary to the Holders entitled thereto.
SECTION 1.19 “DTC” shall mean The Depository Trust Company, the central book-entry clearinghouse and settlement system for securities traded in the United States, and any successor thereto.
SECTION 1.20 “DTC Participants” shall mean participants within DTC.
SECTION 1.21 “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as from time to time amended.
SECTION 1.22 “Foreign Currency” shall mean any currency other than Dollars.
SECTION 1.23 “Foreign Registrar” shall mean the entity, if any, that carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other appointed agent of the Company for the transfer and registration of Shares or, if no such agent is so appointed and acting, the Company.
SECTION 1.24 “Holder” shall mean the person in whose name a Receipt is registered on the books of the Depositary (or the Registrar, if any) maintained for such purpose. A Holder may or may not be a Beneficial Owner. A Holder shall be deemed to have all requisite authority to act on behalf of those Beneficial Owners of the ADRs registered in such Holder’s name.
SECTION 1.25 “Indemnified Person” and “Indemnifying Person” shall have the respective meanings set forth in Section 5.8 hereof.
SECTION 1.26 “Losses” shall have the meaning set forth in Section 5.8 hereof.
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SECTION 1.27 “Memorandum” shall mean the memorandum of association of the Company.
SECTION 1.28 “Opinion of Counsel” shall mean a written opinion from legal counsel to the Company who is acceptable to the Depositary.
SECTION 1.29 “Receipt(s); “American Depositary Receipt(s)”; and “ADR(s)” shall mean the certificate(s) or statement(s) issued by the Depositary evidencing the American Depositary Shares issued under the terms of this Deposit Agreement, as such Receipts may be amended from time to time in accordance with the provisions of this Deposit Agreement. References to Receipts shall include physical certificated Receipts as well as ADSs issued through any book-entry system, including, without limitation, DRS/Profile, unless the context otherwise requires.
SECTION 1.30 “Registrar” shall mean the Depositary or any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed by the Depositary to register ownership of Receipts and transfer of Receipts as herein provided, and shall include any co-registrar appointed by the Depositary for such purposes. Registrars (other than the Depositary) may be removed and substitutes appointed by the Depositary.
SECTION 1.31 “Restricted ADRs” shall have the meaning set forth in Section 2.11 hereof.
SECTION 1.32 “Restricted ADSs” shall have the meaning set forth in Section 2.11 hereof.
SECTION 1.33 “Restricted Securities” shall mean Shares which (i) have been acquired directly or indirectly from the Company or any of its Affiliates in a transaction or chain of transactions not involving any public offering and subject to resale limitations under the Securities Act or the rules issued thereunder, or (ii) are held by an officer or director (or persons performing similar functions) or other Affiliate of the Company or (iii) are subject to other restrictions on sale or deposit under the laws of the United States or the Cayman Islands, under a shareholders’ agreement, shareholders’ lock-up agreement or the Articles of Association or under the regulations of an applicable securities exchange unless, in each case, such Shares are being sold to persons other than an Affiliate of the Company in a transaction (x) covered by an effective resale registration statement or (y) exempt from the registration requirements of the Securities Act (as hereafter defined) and the Shares are not, when held by such person, Restricted Securities.
SECTION 1.34 “Restricted Shares” shall have the meaning set forth in Section 2.11 hereof.
SECTION 1.35 “Securities Act” shall mean the United States Securities Act of 1933, as from time to time amended.
SECTION 1.36 “Shares” shall mean Class B ordinary shares in registered form of the Company, par value $0.0001 each, heretofore or hereafter validly issued and outstanding and fully paid. References to Shares shall include evidence of rights to receive Shares, whether or not stated in the particular instance; provided, however, that in no event shall Shares include evidence of rights to receive Shares with respect to which the full purchase price has not been paid or Shares as to which pre-emptive rights have theretofore not been validly waived or exercised; provided further, however, that, if there shall occur any change in par value, split-up, consolidation, reclassification, exchange, conversion or any other event described in Section 4.9 hereof in respect of the Shares, the term “Shares” shall thereafter, to the extent permitted by law, represent the successor securities resulting from such change in par value, split-up, consolidation, reclassification, exchange, conversion or event.
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SECTION 1.37 “United States” or “U.S.” shall mean the United States of America.
ARTICLE II.
APPOINTMENT
OF DEPOSITARY; FORM OF RECEIPT; DEPOSIT OF SHARES;
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.1 Appointment of Depositary. The Company hereby appoints the Depositary as exclusive depositary for the Deposited Securities and hereby authorizes and directs the Depositary to act in accordance with the terms set forth in this Deposit Agreement. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms of this Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of this Deposit Agreement and the applicable ADR(s) and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in this Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of this Deposit Agreement and the applicable ADR(s) (the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof).
SECTION 2.2 Form and Transferability of Receipts.
(a) Form. Receipts in certificated form shall be substantially in the form set forth in Exhibit A and Exhibit B annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts may be issued in denominations of any number of American Depositary Shares. No Receipt in certificated form shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been dated and signed by the manual or facsimile signature of a duly authorized signatory of the Depositary. The Depositary shall maintain books on which each Receipt so executed and Delivered, in the case of Receipts in certificated form, and each Receipt issued through any book-entry system, including, without limitation, DRS/Profile, in either case as hereinafter provided, and the transfer of each such Receipt shall be registered. Receipts in certificated form bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary shall bind the Depositary, notwithstanding the fact that such signatory has ceased to hold such office prior to the execution and Delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts.
Notwithstanding anything in this Deposit Agreement or in the form of Receipt to the contrary, to the extent available by the Depositary, ADSs shall be evidenced by Receipts issued through any book-entry system, including, without limitation, DRS/Profile, unless certificated Receipts are specifically requested by the Holder. Holders and Beneficial Owners shall be bound by the terms and conditions of this Deposit Agreement and of the form of Receipt, regardless of whether their Receipts are in certificated form or are issued through any book-entry system, including, without limitation, DRS/Profile.
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(b) Legends. In addition to the foregoing, the Receipts may, and upon the written request of the Company shall, be endorsed with, or have incorporated in the text thereof, such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be (i) necessary to enable the Depositary and the Company to perform their respective obligations hereunder, (ii) required to comply with any applicable laws or regulations, or with the rules and regulations of any securities exchange or market upon which ADSs may be traded, listed or quoted, or to conform with any usage with respect thereto, (iii) necessary to indicate any special limitations or restrictions to which any particular ADRs or ADSs are subject by reason of the date of issuance of the Deposited Securities or otherwise or (iv) required by any book-entry system in which the ADSs are held. Holders and Beneficial Owners shall be deemed, for all purposes, to have notice of, and to be bound by, the terms and conditions of the legends set forth, in the case of Holders, on the ADR registered in the name of the applicable Holders or, in the case of Beneficial Owners, on the ADR representing the ADSs owned by such Beneficial Owners.
(c) Title. Subject to the limitations contained herein and in the form of Receipt, title to a Receipt (and to the ADSs evidenced thereby), when properly endorsed (in the case of certificated Receipts) or upon delivery to the Depositary of proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of the State of New York; provided, however, that the Depositary, notwithstanding any notice to the contrary, may treat the Holder thereof as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes and neither the Depositary nor the Company will have any obligation or be subject to any liability under this Deposit Agreement to any holder of a Receipt, unless such holder is the Holder thereof.
SECTION 2.3 Deposits.
(a) Subject to the terms and conditions of this Deposit Agreement and applicable law, Shares or evidence of rights to receive Shares may be deposited by any person (including the Depositary in its individual capacity but subject, however, in the case of the Company or any Affiliate of the Company, to Section 5.7 hereof) at any time beginning on the 181st day after the date of the prospectus contained in the registration statement on Form F-1 under which the ADSs are first sold or on such earlier date as the Company (with the approval of the underwriters referred to in the said prospectus) may specify in writing to the Depositary, whether or not the transfer books of the Company or the Foreign Registrar, if any, are closed, by Delivery of the Shares to the Custodian. Except for Shares deposited by the Company in connection with the initial sale of ADSs under the registration statement on Form F-1, no deposit of Shares shall be accepted under this Deposit Agreement prior to such date. Every deposit of Shares shall be accompanied by the following: (A)(i) in the case of Shares represented by certificates issued in registered form, appropriate instruments of transfer or endorsement, in a form satisfactory to the Custodian, (ii) in the case of Shares represented by certificates issued in bearer form, such Shares or the certificates representing such Shares and (iii) in the case of Shares Delivered by book-entry transfer, confirmation of such book-entry transfer to the Custodian or that irrevocable instructions have been given to cause such Shares to be so transferred, (B) such certifications and payments (including, without limitation, the Depositary’s fees and related charges) and evidence of such payments (including, without limitation, stamping or otherwise marking such Shares by way of receipt) as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement or as may be deemed by them to be appropriate in the circumstances, (C) if the Depositary so requires, a written order directing the Depositary to execute and Deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the number of American Depositary Shares representing the Shares so deposited, (D) evidence satisfactory to the Depositary (which may include an opinion of counsel reasonably satisfactory to the Depositary provided at the cost of the person seeking to deposit Shares) that all conditions to such deposit have been met and all necessary approvals have been granted by, and there has been compliance with the rules and regulations of, any applicable governmental agency and (E) if the Depositary so requires, (i) an agreement, assignment or instrument satisfactory to the Depositary or the Custodian which provides for the prompt transfer by any person in whose name the Shares are or have been recorded to the Custodian of any distribution, or right to subscribe for additional Shares or to receive other property in respect of any such deposited Shares or, in lieu thereof, such indemnity or other agreement as shall be satisfactory to the Depositary or the Custodian and (ii) if the Shares are registered in the name of the person on whose behalf they are presented for deposit, a proxy or proxies entitling the Custodian to exercise voting rights in respect of the Shares for any and all purposes until the Shares so deposited are registered in the name of the Depositary, the Custodian or any nominee. No Share shall be accepted for deposit unless accompanied by confirmation or such additional evidence, if any is required by the Depositary, that is reasonably satisfactory to the Depositary or the Custodian that all conditions to such deposit have been satisfied by the person depositing such Shares under the laws and regulations of the Cayman Islands and any necessary approval has been granted by any governmental body in the Cayman Islands, if any, which is then performing the function of the regulator of currency exchange. The Depositary may issue Receipts against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares or other Deposited Securities required to be registered under the provisions of the Securities Act, unless a registration statement is in effect as to such Shares or other Deposited Securities, or any Shares or other Deposited Securities the deposit of which would violate any provisions of the Memorandum and Articles of Association. The Depositary shall use commercially reasonable efforts to comply with reasonable written instructions of the Company that the Depositary shall not accept for deposit hereunder any Shares specifically identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with the securities laws in the United States and other jurisdictions, provided that the Company shall indemnify the Depositary and the Custodian for any claims and losses arising from not accepting the deposit of any Shares identified in the Company’s instructions.
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(b) As soon as practicable after receipt of any permitted deposit hereunder and compliance with the provisions of this Deposit Agreement, the Custodian shall present the Shares so deposited, together with the appropriate instrument or instruments of transfer or endorsement, duly stamped, to the Foreign Registrar for transfer and registration of the Shares (as soon as transfer and registration can be accomplished and at the expense of the person for whom the deposit is made) in the name of the Depositary, the Custodian or a nominee of either. Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or a nominee, in each case for the account of the Holders and Beneficial Owners, at such place or places as the Depositary or the Custodian shall determine.
(c) In the event any Shares are deposited which entitle the holders thereof to receive a per-share distribution or other entitlement in an amount different from the Shares then on deposit, the Depositary is authorized to take any and all actions as may be necessary (including, without limitation, making the necessary notations on Receipts) to give effect to the issuance of such ADSs and to ensure that such ADSs are not fungible with other ADSs issued hereunder until such time as the entitlement of the Shares represented by such non-fungible ADSs equals that of the Shares represented by ADSs prior to such deposit. The Company agrees to give timely written notice to the Depositary if any Shares issued or to be issued contain rights different from those of any other Shares theretofore issued and shall assist the Depositary with the establishment of procedures enabling the identification of such non-fungible Shares upon Delivery to the Custodian.
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SECTION 2.4 Execution and Delivery of Receipts. After the deposit of any Shares pursuant to Section 2.3 hereof, the Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or Receipts are Deliverable in respect thereof and the number of American Depositary Shares to be evidenced thereby. Such notification shall be made by letter, first class airmail postage prepaid, or, at the request, risk and expense of the person making the deposit, by cable, telex, SWIFT, facsimile or electronic transmission. After receiving such notice from the Custodian, the Depositary, subject to this Deposit Agreement (including, without limitation, the payment of the fees, expenses, taxes and/or other charges owing hereunder), shall issue the ADSs representing the Shares so deposited to or upon the order of the person or persons named in the notice delivered to the Depositary and shall execute and Deliver a Receipt registered in the name or names requested by such person or persons evidencing in the aggregate the number of American Depositary Shares to which such person or persons are entitled.
SECTION 2.5 Transfer of Receipts; Combination and Split-up of Receipts.
(a) Transfer. The Depositary, or, if a Registrar (other than the Depositary) for the Receipts shall have been appointed, the Registrar, subject to the terms and conditions of this Deposit Agreement, shall register transfers of Receipts on its books, upon surrender at the Corporate Trust Office of the Depositary of a Receipt by the Holder thereof in person or by duly authorized attorney, properly endorsed in the case of a certificated Receipt or accompanied by, or in the case of Receipts issued through any book-entry system, including, without limitation, DRS/Profile, receipt by the Depositary of, proper instruments of transfer (including signature guarantees in accordance with standard industry practice) and duly stamped as may be required by the laws of the State of New York, of the United States , of the Cayman Islands and of any other applicable jurisdiction. Subject to the terms and conditions of this Deposit Agreement, including payment of the applicable fees and charges of the Depositary set forth in Section 5.9 hereof and Article (9) of the Receipt, the Depositary shall execute a new Receipt or Receipts and Deliver the same to or upon the order of the person entitled thereto evidencing the same aggregate number of American Depositary Shares as those evidenced by the Receipts surrendered.
(b) Combination and Split Up. The Depositary, subject to the terms and conditions of this Deposit Agreement shall, upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts and upon payment to the Depositary of the applicable fees and charges set forth in Section 5.9 hereof and Article (9) of the Receipt, execute and Deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.
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(c) Co-Transfer Agents. The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers, combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Holders or persons entitled to such Receipts and will be entitled to protection and indemnity, in each case to the same extent as the Depositary. Such co-transfer agents may be removed and substitutes appointed by the Depositary. Each co-transfer agent appointed under this Section 2.5 (other than the Depositary) shall give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of this Deposit Agreement.
(d) Substitution of Receipts. At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated Receipt with a Receipt issued through any book-entry system, including, without limitation, DRS/Profile, or vice versa, execute and Deliver a certificated Receipt or deliver a statement, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the relevant Receipt.
SECTION 2.6 Surrender of Receipts and Withdrawal of Deposited Securities. Upon surrender, at the Corporate Trust Office of the Depositary, of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals of Deposited Securities and cancellation of Receipts (as set forth in Section 5.9 hereof and Article (9) of the Receipt) and (ii) all fees, taxes and/or governmental charges payable in connection with such surrender and withdrawal, and subject to the terms and conditions of this Deposit Agreement, the Memorandum and Articles of Association, Section 7.11 hereof and any other provisions of or governing the Deposited Securities and other applicable laws, the Holder of such American Depositary Shares shall be entitled to Delivery, to him or upon his order, of the Deposited Securities at the time represented by the American Depositary Shares so surrendered. American Depositary Shares may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such American Depositary Shares (if held in certificated form) or by book-entry Delivery of such American Depositary Shares to the Depositary.
A Receipt surrendered for such purposes shall, if so required by the Depositary, be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of a person or persons designated in such order. Thereupon, the Depositary shall direct the Custodian to Deliver (without unreasonable delay) at the designated office of the Custodian or through a book-entry delivery of the Shares (in either case, subject to Sections 2.7, 3.1, 3.2, 5.9, hereof and to the other terms and conditions of this Deposit Agreement, to the Memorandum and Articles of Association, and to the provisions of or governing the Deposited Securities and applicable laws, now or hereafter in effect) to or upon the written order of the person or persons designated in the order delivered to the Depositary as provided above, the Deposited Securities represented by such American Depositary Shares, together with any certificate or other proper documents of or relating to title of the Deposited Securities as may be legally required, as the case may be, to or for the account of such person.
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The Depositary may refuse to accept for surrender American Depositary Shares only in the circumstances described in Article (4) of the Receipt. Subject thereto, in the case of surrender of a Receipt evidencing a number of American Depositary Shares representing other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) issue and Deliver to the person surrendering such Receipt a new Receipt evidencing American Depositary Shares representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Shares represented by the Receipt surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the person surrendering the Receipt.
At the request, risk and expense of any Holder so surrendering a Receipt, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any cash or other property (other than securities) held in respect of, and any certificate or certificates and other proper documents of or relating to title to, the Deposited Securities represented by such Receipt to the Depositary for delivery at the Corporate Trust Office of the Depositary, and for further Delivery to such Holder. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission. Upon receipt by the Depositary of such direction, the Depositary may make delivery to such person or persons entitled thereto at the Corporate Trust Office of the Depositary of any dividends or cash distributions with respect to the Deposited Securities represented by such American Depositary Shares, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.
SECTION 2.7 Limitations on Execution and Delivery, Transfer, etc. of Receipts; Suspension of Delivery, Transfer, etc.
(a) Additional Requirements. As a condition precedent to the execution and Delivery, registration, registration of transfer, split-up, subdivision, combination or surrender of any Receipt, the Delivery of any distribution thereon (whether in cash or shares) or withdrawal of any Deposited Securities, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 hereof and Article (9) of the Receipt hereto, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1 hereof and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of Receipts or American Depositary Shares or to the withdrawal or Delivery of Deposited Securities and (B) such reasonable regulations and procedures as the Depositary may establish consistent with the provisions of this Deposit Agreement and applicable law.
(b) Additional Limitations. The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the issuance of ADSs against the deposit of particular Shares may be withheld, or the registration of transfer of Receipts in particular instances may be refused, or the registration of transfers of Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law, any government or governmental body or commission or any securities exchange on which the Receipts or Shares are listed, or under any provision of this Deposit Agreement or provisions of, or governing, the Deposited Securities, or any meeting of shareholders of the Company or for any other reason, subject, in all cases, to Section 7.11 hereof.
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(c) The Depositary shall not issue ADSs prior to the receipt of Shares or deliver Shares prior to the receipt and cancellation of ADSs.
SECTION 2.8 Lost Receipts, etc. To the extent the Depositary has issued Receipts in physical certificated form, in case any Receipt shall be mutilated, destroyed, lost or stolen, unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, subject to Section 5.9 hereof, the Depositary shall execute and Deliver a new Receipt (which, in the discretion of the Depositary may be issued through any book-entry system, including, without limitation, DRS/Profile, unless specifically requested otherwise) in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and Deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Holder thereof shall have (a) filed with the Depositary (i) a request for such execution and Delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond in form and amount acceptable to the Depositary and (b) satisfied any other reasonable requirements imposed by the Depositary.
SECTION 2.9 Cancellation and Destruction of Surrendered Receipts. All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy Receipts so cancelled in accordance with its customary practices. Cancelled Receipts shall not be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose.
SECTION 2.10 Maintenance of Records. The Depositary agrees to maintain records of all Receipts surrendered and Deposited Securities withdrawn under Section 2.6, substitute Receipts Delivered under Section 2.8 and cancelled or destroyed Receipts under Section 2.9, in keeping with the procedures ordinarily followed by stock transfer agents located in the United States.
SECTION 2.11 Restricted ADSs. At the request and expense of the Company, or at the request and expense of a holder of Shares and with the written consent of the Company, and notwithstanding anything to the contrary in this Deposit Agreement, the Depositary may establish procedures permitting a deposit of Shares that are or may be Restricted Securities (“Restricted Shares”) and the Delivery of restricted American Depositary Shares (“Restricted ADSs”, the ADRs evidencing such Restricted ADSs being the “Restricted ADRs”) representing those Restricted Shares as provided in this Section 2.11. Such procedures shall also govern the removal of the Restrictive Legend (as defined below) from Restricted ADRs, the transfer of Restricted ADRs and the Restricted ADSs evidenced thereby, and the cancellation of Restricted ADRs and withdrawal of Deposited Securities (including Restricted Shares).
(a) The Company shall assist the Depositary in the establishment of such procedures and agrees that it shall take all steps necessary and reasonably satisfactory to the Depositary to ensure that deposits of Restricted Shares, issuances and transfers of Restricted ADRs and the Restricted ADSs evidenced thereby, and cancellations of Restricted ADRs and withdrawals of Deposited Securities (including Restricted Shares) pursuant to such procedures do not violate the provisions of the Securities Act or any other applicable laws. Depositors of Restricted Shares, holders and transferees of Restricted ADRs and the Restricted ADSs evidenced thereby, and the Company may be required to provide such written certifications and instructions as the Depositary or the Company deem necessary, as well as an appropriate Opinion of Counsel in the Cayman Islands and the United States.
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(b) The Restricted ADSs shall not be eligible for inclusion in any book-entry settlement system, including, without limitation, DTC, and shall be segregated on the Depositary’s register as a class of securities separate from, and not fungible with, outstanding American Depositary Shares that are not Restricted ADSs so that Restricted ADSs shall represent interests only in the corresponding Restricted Shares.
(c) Prior to the deposit of Restricted Shares, the depositor shall deliver to the Depositary a delivery order that (i) discloses or acknowledges all restrictions on transferability of the Restricted Shares (and to that extent need not represent and warrant that the deposited Shares are not Restricted Securities), and (ii) provides that the depositor agrees that the Restricted ADSs will be subject to a specified legend in a form provided by the Company and satisfactory to the Depositary (the “Restrictive Legend”) that describes those restrictions and agrees to comply with those restrictions.
(d) Except as otherwise provided in this Section 2.11 and except as required by applicable law, the Restricted ADRs and the Restricted ADSs evidenced thereby shall be treated as ADRs and ADSs issued outstanding under the terms of this Deposit Agreement, all provisions of this Deposit Agreement shall apply to Restricted ADSs. In the event that, in determining the rights and obligations of parties hereto with respect to any Restricted ADSs, any conflict arises between (i) the terms of this Deposit Agreement (other than this Section 2.11) and (ii) the terms of this Section 2.11 or of the applicable Restricted ADR, the terms and conditions set forth in this Section 2.11 and of the Restricted ADR shall be controlling and shall govern the rights and obligations of the parties to this Deposit Agreement pertaining to the deposited Restricted Shares, the Restricted ADSs and Restricted ADRs.
ARTICLE III.
CERTAIN
OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF RECEIPTS
SECTION 3.1 Proofs, Certificates and Other Information. Any person presenting Shares for deposit shall provide, any Holder and any Beneficial Owner may be required to provide, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary or the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Securities, compliance with applicable laws and the terms of this Deposit Agreement and the provisions of, or governing, the Deposited Securities or other information, to execute such certifications and to make such representations and warranties and to provide such other information and documentation as the Depositary may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations hereunder. The Depositary and the Registrar, as applicable, may, and at the reasonable written request of the Company shall, withhold the execution or Delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other distribution of rights or of the proceeds thereof, or to the extent not limited by the terms of Section 7.11 hereof, the Delivery of any Deposited Securities, until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositary’s and the Company’s satisfaction. The Depositary shall from time to time on the written request of the Company advise the Company of the availability of any such proofs, certificates or other information and shall, at the Company’s sole expense, provide or otherwise make available copies thereof to the Company upon written request therefor by the Company, unless such disclosure is prohibited by law. Each Holder and Beneficial Owner agrees to provide any information requested by the Company or the Depositary pursuant to this Section 3.1. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.
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Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, the Agents and each of their respective directors, officers, employees, agents and Affiliates against, and to hold each of them harmless from, any Losses which any of them may incur or which may be made against any of them as a result of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder and/or Beneficial Owner or as a result of any such failure to furnish any of the foregoing.
The obligations of Holders and Beneficial Owners under Section 3.1 shall survive any transfer of Receipts, any surrender of Receipts or withdrawal of Deposited Securities or the termination of this Deposit Agreement.
SECTION 3.2 Liability for Taxes and Other Charges. If any present or future tax or other governmental charge shall become payable by the Depositary or the Custodian with respect to any ADR or any Deposited Securities or American Depositary Shares, such tax or other governmental charge shall be payable by the Holders and Beneficial Owners to the Depositary and such Holders and Beneficial Owners shall be deemed liable therefor. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Securities and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Securities and apply such distributions and sale proceeds in payment of such taxes (including applicable interest and penalties) and charges, with the Holder and the Beneficial Owner remaining fully liable for any deficiency. In addition to any other remedies available to it, the Depositary and the Custodian may refuse the deposit of Shares, and the Depositary may refuse to issue ADSs, to Deliver ADRs, to register the transfer, split-up or combination of ADRs and (subject to Section 7.11 hereof) the withdrawal of Deposited Securities, until payment in full of such tax, charge, penalty or interest is received. The liability of Holders and Beneficial Owners under this Section 3.2 shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of this Deposit Agreement.
SECTION 3.3 Representations and Warranties on Deposit of Shares. Each person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly issued, fully paid, non-assessable and were legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim and are not, and the American Depositary Shares issuable upon such deposit will not be, Restricted Securities (except as contemplated by Section 2.11), (v) the Shares presented for deposit have not been stripped of any rights or entitlements and (vi) the Shares are not subject to any lock-up agreement with the Company or other party, or the Shares are subject to a lock-up agreement but such lock-up agreement has terminated or the lock-up restrictions imposed thereunder have expired. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of American Depositary Shares in respect thereof and the transfer of such American Depositary Shares. If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.
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SECTION 3.4 Compliance with Information Requests. Notwithstanding any other provision of this Deposit Agreement, the Articles of Association and applicable law, each Holder and Beneficial Owner agrees to (a) provide such information as the Company or the Depositary may request pursuant to law (including, without limitation, relevant Cayman Islands law, any applicable law of the United States, the Memorandum and Articles of Association, any resolutions of the Company’s Board of Directors adopted pursuant to the Memorandum and Articles of Association, the requirements of any markets or exchanges upon which the Shares, ADSs or Receipts are listed or traded, or to any requirements of any electronic book-entry system by which the ADSs or Receipts may be transferred), (b) be bound by and subject to applicable provisions of the laws of the Cayman Islands, the Memorandum and Articles of Association and the requirements of any markets or exchanges upon which the ADSs, Receipts or Shares are listed or traded, or pursuant to any requirements of any electronic book-entry system by which the ADSs, Receipts or Shares may be transferred, to the same extent as if such Holder and Beneficial Owner held Shares directly, in each case irrespective of whether or not they are Holders or Beneficial Owners at the time such request is made and, without limiting the generality of the foregoing, (c) comply with all applicable provisions of Cayman Islands law, the rules and requirements of any stock exchange on which the Shares are, or will be registered, traded or listed and the Articles of Association regarding any such Holder or Beneficial Owner's interest in Shares (including the aggregate of ADSs and Shares held by each such Holder or Beneficial Owner) and/or the disclosure of interests therein, whether or not the same may be enforceable against such Holder or Beneficial Owner. The Depositary agrees to use its reasonable efforts to forward upon the request of the Company, and at the Company’s expense, any such request from the Company to the Holders and to forward to the Company any such responses to such requests received by the Depositary.
ARTICLE IV.
THE DEPOSITED SECURITIES
SECTION 4.1 Cash Distributions. Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights, securities or other entitlements under the terms hereof, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can in the judgment of the Depositary (pursuant to Section 4.6 hereof) be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.6 hereof) and will distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of American Depositary Shares held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. Holders and Beneficial Owners understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates. The excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders of the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary shall forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file with governmental agencies such reports as are necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts.
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SECTION 4.2 Distribution in Shares. If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or any of their nominees. Upon receipt of confirmation of such deposit from the Custodian, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.7 hereof and shall, subject to Section 5.9 hereof, either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of this Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes and/or governmental charges). In lieu of Delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms described in Section 4.1 hereof. The Depositary may withhold any such distribution of Receipts if it has not received satisfactory assurances from the Company (including an Opinion of Counsel furnished at the expense of the Company) that such distribution does not require registration under the Securities Act or is exempt from registration under the provisions of the Securities Act. To the extent such distribution may be withheld, the Depositary may dispose of all or a portion of such distribution in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of applicable taxes and/or governmental charges and fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary) to Holders entitled thereto upon the terms described in Section 4.1 hereof.
SECTION 4.3 Elective Distributions in Cash or Shares. Whenever the Company intends to distribute a dividend payable at the election of the holders of Shares in cash or in additional Shares, the Company shall give notice thereof to the Depositary at least 30 days prior to the proposed distribution stating whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon receipt of notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution is available to Holders of ADRs, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof (including, without limitation, any legal opinions of counsel in any applicable jurisdiction that the Depositary in its reasonable discretion may request, at the expense of the Company) and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. If the above conditions are not satisfied, the Depositary shall, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in the local market in respect of the Shares for which no election is made, either cash upon the terms described in Section 4.1 hereof or additional ADSs representing such additional Shares upon the terms described in Section 4.2 hereof. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date (on the terms described in Section 4.7 hereof) and establish procedures to enable Holders to elect the receipt of the proposed dividend in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. Subject to Section 5.9 hereof, if a Holder elects to receive the proposed dividend in cash, the dividend shall be distributed upon the terms described in Section 4.1 hereof or in ADSs, the dividend shall be distributed upon the terms described in Section 4.2 hereof. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.
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SECTION 4.4 Distribution of Rights to Purchase Shares.
(a) Distribution to ADS Holders. Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least 60 days prior to the proposed distribution stating whether or not it wishes such rights to be made available to Holders of ADSs. Upon timely receipt of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall determine, whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof and (iii) the Depositary shall have determined that such distribution of rights is lawful and reasonably practicable. In the event any of the conditions set forth above are not satisfied, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) below or, if timing or market conditions may not permit, do nothing thereby allowing such rights to lapse. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date (upon the terms described in Section 4.7 hereof) and establish procedures to distribute such rights (by means of warrants or otherwise) and to enable the Holders to exercise the rights (upon payment of applicable fees and charges of, and expenses incurred by, the Depositary and taxes and/or other governmental charges). Nothing herein shall obligate the Depositary to make available to the Holders a method to exercise such rights to subscribe for Shares (rather than ADSs).
(b) Sale of Rights. If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7 hereof or determines it is not lawful or reasonably practicable to make the rights available to Holders or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, and if it so determines that it is lawful and reasonably practicable, endeavour to sell such rights in a riskless principal capacity or otherwise, at such place and upon such terms (including public or private sale) as it may deem proper. The Company shall assist the Depositary to the extent necessary to determine such legality and practicability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) upon the terms set forth in Section 4.1 hereof.
(c) Lapse of Rights. If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) hereof or to arrange for the sale of the rights upon the terms described in Section 4.4(b) hereof, the Depositary shall allow such rights to lapse.
The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or exercise or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.
Notwithstanding anything to the contrary in this Section 4.4, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act covering such offering is in effect or (ii) unless the Company furnishes at its expense the Depositary with opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of property (including rights) an amount on account of taxes and/or other governmental charges, the amount distributed to the Holders shall be reduced accordingly. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes and/or charges.
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There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to exercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights or otherwise to register or qualify the offer or sale of such rights or securities under the applicable law of any other jurisdiction for any purpose.
SECTION 4.5 Distributions Other Than Cash, Shares or Rights to Purchase Shares.
(a) Whenever the Company intends to distribute to the holders of Deposited Securities property other than cash, Shares or rights to purchase additional Shares, the Company shall give notice thereof to the Depositary at least 30 days prior to the proposed distribution and shall indicate whether or not it wishes such distribution to be made to Holders of ADSs. Upon receipt of a notice indicating that the Company wishes such distribution be made to Holders of ADSs, the Depositary shall determine whether such distribution to Holders is lawful and practicable. The Depositary shall not make such distribution unless (i) the Company shall have timely requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable.
(b) Upon receipt of satisfactory documentation and the request of the Company to distribute property to Holders of ADSs and after making the requisite determinations set forth in (a) above, the Depositary may distribute the property so received to the Holders of record as of the ADS Record Date, in proportion to the number of ADSs held by such Holders respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary and (ii) net of any taxes and/or other governmental charges. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) and other governmental charges applicable to the distribution.
(c) If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositary not to make such distribution to Holders, (ii) the Depositary does not receive satisfactory documentation within the terms of Section 5.7 hereof or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable or feasible, the Depositary shall endeavor to sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem proper and shall distribute the net proceeds, if any, of such sale received by the Depositary (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) to the Holders as of the ADS Record Date upon the terms of Section 4.1 hereof. If the Depositary is unable to sell such property, the Depositary may dispose of such property in any way it deems reasonably practicable under the circumstances for nominal or no consideration and Holders and Beneficial Owners shall have no rights thereto or arising therefrom.
SECTION 4.6 Conversion of Foreign Currency. Whenever the Depositary or the Custodian shall receive Foreign Currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and in the judgment of the Depositary such Foreign Currency can at such time be converted on a practicable basis (by sale or in any other manner that it may determine in accordance with applicable law) into Dollars transferable to the United States and distributable to the Holders entitled thereto, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such Foreign Currency into Dollars, and shall distribute such Dollars (net of any fees, expenses, taxes and/or other governmental charges incurred in the process of such conversion) in accordance with the terms of the applicable sections of this Deposit Agreement. If the Depositary shall have distributed warrants or other instruments that entitle the holders thereof to such Dollars, the Depositary shall distribute such Dollars to the holders of such warrants and/or instruments upon surrender thereof for cancellation, in either case without liability for interest thereon. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders on account of exchange restrictions, the date of delivery of any Receipt or otherwise.
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In converting Foreign Currency, amounts received on conversion may be calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates (which in any case will not be less than two decimal places). Any excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment.
If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary may file such application for approval or license, if any, as it may deem necessary, practicable and at nominal cost and expense. Nothing herein shall obligate the Depositary to file or cause to be filed, or to seek effectiveness of any such application or license.
If at any time the Depositary shall determine that in its judgment the conversion of any Foreign Currency and the transfer and distribution of proceeds of such conversion received by the Depositary is not practical or lawful, or if any approval or license of any governmental authority or agency thereof that is required for such conversion, transfer and distribution is denied, or not obtainable at a reasonable cost, within a reasonable period or otherwise sought, the Depositary shall, in its sole discretion but subject to applicable laws and regulations, either (i) distribute the Foreign Currency (or an appropriate document evidencing the right to receive such Foreign Currency) received by the Depositary to the Holders entitled to receive such Foreign Currency or (ii) hold such Foreign Currency uninvested and without liability for interest thereon for the respective accounts of the Holders entitled to receive the same.
Holders and Beneficial Owners are directed to refer to Section 7.9 hereof for certain disclosure related to conversion of Foreign Currency.
SECTION 4.7 Fixing of Record Date. Whenever necessary in connection with any distribution (whether in cash, Shares, rights, or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary shall receive notice of any meeting of or solicitation of holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (the “ADS Record Date”), as close as practicable to the record date fixed by the Company with respect to the Shares (if applicable), for the determination of the Holders who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action or to exercise the rights of Holders with respect to such changed number of Shares represented by each American Depositary Share or for any other reason. Subject to applicable law and the provisions of Sections 4.1 through 4.6 hereof and to the other terms and conditions of this Deposit Agreement, only the Holders of record at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.
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SECTION 4.8 Voting of Deposited Securities. Subject to the next sentence, as soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or such solicitation of consents or proxies. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least 30 Business Days prior to the date of such vote or meeting) and at the Company’s expense, and provided no U.S. legal prohibitions exist, mail by regular, ordinary mail delivery (or by electronic mail or as otherwise may be agreed between the Company and the Depositary in writing from time to time) or otherwise distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy; (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of this Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s American Depositary Shares; and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary, or in which instructions may be deemed to have been given in accordance with this Section 4.8, including an express indication that instructions may be given (or be deemed to have been given in accordance with the immediately following paragraph of this section if no instruction is received) to the Depositary to give a discretionary proxy to a person or persons designated by the Company. Voting instructions may be given only in respect of a number of American Depositary Shares representing an integral number of Deposited Securities. Upon the timely receipt of voting instructions of a Holder on the ADS Record Date in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of this Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities, to vote or cause the Custodian to vote the Deposited Securities (in person or by proxy) represented by American Depositary Shares evidenced by such Receipt in accordance with such voting instructions.
In the event that (i) the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs or (ii) no timely instructions are received by the Depositary from a Holder with respect to any of the Deposited Securities represented by the ADSs held by such Holder on the ADS Record Date, the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities, provided, however, that no such instruction shall be deemed to have been given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing, if applicable) that (x) the Company does not wish to give such proxy, (y) the Company is aware, or should reasonably be aware, that substantial opposition exists from Holders against the outcome for which the person designated by the Company would otherwise vote or (z) the outcome for which the person designated by the Company would otherwise vote would materially and adversely affect the rights of holders of Deposited Securities, provided, further, that the Company will have no liability to any Holder or Beneficial Owner resulting from such notification.
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In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions (or the deemed voting instructions, as set out above) received by the Depositary from Holders shall lapse. The Depositary will have no obligation to demand voting on a poll basis with respect to any resolution and shall have no liability to any Holder or Beneficial Owner for not having demanded voting on a poll basis.
Neither the Depositary nor the Custodian shall, under any circumstances exercise any discretion as to voting, and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of for purposes of establishing a quorum or otherwise, the Deposited Securities represented by ADSs except pursuant to and in accordance with such written instructions from Holders, including the deemed instruction to the Depositary to give a discretionary proxy to a person designated by the Company. Deposited Securities represented by ADSs for which (i) no timely voting instructions are received by the Depositary from the Holder, or (ii) timely voting instructions are received by the Depositary from the Holder but such voting instructions fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, shall be voted in the manner provided in this Section 4.8. Notwithstanding anything else contained herein, and subject to applicable law, regulation and the Memorandum and Articles of Association, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the purpose of establishing quorum at a meeting of shareholders.
There can be no assurance that Holders or Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.
Notwithstanding the above, save for applicable provisions of the law of the Cayman Islands, and in accordance with the terms of Section 5.3 hereof, the Depositary shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities or the manner in which such vote is cast or the effect of such vote.
SECTION 4.9 Changes Affecting Deposited Securities. Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of Deposited Securities or upon any recapitalization, reorganization, amalgamation, merger or consolidation or sale of assets affecting the Company or to which it is otherwise a party, any securities which shall be received by the Depositary or the Custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Securities under this Deposit Agreement and the Receipts shall, subject to the provisions of this Deposit Agreement and applicable law, evidence American Depositary Shares representing the right to receive such additional securities. Alternatively, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of this Deposit Agreement and receipt of an Opinion of Counsel furnished at the Company’s expense satisfactory to the Depositary (stating that such distributions are not in violation of any applicable laws or regulations), execute and deliver additional Receipts, as in the case of a stock dividend on the Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts. In either case, as well as in the event of newly deposited Shares, necessary modifications to the form of Receipt contained in Exhibit A and Exhibit B hereto, specifically describing such new Deposited Securities and/or corporate change, shall also be made. The Company agrees that it will, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of Receipt. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an Opinion of Counsel (furnished at the Company’s expense) satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) for the account of the Holders otherwise entitled to such securities upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1 hereof. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or (iii) any liability to the purchaser of such securities.
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SECTION 4.10 Available Information. The Company is subject to the periodic reporting requirements of the Exchange Act applicable to foreign private issuers (as defined in Rule 405 of the Securities Act) and accordingly files certain information with the Commission. These reports and documents can be inspected and copied at the Commission’s website at www.sec.gov or at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington D.C. 20549, U.S.A.
SECTION 4.11 Reports. The Depositary shall make available during normal business hours on any Business Day for inspection by Holders at its Corporate Trust Office any reports and communications, including any proxy soliciting materials, received from the Company which are both received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Securities and made generally available to the holders of such Deposited Securities by the Company. The Company agrees to provide to the Depositary, at the Company’s expense, all such documents that it provides to the Custodian. Unless otherwise agreed in writing by the Company and the Depositary, the Depositary shall, at the expense of the Company and in accordance with Section 5.6 hereof, also mail to Holders by regular, ordinary mail delivery or by electronic transmission (if agreed by the Company and the Depositary) copies of notices and reports when furnished by the Company pursuant to Section 5.6 hereof.
SECTION 4.12 List of Holders. Promptly upon written request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary.
SECTION 4.13 Taxation; Withholding. The Depositary will, and will instruct the Custodian to, forward to the Company or its agents such information from its records as the Company may request to enable the Company or its agents to file necessary tax reports with governmental authorities or agencies. The Depositary, the Custodian or the Company and its agents may, but shall not be obligated to, file such reports as are necessary to reduce or eliminate applicable taxes on dividends and on other distributions in respect of Deposited Securities under applicable tax treaties or laws for the Holders and Beneficial Owners. Holders and Beneficial Owners of American Depositary Shares may be required from time to time, and in a timely manner, to provide and/or file such proof of taxpayer status, residence and beneficial ownership (as applicable), to execute such certificates and to make such representations and warranties, or to provide any other information or documents, as the Depositary or the Custodian may deem necessary or proper to fulfill the Depositary’s or the Custodian’s obligations under applicable law. The Holders and Beneficial Owners shall indemnify the Depositary, the Company, the Custodian, the Agents and their respective directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained by the Beneficial Owner or Holder or out of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder or Beneficial Owner. The obligations of Holders and Beneficial Owners under this Section 4.13 shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of this Deposit Agreement.
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The Company shall remit to the appropriate governmental authority or agency any amounts required to be withheld by the Company and owing to such governmental authority or agency. Upon any such withholding, the Company shall remit to the Depositary information, in a form reasonably satisfactory to the Depositary, about such taxes and/or governmental charges withheld or paid, and, if so requested, the tax receipt (or other proof of payment to the applicable governmental authority) therefor. The Depositary shall, to the extent required by U.S. law, report to Holders (i) any taxes withheld by it; (ii) any taxes withheld by the Custodian, subject to information being provided to the Depositary by the Custodian and (iii) any taxes withheld by the Company, subject to information being provided to the Depositary by the Company. The Depositary and the Custodian shall not be required to provide the Holders with any evidence of the remittance by the Company (or its agents) of any taxes withheld, or of the payment of taxes by the Company, except to the extent the evidence is provided by the Company to the Depositary. None of the Depositary, the Custodian or the Company shall be liable for the failure by any Holder or Beneficial Owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holder’s or Beneficial Owner’s income tax liability.
In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary shall withhold the amount required to be withheld and may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes and/or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes and/or charges to the Holders entitled thereto in proportion to the number of American Depositary Shares held by them respectively.
The Depositary is under no obligation to provide the Holders and Beneficial Owners with any information about the tax status of the Company. The Depositary shall not incur any liability for any tax consequences that may be incurred by Holders and Beneficial Owners on account of their ownership of the American Depositary Shares, including without limitation, tax consequences resulting from the Company (or any of its subsidiaries) being treated as a “Passive Foreign Investment Company” (as defined in the U.S. Internal Revenue Code of 1986, as amended and the regulations issued thereunder) or otherwise.
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ARTICLE V.
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
SECTION 5.1 Maintenance of Office and Transfer Books by the Registrar. Until termination of this Deposit Agreement in accordance with its terms, the Depositary or if a Registrar for the Receipts shall have been appointed, the Registrar shall maintain in the Borough of Manhattan, the City of New York, an office and facilities for the execution and delivery, registration, registration of transfers, combination and split-up of Receipts, the surrender of Receipts and the Delivery and withdrawal of Deposited Securities in accordance with the provisions of this Deposit Agreement.
The Depositary or the Registrar as applicable, shall keep books for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Company and by the Holders of such Receipts, provided that such inspection shall not be, to the Depositary’s or the Registrar’s knowledge, for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or other than a matter related to this Deposit Agreement or the Receipts.
The Depositary or the Registrar, as applicable, may close the transfer books with respect to the Receipts, at any time and from time to time, when deemed necessary or advisable by it in connection with the performance of its duties hereunder, or at the reasonable written request of the Company.
If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges or automated quotation systems in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registration of Receipts and transfers, combinations and split-ups, and to countersign such Receipts in accordance with any requirements of such exchanges or systems. Such Registrar or co-registrars may be removed and a substitute or substitutes appointed by the Depositary.
If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more securities exchanges, markets or automated quotation systems, (i) the Depositary shall be entitled to, and shall, take or refrain from taking such action(s) as it may deem necessary or appropriate to comply with the requirements of such securities exchange(s), market(s) or automated quotation system(s) applicable to it, notwithstanding any other provision of this Deposit Agreement; and (ii) upon the reasonable request of the Depositary, the Company shall provide the Depositary such information and assistance as may be reasonably necessary for the Depositary to comply with such requirements, to the extent that the Company may lawfully do so.
Each Registrar and co-registrar appointed under this Section 5.1 shall give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of this Deposit Agreement.
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SECTION 5.2 Exoneration. None of the Depositary, the Custodian or the Company shall be obligated to do or perform any act which is inconsistent with the provisions of this Deposit Agreement or shall incur any liability to Holders, Beneficial Owners or any third parties (i) if the Depositary, the Custodian or the Company or their respective controlling persons or agents (including without limitation, the Agents) shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required by the terms of this Deposit Agreement, by reason of any provision of any present or future law or regulation of the United States or any state thereof, the Cayman Islands or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the possible criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Memorandum and Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement or in the Memorandum and Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction of the Depositary, the Custodian or the Company or their respective controlling persons or agents (including without limitation, the Agents) in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Holders of American Depositary Shares or (v) for any special, consequential, indirect or punitive damages for any breach of the terms of this Deposit Agreement or otherwise.
The Depositary, its controlling persons, its agents (including without limitation, the Agents), the Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request, opinion or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.
No disclaimer of liability under the Securities Act or the Exchange Act is intended by any provision of this Deposit Agreement.
SECTION 5.3 Standard of Care. The Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) assume no obligation and shall not be subject to any liability under this Deposit Agreement or any Receipts to any Holder(s) or Beneficial Owner(s) or other persons, except in accordance with Section 5.8 hereof, provided, that the Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) agree to perform their respective obligations specifically set forth in this Deposit Agreement or the applicable ADRs without gross negligence or willful misconduct.
Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons, directors, officers, affiliates, employees or agents (including without limitation, the Agents), shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expenses (including fees and disbursements of counsel) and liabilities be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).
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The Depositary and its directors, officers, affiliates, employees and agents (including without limitation, the Agents) shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effects of any vote. The Depositary shall not incur any liability for any failure to determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities or for any tax consequences that may result from the ownership of ADSs, Shares or Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of this Deposit Agreement or for the failure or timeliness of any notice from the Company, or for any action or non action by it in reliance upon the opinion, advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or any other person believed by it in good faith to be competent to give such advice or information. The Depositary and its agents (including without limitation, the Agents) shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or willful misconduct while it acted as Depositary.
SECTION 5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary hereunder by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall, in the event no successor depositary has been appointed by the Company, be entitled to take the actions contemplated in Section 6.2 hereof) and (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided, save that, any amounts, fees, costs or expenses owed to the Depositary hereunder or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such resignation.
The Company shall use reasonable efforts to appoint such successor depositary, and give notice to the Depositary of such appointment, not more than 90 days after delivery by the Depositary of written notice of resignation as provided in this Section 5.4. In the event that notice of the appointment of a successor depositary is not provided by the Company in accordance with the preceding sentence, the Depositary shall be entitled to take the actions contemplated in Section 6.2 hereof.
The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 hereof if a successor depositary has not been appointed), and (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided, save that, any amounts, fees, costs or expenses owed to the Depositary hereunder or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such removal.
In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9 hereof), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding Receipts and such other information relating to Receipts and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly mail notice of its appointment to such Holders.
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Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act and, notwithstanding anything to the contrary in this Deposit Agreement, the Depositary may assign or otherwise transfer all or any of its rights and benefits under this Deposit Agreement (including any cause of action arising in connection with it) to Deutsche Bank AG or any branch thereof or any entity which is a direct or indirect subsidiary or other affiliate of Deutsche Bank AG.
SECTION 5.5 The Custodian. The Custodian or its successors in acting hereunder shall be subject at all times and in all respects to the direction of the Depositary for the Deposited Securities for which the Custodian acts as custodian and shall be responsible solely to it. If any Custodian resigns or is discharged from its duties hereunder with respect to any Deposited Securities and no other Custodian has previously been appointed hereunder, the Depositary shall promptly appoint a substitute custodian. The Depositary shall require such resigning or discharged Custodian to deliver the Deposited Securities held by it, together with all such records maintained by it as Custodian with respect to such Deposited Securities as the Depositary may request, to the Custodian designated by the Depositary. Whenever the Depositary determines, in its discretion, that it is appropriate to do so, it may appoint an additional entity to act as Custodian with respect to any Deposited Securities, or discharge the Custodian with respect to any Deposited Securities and appoint a substitute custodian, which shall thereafter be Custodian hereunder with respect to the Deposited Securities. After any such change, the Depositary shall give notice thereof in writing to all Holders.
Upon the appointment of any successor depositary, any Custodian then acting hereunder shall, unless otherwise instructed by the Depositary, continue to be the Custodian of the Deposited Securities without any further act or writing and shall be subject to the direction of the successor depositary. The successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority to act on the direction of such successor depositary.
SECTION 5.6 Notices and Reports. On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action by such holders other than at a meeting, or of the taking of any action in respect of any cash or other distributions or the offering of any rights in respect of Deposited Securities, the Company shall transmit to the Depositary and the Custodian a copy of the notice thereof in English but otherwise in the form given or to be given to holders of Shares or other Deposited Securities. The Company shall also furnish to the Custodian and the Depositary a summary, in English, of any applicable provisions or proposed provisions of the Memorandum and Articles of Association that may be relevant or pertain to such notice of meeting or be the subject of a vote thereat.
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The Company will also transmit to the Depositary (a) English language versions of the other notices, reports and communications which are made generally available by the Company to holders of its Shares or other Deposited Securities and (b) English language versions of the Company’s annual and other reports prepared in accordance with the applicable requirements of the Commission. The Depositary shall arrange, at the request of the Company and at the Company’s expense, for the mailing of copies thereof to all Holders, or by any other means as agreed between the Company and the Depositary (at the Company’s expense) or make such notices, reports and other communications available for inspection by all Holders, provided, that, the Depositary shall have received evidence sufficiently satisfactory to it, including in the form of an Opinion of Counsel regarding U.S. law or of any other applicable jurisdiction, furnished at the expense of the Company, as the Depositary reasonably requests, that the distribution of such notices, reports and any such other communications to Holders from time to time is valid and does not or will not infringe any local, U.S. or other applicable jurisdiction regulatory restrictions or requirements if so distributed and made available to Holders. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings. The Company has delivered to the Depositary and the Custodian a copy of the Memorandum and Articles of Association along with the provisions of or governing the Shares and any other Deposited Securities issued by the Company or any Affiliate of the Company, in connection with the Shares, in each case, to the extent not in English, along with a certified English translation thereof, and promptly upon any amendment thereto or change therein, the Company shall deliver to the Depositary and the Custodian a copy of such amendment thereto or change therein, to the extent not in English, along with a certified English translation thereof. The Depositary may rely upon such copy for all purposes of this Deposit Agreement.
The Depositary will make available, at the expense of the Company, a copy of any such notices, reports or communications issued by the Company and delivered to the Depositary for inspection by the Holders of the Receipts evidencing the American Depositary Shares representing such Shares governed by such provisions at the Depositary’s Corporate Trust Office, at the office of the Custodian and at any other designated transfer office.
SECTION 5.7 Issuance of Additional Shares, ADSs etc. The Company agrees that in the event it or any of its Affiliates proposes (i) an issuance, sale or distribution of additional Shares, (ii) an offering of rights to subscribe for Shares or other Deposited Securities, (iii) an issuance of securities convertible into or exchangeable for Shares, (iv) an issuance of rights to subscribe for securities convertible into or exchangeable for Shares, (v) an elective dividend of cash or Shares, (vi) a redemption of Deposited Securities, (vii) a meeting of holders of Deposited Securities, or solicitation of consents or proxies, relating to any reclassification of securities, merger, subdivision, amalgamation or consolidation or transfer of assets, (viii) any reclassification, recapitalization, reorganization, merger, amalgamation, consolidation or sale of assets which affects the Deposited Securities or (ix) a distribution of property other than cash, Shares or rights to purchase additional Shares it will obtain U.S. legal advice and take all steps necessary to ensure that the application of the proposed transaction to Holders and Beneficial Owners does not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act or the securities laws of the states of the United States). In support of the foregoing, the Company will furnish to the Depositary at its request, at the Company’s expense, (a) a written opinion of U.S. counsel (satisfactory to the Depositary) stating whether or not application of such transaction to Holders and Beneficial Owners (1) requires a registration statement under the Securities Act to be in effect or (2) is exempt from the registration requirements of the Securities Act and/or (3) dealing with such other issues requested by the Depositary; (b) a written opinion of Cayman Islands counsel (satisfactory to the Depositary) stating that (1) making the transaction available to Holders and Beneficial Owners does not violate the laws or regulations of the Cayman Islands and (2) all requisite regulatory and corporate consents and approvals have been obtained in the Cayman Islands; and (c) as the Depositary may request, a written Opinion of Counsel in any other jurisdiction in which Holders or Beneficial Owners reside to the effect that making the transaction available to such Holders or Beneficial Owners does not violate the laws or regulations of such jurisdiction as well as certificates of the Company as to such matters as the Depositary may deem necessary or appropriate in the circumstances. If the filing of a registration statement is required, the Depositary shall not have any obligation to proceed with the transaction unless it shall have received evidence reasonably satisfactory to it that such registration statement has been declared effective and that such distribution is in accordance with all applicable laws or regulations. If, being advised by counsel, the Company determines that a transaction is required to be registered under the Securities Act, the Company will either (i) register such transaction to the extent necessary, (ii) alter the terms of the transaction to avoid the registration requirements of the Securities Act or (iii) direct the Depositary to take specific measures, in each case as contemplated in this Deposit Agreement, to prevent such transaction from violating the registration requirements of the Securities Act.
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The Company agrees with the Depositary that neither the Company nor any of its Affiliates will at any time (i) deposit any Shares or other Deposited Securities, either upon original issuance or upon a sale of Shares or other Deposited Securities previously issued and reacquired by the Company or by any such Affiliate, or (ii) issue additional Shares, rights to subscribe for such Shares, securities convertible into or exchangeable for Shares or rights to subscribe for such securities, unless such transaction and the securities issuable in such transaction are exempt from registration under the Securities Act or have been registered under the Securities Act (and such registration statement has been declared effective).
Notwithstanding anything else contained in this Deposit Agreement, nothing in this Deposit Agreement shall be deemed to obligate the Company to file any registration statement in respect of any proposed transaction.
SECTION 5.8 Indemnification. The Company agrees to indemnify the Depositary, any Custodian and each of their respective directors, officers, employees, agents (including without limitation, the Agents) and Affiliates against, and hold each of them harmless from, any losses, liabilities, taxes, costs, claims, judgments, proceedings, actions, demands and any charges or expenses of any kind whatsoever (including, but not limited to, reasonable fees and expenses of counsel together with, in each case, value added tax and any similar tax charged or otherwise imposed in respect thereof) (collectively referred to as “Losses”) which the Depositary or any agent (including without limitation, the Agents) thereof may incur or which may be made against it as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement or that may arise (a) out of or in connection with any offer, issuance, sale, resale, transfer, deposit or withdrawal of Receipts, American Depositary Shares, the Shares, or other Deposited Securities, as the case may be, (b) out of or in connection with any offering documents in respect thereof or (c) out of or in connection with acts performed or omitted, including, but not limited to, any delivery by the Depositary on behalf of the Company of information regarding the Company in connection with this Deposit Agreement, the Receipts, the American Depositary Shares, the Shares, or any Deposited Securities, in any such case (i) by the Depositary, the Custodian or any of their respective directors, officers, employees, agents (including without limitation, the Agents) and Affiliates, except to the extent any such Losses arise out of the gross negligence or wilful misconduct of any of them, or (ii) by the Company or any of its directors, officers, employees, agents and Affiliates.
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The Depositary agrees to indemnify the Company and hold it harmless from any Losses which may arise out of acts performed or omitted to be performed by the Depositary arising out of its gross negligence or wilful misconduct. Notwithstanding the above, in no event shall the Depositary or any of its directors, officers, employees, agents (including without limitation, the Agents) and/or Affiliates be liable for any special, consequential, indirect or punitive damages to the Company, Holders, Beneficial Owners or any other person.
Any person seeking indemnification hereunder (an “Indemnified Person”) shall notify the person from whom it is seeking indemnification (the “Indemnifying Person”) of the commencement of any indemnifiable action or claim promptly after such Indemnified Person becomes aware of such commencement (provided that the failure to make such notification shall not affect such Indemnified Person’s rights to indemnification except to the extent the Indemnifying Person is materially prejudiced by such failure) and shall consult in good faith with the Indemnifying Person as to the conduct of the defense of such action or claim that may give rise to an indemnity hereunder, which defense shall be reasonable under the circumstances. No Indemnified Person shall compromise or settle any action or claim that may give rise to an indemnity hereunder without the consent of the Indemnifying Person, which consent shall not be unreasonably withheld.
The obligations set forth in this Section shall survive the termination of this Deposit Agreement and the succession or substitution of any party hereto.
SECTION 5.9 Fees and Charges of Depositary. The Company, the Holders, the Beneficial Owners, and persons depositing Shares or surrendering ADSs for cancellation and withdrawal of Deposited Securities shall be required to pay to the Depositary the Depositary’s fees and related charges identified as payable by them respectively as provided for under Article (9) of the Receipt. All fees and charges so payable may, at any time and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated in Section 6.1 hereof. The Depositary shall provide, without charge, a copy of its latest fee schedule to anyone upon request.
The Depositary and the Company may reach separate agreement in relation to the payment of any additional remuneration to the Depositary in respect of any exceptional duties which the Depositary finds necessary or desirable and agreed by both parties in the performance of its obligations hereunder and in respect of the actual costs and expenses of the Depositary in respect of any notices required to be given to the Holders in accordance with Article (20) of the Receipt.
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In connection with any payment by the Company to the Depositary:
(i) | all fees, taxes, duties, charges, costs and expenses which are payable by the Company shall be paid or be procured to be paid by the Company (and any such amounts which are paid by the Depositary shall be reimbursed to the Depositary by the Company upon demand therefor); |
(ii) | such payment shall be subject to all necessary applicable exchange control and other consents and approvals having been obtained. The Company undertakes to use its reasonable endeavours to obtain all necessary approvals that are required to be obtained by it in this connection; and |
(iii) | the Depositary may request, in its sole but reasonable discretion after reasonable consultation with the Company, an Opinion of Counsel regarding U.S. law, the laws of the Cayman Islands or of any other relevant jurisdiction, to be furnished at the expense of the Company, if at any time it deems it necessary to seek such an Opinion of Counsel regarding the validity of any action to be taken or instructed to be taken under this Agreement. |
The Company agrees to promptly pay to the Depositary such other fees, charges and expenses and to reimburse the Depositary for such out-of-pocket expenses as the Depositary and the Company may agree to in writing from time to time. Responsibility for payment of such charges may at any time and from time to time be changed by agreement between the Company and the Depositary.
All payments by the Company to the Depositary under this Section 5.9 shall be paid without set-off or counterclaim, and free and clear of and without deduction or withholding for or on account of, any present or future taxes, levies, imports, duties, fees, assessments or other charges of whatever nature, imposed by the Cayman Islands or by any department, agency or other political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.
The right of the Depositary to receive payment of fees, charges and expenses as provided above shall survive the termination of this Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4 hereof, such right shall extend for those fees, charges and expenses incurred prior to the effectiveness of such resignation or removal.
SECTION 5.10 Restricted Securities Owners/Ownership Restrictions. From time to time or upon request of the Depositary, the Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or entities who beneficially own Restricted Securities and the Company shall update such list on a regular basis. The Depositary may rely on such list or update but shall not be liable for any action or omission made in reliance thereon. The Company agrees to advise in writing each of the persons or entities who, to the knowledge of the Company, holds Restricted Securities that such Restricted Securities are ineligible for deposit hereunder (except under the circumstances contemplated in Section 2.11) and, to the extent practicable, shall require each of such persons to represent in writing that such person will not deposit Restricted Securities hereunder (except under the circumstances contemplated in Section 2.11). Holders and Beneficial Owners shall comply with any limitations on ownership of Shares under the Memorandum and Articles of Association or applicable Cayman Islands law as if they held the number of Shares their ADSs represent. The Company shall, in accordance with Article (24) of the Receipt, inform Holders and Beneficial Owners and the Depositary of any other limitations on ownership of Shares that the Holders and Beneficial Owners may be subject to by reason of the number of ADSs held under the Articles of Association or applicable Cayman Islands law, as such restrictions may be in force from time to time.
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The Company may, in its sole discretion, but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner pursuant to the Memorandum and Articles of Association, including but not limited to, the removal or limitation of voting rights or the mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADRs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Memorandum and Articles of Association; provided that any such measures are practicable and legal and can be undertaken without undue burden or expense, and provided further the Depositary’s agreement to the foregoing is conditional upon it being advised of any applicable changes in the Memorandum and Articles of Association. The Depositary shall have no liability for any actions taken in accordance with such instructions.
ARTICLE VI.
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment/Supplement. Subject to the terms and conditions of this Section 6.1 and applicable law, the Receipts outstanding at any time, the provisions of this Deposit Agreement and the form of Receipt attached hereto and to be issued under the terms hereof may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable and not materially prejudicial to the Holders without the consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and/or other governmental charges, delivery and other such expenses payable by Holders or Beneficial Owners), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding Receipts until 30 days after notice of such amendment or supplement shall have been given to the Holders of outstanding Receipts. Notice of any amendment to this Deposit Agreement or form of Receipts shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (e., upon retrieval from the Commission's, the Depositary's or the Company's website or upon request from the Depositary).The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the American Depositary Shares to be registered on Form F-6 under the Securities Act or (b) the American Depositary Shares or the Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such American Depositary Share or Shares, to consent and agree to such amendment or supplement and to be bound by this Deposit Agreement as amended and supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of this Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement this Deposit Agreement and the Receipt at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to this Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.
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SECTION 6.2 Termination. The Depositary shall, at any time at the written direction of the Company, terminate this Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination, provided that, the Depositary shall be reimbursed for any amounts, fees, costs or expenses owed to it in accordance with the terms of this Deposit Agreement and in accordance with any other agreements as otherwise agreed in writing between the Company and the Depositary from time to time, prior to such termination shall take effect. If 90 days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and in either case a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 hereof, the Depositary may terminate this Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed for such termination. On and after the date of termination of this Deposit Agreement, each Holder will, upon surrender of such Receipt at the Corporate Trust Office of the Depositary, upon the payment of the charges of the Depositary for the surrender of Receipts referred to in Section 2.6 hereof and subject to the conditions and restrictions therein set forth, and upon payment of any applicable taxes and/or governmental charges, be entitled to Delivery, to him or upon his order, of the amount of Deposited Securities represented by such Receipt. If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Registrar thereafter shall discontinue the registration of transfers of Receipts, and the Depositary shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights or other property as provided in this Deposit Agreement, and shall continue to Deliver Deposited Securities, subject to the conditions and restrictions set forth in Section 2.6 hereof, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes and/or governmental charges or assessments). At any time after the expiration of six months from the date of termination of this Deposit Agreement, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, in an unsegregated account, without liability for interest for the pro rata benefit of the Holders of Receipts whose Receipts have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement with respect to the Receipts and the Shares, Deposited Securities and American Depositary Shares, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes and/or governmental charges or assessments). Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary hereunder. The obligations under the terms of this Deposit Agreement and Receipts of Holders and Beneficial Owners of ADSs outstanding as of the effective date of any termination shall survive such effective date of termination and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of this Deposit Agreement and the Holders have each satisfied any and all of their obligations hereunder (including, but not limited to, any payment and/or reimbursement obligations which relate to prior to the effective date of termination but which payment and/or reimbursement is claimed after such effective date of termination).
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ARTICLE VII.
MISCELLANEOUS
SECTION 7.1 Counterparts. This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one and the same agreement. Copies of this Deposit Agreement shall be maintained with the Depositary and shall be open to inspection by any Holder during business hours.
SECTION 7.2 No Third-Party Beneficiaries. This Deposit Agreement is for the exclusive benefit of the parties hereto (and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person, except to the extent specifically set forth in this Deposit Agreement. Nothing in this Deposit Agreement shall be deemed to give rise to a partnership or joint venture among the parties hereto nor establish a fiduciary or similar relationship among the parties. The parties hereto acknowledge and agree that (i) the Depositary and its Affiliates may at any time have multiple banking relationships with the Company and its Affiliates, (ii) the Depositary and its Affiliates may be engaged at any time in transactions in which parties adverse to the Company or the Holders or Beneficial Owners may have interests and (iii) nothing contained in this Agreement shall (a) preclude the Depositary or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, or (b) obligate the Depositary or any of its Affiliates to disclose such transactions or relationships or to account for any profit made or payment received in such transactions or relationships.
SECTION 7.3 Severability. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.4 Holders and Beneficial Owners as Parties; Binding Effect. The Holders and Beneficial Owners from time to time of American Depositary Shares shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of any Receipt by acceptance hereof or any beneficial interest therein.
SECTION 7.5 Notices. Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by first-class mail, air courier or cable, telex, facsimile transmission or electronic transmission, confirmed by letter, addressed to Hesai Group, 9th Floor, Building L2-B, 1588 Zhuguang Road, Qingpu District, Shanghai, 201702, the People’s Republic of China, Attention: Rachel Yang or to any other address which the Company may specify in writing to the Depositary or at which it may be effectively given such notice in accordance with applicable law.
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Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent by first-class mail, air courier or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Company’s expense, unless otherwise agreed in writing between the Company and the Depositary, confirmed by letter, addressed to Deutsche Bank Trust Company Americas, 1 Columbus Circle, New York, NY 10019, USA, Attention: ADR Department, telephone: +1 212 250-9100, facsimile: + 1 212 797 0327 or to any other address which the Depositary may specify in writing to the Company.
Any and all notices to be given to any Holder shall be deemed to have been duly given if personally delivered or sent by first-class mail or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Company’s expense, unless otherwise agreed in writing between the Company and the Depositary, addressed to such Holder at the address of such Holder as it appears on the transfer books for Receipts of the Depositary, or, if such Holder shall have filed with the Depositary a written request that notices intended for such Holder be mailed to some other address, at the address specified in such request. Notice to Holders shall be deemed to be notice to Beneficial Owners for all purposes of this Deposit Agreement.
Delivery of a notice sent by mail, air courier or cable, telex, facsimile or electronic transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex, facsimile or electronic transmission) is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service. The Depositary or the Company may, however, act upon any cable, telex, facsimile or electronic transmission received by it from the other or from any Holder, notwithstanding that such cable, telex, facsimile or electronic transmission shall not subsequently be confirmed by letter as aforesaid, as the case may be.
SECTION 7.6 Governing Law and Jurisdiction. This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Subject to the Depositary's rights under the third paragraph of this Section 7.6, the Company and the Depositary agree that the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or relate in any way to this Deposit Agreement including without limitation claims under the Securities Act and, for such purposes, each irrevocably submits to the exclusive jurisdiction of such courts. Notwithstanding the above, the parties hereto agree that any judgment and/or order from any such New York court can be enforced in any court having jurisdiction thereof. The Company hereby irrevocably designates, appoints and empowers Cogency Global Inc. (the “Process Agent”), now at 122 East 42nd Street, 18th Floor, New York, NY 10168, as its authorized agent to receive and accept for and on its behalf, and on behalf of its properties, assets and revenues, service by mail of any and all legal process, summons, notices and documents that may be served in any suit, action or proceeding brought against the Company in such courts as described in the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Process Agent shall cease to be available to act as such, the Company agrees to designate a new agent in the City of New York on the terms and for the purposes of this Section 7.6 reasonably satisfactory to the Depositary. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Process Agent (whether or not the appointment of such Process Agent shall for any reason prove to be ineffective or such Process Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 7.5 hereof. The Company agrees that the failure of the Process Agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon.
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The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any actions, suits or proceedings brought in any court as provided in this Section 7.6, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
The Company, the Depositary and by holding an American Depositary Share (or interest therein) Holders and Beneficial Owners each agree that, notwithstanding the foregoing, with regard to any claim or dispute or difference of whatever nature between or involving the parties hereto arising directly or indirectly from the relationship created by this Deposit Agreement, the Depositary, in its sole discretion, shall be entitled to refer such dispute or difference for final settlement by arbitration (“Arbitration”) in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”) then in force. The arbitration shall be conducted by three arbitrators, one nominated by the Depositary, one nominated by the Company, and one nominated by the two party-appointed arbitrators within 30 calendar days of the confirmation of the nomination of the second arbitrator. If any arbitrator has not been nominated within the time limits specified herein and in the Rules, then such arbitrator shall be appointed by the American Arbitration Association in accordance with the Rules. Judgment upon the award rendered by the arbitrators may be enforced in any court having jurisdiction thereof. The seat and place of any reference to arbitration shall be New York City, New York, and the procedural law of such arbitration shall be New York law. The language to be used in the arbitration shall be English. The fees of the arbitrator and other costs incurred by the parties in connection with such Arbitration shall be paid by the party or parties that is (are) unsuccessful in such Arbitration. For the avoidance of doubt this paragraph does not preclude Holders and Beneficial Owners from pursuing claims under the Securities Act or the Exchange Act in federal courts.
Holders and Beneficial Owners understand, and by holding an American Depositary Share or an interest therein, such Holders and Beneficial Owners each irrevocably agrees that any legal suit, action or proceeding against or involving the Company or the Depositary, regardless of whether such legal suit, action or proceeding also involves parties other than the Company or the Depositary, arising out of or relating in any way to the Deposit Agreement, the American Depositary Shares or Receipts, or the transactions contemplated hereby or thereby or by virtue of ownership thereof, including without limitation claims under the Securities Act, may only be instituted in the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, in the state courts in New York County, New York), and by holding an American Depositary Share or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Holders and Beneficial Owners agree that the provisions of this paragraph shall survive such Holders’ and Beneficial Owners’ ownership of American Depositary Shares or interests therein.
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EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ANY ADRs) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THIS DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).
The provisions of this Section 7.6 shall survive any termination of this Deposit Agreement, in whole or in part.
SECTION 7.7 Assignment. Subject to the provisions and exceptions set forth in Section 5.4 hereof, this Deposit Agreement may not be assigned by either the Company or the Depositary.
SECTION 7.8 Agents. The Depositary shall be entitled, in its sole but reasonable discretion, to appoint one or more agents (the “Agents”) of which it shall have control for the purpose, inter alia, of making distributions to the Holders or otherwise carrying out its obligations under this Agreement.
SECTION 7.9 Affiliates etc. The Depositary reserves the right to utilize and retain a division or Affiliate(s) of the Depositary to direct, manage and/or execute any public and/or private sale of Shares, rights, securities, property or other entitlements hereunder and to engage in the conversion of Foreign Currency hereunder. It is anticipated that such division and/or Affiliate(s) will charge the Depositary a fee and/or commission in connection with each such transaction, and seek reimbursement of its costs and expenses related thereto. Such fees/commissions, costs and expenses, shall be deducted from amounts distributed hereunder and shall not be deemed to be fees of the Depositary under Article (9) of the Receipt or otherwise. Persons are advised that in converting foreign currency into U.S. dollars the Depositary may utilize Deutsche Bank AG or its affiliates (collectively, “DBAG”) to effect such conversion by seeking to enter into a foreign exchange (“FX”) transaction with DBAG. When converting currency, the Depositary is not acting as a fiduciary for the holders or beneficial owners of depositary receipts or any other person. Moreover, in executing FX transactions, DBAG will be acting in a principal capacity, and not as agent, fiduciary or broker, and may hold positions for its own account that are the same, similar, different or opposite to the positions of its customers, including the Depositary. When the Depositary seeks to execute an FX transaction to accomplish such conversion, customers should be aware that DBAG is a global dealer in FX for a full range of FX products and, as a result, the rate obtained in connection with any requested foreign currency conversion may be impacted by DBAG executing FX transactions for its own account or with another customer. In addition, in order to source liquidity for any FX transaction relating to any foreign currency conversion, DBAG may internally share economic terms relating to the relevant FX transaction with persons acting in a sales or trading capacity for DBAG or one of its agents. DBAG may charge fees and/or commissions to the Depositary or add a mark-up in connection with such conversions, which are reflected in the rate at which the foreign currency will be converted into U.S. dollars. The Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs.
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SECTION 7.10 Exclusivity. The Company agrees not to appoint any other depositary for the issuance or administration of depositary receipts evidencing any class of stock of the Company so long as Deutsche Bank Trust Company Americas is acting as Depositary hereunder.
SECTION 7.11 Compliance with U.S. Securities Laws. Notwithstanding anything in this Deposit Agreement to the contrary, the withdrawal or Delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.
SECTION 7.12 Titles. All references in this Deposit Agreement to exhibits, Articles, sections, subsections, and other subdivisions refer to the exhibits, Articles, sections, subsections and other subdivisions of this Deposit Agreement unless expressly provided otherwise. The words “this Deposit Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import refer to this Deposit Agreement as a whole as in effect between the Company, the Depositary and the Holders and Beneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to sections of this Deposit Agreement are included for convenience only and shall be disregarded in construing the language contained in this Deposit Agreement.
IN WITNESS WHEREOF, HESAI GROUP and DEUTSCHE BANK TRUST COMPANY AMERICAS have duly executed this Deposit Agreement as of the day and year first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of American Depositary Shares evidenced by Receipts issued in accordance with the terms hereof.
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HESAI GROUP |
By: | ||
Name: | ||
Title: |
DEUTSCHE BANK TRUST COMPANY AMERICAS |
By: | ||
Name: | ||
Title: |
By: | ||
Name: | ||
Title: |
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EXHIBIT A
CUSIP________
ISIN________
American Depositary Shares (Each American Depositary Share representing one Fully Paid Class B Ordinary Share) |
[FORM OF FACE OF RECEIPT]
AMERICAN DEPOSITARY RECEIPT
for
AMERICAN DEPOSITARY SHARES
representing
DEPOSITED ORDINARY SHARES
of
HESAI GROUP
(Incorporated under the laws of the Cayman Islands)
DEUTSCHE BANK TRUST COMPANY AMERICAS, as depositary (herein called the “Depositary”), hereby certifies that ________________ is the owner of ______________ American Depositary Shares (hereinafter “ADS”), representing deposited ordinary shares, each of Par Value of U.S. $0.0001 including evidence of rights to receive such ordinary shares (the “Shares”) of Hesai Group, a company incorporated under the laws of the Cayman Islands (the “Company”). As of the date of the Deposit Agreement (hereinafter referred to), each ADS represents one Share deposited under the Deposit Agreement with the Custodian which at the date of execution of the Deposit Agreement is Deutsche Bank AG, Hong Kong Branch (the “Custodian”). The ratio of Depositary Shares to shares of stock is subject to subsequent amendment as provided in Article IV of the Deposit Agreement. The Depositary’s Corporate Trust Office is located at 1 Columbus Circle, New York, NY 10019, U.S.A.
(1) The Deposit Agreement. This American Depositary Receipt is one of an issue of American Depositary Receipts (“Receipts”), all issued or to be issued upon the terms and conditions set forth in the Deposit Agreement, dated as of , 2023 (as amended from time to time, the “Deposit Agreement”), by and among the Company, the Depositary, and all Holders and Beneficial Owners from time to time of Receipts issued thereunder, each of whom by accepting a Receipt agrees to become a party thereto and becomes bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights and obligations of Holders and Beneficial Owners of Receipts and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time, received in respect of such Shares and held thereunder (such Shares, other securities, property and cash are herein called “Deposited Securities”). Copies of the Deposit Agreement are on file at the Corporate Trust Office of the Depositary and the Custodian.
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Each owner and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s) (the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof).
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and the Memorandum and Articles of Association (as in effect on the date of the Deposit Agreement) and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. All capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed thereto in the Deposit Agreement. To the extent there is any inconsistency between the terms of this Receipt and the terms of the Deposit Agreement, the terms of the Deposit Agreement shall prevail. Prospective and actual Holders and Beneficial Owners are encouraged to read the terms of the Deposit Agreement. The Depositary makes no representation or warranty as to the validity or worth of the Deposited Securities. The Depositary has made arrangements for the acceptance of the American Depositary Shares into DTC. Each Beneficial Owner of American Depositary Shares held through DTC must rely on the procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such American Depositary Shares. The Receipt evidencing the American Depositary Shares held through DTC will be registered in the name of a nominee of DTC. So long as the American Depositary Shares are held through DTC or unless otherwise required by law, ownership of beneficial interests in the Receipt registered in the name of DTC (or its nominee) will be shown on, and transfers of such ownership will be effected only through, records maintained by (i) DTC (or its nominee), or (ii) DTC Participants (or their nominees).
(2) Surrender of Receipts and Withdrawal of Deposited Securities. Upon surrender, at the Corporate Trust Office of the Depositary, of ADSs evidenced by this Receipt for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals of Deposited Securities and cancellation of Receipts (as set forth in Section 5.9 of the Deposit Agreement and Article (9) hereof) and (ii) all fees, taxes and/or governmental charges payable in connection with such surrender and withdrawal, and, subject to the terms and conditions of the Deposit Agreement, the Memorandum and Articles of Association, Section 7.11 of the Deposit Agreement, Article (22) hereof and the provisions of or governing the Deposited Securities and other applicable laws, the Holder of the American Depositary Shares evidenced hereby is entitled to Delivery, to him or upon his order, of the Deposited Securities represented by the ADS so surrendered. ADS may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such ADS (if held in registered form) or by book-entry delivery of such ADS to the Depositary.
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A Receipt surrendered for such purposes shall, if so required by the Depositary, be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of a person or persons designated in such order. Thereupon, the Depositary shall direct the Custodian to Deliver (without unreasonable delay) at the designated office of the Custodian or through a book-entry delivery of the Shares (in either case subject to the terms and conditions of the Deposit Agreement, to the Memorandum and Articles of Association, and to the provisions of or governing the Deposited Securities and applicable laws, now or hereafter in effect), to or upon the written order of the person or persons designated in the order delivered to the Depositary as provided above, the Deposited Securities represented by such ADSs, together with any certificate or other proper documents of or relating to title for the Deposited Securities or evidence of the electronic transfer thereof (if available) as the case may be to or for the account of such person. Subject to Article (4) hereof, in the case of surrender of a Receipt evidencing a number of ADSs representing other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) issue and Deliver to the person surrendering such Receipt a new Receipt evidencing American Depositary Shares representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Shares represented by the Receipt so surrendered and remit the proceeds thereof (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the person surrendering the Receipt. At the request, risk and expense of any Holder so surrendering a Receipt, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any cash or other property (other than securities) held in respect of, and any certificate or certificates and other proper documents of or relating to title to, the Deposited Securities represented by such Receipt to the Depositary for Delivery at the Corporate Trust Office of the Depositary, and for further Delivery to such Holder. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission. Upon receipt of such direction by the Depositary, the Depositary may make delivery to such person or persons entitled thereto at the Corporate Trust Office of the Depositary of any dividends or cash distributions with respect to the Deposited Securities represented by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.
(3) Transfers, Split-Ups and Combinations of Receipts. Subject to the terms and conditions of the Deposit Agreement, the Registrar shall register transfers of Receipts on its books, upon surrender at the Corporate Trust Office of the Depositary of a Receipt by the Holder thereof in person or by duly authorized attorney, properly endorsed in the case of a certificated Receipt or accompanied by, or in the case of Receipts issued through any book-entry system, including, without limitation, DRS/Profile, receipt by the Depositary of proper instruments of transfer (including signature guarantees in accordance with standard industry practice) and duly stamped as may be required by the laws of the State of New York, of the United States, of the Cayman Islands and of any other applicable jurisdiction. Subject to the terms and conditions of the Deposit Agreement, including payment of the applicable fees and expenses incurred by, and charges of, the Depositary, the Depositary shall execute and Deliver a new Receipt(s) (and if necessary, cause the Registrar to countersign such Receipt(s)) and deliver same to or upon the order of the person entitled to such Receipts evidencing the same aggregate number of ADSs as those evidenced by the Receipts surrendered. Upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts upon payment of the applicable fees and charges of the Depositary, and subject to the terms and conditions of the Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as the Receipt or Receipts surrendered.
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(4) Pre-Conditions to Registration, Transfer, Etc. As a condition precedent to the execution and Delivery, registration, registration of transfer, split-up, subdivision, combination or surrender of any Receipt, the delivery of any distribution thereon (whether in cash or shares) or withdrawal of any Deposited Securities, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in the Deposit Agreement and in this Receipt, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of Receipts and ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations of the Depositary or the Company consistent with the Deposit Agreement and applicable law.
The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the issuance of ADSs against the deposit of particular Shares may be withheld, or the registration of transfer of Receipts in particular instances may be refused, or the registration of transfer of Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law, any government or governmental body or commission or any securities exchange upon which the Receipts or Share are listed, or under any provision of the Deposit Agreement or provisions of, or governing, the Deposited Securities or any meeting of shareholders of the Company or for any other reason, subject in all cases to Article (22) hereof.
The Depositary shall not issue ADSs prior to the receipt of Shares or deliver Shares prior to the receipt and cancellation of ADSs.
(5) Compliance With Information Requests. Notwithstanding any other provision of the Deposit Agreement or this Receipt, each Holder and Beneficial Owner of the ADSs represented hereby agrees to comply with requests from the Company pursuant to the laws of the Cayman Islands, the rules and requirements of the NASDAQ Stock Market and any other stock exchange on which the Shares are, or will be registered, traded or listed, the Memorandum and Articles of Association, which are made to provide information as to the capacity in which such Holder or Beneficial Owner owns ADSs and regarding the identity of any other person interested in such ADSs and the nature of such interest and various other matters whether or not they are Holders and/or Beneficial Owner at the time of such request. The Depositary agrees to use reasonable efforts to forward any such requests to the Holders and to forward to the Company any such responses to such requests received by the Depositary.
(6) Liability of Holder for Taxes, Duties and Other Charges. If any tax or other governmental charge shall become payable by the Depositary or the Custodian with respect to any Receipt or any Deposited Securities or ADSs, such tax or other governmental charge shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Securities and may sell for the account of the Holder and/or Beneficial Owner any or all of the Deposited Securities and apply such distributions and sale proceeds in payment of such taxes (including applicable interest and penalties) or charges, with the Holder and the Beneficial Owner hereof remaining fully liable for any deficiency. The Custodian may refuse the deposit of Shares, and the Depositary may refuse to issue ADSs, to deliver Receipts, register the transfer, split-up or combination of ADRs and (subject to Article (22) hereof) the withdrawal of Deposited Securities, until payment in full of such tax, charge, penalty or interest is received.
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The liability of Holders and Beneficial Owners under the Deposit Agreement shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of the Deposit Agreement.
Holders understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which may exceed the number of decimal places used by the Depositary to report distribution rates (which in any case will not be less than two decimal places). Any excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment.
(7) Representations and Warranties of Depositors. Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares (and the certificates therefor) are duly authorized, validly issued, fully paid, non-assessable and were legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares, have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated by Section 2.11 of the Deposit Agreement), (v) the Shares presented for deposit have not been stripped of any rights or entitlements and (vi) the Shares are not subject to any lock-up agreement with the Company or other party, or the Shares are subject to a lock-up agreement but such lock-up agreement has terminated or the lock-up restrictions imposed thereunder have expired or been validly waived. Such representations and warranties shall survive the deposit and withdrawal of Shares and the issuance, cancellation and transfer of ADSs. If any such representations or warranties are false in any way, the Company and Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.
(8) Filing Proofs, Certificates and Other Information. Any person presenting Shares for deposit shall provide, any Holder and any Beneficial Owner may be required to provide, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary such proof of citizenship or residence, taxpayer status, payment of all applicable taxes and/or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Securities, compliance with applicable laws and the terms of the Deposit Agreement and the provisions of, or governing, the Deposited Securities or other information as the Depositary deems necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement. Pursuant to the Deposit Agreement, the Depositary and the Registrar, as applicable, may withhold the execution or Delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other distribution of rights or of the proceeds thereof, or to the extent not limited by the terms of Article (22) hereof or the terms of the Deposit Agreement, the Delivery of any Deposited Securities until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositary’s and the Company’s satisfaction. The Depositary shall from time to time on the written request of the Company advise the Company of the availability of any such proofs, certificates or other information and shall, at the Company’s sole expense, provide or otherwise make available copies thereof to the Company upon written request therefor by the Company, unless such disclosure is prohibited by law. Each Holder and Beneficial Owner agrees to provide any information requested by the Company or the Depositary pursuant to this paragraph. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.
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Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, the Agents and each of their respective directors, officers, employees, agents and Affiliates against, and to hold each of them harmless from, any Losses which any of them may incur or which may be made against any of them as a result of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder and/or Beneficial Owner or as a result of any such failure to furnish any of the foregoing.
The obligations of Holders and Beneficial Owners under the Deposit Agreement shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of the Deposit Agreement.
(9) Charges of Depositary. The Depositary reserves the right to charge the following fees for the services performed under the terms of the Deposit Agreement, provided, however, that no fees shall be payable upon distribution of cash dividends so long as the charging of such fee is prohibited by the exchange, if any, upon which the ADSs are listed:
(i) to any person to whom ADSs are issued or to any person to whom a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash), a fee not in excess of U.S. $ 5.00 per 100 ADSs (or fraction thereof) so issued under the terms of the Deposit Agreement to be determined by the Depositary;
(ii) to any person surrendering ADSs for withdrawal of Deposited Securities or whose ADSs are cancelled or reduced for any other reason including, inter alia, cash distributions made pursuant to a cancellation or withdrawal, a fee not in excess of U.S. $ 5.00 per 100 ADSs reduced, cancelled or surrendered (as the case may be);
(iii) to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs held for the distribution of cash dividends;
(iv) to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs held for the distribution of cash entitlements (other than cash dividends) and/or cash proceeds, including proceeds from the sale of rights, securities and other entitlements;
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(v) to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs (or portion thereof) issued upon the exercise of rights; and
(vi) for the operation and maintenance costs in administering the ADSs an annual fee not in excess of U.S. $ 5.00 per 100 ADSs, such fee to be assessed against Holders of record as of the date or dates set by the Depositary as it sees fit and collected at the sole discretion of the Depositary by billing such Holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions.
In addition, Holders, Beneficial Owners, any person depositing Shares for deposit and any person surrendering ADSs for cancellation and withdrawal of Deposited Securities will be required to pay the following charges:
(i) taxes (including applicable interest and penalties) and other governmental charges;
(ii) such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities with the Foreign Registrar and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;
(iii) such cable, telex, facsimile and electronic transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the depositor depositing or person withdrawing Shares or Holders and Beneficial Owners of ADSs;
(iv) the expenses and charges incurred by the Depositary and/or a division or Affiliate(s) of the Depositary in the conversion of Foreign Currency;
(v) such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Shares, Deposited Securities, ADSs and ADRs;
(vi) the fees and expenses incurred by the Depositary in connection with the delivery of Deposited Securities, including any fees of a central depository for securities in the local market, where applicable;
(vii) any additional fees, charges, costs or expenses that may be incurred by the Depositary or a division or Affiliate(s) of the Depositary from time to time.
Any other fees and charges of, and expenses incurred by, the Depositary or the Custodian under the Deposit Agreement shall be for the account of the Company unless otherwise agreed in writing between the Company and the Depositary from time to time. All fees and charges may, at any time and from time to time, be changed by agreement between the Depositary and Company but, in the case of fees and charges payable by Holders or Beneficial Owners, only in the manner contemplated by Article (20) hereof.
The Depositary may make payments to the Company and/or may share revenue with the Company derived from fees collected from Holders and Beneficial Owners, upon such terms and conditions as the Company and the Depositary may agree from time to time.
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(10) Title to Receipts. It is a condition of this Receipt, and every successive Holder of this Receipt by accepting or holding the same consents and agrees, that title to this Receipt (and to each ADS evidenced hereby) is transferable by delivery of the Receipt, provided it has been properly endorsed or accompanied by proper instruments of transfer, such Receipt being a certificated security under the laws of the State of New York. Notwithstanding any notice to the contrary, the Depositary may deem and treat the Holder of this Receipt (that is, the person in whose name this Receipt is registered on the books of the Depositary) as the absolute owner hereof for all purposes. The Depositary shall have no obligation or be subject to any liability under the Deposit Agreement or this Receipt to any holder of this Receipt or any Beneficial Owner unless such holder is the Holder of this Receipt registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner or the Beneficial Owner’s representative is the Holder registered on the books of the Depositary.
(11) Validity of Receipt. This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose, unless this Receipt has been (i) dated, (ii) signed by the manual or facsimile signature of a duly authorized signatory of the Depositary, (iii) if a Registrar for the Receipts shall have been appointed, countersigned by the manual or facsimile signature of a duly authorized signatory of the Registrar and (iv) registered in the books maintained by the Depositary or the Registrar, as applicable, for the issuance and transfer of Receipts. Receipts bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly-authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the execution and delivery of such Receipt by the Depositary or did not hold such office on the date of issuance of such Receipts.
(12) Available Information; Reports; Inspection of Transfer Books. The Company is subject to the periodic reporting requirements of the Exchange Act applicable to foreign private issuers (as defined in Rule 405 of the Securities Act) and accordingly files certain information with the Commission. These reports and documents can be inspected and copied at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington D.C. 20549, U.S.A. The Depositary shall make available during normal business hours on any Business Day for inspection by Holders at its Corporate Trust Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company.
The Depositary or the Registrar, as applicable, shall keep books for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Company and by the Holders of such Receipts, provided that such inspection shall not be, to the Depositary’s or the Registrar’s knowledge, for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the Receipts.
The Depositary or the Registrar, as applicable, may close the transfer books with respect to the Receipts, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to Article (22) hereof.
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Dated: | DEUTSCHE BANK TRUST COMPANY AMERICAS, as Depositary |
By: |
By: |
The address of the Corporate Trust Office of the Depositary is 1 Columbus Circle, New York, NY 10019, U.S.A.
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EXHIBIT B
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(13) Dividends and Distributions in Cash, Shares, etc. Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights securities or other entitlements under the Deposit Agreement, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (upon the terms of the Deposit Agreement), be converted on a practicable basis, into Dollars transferable to the United States, promptly convert or cause to be converted such dividend, distribution or proceeds into Dollars and will distribute promptly the amount thus received (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of ADSs representing such Deposited Securities held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. Holders and Beneficial Owners understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates. The excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary shall forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file with governmental agencies such reports as are necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts.
If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or their nominees. Upon receipt of confirmation of such deposit, the Depositary shall, subject to and in accordance with the Deposit Agreement, establish the ADS Record Date and either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held by such Holders as of the ADS Record Date, additional ADSs, which represent in aggregate the number of Shares received as such dividend, or free distribution, subject to the terms of the Deposit Agreement (including, without limitation, the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of the applicable fees and charges of, and the expenses incurred by, the Depositary, and taxes and/or governmental charges). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms set forth in the Deposit Agreement.
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In the event that (x) the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, (y) if the Company, in the fulfillment of its obligations under the Deposit Agreement, has either (a) furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), or (b) fails to timely deliver the documentation contemplated in the Deposit Agreement, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of taxes and/or governmental charges, and fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary) to Holders entitled thereto upon the terms of the Deposit Agreement. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement.
Upon timely receipt of a notice indicating that the Company wishes an elective distribution to be made available to Holders upon the terms described in the Deposit Agreement, the Depositary shall, upon provision of all documentation required under the Deposit Agreement, (including, without limitation, any legal opinions the Depositary may request under the Deposit Agreement) determine whether such distribution is lawful and reasonably practicable. If so, the Depositary shall, subject to the terms and conditions of the Deposit Agreement, establish an ADS Record Date according to Article (14) hereof and establish procedures to enable the Holder hereof to elect to receive the proposed distribution in cash or in additional ADSs. If a Holder elects to receive the distribution in cash, the dividend shall be distributed as in the case of a distribution in cash. If the Holder hereof elects to receive the distribution in additional ADSs, the distribution shall be distributed as in the case of a distribution in Shares upon the terms described in the Deposit Agreement. If such elective distribution is not lawful or reasonably practicable or if the Depositary did not receive satisfactory documentation set forth in the Deposit Agreement, the Depositary shall, to the extent permitted by law, distribute to Holders, on the basis of the same determination as is made in the Cayman Islands, in respect of the Shares for which no election is made, either (x) cash or (y) additional ADSs representing such additional Shares, in each case, upon the terms described in the Deposit Agreement. Nothing herein shall obligate the Depositary to make available to the Holder hereof a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that the Holder hereof will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.
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Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least 60 days prior to the proposed distribution stating whether or not it wishes such rights to be made available to Holders of ADSs. Upon timely receipt by the Depositary of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Company shall determine whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to any Holders only if the Company shall have timely requested that such rights be made available to Holders, the Depositary shall have received the documentation required by the Deposit Agreement, and the Depositary shall have determined that such distribution of rights is lawful and reasonably practicable. If such conditions are not satisfied, the Depositary shall sell the rights as described below. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date and establish procedures (x) to distribute such rights (by means of warrants or otherwise) and (y) to enable the Holders to exercise the rights (upon payment of the applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges). Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holders a method to exercise such rights to subscribe for Shares (rather than ADSs). If (i) the Company does not timely request the Depositary to make the rights available to Holders or if the Company requests that the rights not be made available to Holders, (ii) the Depositary fails to receive the documentation required by the Deposit Agreement or determines it is not lawful or reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, and if it so determines that it is lawful and reasonably practicable, endeavour to sell such rights in a riskless principal capacity or otherwise, at such place and upon such terms (including public and/or private sale) as it may deem proper. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) upon the terms hereof and in the Deposit Agreement. If the Depositary is unable to make any rights available to Holders or to arrange for the sale of the rights upon the terms described above, the Depositary shall allow such rights to lapse. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.
Notwithstanding anything herein to the contrary, if registration (under the Securities Act and/or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act covering such offering is in effect or (ii) unless the Company furnishes to the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case satisfactorily to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of property (including rights) an amount on account of taxes and/or other governmental charges, the amount distributed to the Holders shall be reduced accordingly. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes and/or charges.
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There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to exercise rights on the same terms and conditions as the holders of Shares or to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights or otherwise to register or qualify the offer or sale of such rights or securities under the applicable law of any other jurisdiction for any purpose.
Upon receipt of a notice regarding property other than cash, Shares or rights to purchase additional Shares, to be made to Holders of ADSs, the Depositary shall determine, after consultation with the Company, whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have timely requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received the documentation required by the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. Upon satisfaction of such conditions, the Depositary shall distribute the property so received to the Holders of record as of the ADS Record Date, in proportion to the number of ADSs held by such Holders respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes and/or governmental charges. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.
If the conditions above are not satisfied, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem proper and shall distribute the proceeds of such sale received by the Depositary (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the Holders upon the terms hereof and of the Deposit Agreement. If the Depositary is unable to sell such property, the Depositary may dispose of such property in any way it deems reasonably practicable under the circumstances.
(14) Fixing of Record Date. Whenever necessary in connection with any distribution (whether in cash, Shares, rights or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of or solicitation of holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of any notice, or any other matter, the Depositary shall fix a record date (the “ADS Record Date”), as close as practicable to the record date fixed by the Company with respect to the Shares (if applicable), for the determination of the Holders who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, or to give or withhold such consent, or to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by each ADS or for any other reason. Subject to applicable law and the terms and conditions of this Receipt and the Deposit Agreement, only the Holders of record at the close of business in New York on such ADS Record Date shall be entitled to receive such distributions, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.
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(15) Voting of Deposited Securities. Subject to the next sentence, as soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or such solicitation of consents or proxies. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least 30 Business Days prior to the date of such vote or meeting) and at the Company’s expense, and provided no U.S. legal prohibitions exist, mail by regular, ordinary mail delivery (or by electronic mail or as otherwise may be agreed between the Company and the Depositary in writing from time to time) or otherwise distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy; (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s American Depositary Shares; and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary, or in which instructions may be deemed to have been given in accordance with this Article (15), including an express indication that instructions may be given (or be deemed to have been given in accordance with the immediately following paragraph of this section if no instruction is received) to the Depositary to give a discretionary proxy to a person or persons designated by the Company. Voting instructions may be given only in respect of a number of American Depositary Shares representing an integral number of Deposited Securities. Upon the timely receipt of voting instructions of a Holder on the ADS Record Date in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of the Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities, to vote or cause the Custodian to vote the Deposited Securities (in person or by proxy) represented by American Depositary Shares evidenced by such Receipt in accordance with such voting instructions.
In the event that (i) the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs or (ii) no timely instructions are received by the Depositary from a Holder with respect to any of the Deposited Securities represented by the ADSs held by such Holder on the ADS Record Date, the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities, provided, however, that no such instruction shall be deemed to have been given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing, if applicable) that (x) the Company does not wish to give such proxy, (y) the Company is aware, or should reasonably be aware, that substantial opposition exists from Holders against the outcome for which the person designated by the Company would otherwise vote or (z) the outcome for which the person designated by the Company would otherwise vote would materially and adversely affect the rights of holders of Deposited Securities, provided, further, that the Company will have no liability to any Holder or Beneficial Owner resulting from such notification.
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In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions (or the deemed voting instructions, as set out above) received by the Depositary from Holders shall lapse. The Depositary will have no obligation to demand voting on a poll basis with respect to any resolution and shall have no liability to any Holder or Beneficial Owner for not having demanded voting on a poll basis.
Neither the Depositary nor the Custodian shall, under any circumstances exercise any discretion as to voting, and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of for purposes of establishing a quorum or otherwise, Deposited Securities represented by ADSs except pursuant to and in accordance with such written instructions from Holders, including the deemed instruction to the Depositary to give a discretionary proxy to a person designated by the Company. Deposited Securities represented by ADSs for which (i) no timely voting instructions are received by the Depositary from the Holder, or (ii) timely voting instructions are received by the Depositary from the Holder but such voting instructions fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, shall be voted in the manner provided in this Article (15). Notwithstanding anything else contained herein, and subject to applicable law, regulation and the Memorandum and Articles of Association, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the purpose of establishing quorum at a meeting of shareholders.
There can be no assurance that Holders or Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.
Notwithstanding the above, save for applicable provisions of the law of the Cayman Islands, and in accordance with the terms of Section 5.3 of the Deposit Agreement, the Depositary shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities or the manner in which such vote is cast or the effect of such vote.
(16) Changes Affecting Deposited Securities. Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or sale of assets affecting the Company or to which it otherwise is a party, any securities which shall be received by the Depositary or a Custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Securities under the Deposit Agreement, and the Receipts shall, subject to the provisions of the Deposit Agreement and applicable law, evidence ADSs representing the right to receive such additional securities. Alternatively, the Depositary may, with the Company’s approval, and shall, if the Company shall so requests, subject to the terms of the Deposit Agreement and receipt of satisfactory documentation contemplated by the Deposit Agreement, execute and deliver additional Receipts as in the case of a stock dividend on the Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts, in either case, as well as in the event of newly deposited Shares, with necessary modifications to this form of Receipt specifically describing such new Deposited Securities and/or corporate change. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall if the Company requests, subject to receipt of satisfactory legal documentation contemplated in the Deposit Agreement, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) for the account of the Holders otherwise entitled to such securities and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to the Deposit Agreement. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to Holders in general or any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such securities.
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(17) Exoneration. None of the Depositary, the Custodian or the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or shall incur any liability to Holders, Beneficial Owners or any third parties (i) if the Depositary, the Custodian or the Company or their respective controlling persons or agents shall be prevented or forbidden from, or subjected to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement and this Receipt, by reason of any provision of any present or future law or regulation of the United States, the Cayman Islands or any other country, or of any other governmental authority or regulatory authority or stock exchange, or by reason of any provision, present or future of the Memorandum and Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control, (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Memorandum and Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction of the Depositary, the Custodian or the Company or their respective controlling persons or agents in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for any inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADS or (v) for any special, consequential, indirect or punitive damages for any breach of the terms of the Deposit Agreement or otherwise. The Depositary, its controlling persons, its agents (including without limitation, the Agents), any Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request, opinion or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. No disclaimer of liability under the Securities Act or the Exchange Act is intended by any provision of the Deposit Agreement.
(18) Standard of Care. The Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) assume no obligation and shall not be subject to any liability under the Deposit Agreement or the Receipts to Holders or Beneficial Owners or other persons, except in accordance with Section 5.8 of the Deposit Agreement, provided, that the Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) agree to perform their respective obligations specifically set forth in the Deposit Agreement without gross negligence or wilful misconduct. The Depositary and its directors, officers, Affiliates, employees and agents (including without limitation, the Agents) shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effect of any vote. The Depositary shall not incur any liability for any failure to determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities or for any tax consequences that may result from the ownership of ADSs, Shares or Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement or for the failure or timeliness of any notice from the Company or for any action or non action by it in reliance upon the opinion, advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or any other person believed by it in good faith to be competent to give such advice or information. The Depositary and its agents (including without limitation, the Agents) shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or willful misconduct while it acted as Depositary.
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(19) Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall, in the event no successor depositary has been appointed by the Company, be entitled to take the actions contemplated in the Deposit Agreement), or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement, save that, any amounts, fees, costs or expenses owed to the Depositary under the Deposit Agreement or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such resignation. The Company shall use reasonable efforts to appoint such successor depositary, and give notice to the Depositary of such appointment, not more than 90 days after delivery by the Depositary of written notice of resignation as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by written notice of such removal which notice shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in the Deposit Agreement if a successor depositary has not been appointed), or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement save that, any amounts, fees, costs or expenses owed to the Depositary under the Deposit Agreement or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such removal. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York and if it shall have not appointed a successor depositary the provisions referred to in Article (21) hereof and correspondingly in the Deposit Agreement shall apply. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in the Deposit Agreement), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding Receipts and such other information relating to Receipts and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly mail notice of its appointment to such Holders. Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act and, notwithstanding anything to the contrary in the Deposit Agreement, the Depositary may assign or otherwise transfer all or any of its rights and benefits under the Deposit Agreement (including any cause of action arising in connection with it) to Deutsche Bank AG or any branch thereof or any entity which is a direct or indirect subsidiary or other affiliate of Deutsche Bank AG.
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(20) Amendment/Supplement. Subject to the terms and conditions of this Article (20), and applicable law, this Receipt and any provisions of the Deposit Agreement may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than the charges of the Depositary in connection with foreign exchange control regulations, and taxes and/or other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding Receipts until 30 days after notice of such amendment or supplement shall have been given to the Holders of outstanding Receipts. Notice of any amendment to the Deposit Agreement or form of Receipts shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission's, the Depositary's or the Company's website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADS, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the Receipt at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, or rules or regulations.
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(21) Termination. The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination provided that, the Depositary shall be reimbursed for any amounts, fees, costs or expenses owed to it in accordance with the terms of the Deposit Agreement and in accordance with any other agreements as otherwise agreed in writing between the Company and the Depositary from time to time, prior to such termination shall take effect. If 90 days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and in either case a successor depositary shall not have been appointed and accepted its appointment as provided herein and in the Deposit Agreement, the Depositary may terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed for such termination. On and after the date of termination of the Deposit Agreement, each Holder will, upon surrender of such Holder’s Receipt at the Corporate Trust Office of the Depositary, upon the payment of the charges of the Depositary for the surrender of Receipts referred to in Article (2) hereof and in the Deposit Agreement and subject to the conditions and restrictions therein set forth, and upon payment of any applicable taxes and/or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by such Receipt. If any Receipts shall remain outstanding after the date of termination of the Deposit Agreement, the Registrar thereafter shall discontinue the registration of transfers of Receipts, and the Depositary shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights or other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, subject to the conditions and restrictions set forth in the Deposit Agreement, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments). At any time after the expiration of six months from the date of termination of the Deposit Agreement, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, in an unsegregated account, without liability for interest for the pro rata benefit of the Holders of Receipts whose Receipts have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement with respect to the Receipts and the Shares, Deposited Securities and ADSs, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments) and except as set forth in the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except as set forth in the Deposit Agreement. The obligations under the terms of the Deposit Agreement and Receipts of Holders and Beneficial Owners of ADSs outstanding as of the effective date of any termination shall survive such effective date of termination and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement and the Holders have each satisfied any and all of their obligations hereunder (including, but not limited to, any payment and/or reimbursement obligations which relate to prior to the effective date of termination but which payment and/or reimbursement is claimed after such effective date of termination).
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(22) Compliance with U.S. Securities Laws; Regulatory Compliance. Notwithstanding any provisions in this Receipt or the Deposit Agreement to the contrary, the withdrawal or Delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Section I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.
(23) Certain Rights of the Depositary. The Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. The Depositary may issue ADSs against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.
(24) Ownership Restrictions. Owners and Beneficial Owners shall comply with any limitations on ownership of Shares under the Memorandum and Articles of Association or applicable Cayman Islands law as if they held the number of Shares their American Depositary Shares represent. The Company shall inform the Owners, Beneficial Owners and the Depositary of any such ownership restrictions in place from time to time.
(25) Waiver. EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ANY ADRs) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).
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(ASSIGNMENT AND TRANSFER SIGNATURE LINES)
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto ______________________________ whose taxpayer identification number is _______________________ and whose address including postal zip code is ____________________________, the within Receipt and all rights thereunder, hereby irrevocably constituting and appointing ________________________ attorney-in-fact to transfer said Receipt on the books of the Depositary with full power of substitution in the premises.
Dated: | Name: |
By: | |
Title: |
NOTICE: The signature of the Holder to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever. | |
If the endorsement be executed by an attorney, executor, administrator, trustee or guardian, the person executing the endorsement must give his/her full title in such capacity and proper evidence of authority to act in such capacity, if not on file with the Depositary, must be forwarded with this Receipt. |
SIGNATURE GUARANTEED | |
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ARTICLE I. DEFINITIONS | 1 |
SECTION 1.1 | “Affiliate” | 1 |
SECTION 1.2 | “Agent” | 1 |
SECTION 1.3 | “American Depositary Share(s)” and “ADS(s)” | 2 |
SECTION 1.4 | “Article” | 2 |
SECTION 1.5 | “Articles of Association” | 2 |
SECTION 1.6 | “ADS Record Date” | 2 |
SECTION 1.7 | “Beneficial Owner” | 2 |
SECTION 1.8 | “Business Day” | 2 |
SECTION 1.9 | “Commission” | 2 |
SECTION 1.10 | “Company” | 2 |
SECTION 1.11 | “Corporate Trust Office” | 2 |
SECTION 1.12 | “Custodian” | 2 |
SECTION 1.13 | “Deliver”, “Deliverable” and “Delivery” | 2 |
SECTION 1.14 | “Deposit Agreement” | 3 |
SECTION 1.15 | “Depositary” | 3 |
SECTION 1.16 | “Deposited Securities” | 3 |
SECTION 1.17 | “Dollars” and “$” | 3 |
SECTION 1.18 | “DRS/Profile” | 3 |
SECTION 1.19 | “DTC” | 3 |
SECTION 1.20 | “DTC Participants” | 3 |
SECTION 1.21 | “Exchange Act” | 3 |
SECTION 1.22 | “Foreign Currency” | 3 |
SECTION 1.23 | “Foreign Registrar” | 3 |
SECTION 1.24 | “Holder” | 3 |
SECTION 1.25 | “Indemnified Person” and “Indemnifying Person” | 3 |
SECTION 1.26 | “Losses” | 3 |
SECTION 1.27 | “Memorandum” | 4 |
SECTION 1.28 | “Opinion of Counsel” | 4 |
SECTION 1.29 | “Receipt(s); “American Depositary Receipt(s)”; and “ADR(s)” | 4 |
SECTION 1.30 | “Registrar” | 4 |
SECTION 1.31 | “Restricted ADRs” | 4 |
SECTION 1.32 | “Restricted ADSs” | 4 |
SECTION 1.33 | “Restricted Securities” | 4 |
SECTION 1.34 | “Restricted Shares” | 4 |
SECTION 1.35 | “Securities Act” | 4 |
SECTION 1.36 | “Shares” | 4 |
SECTION 1.37 | “United States” or “U.S.” | 5 |
ARTICLE II. APPOINTMENT OF DEPOSITARY; FORM OF RECEIPT; DEPOSIT OF SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS | 5 |
SECTION 2.1 | Appointment of Depositary | 5 |
SECTION 2.2 | Form and Transferability of Receipts | 5 |
SECTION 2.3 | Deposits | 6 |
SECTION 2.4 | Execution and Delivery of Receipts | 8 |
SECTION 2.5 | Transfer of Receipts; Combination and Split-up of Receipts | 8 |
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SECTION 2.6 | Surrender of Receipts and Withdrawal of Deposited Securities | 9 |
SECTION 2.7 | Limitations on Execution and Delivery, Transfer, etc. of Receipts; Suspension of Delivery, Transfer, etc. | 10 |
SECTION 2.8 | Lost Receipts, etc. | 11 |
SECTION 2.9 | Cancellation and Destruction of Surrendered Receipts | 11 |
SECTION 2.10 | Maintenance of Records | 11 |
SECTION 2.11 | Restricted ADSs | 11 |
ARTICLE III. CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF RECEIPTS | 12 |
SECTION 3.1 | Proofs, Certificates and Other Information | 12 |
SECTION 3.2 | Liability for Taxes and Other Charges | 13 |
SECTION 3.3 | Representations and Warranties on Deposit of Shares | 13 |
SECTION 3.4 | Compliance with Information Requests | 14 |
ARTICLE IV. THE DEPOSITED SECURITIES | 14 |
SECTION 4.1 | Cash Distributions | 14 |
SECTION 4.2 | Distribution in Shares | 15 |
SECTION 4.3 | Elective Distributions in Cash or Shares | 15 |
SECTION 4.4 | Distribution of Rights to Purchase Shares | 16 |
SECTION 4.5 | Distributions Other Than Cash, Shares or Rights to Purchase Shares | 17 |
SECTION 4.6 | Conversion of Foreign Currency | 17 |
SECTION 4.7 | Fixing of Record Date | 18 |
SECTION 4.8 | Voting of Deposited Securities | 19 |
SECTION 4.9 | Changes Affecting Deposited Securities | 20 |
SECTION 4.10 | Available Information | 21 |
SECTION 4.11 | Reports | 21 |
SECTION 4.12 | List of Holders | 21 |
SECTION 4.13 | Taxation; Withholding | 21 |
ARTICLE V. THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY | 23 |
SECTION 5.1 | Maintenance of Office and Transfer Books by the Registrar | 23 |
SECTION 5.2 | Exoneration | 24 |
SECTION 5.3 | Standard of Care | 24 |
SECTION 5.4 | Resignation and Removal of the Depositary; Appointment of Successor Depositary | 25 |
SECTION 5.5 | The Custodian | 26 |
SECTION 5.6 | Notices and Reports | 26 |
SECTION 5.7 | Issuance of Additional Shares, ADSs etc. | 27 |
SECTION 5.8 | Indemnification | 28 |
SECTION 5.9 | Fees and Charges of Depositary | 29 |
SECTION 5.10 | Restricted Securities Owners/Ownership Restrictions | 30 |
ARTICLE VI. AMENDMENT AND TERMINATION | 31 |
SECTION 6.1 | Amendment/Supplement | 31 |
SECTION 6.2 | Termination | 32 |
ARTICLE VII. MISCELLANEOUS | 33 |
SECTION 7.1 | Counterparts | 33 |
SECTION 7.2 | No Third-Party Beneficiaries | 33 |
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SECTION 7.3 | Severability | 33 |
SECTION 7.4 | Holders and Beneficial Owners as Parties; Binding Effect | 33 |
SECTION 7.5 | Notices | 33 |
SECTION 7.6 | Governing Law and Jurisdiction | 34 |
SECTION 7.7 | Assignment | 36 |
SECTION 7.8 | Agents | 36 |
SECTION 7.9 | Affiliates etc. | 36 |
SECTION 7.10 | Exclusivity | 37 |
SECTION 7.11 | Compliance with U.S. Securities Laws | 37 |
SECTION 7.12 | Titles | 37 |
EXHIBIT A | 39 | |
EXHIBIT B | 48 |
62
Exhibit 5.1
Our ref KON/790004-000001/25788554v2
Hesai Group
PO Box 309
Ugland House
Grand Cayman
KY1-1104 Cayman Islands
2 February 2023
Dear Sir or Madam
Hesai Group
We have acted as Cayman Islands legal advisers to Hesai Group (the “Company”) in connection with the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) under the U.S. Securities Act of 1933, as amended to date relating to the offering by the Company (the “Offering”) of certain American depositary shares (the “ADSs”) representing the Company's class B ordinary shares with a par value of US$0.0001 each (the “Shares”).
We are furnishing this opinion as Exhibits 5.1, 8.1 and 23.2 to the Registration Statement.
1 | Documents Reviewed |
For the purposes of this opinion, we have reviewed only originals, copies or final drafts of the following documents:
1.1 | The certificate of incorporation of the Company dated 21 April 2021. |
1.2 | The amended and restated memorandum and articles of association of the Company as adopted by a special resolution passed on 18 May 2021 (the “Pre-IPO Memorandum and Articles”). |
1.3 | The second amended and restated memorandum and articles of association of the Company as conditionally adopted by a special resolution passed on 28 January 2023 and effective immediately prior to the completion of the Company’s initial public offering of ADSs representing its Shares (the “Post-offering Memorandum and Articles”). |
1.4 | The written resolutions of the board of directors of the Company dated 16 January 2023 (the “Directors’ Resolutions”). |
1.5 | The written resolutions of the shareholders of the Company dated 28 January 2023 (the “Shareholders’ Resolutions”). |
1.6 | A certificate from a director of the Company, a copy of which is attached hereto (the “Director’s Certificate”). |
1.7 | A certificate of good standing dated 30 January 2023, issued by the Registrar of Companies in the Cayman Islands (the “Certificate of Good Standing”). |
1.8 | The Registration Statement. |
2 | Assumptions |
The following opinions are given only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving these opinions we have relied (without further verification) upon the completeness and accuracy, as of the date of this opinion letter, of the Director’s Certificate and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
2.1 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals. |
2.2 | All signatures, initials and seals are genuine. |
2.3 | The Company will receive money or money’s worth in consideration for the issue of the Shares and none of the Shares were or will be issued for less than par value. |
2.4 | There is nothing contained in the minute book or corporate records of the Company (which we have not inspected) which would or might affect the opinions set out below. |
2.5 | There is nothing under any law (other than the law of the Cayman Islands), which would or might affect the opinions set out below. |
3 | Opinion |
Based upon the foregoing and subject to the qualifications set out below and having regard to such legal considerations as we deem relevant, we are of the opinion that:
3.1 | The Company has been duly incorporated as an exempted company with limited liability and is validly existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
3.2 | The authorised share capital of the Company, with effect immediately prior to the completion of the Offering of the ADSs representing the Shares, will be US$100,000 divided into 1,000,000,000 shares comprising of (i) 50,000,000 class A ordinary shares of a par value of US$0.0001 each, (ii) 900,000,000 class B ordinary shares of a par value of US$0.0001 each, and (iii) 50,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with the Post-offering Memorandum and Articles. |
3.3 | The issue and allotment of the Shares have been duly authorised and when allotted, issued and paid for as contemplated in the Registration Statement, the Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman Islands law, a share is only issued when it has been entered in the register of members (shareholders). |
3.4 | The statements under the caption “Taxation” in the prospectus forming part of the Registration Statement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material respects and that such statements constitute our opinion. |
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4 | Qualifications |
The opinions expressed above are subject to the following qualifications:
4.1 | To maintain the Company in good standing with the Registrar of Companies under the laws of the Cayman Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law. |
4.2 | Under the Companies Act, the register of members of a Cayman Islands company is by statute regarded as prima facie evidence of any matters which the Companies Act directs or authorises to be inserted therein. A third party interest in the shares in question would not appear. An entry in the register of members may yield to a court order for rectification (for example, in the event of fraud or manifest error). |
4.3 | In this opinion the phrase “non-assessable” means, with respect to shares in the Company, that a shareholder shall not, solely by virtue of its status as a shareholder and in absence of a contractual arrangement, or an obligation pursuant to the memorandum and articles of association, to the contrary, be liable for additional assessments or calls on the shares by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). |
Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject of this opinion.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our name under the headings “Enforceability of Civil Liabilities”, “Taxation” and “Legal Matters” and elsewhere in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Maples and Calder (Hong Kong) LLP
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Annexure
Director's Certificate
To: | Maples and Calder (Hong Kong) LLP |
26th Floor, Central Plaza | |
18 Harbour Road, Wanchai | |
Hong Kong |
2 February 2023
Dear Sirs
Hesai Group (the "Company")
I, the undersigned, being a director of the Company, am aware that you are being asked to provide a legal opinion (the "Opinion") in relation to certain aspects of Cayman Islands law. Capitalised terms used in this certificate have the meaning given to them in the Opinion. I hereby certify that:
1 | The Pre-IPO Memorandum and Articles remain in full force and effect and, except as amended by the Shareholders' Resolutions conditionally adopting the Post-offering Memorandum and Articles, are otherwise unamended. | |
2 | The Directors' Resolutions were duly passed in the manner prescribed in the Pre-IPO Memorandum and Articles (including, without limitation, with respect to the disclosure of interests (if any) by each director of the Company) and have not been amended, varied or revoked in any respect. | |
3 | The Shareholders' Resolutions were duly passed in the manner prescribed in the Pre-IPO Memorandum and Articles and have not been amended, varied or revoked in any respect. | |
4 | The authorised share capital of the Company is US$50,000 divided into 500,000,000 shares of a par value of US$0.0001 each, comprising of (i) 35,000,000 class A ordinary shares of a par value of US$0.0001 each, (ii) 150,000,000 class B ordinary shares of a par value of US$0.0001 each, and (iii) 315,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors of the Company may determine in accordance with Article 9 of the Pre-IPO Memorandum and Articles. | |
5 | The authorised share capital of the Company, with effect immediately prior to the completion of the Company’s initial public offering of the ADSs representing the Shares, will be US$100,000 divided into 1,000,000,000 shares comprising of (i) 50,000,000 class A ordinary shares of a par value of US$0.0001 each, (ii) 900,000,000 class B ordinary shares of a par value of US$0.0001 each, and (iii) 50,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with the Post-offering Memorandum and Articles. | |
6 | The shareholders of the Company have not restricted or limited the powers of the directors of the Company in any way and there is no contractual or other prohibition (other than as arising under Cayman Islands law) binding on the Company prohibiting it from allotting and issuing the Shares or otherwise performing its obligations under the transactions contemplated by under the Registration Statement. |
7 | The directors of the Company at the date of the Director's Resolutions and at the date of this certificate were and are as follows: |
SUN Kai
LI Yifan
XIANG Shaoqing
YANG Cailian
Louis Tung-Jung HSIEH
8 | Each director of the Company considers the transactions contemplated by the Registration Statement to be of commercial benefit to the Company and has acted bona fide in the best interests of the Company, and for a proper purpose of the Company in relation to the transactions the subject of the Opinion. | |
9 | To the best of my knowledge and belief, having made due inquiry, the Company is not the subject of legal, arbitral, administrative or other proceedings in any jurisdiction and neither the directors nor shareholders have taken any steps to have the Company struck off or placed in liquidation. Further, no steps have been taken to wind up the Company or to appoint restructuring officers or interim restructuring officers, and no receiver has been appointed in relation to any of the Company's property or assets. | |
10 | Upon the completion of the Company's Offering of the ADSs representing the Shares, the Company will not be subject to the requirements of Part XVIIA of the Companies Act (As Revised). |
I confirm that you may continue to rely on this Certificate as being true and correct on the day that you issue the Opinion unless I shall have previously notified you personally to the contrary.
[signature page follows]
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Signature: | /s/ Yifan Li | |
Name: Yifan Li | ||
Title: Director and Chief Executive Officer |
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use in this Registration Statement (No. 333-269247) on Form F-1/A of our report dated October 11, 2022 (November 18, 2022, as to the convenience translation disclosed in Note 2), relating to the financial statements of Hesai Group. We also consent to the reference to us under the heading "Experts" in such Registration Statement.
/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP
Shanghai, China
February 2, 2023
Exhibit 99.2
Legal Opinion
To: | Hesai Group |
9th Floor, Building L2-B, 1588 Zhuguang Road
Qingpu District
Shanghai 201702
People’s Republic of China
February 2, 2023
Dear Sirs:
1. | We are lawyers qualified in the People’s Republic of China (the “PRC”) and are qualified to issue opinions on the PRC Laws (as defined in Section 5). For the purpose of this legal opinion (this “Opinion”), the PRC does not include the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan. |
2. | We act as the PRC counsel to Hesai Group (the “Company”), an exempted company incorporated under the laws of the Cayman Islands, in connection with (a) the proposed initial public offering (the “Offering”) by the Company of American Depositary Shares (the “ADSs”), representing Class B ordinary shares of par value US$0.0001 per share of the Company, in accordance with the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the “Registration Statement”), filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) under the U.S. Securities Act of 1933, as amended, and (b) the Company’s proposed listing of the ADSs on the New York Stock Exchange or the Nasdaq Stock Market. |
3. | In so acting, we have examined the Registration Statement, the originals or copies certified or otherwise identified to our satisfaction, of documents provided to us by the Company and such other documents, corporate records, certificates, approvals and other instruments as we have deemed necessary for the purpose of rendering this Opinion, including, without limitation, originals or copies of the agreements and certificates issued by Governmental Authorities and officers of the Company (the “Documents”). |
4. | In examining the Documents and for the purpose of giving this Opinion, we have assumed without further inquiry: |
(a) | the genuineness of all the signatures, seals and chops, the authenticity of the Documents submitted to us as original and the conformity with authentic original documents submitted to us as copies and the authenticity of such originals; | |
(b) | the truthfulness, accuracy and completeness of the Documents, as well as the factual statements contained in the Documents; | |
(c) | that the Documents provided to us remain in full force and effect up to the date of this Opinion and that none of the Documents has been revoked, amended, varied or supplemented except as otherwise indicated in such documents; | |
(d) | that information provided to us by the Company and the PRC Subsidiaries in response to our inquiries for the purpose of this Opinion is true, accurate, complete and not misleading, and that the Company and the PRC Subsidiaries have not withheld anything that, if disclosed to us, would reasonably cause us to alter this Opinion in whole or in part; | |
(e) | all Governmental Authorizations and other official statement or documentation are obtained by lawful means in due course; | |
(f) | that each of the parties other than PRC companies is duly organized and is validly existing in good standing under the laws of its jurisdiction of organization and/or incorporation (as the case may be); | |
(g) | that all parties other than the PRC companies have the requisite power and authority to enter into, execute, deliver and perform all the Documents to which they are parties and have duly executed, delivered, performed, and will duly perform their obligations under all the Documents to which they are parties; and | |
(h) | all documents submitted to us are legal, valid, binding and enforceable under all such laws as govern or relate to them other than PRC Laws. |
For the purpose of rendering this Opinion, where important facts were not independently established to us, we have relied upon certificates issued by Governmental Authorities and representatives of the shareholders of the Company and the PRC Subsidiaries with proper authority and upon representations, made in or pursuant to the Documents.
5. | The following terms as used in this Opinion are defined as follows: |
“Governmental Authority” | means any competent government authorities, courts, arbitration commissions, or regulatory bodies of the PRC. “Governmental Authorities” shall be construed accordingly. | |
“Governmental Authorization” | means any license, consent, authorization, sanction, permission, declaration, approval, order, registration, clearance, annual inspection, waiver, qualification, certificate and permit from, and any report to and filing with, any Governmental Authority pursuant to any applicable PRC Laws. “Governmental Authorizations” shall be construed accordingly. |
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Capitalized terms used herein and not otherwise defined herein shall have the same meanings described in the Registration Statement.
6. | Based upon and subject to the foregoing and the disclosures contained in the Registration Statement and the qualifications set out below, we are of the opinion that: |
(1) | Based on our understanding of the PRC Laws, the ownership structures of the PRC Subsidiaries, currently do not, and immediately after giving effect to the Offering, will not result in any violation of the PRC Laws. |
(2) | The M&A Rules purport, among other things, to require an offshore special purpose vehicles controlled by PRC companies or individuals and formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval from the CSRC prior to publicly listing their securities on an overseas stock exchange. Based on our understanding of the PRC Laws, the CSRC’s approval is not required for the approval of the listing and trading of the Company’s ADSs on the New York Stock Exchange or the Nasdaq Stock Market, given that (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings under the Prospectus are subject to the M&A Rules; and (ii) when the Company set up its offshore holding structure, Shanghai Hesai was a then existing foreign-invested entity and not a PRC domestic company as defined under the M&A Rules, and the acquisition by Hesai Hong Kong of the equity interest in Shanghai Hesai was not subject to the M&A Rules. However, uncertainties still exist as to how the M&A Rules will be interpreted and implemented and our opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. |
(3) | The statements set forth under the caption “Taxation” in the Registration Statement insofar as they constitute statements of PRC tax law, are accurate in all material respects. |
(4) | To our best knowledge after due and reasonable inquiries, the statements set forth under the caption “Permissions for Our Operation and Securities Issuances to Foreign Investors and Recent Regulatory Developments” in the Registration Statement (other than any factual data or description contained therein) insofar as they constitute statements of PRC Laws, are accurate in all material respects. |
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7. | This Opinion is subject to the following qualifications: |
(a) | This Opinion relates only to the PRC Laws and we express no opinion as to any other laws and regulations. There is no guarantee that any of the PRC Laws, or the interpretation thereof or enforcement therefor, will not be changed, amended or replaced in the immediate future or the longer term with or without retrospective effect. |
(b) | We have not verified, and express no opinion on, the truthfulness, accuracy and completeness of all factual statements expressly made in the Documents. |
(c) | This Opinion is intended to be used in the context which is specifically referred to herein and each section should be looked on as a whole regarding the same subject matter and no part shall be extracted for interpretation separately from this Opinion. |
(d) | This Opinion is subject to the effects of (i) certain legal or statutory principles affecting the enforceability of contractual rights generally under the concepts of public interest, national security, good faith and fair dealing, applicable statutes of limitation, and the limitations by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditor’s rights generally; (ii) any circumstance in connection with formulation, execution or performance of any legal documents that would be deemed materially mistaken, clearly unconscionable or fraudulent; (iii) judicial discretion with respect to the availability of injunctive relief, the calculation of damages, and the entitlement of attorneys’ fees and other costs; and (iv) the discretion of any competent PRC legislative, administrative or judicial bodies in exercising their authority in connection with the interpretation, implementation and application of relevant PRC Laws. |
This Opinion is rendered to you for the purpose hereof only, and save as provided herein, this Opinion shall not be quoted nor shall a copy be given to any person (apart from the addressee) without our express prior written consent except where such disclosure is required to be made by applicable law or is requested by the SEC or any other regulatory agencies.
We hereby consent to the use of this Opinion in, and the filing hereof as an exhibit to, the Registration Statement, and to the reference of our name under captions “Risk Factors,” “Permissions for Our Operation and Securities Issuances to Foreign Investors and Recent Regulatory Developments,” “Enforceability of Civil Liabilities,” “Corporate History and Structure” and “Legal Matters” in the Registration Statement. In giving such consent, we do not thereby admit that we fall within the category of the person whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder.
[The remainder of this page is intentionally left blank]
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[Signature Page]
Yours sincerely,
/s/ Commerce & Finance Law Offices
Commerce & Finance Law Offices
Exhibit 99.5
January 17, 2023
Hesai Group
9th Floor, Building L2-B
1588 Zhuguang Road, Qingpu District
Shanghai 201702
People’s Republic of China
Dear Sirs:
Pursuant to Rule 438 under the Securities Act of 1933, as amended, I hereby consent to the references to my name in the Registration Statement on Form F-1 (the “Registration Statement”) of Hesai Group (the “Company”) and any amendments thereto, which indicate that I have accepted the nomination to become a director of the Company. I further agree that immediately upon the United States Securities and Exchange Commission’s declaration of effectiveness of the Registration Statement, I will serve as a member of the board of directors of the Company.
* * *
Sincerely yours, | |
/s/ Bonnie Zhang | |
Name: Bonnie Zhang |
[Signature Page to Consent of Independent Director]
Exhibit 99.6
February 1, 2023
Hesai Group
9th Floor, Building L2-B
1588 Zhuguang Road, Qingpu District
Shanghai 201702
People’s Republic of China
Dear Sirs:
Pursuant to Rule 438 under the Securities Act of 1933, as amended, I hereby consent to the references to my name in the Registration Statement on Form F-1 (the “Registration Statement”) of Hesai Group (the “Company”) and any amendments thereto, which indicate that I have accepted the nomination to become a director of the Company. I further agree that immediately upon the United States Securities and Exchange Commission’s declaration of effectiveness of the Registration Statement, I will serve as a member of the board of directors of the Company.
* * *
Sincerely yours,
/s/ Jie Chen | |
Name: Jie Chen |
[Signature Page to Consent of Independent Director]
Exhibit 107
Calculation of Filing Fee Table
Form F-1
(Form Type)
Hesai Group
(Exact Name of Registrant as Specified in its Charter)
Table 1 – Newly Registered Securities
Security Type |
Security Class Title(1) | Fee Calculation Rule |
Amount Registered |
Proposed Maximum Offering Price Per Unit |
Maximum
Aggregate Offering Price |
Fee Rate | Amount of Fee | |
Fees to Be Paid | Equity | Class B ordinary shares, par value US$0.0001 per share | Rule 457(a) | 10,350,000 | US$19.00 | US$196,650,000.00(2)(3) | 0.0001102 | US$21,670.83 |
Fees Previously Paid | Equity | Class B ordinary shares, par value US$0.0001 per share | Rule 457(o) | — | — | US$100,000,000.00(4) | US$11,020.00 | |
Total Offering Amount | US$196,650,000.00 | US$21,670.83 | ||||||
Total Fees Previously Paid | US$11,020.00 | |||||||
Total Fee Offsets | N/A | |||||||
Net Fee Due | US$10,650.83 |
(1) | American depositary shares issuable upon deposit of Class B ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No. 333-269524). Each American depositary share represents one Class B ordinary share. |
(2) | Includes Class B ordinary shares that are issuable upon the exercise of the underwriters’ over-allotment option. Also includes Class B ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public. These Class B ordinary shares are not being registered for the purpose of sales outside the United States. |
(3) | Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act of 1933. |
(4) | Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933. |